As sequester day dawned, with its arguments about what, how much, and how urgently we should be cutting from government spending, an odd and intellectual note rose in Arkansas. Governor Mike Beebe, of Little Rock, was at last prepared to allow the Medicare expansion that Obamacare demands, but only by way of enrolling his citizens in private exchanges, even though, as Politico reported, “enrollees with private exchange coverage may get a similar mix of benefits as they would get in Medicaid but could face higher co-pays, deductibles and other costs.” Why pay more for less? Well, the Arkansas Times reports that “Beebe said that for some legislators, subsidizing folks to buy private insurance was preferable to directly covering people through a government program for ‘philosophical’ reasons.”
The notion is that there is some inherent virtue or “philosophical” virtue in a market solution even when the market solution costs more and does less would have baffled Adam Smith as much as it will likely baffle the people of Arkansas. In cases like these, the market becomes not an instrument of prosperity but, rather, an icon of piety—an icon oddly favored by those who are otherwise rightly critical of undue utopianism and idol-worship.
That the free market won’t work for medicine is an economic truth by now ancient and undisputed. Consumers can’t make efficient decisions about how much medicine to buy or how much to pay for it. It is, after all, the essence of a free market that we have to be free to say no—free to choose means free to stamp away from a bad deal. It is the essence of medicine, though, that everyone sooner or later needs a lot of it and cannot possibly walk away, disgusted, from this or that producer’s stall. When Mom is seriously ill, we don’t want a cheap mastectomy done by a second-rate surgeon. We properly want the best. So we trust our doctor, whose solemnly taken oath is not to save us money but to get us the finest care—and who is, no shame on her, trying to make a little money for herself. The market won’t work for medicine —as much because of the inexorability of mortality as because of the inefficiency of markets.
This is the odd thing about what Justice Ginsburg called “the broccoli horrible,” the oft-repeated fear that if everyone can be made to buy health insurance under the Barack Administration, then under the Malia Administration we might be made to buy (and eat), well, broccoli. The analogy between broccoli and medical care would hold only if it were the case that, sooner or later, everyone had to buy broccoli and eat it, that broccoli was too scarce and expensive for anyone to pay for out of pocket, and that, in the end, someone was going to have to pay for the broccoli that everyone ate. Some people may smoke cigarettes, drink Pepsi, and refuse to eat their broccoli, and they should, indeed, be free to do so. But, in the real world, no one dies without first trying to get well.
Health care is not a unique case: there are many good things in life that market economics won’t provide—grand opera, for instance. In the eighteenth century, Mozart and Da Ponte could put on “Così Fan Tutte “ in the hope of making scudi or two, but these days sopranos can’t be had for, so to speak, a song. Sopranos aren’t more productive now than they were in 1780; rather, one imagines that they are less productive. The efficiencies of industrialization don’t work for opera. So what could be done for a profit then must be done for naches now. This is not a critique of market economics; it is simply a description of them. If we want a world with cheap (if uncomfortable) air travel and amazing smartphones, then bless the market. (Although it doesn’t hurt to remember that the smartphone, like the Internet that it surfs, depends in ways direct and indirect on government seeding.) If we want a world with productions of “Così Fan Tutte” and radiation treatments for clerical workers who get breast cancer, then submitting ourselves solely to the market is not the way to get them.
For today’s conservatives, the market has increasingly become the kind of utopian ideal that conservatives in the tradition of Edmund Burke have always feared—a thing whose virtue is not yet, and probably never will be, attained on earth, but must be worshipped nonetheless. In these debates, it is the mixed-up liberal who is the actual pragmatist, seeing what works, while the free marketers are the slaves of a beautifully utopian line of thought.
Not only are there things that the market is not well suited to fixing—the best thing to enable the private market to make a profit is often public services that operate at a loss. Seeing a postal worker trudging through snow with her packages might make us reflect gloomily on the illogic of public policy. The post office lost fifteen billion dollars last year (though a good part of that was due to a disastrous bookkeeping requirement imposed by Congress); eliminating Saturday mail delivery is part of its plan to “return to profitability.” Almost everyone agrees that it can’t sustain losses indefinitely. But are these losses really losses, or are we looking at the wrong unit of analysis? Lots of things are unprofitable if you narrowly consider outlays and income—including most of our roadways. To say that the post office runs at a loss is to say that it subsidizes a system of conveyance and communication. This in turn makes possible trillions of dollars’ worth of enterprise. (The magazine business, for instance.) Nobody asks whether the Interstate Highway System is profitable, but if you did you’d have to point to its vast maintenance costs, which are in the billions, and mostly paid for by state and federal taxes. At the same time, of course, the system contributes substantially to national productivity. The right unit of consideration isn’t the road; it’s everyone who uses it, and how we benefit from its existence—its “externalities.” The same goes for public-transportation systems that alleviate the residential pressures on the big city, reduce traffic congestion, bring in employees, and enable a substantial amount of “value creation”—but none of that will ever show up on the balance sheets. Running at a loss represents the subvention of public goods.
Anyone who has lived abroad in any of the great Allied social democracies—in France, let’s say—will at times have gotten worn out trying to make the point that the free market is not a demon designed to undermine human solidarity but that it is, rather, a wonderful engine of prosperity that needs to be regulated, watched, and kept from overheating, like every other wonderful engine. But anyone who stays here at home will get worn out trying to make the point that the market is no small God, and shouldn’t be treated as one. The market is a beautiful thing, but it should no more become an idol than any other object of social philosophy. Society is about running at a loss, because profit and loss are, above all, human terms to be given a human measure. Societies run at a loss so that their citizens can live at a profit, in productive comfort. Indeed, this insight has been at the heart of the greatest period of prosperity and peace that any societies have ever shared. To impoverish us in the blind pursuit of an abstract philosophical point about the absolute virtues of the private seems a little crazy. Even a philosopher might find that an awfully steep price to pay for a philosophy.
Illustration by Richard McGuire.
