Daniel Shapiro is an American professor of political philosophy who wants to convince supporters of the welfare state that they are wrong in believing in public social programs. He contends that such supporters' objectives can be better achieved through private market forces, and thus the answer to the question, “Is the Welfare State justified?” is “no.” While Shapiro is well versed in social programs around the world, this book can be categorized as political theory rather than comparative public policy. In making his argument, Shapiro chooses to deal with three main ingredients of the welfare state: health insurance, retirement pensions and social assistance.

As far as health insurance is concerned, Shapiro argues that we are mistaken to think that “medicare” is more egalitarian than buying private health insurance. That is largely because eventually some kind of rationing will be necessary in a public plan, and the rationing of catastrophic care will favour knowledgeable, well-connected and well-motivated middle-class citizens at the expense of the poor, ignorant, and inarticulate. However true, Shapiro's claim that such rationing is less egalitarian than a market system based on income is not convincing. He also condemns public systems because those with low risks pay for those with high risks, and even those who make bad lifestyle decisions (smoking and so forth) will be looked after. He claims that a market-based system is more egalitarian because people are held responsible for the costs of their choices, and financial incentives to alter one's bad habits are more effective than government exhortations. Fortunately for his argument, Shapiro does not promote the US health care system as his ideal type of market health insurance. There IS government participation in the US system (too much to call it a market system), although even his ideal market health system would involve compulsory purchase of health insurance and public subsidization of the indigent.

The second issue is retirement pensions. But as in the case of health insurance, Shapiro's advocacy of a private sector solution still allows a role for government to make private pensions compulsory and to provide a minimal pension for the indigent. The main inequitable problem with (non-contributory, pay-as-you-go) public pension plans in his eyes is that current workers pay for the pensions of those retired, leading to “huge intergenerational inequities.” Another defect in government pension plans is the politicizing of the investment process, and another advantage of private pension plans is their higher rate of return. Shapiro tries to persuade us that equity is achieved when private pensions enable “the poor and less affluent to take responsibility for planning their retirement by giving them the kind of individual ownership and control” (177) otherwise reserved for the more affluent. Unfortunately for his conversion purposes, most supporters of the welfare state have a different definition of equity.

Finally, we come to pure welfare. The two main issues here are whether social assistance should be delivered by government or by charities and whether it should be provided on a conditional or unconditional basis. The issue of depending on private charities begins with a discussion of whether it is just to redistribute income from the affluent to the less affluent, citing US studies that the fortunes of the very rich are based on entrepreneurship rather than inheritance. Since it is basically unjust, in Shapiro's view, the preferable policy would be to allow the affluent to contribute to private charities on a voluntary basis rather than be subject to any “coercive transfer.” If the poor need more than they receive from a private charity, they can seek the help of a competing charity and always have the option of relying on family and friends. Charities are also better than government agencies at cutting off assistance in the case of recipients who do not improve their behaviour. Not surprisingly, Shapiro is quite certain that conditional aid is better than unconditional, and failing to meet the conditions would result in withdrawal or a significant reduction in aid. He argues that egalitarians should want recipients to take responsibility for their future and should therefore not provide unconditional aid. On this point, Shapiro disagrees with Amitai Etzioni who considers that no one's benefits should ever be completely cut off or sharply reduced as “part of the communitarian value of assuming responsibility for all members of the community” (271).

No one would claim that public social programs in Canada, the US, or other countries are perfect, and Shapiro makes a number of good points about their defects. On the other hand, his theoretical concerns about rights, obligations and personal responsibility rather than needs, and his definitions of equity that omit levels of income, are not likely to convince many supporters of the welfare state that such programs would be improved if transferred to the private sector.