Our social attitudes, and our economic institutions – from the welfare state to the commercial legal system – depend on the increasingly tenuous distinction between nature, nurture and personal responsibility.
“The fault, dear Brutus, is not in our stars, but in ourselves, that we are underlings.” Cassius was not on his way to buy insurance when he said this. But if he had been, he would have understood why he could insure against being struck by lightning, but not against banishment. And those who read his words today will appreciate why they are regularly offered financial protection against damage to property or personal injury, but not divorce, pregnancy or redundancy. The answer lies in the difference between the faults in ourselves and the faults in our stars.
For a bolt of lightning to strike is truly a random event, and an insurance company which pools a lot of these risks can be fairly confident of the outcome. But divorce, pregnancy and redundancy are events which are partly under individual control, and the people who may experience these events know better how likely they are than any insurance company. If you want to insure against becoming pregnant, I don’t want to sell you the policy.
What are the relative roles of personal responsibility and unpredictable misfortune? How much do we know about ourselves relative to what others know, and how reliably can they find it out? When Caesar had been warned to beware the Ides of March, did that change the allocation of blame for his fate between himself and the conspirators? It is the answers to these questions that differentiate those risks that can and should be left to the private insurance market – like fire and theft – from those – abrupt loss of office – that typically fall on individuals themselves. In many countries these latter risks are partly picked up by the state. It offers benefits to lone parents, mothers and their children, and those who lose their jobs. Se we define the borderlines between private and social insurance.
Where risks are not random, we generally need to worry about fault. If, as in the United States, there is very little social insurance to cover personal risks, then the only way you can avoid bearing them yourself is to attribute blame to someone else. That is an important part of the reason why American is such a litigious society.
In European countries, where social insurance is more extensive, we try to limit provision, though not to eliminate it, for those whose plight is their own fault. So we withhold some benefit from people who left jobs voluntarily, we are unsympathetic to divorcees without children, and we agonise over how supportive we should be of lone parents. In all these cases, our society’s assessment of the relative contribution of individual responsibility and genuine misfortune governs the generosity of our social insurance provision.
And it is why in most countries outside the United States, medical insurance has in effect been nationalised. Ill health has some of the characteristics of fire, and some of the characteristics of divorce. There are elements of luck in the incidence of any illness. But there are also elements of personal responsibility. And even if there is no fault, nor is there randomness. It is not very difficult to assess that some people are more likely to get ill than others, by virtue of their age, their lifestyle, or the knowledge that they themselves have.
In sectors such as these, private insurance markets tend to unravel, as insurers adopt direct and indirect ways of picking off the better risks. So many people are left uninsured, and the system does best when employers ensure on behalf of large, undifferentiated groups of customers. Private medical insurance only works well either when it is based around employers or where, as in most countries, its operation is so regulated by government that it really constitutes a health service rather than a private insurance market.
The nature of the risks that individuals face, the difference between true misfortune and personal responsibility, and what we know about the risks we face relative to what others know, are fundamental to the design of our social economic and political institutions. They are the most important factors determining the boundaries between the public and private sector, the design of the social security system, and the degree of state involvement in western societies in many important activities such as health and employment..
That is why this week’s announcement in which the British government wants to work with the insurance industry on a voluntary code to evaluate genetic testing is much more significant than it seems. We see the opening of a Pandora’s box. You cannot peek inside Pandora’s box and shut it again. No attempts to reverse the march of technology, or to suppress knowledge we already have, have succeeded for long.
As our knowledge of genes grows, we change the boundaries between what we think is determined for us and what is a matter of our own choice and responsibility. And we alter the distinction between what we know about ourselves and what others can know about us. Most immediately, this will be relevant to life and medical insurance, as what have hitherto been unpredictable, and hence insurable, events become systematically more predictable. This is simply an inevitable part of most advances in medical technology, and it is why insurance markets are not ultimately a viable solution to the problems of ill-health, pensions or long-term care.
But the full ramifications go wider. It is no more true that I commit crimes because of my criminal genes than true that my crimes are all the fault of society. But there is enough in both contentions to make it ultimately impossible, to distinguish clearly nature, nurture and personal responsibility. Yet it is not just our social attitudes, but our economic institutions – from the welfare state to the commercial legal system – that depend on that distinction. The more we learn about either sociology or genetics, the more tenuous the distinction becomes.