When Policy Feedback Fails: "Collective Cooling" in Detroit's Municipal Bankruptcy

• In Event: 4132 - Neoliberal Welfare States: Substantive and Theoretical Issues

Abstract

The received wisdom among welfare state scholars is that policy feedbacks render social insurance programs durable. Yet, in the case of Detroit’s municipal bankruptcy, a voting majority of retired city workers accepted a settlement that asked them to waive key legal protections, formally accept gutted medical benefits, trimmed pension benefits, and a new public-private pension financing mechanism. This article synthesizes interactionist theories of loss to introduce the concept of “collective cooling.” I argue that collective cooling helps to establish the limits of policy feedbacks by explaining how a group of retirees’ collective self-understandings were adjusted from that of contractual citizens to charitable dependents. Key components of this process included: 1 Adjusting group members’ understandings of how they were perceived by powerful others and 2. Adjusting the loss from one that reflected poorly on members to one that did not. Implications are discussed for how people accept unexpected economic losses, especially those imposed by a trusted institution such as an employer or government organization.

Author

• Mikell Alexandra Hyman, Max Planck Institute for the Study of Socieities