Written by Right Side News
A professor at one of our leading universities teaches a course in health policy and decided to assign my book, Priceless, to his class. He also contacted some prominent "left-of-center" health economists to see if he could balance my book with something from the other side. Here was his query:
People like Peter Orszag and Uwe Reinhardt have said that even though they don't agree with everything in Goodman's book, it is sound economics and definitely a book that should be read. Is there a left-of-center book that is like Goodman's — one that is economically defensible, but one that scholars like Goodman, Mark Pauly and Steve Perente would admit are worth reading?
The answer was "no." There is no such book.
I find this rather amazing. It is no secret that 99.9% of the health policy community is liberal — or if you like, "progressive." So why is there no book describing a liberal approach to health policy?
As I began to reflect on that fact, it occurred to me that this phenomenon goes way beyond health care. Milton Friedman's Capitalism and Freedom is a classic example of using economic analysis to make the case for a free economy. In it, Friedman argues for school vouchers, a flat tax, an end to occupational licensing, private savings rather than Social Security, a monetary rule, etc. Is there any comparable book on the left, using economics to defend liberal institutions against these reforms? I believe the answer is "no."
Let’s put this a different way. Given that liberalism is the dominant political ideology and given that it largely replaced 19th century classical liberalism, is there a place I can go to find why the proponents think it’s so much better than the ideology it replaced? If the answer is “no,” why is that?
The answer, I believe, is that liberalism is not an ideology at all; it is a sociology. The same may be said of conservatism. (Incidentally, Friedman did not call himself a “conservative;” he called himself a “classical liberal.”) I’ll save the conservatives for another day.
An ideology is a set of ideas that cohere. Socialism is an ideology. So is libertarianism. Suppose I told you that socialists believe the government should nationalize the steel industry and the auto industry. You would have no difficulty inferring what their position is on nationalizing the airline industry. Right? Suppose I told you that libertarians believe in a free market for tinker toys and ham sandwiches. You would have no difficulty inferring that they also believe in a free market for Rubik’s Cubes.
Sociologies are different. They represent a set of ideas that are often incoherent. These ideas are likely to come together not because of reason, but because of history or happenstance. Not only do the ideas not cohere, they may be completely contradictory.
Take the issue of preschool education ― forcefully endorsed by the president the other night. As David Brooks explained, the issue is really about allowing poor children to escape from the anti-education atmosphere of their homes to a place that will at least give them a chance to learn. Given a person’s position on preschool education for four year olds, shouldn’t you be able to predict how he will think about allowing poor six- and seven-year-old children to escape from bad schools? As it turns out you can’t.
Brooks explains the preschool issue this way:
This is rude to say, but here’s what this is about: Millions of parents don’t have the means, the skill or, in some cases, the interest in building their children’s future. Early childhood education is about building structures so both parents and children learn practical life skills. It’s about getting kids from disorganized homes into rooms with kids from organized homes so good habits will rub off. It’s about instilling achievement values where they are absent.
Okay, so how is that different from the situation faced by slightly older children trapped in lousy schools where teachers couldn’t care less what they learn? It isn’t. Yet many of those who favor preschool education (a new and expensive entitlement) are reliable opponents of vouchers or charter schools or just about any other escape route that offends the teacher’s unions. And that includes President Obama.
Then there is the issue of the minimum wage. (See Greg Mankiw’s summary of the economics literature here.) The minimum wage does almost nothing to relieve poverty. That’s because almost no one who is a head of household is earning the minimum wage for any length of time. However, I think it is fairly well-established that a higher minimum wage gives teenagers in above-average income households more pocket change, even as it closes off job opportunities for poor, minority teenagers. (The black teenage unemployment rate is about twice that of whites.) If you want to maximize job opportunities for low-income youngsters, as President Obama says he does, you certainly wouldn’t want a minimum wage standing between a minority youth and his first job. Yet creating that barrier and making it permanent is part of the Obama agenda for the labor market.
A related issue is public policy toward unions. There is no mystery about what a union is. It is an attempt to monopolize the supply of labor to employers. In most all cases, unions confer special (monopoly) status on workers who are solidly middle class, allowing them to seek above-market wages by closing off competition from those who earn less and have less. Yet encouraging labor unions is another core pillar of the Obama presidency.
Our federal deficit is almost totally caused by entitlement spending on the elderly. Our government routinely sends Social Security checks to billionaires and pays their medical bills to boot ― paid for in part by a 15.3% payroll tax imposed on the parents of the children to whom the president would like to provide preschool education.
The zip codes in America where people cash the largest Social Security checks are the very same zip codes where Medicare spends the most dollars on the average enrollee. And unlike the income tax, every worker pays the payroll tax ― no matter how poor. Yet these are the programs that President Obama resists reforming ― even as he rails on about how the rich aren’t contributing their fair share.
In health policy I have had personal experience trying to understand left-of-center thinking. In the 2008 election, John McCain offered by far the most progressive health plan. By that I mean it offered a much better deal to most below-average income families and it involved far more redistribution from high-income to low-income families than ObamaCare. (BTW, this isn’t even a close call.) However, you would never know these things reading an analysis of the McCain plan by Sherry Glied and her colleagues ― who somehow managed to convince themselves that the McCain plan was actually worse than the status quo!
Some readers will be quick to point out that the Democratic Party ― dating back to the days of Franklin Roosevelt ― consists of a coalition of interests and that winning elections requires satisfying each of those interests. Fair enough. But we are here talking about thinking, not winning elections.
Politicians will invariably search for some intellectual justification for what they do. Since their policies are incoherent, no ideology will serve their purpose. What they need is a sociology ― a way of thinking about the world that defends the indefensible ― espoused by intellectuals who will apologize for the mixed economy welfare state without any obvious sense of embarrassment.
For the Obama administration, that sociology is liberalism. Its adherents once called themselves “liberals.” Today, they are “progressives.”
John C. Goodman is President of the National Center for Policy Analysis, Research Fellow at the Independent Institute, and author of the book Priceless: Curing the Healthcare Crisis.
The Wall Street Journal and the National Journal, among other media, have called him the "Father of Health Savings Accounts." Dr. Goodman's health policy blog is the premier right-of-center health care blog on the Internet.
It is the only place where pro-free enterprise, private sector solutions tohealth care problems are routinely examined and debated by top health policy experts across the ideological specturm.