Disability in Anarcho-Capitalism
by Ethan Glover, Tue, Dec 16, 2014 - (Edited) Sun, Sep 10, 2017
There is an infinite amount of questions that we could ask about an anarcho-capitalist society. Honestly, the answers are more or less the same. Don't use violence, think of a better way to solve the issue. The problem is; many people out there see some issues as an impossibility. One question recently brought to my attention is that of the disabled. Without services like SSI, how will those who can't work live? Not everyone has a family, and churches can't possibly cover everyone. So what do we do?
What Would You Do?
The first consideration one must always make when it comes to this philosophy that depends on the flexibility of people (rather than a centralized system) is, "What would I do?" This isn't just a cliche question meant to fill space. The power of asking it cannot be underestimated. It seems that every question about anarcho-capitalism could easily be answered by the person asking it.
That's why before you ask a question about this system, it is most important that you attempt to answer the question yourself. I'm willing to answer questions and take discussions here, but I don't want to do anyone's homework. If you've ever posted a homework question on a forum, you may have got people asking you what you've tried so far. They don't expect you to have read a particular book or article (or at least they shouldn't). What is required is that you at least make an attempt. If you just look for the easy answer, you won't learn anything and will probably forget the answer (and question) in about five minutes. So, if you don't know the answer to disability in an anarcho-capitalist society, before you read on, take a moment to think about this for yourself. Imagine you've been assigned to solve this issue, and no government exists, it's not an option; what do you do?
Got something? Don't worry if your answer doesn't feel complete, we're going to walk through it either way. Also, note that there is no perfect solution that will work universally. That's the whole reason government doesn't work in the first place.
As I thought about the question as to what I might do myself, I came up with insurance. Simple, but it should be effective right? My insurance company would do general life insurance, health insurance, all that jazz, but it would also offer disability insurance specifically. If someone became disabled, I wouldn't just hand them a check though. I'd also work with companies and build relationships with them that allows me to find a job that the disabled can do safely if they can do anything at all. (Obviously, someone with Parkinson's wouldn't be able to work at all.) The job would help keep the amount I have to pay out and thus the cost of the insurance as low as possible. For those who can't work, we could make sure they are supported, and if at all necessary, we could run charity drives to make sure they have all they need.
To extend on this a bit, if I owned a business that did dangerous work such as mining or deep sea fishing, I as an employer would offer disability insurance as a benefit. (Maybe from my own insurance company.) This would allow this dangerous business to remain competitive and to give potential employees reassurance that in the case of them being hurt, they will be taken care of.
Now the question is, doesn't this already exist? This is exactly how private insurance companies handle things now. If so many people are on SSI, it must be better in some way. Maybe it pays more, or maybe it's cheaper. I was curious about this myself, so I did a bit of research.
Why Not Now?
It turns out that SSI doesn't pay much for the disabled. A maximum of $733/month. On the other hand, private insurance works pretty much like I imagined it would work in an anarcho-capitalist society before researching it. Insurance companies prefer to list people as "partially disabled" and help people to find a job, usually by working with the company they're already with, that they can do safely. The salary for this job supplements part of your income while the insurance company pays the difference from your original job. That means for SSI to be beneficial to you as far as payout goes; you have to make less than $733/month or just under $9,000/year. To put that in context, the poverty line for a single person is $11,670. This means that if you're on SSI, you're inevitably also taking other welfare such as food stamps, while with private insurance you're likely not seeing a huge loss.
OK, so public benefits are nothing compared to private, but the benefit probably comes from the price. To get private insurance, you have to pay a monthly fee. SSI is free, right? According to an American Community Survey, the adult population (age 18-64) in the United States in 2012 was estimated to be 194.5 million people. The total cost of specifically disabled people using SSI in 2003 was $65 billion and rising. Doing the simple math, this means that the cost of SSI is $334.19/year, whether you use it or not. The cost of private disability insurance? An average of $226/year.
That sucks. When taxpayers take on the collective burden of disabilities, they still can't outdo private companies. Most of that money is lost in government bureaucracy and probably a good portion is laundered, or simply spent on overpriced programs due to a lack of economic calculation.
So why don't more people take private insurance? My guess is that because they're already paying for insurance. It may be pricey, and the benefits may be terrible, but what are the chances of getting disabled anyway? Personally, I believe if people were faced with the thought of not having a government to back them up, and faced with a $334.19 tax cut, they might be likely to get a $226 insurance plan. In addition, as people move into a private system, subject to price signals, prices go down. Something that hasn't happened with SSI since… ever. Despite a rising population and despite the fact that the baby boomer generation is currently at the top of its earning potential. How's that for supply and demand?
A Note on Socialism
The question that was brought to my attention on this subject also mentioned "anarcho-socialism," or communism. It turns out, according to the Anarchist FAQ, anarcho-communists support the same things anarcho-capitalists support on this matter. It makes mention of mutual aid societies which took small yearly fees to contract doctors privately to service its members. These societies were inevitably shut down by the monopoly of the American Medical Association, but prior to things like SSI, they handled things quite well.
On the other side of things, the FAQ also supports the current welfare state while at the same time saying the welfare state is used for capitalists to control people. It then calls libertarianism hypocritical because it supports shifting dependency from the state to the free market, while also talking about "self-managed, working class alternatives" to the welfare state. Basically, it's a bunch of gobbledygook. Anarcho-socialists tend to support and not support everything at once. For instance, as a solution to welfare it suggests municipal housing that is, by own its words, "paternalistic, bureaucratic, and hardly a wonderful living experience." In short, they have no answer and all answers at the same time. Best to stick with what we know works.
To get a better idea of how anarcho-capitalist think about poverty in general, check out this guest post from Libertarian Money.