• Eugene McGarrell

Does "social insurance"* need to evolve?

* insurance of the individual against certain hazards (as unemployment, old age, and disability) that is undertaken, facilitated, or enforced by government.

Social insurance was first introduced by the German Emperor William the First in 1881. The Emperor explained in a letter to the Parliament that ". . .those who are disabled from work by age and invalidity have a well-grounded claim to care from the state."

In accordance with the wishes of the Emperor the German Chancellor Otto von Bismarck designed and delivered the scheme in order to “promote the well-being of workers… to keep the German economy operating at maximum efficiency, and to stave-off calls for more radical socialist alternatives”.

So what do we know about social insurance and the impact of these schemes? Well we know that social insurance is not insurance* as we know it.

*a third party paying claims based on risk-based premiums.

Insurance is a relatively simple system for people and agencies to pool financial risk. In comparison social insurance is much more complex.

We also know that social insurance in not social welfare*.

*means tested social services provided by a government for its citizens

Governments around the world continue to increase their share of GDP into social insurance programs which has led to a significant rise in a number of health and wellbeing but with little to show in terms of benefit for the individual, the family and community. The design of social insurance programs varies significantly (compare NDIS and the workers compensation models in Australia) and they seem to lack an evidence base linking their model with health, social and economic outcomes.

Social insurance schemes were designed with the best intentions. Most were designed within a very different social and economic context. The future of work is uncertain although most of us see that automation will have a significant impact. The emerging landscape will need an emerging model of social insurance that can demonstrate the health, social and economic return on investment.

A social culture has emerged where people feel entitled to benefits and where this entitlement has led to a growing dependency mindset. Dependent and entitled are paradigms that do not facilitate a sense of agency. The insidious depletion of self-agency is leading to a lack of hope and therefore a lack of purpose to contribute in community, be part of society and belong to the wider tribe. The social insurance programs of today are not fit for purpose in the context of tomorrow’s.

So, what’s needed within the emerging context of automation, quantum computing, blockchain technology, social fragmentation, the ailing neo-liberal dream, Brexit, Trump, BoJo, trade wars, war with Iran and Bitcoin?

I think some of the answers are found in Rutger Bregman’s book Utopia for Realists and in the work of Johan Hari. There are many thought leaders out there sharing their ideas just like Hugh Mackay and many social entrepreneurs creating emerging models of social insurance with communities.

But their needs to be a getting together of these thought leaders, of social innovators, of policy makers and economic gurus to debate and nut out a social insurance model that will support self-agency, build our economy, connect our communities and care for people who are experiencing vulnerable situations.

We need a summit of all these great minds, of all the people working on the front line, of all the people experiencing marginalisation, of all the policy makers and legislators. We get this right we help to make our society a place our kids and grand-kids will flourish.

A society where we all feel we belong, where we all contribute to the economy, where people affected by injury, illness, ageing and disability have self agency and hope and where the local economies support local communities.

Utopia? Maybe... but without dreams who do we become?

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