Wednesday, September 13, 2017

Social Insurance

Are you a fan of the 'pay for yourself' or the 'split the bill' model of going out for dinner in a group? It probably makes a difference if you are a tee-totalling vegan (TTV) or a drunken meat lover (DML). Splitting the bill avoids the nightmarish accounting required, and policing of friends. It helps to know in advance for the person who has come for the company, but not the bill (salad and tap water please).

It is likely the TTV will be a fan of pay as you go, and the DML will mock them as a cheap spoil sport. This is called 'adverse selection'. Naturally we are going to fight our corner. Young, healthy people aren't going to fancy splitting the health bill. Older, sicker people are going to call them spoil sports.

Social Insurance is one way of agreeing in advance, behind the 'veil of ignorance'. If you didn't know which character you would be, what is the fairest way of splitting the bill for the biggest risks we face in life that aren't your fault?

Risks like being born in the wrong place, of the wrong gender, liking the wrong gender, to the wrong parents, with the wrong skills.

Part of a Universal Basic Income could be set aside to pay a 'veil of ignorance' social insurance premium - to cover some of the risks that are nobodies fault.

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