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Social Security and Modern Society

Social security is not a mere burden but a benefit of productivity and an engine of economic growth. Countries with comfortable social security systems are internationally very competitive. Social security is a modern society supports economic growth and employment.

By Friedhelm Hengsbach

[This address on 2003 Health Insurance Day is translated from the German on the World Wide Web,  http://www.udak.de/ersatzkassentag_rede_hengsbach.htm.]

"Baker, why are you putting three loafs of bread in the oven? You only need one for yourself to eat this week? - "One is for me and my wife. The second is for my children and the third for my parents." Happily modern society does not orient itself in the idyll of a pre-industrial family in adjusting social security.


Those who advocate lowering social benefits judge social security in its function for economic growth and the degree of employment. Low non-wage labor costs and competitiveness of the export economy are not original health goals. However social security hurts economic growth. As a dependent variable, social security can be built up with rising prosperity and restricted in declining prosperity. A cap in income must be temporarily accepted so at the end prosperity for everyone can be provided. The chancellor's agenda seems to follow this argument. The opposite position is just as plausible now. Social security is not a mere burden but a benefit of productivity and a motor of economic growth. Countries with comfortable social security systems are internationally very competitive.

THESIS: Social security in a modern society does not lessen economic growth and employment but supports them.


Life risks caused by personal conduct are rightly left to private insurance. The industrial revolution, the increasing social interconnection, the situation of dependent labor and dangerous ecological conditions produced collective risks. Relief funds insured against these risks in a solidarian way. An initiative of employers for the new social market economy, the project of a contract of mutuality between politics and the citizen and the agenda of the German chancellor reflect opposite tendencies. Social risks are individualized and transformed into private responsibilities.

THESIS: A modern society insures against collective risks in solidarity. Only individual risks should be insured by individual economic subjects.


Since the economic-political turn stabilized with Helmut Kohl's taking office, a naÔve trust in the self-healing power of the market and the confession to the sleek state as the best of all possible states has gained a majority. Competition is promoted for a delimited market and also in the public sphere and social institutions. Social- and health markets stimulate schools and hospitals, educational institutions and health insurance plans to compete for the purchasing power of customers and entice private sponsors. Administrative controls should order costs and benefits exactly. Economic calculation is now stylized as a "fact of reason". However efficiency/ profitability in business accounting usually only consists in shifting part of the benefit costs to other economic entities or the general public. Economic efficiency in health institutions can result in social irrationality and inefficiency. "Competition' between the insurance plans should be in quotation marks. The so-called health market is socially constructed which is clear in the endless history of structurally balanced risks, concentration processes and the shift of negotiating power between health insurance plans and providers. Health goods are "trust goods". Universal access to health care is a basic right.

THESIS: Shifting claims to basic social rights to private exchange relations is a reckless dissolution of social security.


While the fascination of flat hierarchies has already faded in the businesses, a hurricane of constitutional weariness broke out several weeks ago in the media. However the plebescite white speck of the constitution was not criticized. The constitutional organs of the Upper House of Parliament, the courts and the parliament were insulted. The land is ungovernable and too unwieldy to carry out the urgent social reforms. Is this debate an impulse or a reflex of changes in the political sphere? The government parties duck in the shadows of the chancellor. The executive rolls over the delegates with legal initiatives. The communes are bled white financially. The self-governments of the public health system threaten to be slowly and insiduously delivered up to the state regiment. The state desires direct access to the benefit providers and insured. How can the self-government of health insurance plans mark their own role in relation to state power, collective negotiating partners and individual providers and groups and suppliers? How are doctors included in the order of financial resources and health goals. Internal self-government means: expanding the rights of participation of the insured and patients in decision-making processes.

THESIS: The networks of self-government in civil society rightly resist the direct grasp of executive state power.


The solidarity foundations of industrial work societies were an unbroken work biography, the lifelong partnership of a woman with a gainfully working man and the normality of households with children. All three foundations are fragile. Even if an end of paid labor is not in sight, this will not be the only key of social integration. Three work forms (conventional paid work, private relational work and civil society engagement) can be combined with three kinds of income (labor-, capital and transfer income) and apportioned fairly to men and women. The basis of the expanded solidarity is the conviction: every person whose center of life lies in the jurisdiction of the constitution has a right to a minimum share of national income and assets. The claim to a reasonable livelihood is gained by participating in socially useful work. The expanded solidarity should be financed by including all income and assets arising in society as legal contributions, not only wages.

THESIS: The post-industrial society expands the foundation and range of solidarity and establishes a republican solidarity.

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