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Social insurance against kidney failure

Greg Mankiw in his recent JEP study “Defending the One Percent” provides the following contra to the Rawls (1971) “veil of ignorance” argument:

“A common thought experiment used to motivate income redistribution is to imagine a situation in which individuals are in an “original position” behind a “veil of ignorance”…. This original position occurs in a hypothetical time before we are born, without the knowledge of whether we will be lucky or unlucky, talented or less talented, rich or poor. A risk-averse person in such a position would want to buy insurance against the possibility of being born into a less-fortunate station in life. In this view, governmental income redistribution is an enforcement of the social insurance contract to which people would have voluntarily agreed in this original position.

Yet take this logic a bit further. In this original position, people would be concerned about more than being born rich or poor. They would also be concerned about health outcomes. Consider kidneys, for example. Most people walk around with two healthy kidneys, one of which they do not need. A few people get kidney disease that leaves them without a functioning kidney, a condition that often cuts life short. A person in the original position would surely sign an insurance contract that guarantees him at least one working kidney. That is, he would be willing to risk being a kidney donor if he is lucky, in exchange for the assurance of being a transplant recipient if he is unlucky. Thus, the same logic of social insurance that justifies income redistribution similarly justifies government-mandated kidney donation.

No doubt, if such a policy were ever seriously considered, most people would oppose it. A person has a right to his own organs… But if that is the case …it undermines the thought experiment more generally. If imagining a hypothetical social insurance contract signed in an original position does not supersede the right of a person to his own organs, why should it supersede the right of a person to the fruits of his own labor?”

I am unsure of this. If the kidney removal and loan process is costless why not? If you are risk-averse and worried enough about the uncertain status of your kidneys why would you not agree to such a social contract so that risks are shared and no-one dies of kidney disease? In practical terms only a few kidneys would be transferred so the expected cost to any individual is low.  If there was a cost to making the transfers – there could conceivably be a much greater cost than making income transfers – then everyone might be worse-off making them.

Another way of thinking about it might be in terms of Scanlon’s contractualism and the “reasonableness to reject” criterion.  Could people reasonably reject the option of helping others if it doesn’t cost them a lot? Presumably it is not.  But maybe transferring kidneys is a relatively high cost option that people could reasonably object to whereas shifting incomes around is not.

4 comments to Social insurance against kidney failure

  • Jim Rose

    G.a. cohen got himself into a knot over do you own your own eyes when discussing nozick and selfownership even though 2 working eyes is gentic luck as much as ant other chances of birth.

  • conrad

    “Could people reasonably reject the option of helping others if it doesn’t cost them a lot?”

    The problem with this is it’s really an economist style logic. The likely reality is that a lot of human helping behavior is done with no real evaluation of the cost. There may be costs after the act in some circumstances, but these may have had no impact on the act. So if cost isn’t relevant to most helping behavior, then it’s meaningless to consider it — it’s basically entirely the wrong framework for understanding this type of thing.

  • conrad

    You might like to consider arguments such as that presented here: http://www.unl.edu/rhames/ms/coall-hertwig.pdf about grandparents and altruism if you want to get a better idea for what I mean above and the fact that trying to analyse things in terms of costs can fail in terms of predicting the actual data.

  • Michael

    This isn’t a valid comparison. In fact it’s bordering on idiotic. If Kidneys removal where easy and we lived in a world where 10% of population had 3 kidneys and a small percentage had thousands of them to the point where they had such diminished utility as to be a nuisance then we might be constructing a valid scenario.