Class 12 slides: Equity and Redistribution following Rawls

1
Class 12 slides Equity and Redistribution
following Rawls

• Other conceptions of Welfare (151)
• Alternative Concepts of Utility (154)
• Cash versus In-kind Transfers (156)
• Implications for redistributive policy in the
  health care area (159-65)
• Analyzing The Struggle for the Soul of Health
  Insurance

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Other Conceptions of WelfareEqual Shares of
Something Important

• to defend the inequalities of many
  variables,theorist needs to relate
  inequalitiesto equal consideration for all in
  some adequate substantial way.Sen (151)
• Equality versus fair or just distributionMooney
  (152)
• What is being equalized under utilitarianism?
• What should be equalized? Resources (Dworkin).
  Opportunity (Roemer). Capabilities (Sen).

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Alternative (broader) concepts of utility (154-6)

• Why do people vote for their favorite candidate
  or contribute to charities in the face of
  overwhelming free rider incentives?
• Commitment to projects that are not in ones
  self-interest (Amartya Sen)
• Two distinct altruistic motivations, goods
  altruism and participation altruism (H.
  Margolis)
• multiple utility functions (Henry Aaron)

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Cash versus In-Kind Transfers of Wealth

• Why should policy makers pay attention to donor
  and taxpayer preferences to in-kind over cash
  transfers?
• Because people that extend aid to the needy do so
  to alter their consumption patterns rather than
  increase their general welfare. (157)
• Since in-kind transfers reduce the chance welfare
  recipients squander the payment, they encourage a
  more efficient redistribution of wealth (158)
• In- kind transfers are less likely to change the
  consumption patterns and work effort of welfare
  recipients (158)

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Three key implications for redistribution policy
in the health area

• Providing Health Services Rather than Cash
  Worldwide, social policy regarding transfers of
  wealth to those in need is conducted in a manner
  not consistent with what we might expect under
  the traditional economic model. Instead, in U.S.
  and other countries, donor and tax payer
  donations are more often as in-kind transfers.
  (159)
• Focusing on People's Health, Not Utility Do
  people consider health as higher kind of wealth
  or resource? Good health provides people with
  the opportunity or capability to achieve other
  desired things. Perhaps because people consider
  health a primary good policy makers support
  programs that seek to equalize peoples ability
  to obtain needed medical care. (160)
• National Health Insurance (163)

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The Struggle for the Soul of Health Insurance

• Abstract The politics of American heath
  insurance is a struggle over which visions of
  distributive justice should govern the
  solidarity principle or the logic of actuarial
  fairness. Actuarial fairness is central to
  American private health insurance. It is both an
  antiredistributive ideology and a method of
  organizing mutual aid by fragmenting communities
  into ever-smaller, more homogeneous groups,
  leading ultimately to the destruction of mutual
  aid. This fragmentation is accomplished by
  fostering in people a sense of their differences
  and their responsibility for themselves, rather
  than their commonalities and interdependence.
  Actuarial fairness in the US has developed as a
  business strategy for gaining market share.
  Medical underwriting, which is far more extensive
  than commonly known, is the information
  technology used for implementing actuarial
  fairness. Despite significant changes in the
  political context of health insurance which are
  leading toward restraints on underwriting, the
  logic of actuarial fairness is so deeply embedded
  in the structure of competitive markets in
  insurance and so deeply consonant with social
  divisions in American society that eradicating it
  will take more than any current reform proposals
  contemplate.