The “maximin” principle states that the fairest possible society would be one in which the social contract maximizes the minimum possible position. In other words, the society is designed such that the worst possible place is tolerable. As I noted in my earlier post, the philosopher John Rawls’ contended that the architects of a hypothetical society, working from behind a veil of ignorance, would choose to shape their society around this principle. Why? Because, in a very important sense, there is a veil of ignorance. Not in the literal sense, of course, but it is nevertheless true that a person, upon entering the world as a social actor, has no control over when or where he or she will end up. As long as the possibility exists that one might end up at either the high end or low end of the economic spectrum, the maximin principle makes sense.
Of course, the question might naturally arise, “Why not simply distribute wealth equally, such that all positions are the same?” In other words, why not create a society with no risk? The answer, I think, is that up to a certain point, we are willing to endure a certain amount of risk. As long as the maximin principle is in place (that is, as long as there is an adequate, if not robust, social safety net), people will be willing to risk ending up at the minimum position in order to have a shot at the maximum position. This is a phenomenon we might term the American Dream principle. That is, people in all positions are willing to enter into risk in order to attain the maximum position, so long as losing everything isn’t the end of the world.
It is interesting to think about how the maximin principle might apply to the Medicaid program. Medicaid is part of the system, after all, that maximizes the minimum position. It raises the floor and makes people more willing to enter into economic risk. Nevertheless, the burden of paying for the program falls largely on those who do not occupy the minimum position, that is, people who do not qualify for benefits.
Thus, we can think of Medicaid funding as a kind of balancing act. On the one hand, rational citizens who occupy the higher economic positions should always want Medicaid to be in place in order to maximize the minimum, because the possibility always exists that one could lose one’s economic means. At the same time, the more benefits that are provided under Medicaid and the further eligibility is expanded, the more of a burden the program places on the higher economic positions, and thus, at a certain point, economic means start to become less of an advantage. So, thought of in terms of the maximin principle, there is an awkward balance that has to take place between not making the program so expensive that it is overly burdensome for the maximum positions and not reducing eligibility and funding so low that the program no longer maximizes the minimum economic positions.
This again goes to the point I made in my previous entry: what would the program look like if its policymakers were also beneficiaries? Thought of in terms of risk theory, perhaps the question is better framed: “If I could end up at a minimum economic position at any time, what would I want the program to look like?” In other words, in a volatile economic climate, how much risk is one willing to take and how large does one need the social safety net to be in order to mitigate that risk?
