Car Insurance and the Arbitrary Quality of Egalitarian Justice

Classical liberals claim that theories of justice must be judged by their practical capacity to facilitate positive sum games in society and to eliminate scope for the exercise of inconsistent and arbitrary political power. Unfortunately, as one of the recent rulings by the European Court of Justice reveals few people in today’s legal and political elites are willing to conceive justice in this regard. Three weeks ago the European Court ruled that it was inadmissible for car insurance providers to take into account sex-specific differences for risk assessment and actuarial purposes on the grounds that this breached the fundamental ‘right to equal treatment’ for men and women. As a consequence, European women will no longer be able to benefit from cheaper driving insurance resulting from their lesser likelihood of involvement in automobile accidents than men of equivalent age and experience. It is difficult to see how this decision is compatible with a positive sum view of society. Men will not be made any better off by the decision as their insurance premiums will at best remain unchanged and women will be made worse off as their previously cheaper premiums will now be equalised upwards in line with those of men.

The nature of this European ruling, however, reveals the wider incompatibility of egalitarian theories of justice with non-arbitrary rule. Egalitarians usually advocate ‘equalising’ policies on the grounds that inequalities are only justified if in some way they operate to raise the position of the ‘worst off’ (Rawlsians) or, if they stem from personal choices rather than from the ‘bad brute luck’ of genetic accident or social circumstance (the ‘luck egalitarian’ followers of Ronald Dworkin). According to these views, any inequalities that do not raise the position of the worst off or do not result from personal choices should be eradicated or compensated for in some way. The European Court’s ruling could certainly be construed in this vein. Charging lower (unequal) car insurance premiums for women might not be justified because this ‘unfair advantage’ does not benefit men in any way. And, differential premiums should be eradicated because the higher risk of accidents for men may not reflect their free choice to engage in riskier driving behaviour. Rather, such ‘choices’ may reflect a genetically determined propensity for men to take more risks than women, or alternatively the fact that many men have been socialised in a ‘macho culture’ which encourages them to take risks which are not genuinely of their ‘choosing’. It is not clear whether such principles directly informed the European Court’s interpretation of ‘equal treatment’ in this particular case, but if they did then all manner of dystopian policy consequences might follow from any non-arbitrary application of the relevant egalitarian doctrine.

Average life expectancy for men is typically 5-7 years less than for women. Irrespective of whether this ‘unfair’ difference reflects a natural/ genetic propensity of men to die younger, or is a reflection of social conditioning which leads men to behave in ways which shorten their lives, a non-arbitrary application of egalitarian principles would favour policies to eliminate such ‘unjustified’ inequality. This might require for example, ensuring that men receive more and better health care than women, or alternatively making sure that during their relatively shorter lives men perform less demanding and less stressful roles than women in order to counteract the ‘bad brute luck’ of having a genetic propensity to earlier death*. Seen in this light, the allocation of resources in most health care systems which tend to spend more on women than on men – is manifestly unjust.

Of course, it might be argued that since men have benefited from patriarchal social values which garner them ‘unfair’ advantages over women in other aspects of life- the gender ‘pay gap’, for example, then ‘compensatory’ policies of the above nature are not in fact justified on egalitarian grounds (but then why stop women from getting cheaper car insurance?). This response, however, only serves to confirm that the pursuit of ‘social justice’ as egalitarians understand it is incompatible with a system of non-arbitrary rule. Quite apart from the difficulty of assessing the extent to which the gender pay gap is attributable to the differential choices of men and women relative to the role played by genetic or social conditioning** , there is no basis to determine an appropriate ‘rate of exchange’ between these different types of ‘disadvantage’ and ‘inequality’. What pay differential is sufficient to compensate men for their loss of an extra seven years of life? And, how much extra life expectancy and benefits such as cheaper driving insurance are sufficient to compensate women for the cultural legacy of patriarchy? Such questions cannot be answered with reference to a clear standard of ‘equal treatment’ because there is no widely acceptable procedure to determine what this might require. In practice, therefore, it will be the arbitrary power of bureaucrats and judges that determines which ‘inequalities’ matter, for whom, and ‘how much’. For classical liberals, there can be no better reason for keeping the remit of justice out of distributive questions and to confine its reach to clear and simple rules that can protect the person and property of men and women alike.

* On this see, Kekes, J. (1997) A Question for Egalitarians, Ethics, 107: 658-669.
** On this see Shackleton, L. (2008) Should we Mind the Gap? London: Institute of Economic Affairs.

6 thoughts on “Car Insurance and the Arbitrary Quality of Egalitarian Justice

  1. What’s it got to do with liberals? While liberals clearly favour inequity-resolving laws, I can’t see how anyone would call this equity inducing – in fact, it positively discriminates against women by requiring that their risk be assessed wrongly and highly. And it will be overturned. File this one under the law is an ass

  2. I agree with your conclusion. From a classical liberal position the decision is crazy. But from an egalitarian liberal point of view this is not necessarily so – since from that perspective it might be thought ‘unfair’ for women to get a better deal if this results from decisions which reflect some genetic advantage or social conditioning advantage. The post is trying to show what absurd conclusions might be arrived at if this logic were pursued. Mark

  3. As an aside, overweight people benefit from gravity far more than do other people. Perhaps Europe can compensate the non-overweight population for this discrepancy.

  4. The ECJ really has gone nuts lately. (The votes for prisoners decision is a whole other kettle of fish.)

    But I do think this is a fair critique of Rawlsianism. Rawls would not think it legitimate, for instance, to argue that market inequalities are fair simply because they reflect the marginal productivities of workers (and thus redistribution would be “unfair” because it “assesses productivity wrongly”). I think Rawls would be committed to arguing for banning gender differences in insurance premiums.

  5. Even on its own terms, the judgement fails. Women of a given age pay more for an annuity. Equalising premiums means that for a given premium women get more expected years of income (because on average they live longer). Discrimination? To put it another way, for a given retirement age and price of a pension, women can spend more time (on average) not working and receiving that pension than men can. However, they live longer and therefore could wait a little longer before buying their pension – and (in round numbers) be retired and working for the same proportion of their lives as men for a given rate of saving. Similarly, with driving, it is now effectively illegal to assess a woman on the basis of her risk – the risk of men has to be taken into account too. Quite frankly, once you get away from the idea that economic resources should be allocated by free agreement between the parties you tie yourself in knots.

    @justanAustralian – I am afraid it will not be reversed I don’t think

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