Abstract illustration of social security and personal identity.

Is Social Security a Right or a Responsibility? Understanding the Argument for Social Insurance

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Lena Kashyap in Politics & Policy June 2025 • 4 min read.

"Explore the debate around compulsory social insurance and how it ties into personal identity and societal well-being. A must-read for understanding the future of welfare states."


Social insurance, designed to cushion the financial blow of unemployment or illness, stands as a cornerstone of many welfare states. Yet, its very nature—compulsory and often non-actuarial—ignites ongoing debates. Unlike private insurance, social insurance requires everyone, regardless of their risk profile, to contribute. This means those considered 'good risks' by market insurers help cover the costs for those deemed 'bad risks.' This setup often faces criticism as a form of compulsory income redistribution.

Critics like Robert Nozick and Milton Friedman argue that mandatory taxation for redistributive purposes infringes upon individual freedom, likening it to forced labor. However, a different perspective argues that social insurance isn't just about economics; it's deeply intertwined with our personal identity and social stability.

This article explores the argument that social insurance, particularly compulsory schemes, plays a crucial role in safeguarding our identities by protecting living standards and social positions. It delves into how this approach addresses concerns about exploitation and individual liberty, offering a fresh perspective on the value of social safety nets.

Why Should We Link Social Security to Personal Identity?

Abstract illustration of social security and personal identity.

Our social standing and financial security are more than just material concerns; they're integral to our sense of self. Social psychologists emphasize that our social identity—the part of our self-concept derived from our membership in social groups—shapes our expectations, beliefs, and sense of belonging. Maintaining a steady income is crucial for upholding both our living standards and our social identity.

Consider the words of economist Lars Osberg: 'For many individuals, the sense of identity they have in society is hard to separate from observable manifestations of identity through consumption... Economic insecurity about these outcomes can, therefore, be highly threatening to personal identity.'

  • Ambitions and Projects: A stable income allows us to pursue hobbies, education, and personal goals that define who we are.
  • Relationships: Maintaining connections with friends and family often depends on our ability to participate in shared activities and reciprocate generosity.
  • Family Stability: Financial strain can lead to conflict and even family breakdown, highlighting the importance of economic security for personal relationships.
  • Community Ties: Our residence and housing situation significantly impact our social identity, and the ability to maintain our home contributes to our sense of stability and belonging.
The risk of unemployment or illness poses a direct threat to these interconnected aspects of our lives. In an increasingly competitive global economy, job security is no longer a guarantee, even for the well-educated. The British Commission on Social Justice, for instance, found that while unskilled workers are most vulnerable, job insecurity affects all social classes. Similarly, while certain demographics may be statistically more likely to rely on sickness insurance, unforeseen circumstances can affect anyone. Even those with high incomes and seemingly secure social positions aren't immune to hardship. As Goodin et al. point out, 'The risk of poverty and the need for government assistance to alleviate it is widespread across the population.'

Why is understanding social security important?

The argument presented supports compulsory social insurance as a vital component of a just and stable society. By protecting individuals from economic hardship, social insurance safeguards personal identities, reinforces social bonds, and promotes a more equitable distribution of opportunities. As societies evolve, understanding and adapting our social safety nets remains crucial to ensure they continue to reflect our shared values and provide genuine security for all.

About this Article -

This article was crafted using a human-AI hybrid and collaborative approach. AI assisted our team with initial drafting, research insights, identifying key questions, and image generation. Our human editors guided topic selection, defined the angle, structured the content, ensured factual accuracy and relevance, refined the tone, and conducted thorough editing to deliver helpful, high-quality information.See our About page for more information.

Everything You Need To Know

1

What is the core purpose of social insurance and how does it differ from private insurance?

The primary function of social insurance is to cushion individuals against financial hardships arising from events like unemployment or illness. A key distinction from private insurance lies in its compulsory and non-actuarial nature. Unlike private insurance, which assesses risk and sets premiums accordingly, social insurance mandates participation from everyone, regardless of their individual risk profile. This means those considered 'good risks' subsidize the costs for those deemed 'bad risks', leading to potential income redistribution.

2

Why do some critics, such as Robert Nozick and Milton Friedman, oppose compulsory social insurance?

Critics like Robert Nozick and Milton Friedman argue that mandatory taxation for social insurance infringes upon individual freedom. They view compulsory contributions as a form of forced labor because it involves taking money from individuals to redistribute it for others. This perspective emphasizes individual liberty and the right to control one's own resources, contrasting with the collectivist approach inherent in social insurance schemes.

3

How does social insurance relate to personal identity and social stability, according to the arguments presented?

The argument suggests that social insurance is crucial for safeguarding personal identity and social stability. It does so by protecting living standards and social positions, which are integral to our sense of self. Economic insecurity, such as the risk of unemployment or illness, can threaten our ambitions, relationships, family stability, and community ties. By providing a safety net, social insurance reinforces social bonds and ensures that individuals can maintain their social roles and identities.

4

In what specific ways does economic security contribute to our personal identity, as highlighted in the text?

Economic security supports various aspects of our personal identity. A stable income allows us to pursue our ambitions and projects, such as hobbies and education. It also enables us to maintain relationships with friends and family by participating in shared activities. Furthermore, it contributes to family stability by reducing financial strain and supporting community ties by enabling individuals to maintain their residence and housing situation, thus fostering a sense of belonging and social standing.

5

Why is understanding social security and its implications important in contemporary society?

Understanding social security is crucial because it is a vital component of a just and stable society. In a world with evolving economic landscapes, adapting our social safety nets is crucial. Social insurance safeguards personal identities, reinforces social bonds, and promotes a more equitable distribution of opportunities. By protecting individuals from economic hardship, social insurance ensures that society reflects our shared values and provides genuine security for all. Comprehending the arguments for and against social insurance enables informed discussions and helps shape the future of welfare states.

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