Accounting for the Benefits of Social Security and the Role of Business: Four Ideal Types and Their Different Heuristics

Abstract

Germany is considered to be a pioneer of social security systems; nonetheless, globalization and demographic changes have put enormous pressure on them. A solution is not yet in sight as the debate on the future of the German social security systems still lacks consensus. We argue that ideas matter and that the debate can benefit from a deeper reflection on the concept of social security. This objective is pursued along two lines. First, we take a historical perspective and reconstruct the development of Germany’s social security systems. Second, we scrutinize from a theoretical perspective how social security is conceptualized in public and theoretical debates. Behind the various positions, we identify four basic ideal types. We then analyze how these ideal types account for the benefits of social security systems and what role they assign to corporations in providing social security. While two ultimately reinforce potential conflicts between different groups in society, the other two ideal types reveal possible benefits for all. The last ideal type actually conceptualizes social security systems as insurance that fosters risky but overall productive investments in human and other forms of capital. Therefore, it can be shown that social security systems are not necessarily threatened by globalization and that incentives exist for corporations to invest in the provision of social security.