Paradigms of Social Justice and Obligation

I. The Protection Rackets, Security, & Risk-Avoidance

    This past century has seen an exponentially growing demand for security at all costs, as if there were enough money to make life risk-free. Institutions are happy to "guarantee" security to individuals overwhelmed by the onslaught of change. Protection rackets work by exaggerating both risk and security. The threatened risk compels the purchase of protection. See table for major examples.
 
 

Protection Racket	Alleged Risk	Growth	Current per Capita
government	anarchy	10.2x ('29-'87)	$7400
military	"our enemies"	38.1x ('00-'90)	$1200
police	crime	6.3x ('54-'90)	$410
religion	damnation	2.8x ('50-'87)	$180
insurance	loss	3.7x ('50-'87)	$800
health insurance	medical costs	18.1x ('50-'88)	$600
pensions	disability	4.8x ('50-'87)	$905
medical	sickness, injury, death	5.0x ('50-'87)	$2050

 

All figures are expenditures adjusted for inflation and population growth. Growth of federal, state, and local governments. Medical growth based on national health expenditures reported by US Dept of HHS. Insurance growth based on private premium income. Pensions based on annual growth of public and private (excl. SS) pension funds in 1950 and 1987. Contributions to organized religion are from total private philanthropy. By comparison, inflation adjusted average earnings of workers grew 1.8x ('50-'87). Inflation measured by Consumer Price Index. U.S. Statistical Abstracts, U.S. Dept of Commerce, Census Bureau

    Of course in principle, insurance is judicious, preventive, even a necessity against catastrophe. But buying insurance is not necessarily any of these. The twentieth century peculiarity of insurance expresses a materialistic mentality; when anything and anyone can be bought, throwing money at a "problem" absolves responsibility and repeals consequences. Incentives to minimize risk, as well as control over future resources to handle a multiplicity of negative consequences are abandoned to the insurer. As change is a constant and crisis is guaranteed, the individual who has bought into this lifestyle, with little savings and in debt, will find he has scant security.

    Characteristically, the growth of new protection rackets occurs while traditional protection fails. The archetypal protection racket, "organized crime", could exist only because government criminalized economic business, became corrupted in turn, and failed to provide protection. [Richards,Friedman] The extended family no longer guarantees old age security. The close community rarely exists to provide the support to bridge hard times, as it once did. The loss of bank savings in the Great Depression gave impetus to Social Security.

    "Security" as a paradigm is a convenient and recognizable rationalization. But these "security" cravings may also reflect a perception of growing insecurity and instability in the whole of social life. The manufactured reality of the mass media for instance portrays an abundance of illness, crime, violence, and war. The protection rackets pander to biological motivations of fear and anxiety. Fear functions by motivating avoidance. But risk is not all that is avoided; personal (not social!) responsibility and individual decision are increasingly shunned. The protection rackets shift the consequences of individual mistakes onto others. Health insurance and medical costs shift the cost of unhealthy lifestyles onto everyone buying "protection". The two faces of insecurity are at once lost innovation and protected recklessness. Common refrains are "avoiding responsibility is avoiding blame" and "the rewards are inadequate for the risk". The unfolding disaster of the savings and loan industry bail-out shows the results of such attitudes; thanks to the biggest protection racket of all, we must all pay for the mistakes of a few.

    The power of insurance companies now is such that they routinely discriminate - against "risk-groups" - and can demand intrusive answers, procedures, and all sorts of contractual compliance, with impunity. Sure, "private" companies are free to set any contractual conditions - individually they don't force anyone to comply. Collectively and in collusion, protected and subsidized by law and legal precedent, they have unaccountable powers government has not yet dared to assume. Nothing has prevented insurers from demanding drug tests, or medical screens, or family history, while government at least must contend with some judiciary review.