We live in a society where we are expected to look after ourselves. For most of us this means we need paid work on a regular basis. When we cannot find it, or it is interrupted because of a dismissal, a firm’s closure, an accident that stops us working or imposes a sudden loss of necessary assets, like a home, or an illness, the need for a steady income is still there, indeed, likely will be greater. What now?
Charity and government come into the picture. Both these sources of sustenance are limited in scope. Charity is so because it depends on the willingness and means of persons who have no obligation to look after anyone but themselves. So, it cannot be counted on. And it usually leads to the demeaning exercise of control over needy people by unelected people. In the case of governments, the starting point of our kind of government, namely, that we are to take responsibility for ourselves and go to extreme ends to do so before we call on government for support, stands in the way. Only those who fall into specific categories and meet stringent and mean eligibility criteria will get governmental help. Anyone having had to apply for workers’ compensation, or unemployment benefits, or a disability pension or a rental supplement, will know about the struggles that have to be won. Our governments justify this ungenerous nit-picking by saying that they are ensuring a ready and willing workforce for entrepreneurs. As well, they claim they are contributing to our moral welfare by teaching us all to be self-sufficient. This requires them to make sure that only truly meritorious claimants get something without working for it.
In the result, all of us feel the need to confront the possibility that we may have to provide for our needs if we are injured or lose some of our capacities or assets. We buy insurance, insurance of all kinds to cover the gaps: house insurance, car insurance, travel insurance, life insurance, income replacement insurance, and so forth. We buy it from private insurance companies.
Insurance corporations make their money in several ways. They collect premiums to issue a policy which will pay us for a loss we fear might occur, say, a flooded basement or sickness, or a factory closure. Insurance companies calculate, very carefully, how likely it is that the risk will materialize and will not write policies for people whose risks are particularly high or only write very expensive polices for them and/or insert many exceptions to the coverage sold. After all, insurance companies are interested in their profit, not in our welfare. Insurance may cover risks, but insurance companies do not take too many risks. They look for safe bets and, inasmuch as they think they have written some dangerous policies, they will frequently ask another insurer (for a fee) to take them on. They reinsure the risks they have undertaken, lessening their profit somewhat but eliminating the risk of losses. It is a for-profit business and not designed to help vulnerable people.
For this reason, insurance companies insert many hurdles that policyholders must clear before they can collect the repayment they bought in good faith. Sometimes insurance companies are able to avoid paying out altogether; more often, they are able to string the matter out. Delays put pressure on needy claimants to settle for less than the policy had promised. Policyholders frequently do not get what they thought they had paid for. This means, as it always does in a capitalist society, that the most vulnerable, those with the greatest needs and least wealth, will be left the worst off. This fattens the insurance companies’ coffers. And these coffers bulge with money.
The paying of premiums is the direct equivalent of depositing money into an account run by someone else. Insurance companies use this in-flow of money, less any needed for administration, advertising and the maintenance of a fund to pay out on some polices, to invest in markets. The people who were forced to contribute monies to an insurance company because our society does not protect them adequately against the unpredictable ups and downs of life in a market economy, have no say over the way insurance companies use their money. The paradox is that it is predictable that insurance company investments will help fund polluters, job-destroying technology manufacturers, environmentally destructive miners and lumber firms, dangerous drug-makers, and the like, that is, their investments of monies contributed by risk-averse non-property owners will promote the very risks that forces most of them to buy insurance.
It is all upside down because private insurance is an inherent aspect of capitalism. It is only in a society in which we do not accept our collective responsibility and obligation to deal with the harms done to fellow citizens as if they were harms to us that the welfare of others is left to capricious charity, to disciplining and humiliating governments and to inefficient and manipulative private for-profit insurers. We can, and should, do better. We can begin by questioning our devotion to the maintenance of a society made up of self-serving individuals and begin to think about how to create a society based on communalism, mutuality and reciprocity.