When Basic Services Are Guaranteed As a “Right”


by Kevin Carson
http://c4ss.org/content/23900

When Basic Services Are Guaranteed As a “Right”

Recently Ezra Klein pointed out (“What liberals get wrong about single payer,” Washington Post, January 13) that single-payer healthcare wouldn’t solve the problem of America having the most expensive healthcare system in the world. American health insurance premiums aren’t so high because of the overhead cost or profit of insurance companies, but because of the price of service delivery itself. The private insurance industry is an uncompetitive cartel, to be sure. But next to the almost 300% price markup on an MRI in the U.S. compared to France, or the 2000% markup on a drug under patent, the cost of insurance is almost nothing.

In response, Professor Uwe Reinhardt of Princeton added that a single-payer system wouldn’t work in the U.S. because it would be controlled by the corrupt culture of the service deliverers (“Is the U.S. too corrupt for single-payer healthcare?” Washington Post, January 16). “Medicare is a large insurance company whose board of directors (Ways and Means and Senate Finance) accept payments from vendors to the company. In the private market, that would get you into trouble.” Basically, the prices Medicare-for-all paid for healthcare services would be set by the healthcare providers and reflect their institutionalized monopoly culture.

All too often, when well-meaning people say a particular need should be a “basic human right,” what that means is that the average person gets that need for “free” — but they get it as defined by the authoritarian institutions and professional priesthoods that deliver that service. The nationalization and public financing serve mainly to lock in that institutional culture personally, and make it difficult at best for the individual to escape that institutional model of service whether they actually want it or not.

A common theme in the work of Ivan Illich was the provision of services in all aspects of life by bureaucratic, hierarchical institutions with high overhead business models and the delivery of actual services by authoritarian professional priesthoods.

“Many students … intuitively know what the schools do for them. They school them to confuse process and substance …. [T]he more treatment there is, the better are the results …. The student is thereby ‘schooled’ to confuse teaching with learning, grade advancement with education, a diploma with competence, and fluency with the ability to say something new …. Health, learning, dignity, independence, and creative endeavor are defined as little more than the performance of the institutions which claim to serve these ends, and their improvement is made to depend on allocating more resources to the management of hospitals, schools, and other agencies in question.”

If you want an illustration of the total gestalt of the kinds of services delivered by such institutions, with their mission statements, Weberian work rules and accounting systems which define the consumption of resources as “value,” just compare the proprietary, institutionally designed “office productivity software” the IT department makes you use at work with platforms and utilities like Ope Office that people willingly choose for themselves at home.

I once saw an activist critic of agribusiness on C-SPAN describing the process by which the USDA created the “Food Pyramid;” it was basically negotiated by a committee made up of representatives of Big Cereal Grains, Big Meat, Big Dairy, ad nauseam.

We have “free” education through grade 12 as a basic human right in the U.S. And what is it? A system set up for processing, grading and sorting human raw material into an input for corporate HR departments. The first statewide public school systems were set up in New England because mill owners needed hands who’d been taught to be punctual, line up on command, eat and pee at the sound of a bell, and cheerfully obey instructions from an authority figure behind a desk. As a majority of people moved into white collar jobs, this basic function persisted — with the additional task of schooling students to prioritize tasks set for them by an authority figure over their own self-directed interests, and to regard as a trivial “hobby” anything not assigned by a boss.

The proper solution to the crisis resulting from enormously expensive healthcare is not to leave the expensive business model in place and then finance it with tax money, but to cause its price to implode to affordable levels by removing all the state-enforced monopolies and institutional frameworks that make it so expensive. Imagine a society where one of Pfizer’s $10 pills cost fifty cents, an MRI was $250, outpatient treatments and tests were covered by $70/month dues at a cooperative clinic, and catastrophic insurance was $50/month. That’s what we’d have if corporate-state collusion and monopoly were replaced by competitive markets and horizontal cooperation.

Before you make something “free,” think long and hard; you may also be making it compulsory.

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9 responses to “When Basic Services Are Guaranteed As a “Right”

  1. Some standard wrong statements from Kevin.

    For example, that H. Mann and others created the Massachusetts education system (called the “New England” system – as if this area was one State) for the benefit of the selfish factory owners – in reality it was created in line with Mann’s ideas from German philosophy.

    At least we did not have the idea that the “Great Society” Welfare State schemes were created in the 1960s for the benefit of the big business. Perhaps Kevin has learned not to repeat that particular piece of nonsense.

    Instead we get the idea that patents are the primary cause of the high cost of American health care. This fails the first test of an effort to explain the current situation.

    American health care was expensive in the 1950s (due to doctor licensing and so on – as Milton Friedman exposed). But it was a tiny fraction of the cost of health insurance today – so what changed?

    “What changed” – is the key thing that needs a theory needs to explain.

    Medical drugs were already a matter of patent in the 1950s – so blaming patents for the change (the explosion of costs) simply will not work.

    There has been a change since the 1950s – but it was in the K. Amendments to the FDA in the early 1960s (which increased the costs of drug development as part of a massive health and safety panic) not a patent matter. See Milton Friedman’s “Free To Choose” (the chapter on “Who Protects the Consumer”) on this – and for opposition to the FDA generally.

    Was it the profits of insurance companies?

    Well those insurance companies that make a profit at all (some are non-profit) actually make a very narrow margin (one reason they are in danger of going bankrupt under Obamacare – and will soon be begging or a bailout). People who actually want to look up what the profit margin of American insurance companies is can do so. It is razor thin.

    So what has changed?

    Regulations are one thing – the vast growth of “mandates” and other such regulations (at State and Federal level) that have utterly undermined the basis of the insurance market (distorted even in the 1950s – but a farce now).

    Also the Welfare schemes themselves……….

    Even David Ricardo would have understood.

    It one subsidies something – the cost rises.

    If one subsidises higher education (for example via government backed “student loans”) the cost explodes over time.

    It is no different with Medicare, Medicaid and SCHIP – they have exploded medical costs.

    And Obamacare?

    It INCREASES regulations (such as mandates – for example that companies must not charge a market price for people with “pre existing conditions”) and in INCREASES subsidies.

    As it increases regulations and increases subsidies – it will increase costs.

    This is how the present mess was created in the first place.

  2. Additional to Paul’s comment, I am baffled as to what point Carson is making regarding office software. It is pretty obvious that if a free software (Open Office in this example) is as productive or more productive than a proprietary one which costs money, then evil corporations would choose the free one. Now it certainly may be the case that some or many corporate IT managers are making the wrong choices due to incompetence, but it is impossible to see a conspiracy in such matters.

    I do not use much office software myself (rudimentary spreadsheets mainly and, yes, I use Open Office for that, because it is free and quite adequate to my needs). But I can give a personal opinion on graphics software. It is commonplace on the internet for fans of Open Source to claim that the free software like Gimp is as good as Photoshop. But I use (expensive) Photoshop because it genuinely is better in my own perception, for my own (subjective values) needs.

    Of course, I am a one man corporation, so I am probably part of the great corporate conspiracy, or something.

  3. To be fair to Kevin – at least he is NOT saying that education, health care (and so on) are “rights” (thus turning the idea of a “right” on its head – not a limitation on force, government or private, but an excuse for it).

    Some of the Bleeding Heart “libertarians” would say that such things (plus a basic income) are rights.

    On farming New Zealand shows that farm subsidies are not necessary – farm subsidies were (of course) the creation of interventionists in the 1930s (most of whom were not exactly friendly towards “capitalists” and held the deluded opinion that government intervention would help “family farms”). Once a government intervention is established any business will attempt to take advantage of it (and big business enterprises will do that job better) that is not the same thing as creating the intervention in the first place – which they simply did not.

    On softwear.

    I simply do not know enough about the subject – so I must bow to Ian’s opinion.

    • “Some of the Bleeding Heart ‘libertarians’ would say that such things (plus a basic income) are rights.”

      Who among the “bleeding hearts” is saying that? I don’t read them terribly closely, but my usual perception of their claims is that e.g. a “basic income guarantee” would make the state more stable/efficient without more rights violations than already exist. I disagree with that (and I’m not interested in making the state more stable/efficient — quite the opposite, I want to smash it, and one of the best ways to do that is to let it screw up and make people mad/unruly), but I haven’t noticed them claiming “rights” in e.g. basic income guarantees, “single-payer”: health care and stuff like that.

      • I am agnostic on anarchism in the long term, but don’t think it’s an option in the short term. This being so, I don’t want to make people more miserable than they already are. Assuming it would shut down the welfare bureaucracies, rather than add another level of entitlements, I’m not against the principle of a basic income.

  4. Thomas may be right about the “Bleeding Hearts” – they do say that the state should provide X,Y, Z and they do reject the non aggression principle (i.e. the Bleeding Hearts are not libertarians indeed are anti libertarian). But they may avoid saying that X,Y, Z good and services are RIGHTS.

    Indeed talking in terms of “natural rights” or “natural law” is not really consistent with being consequentialist utilitarians – which is what the leading “Bleeding Hearts” appear to be. Such things as the Bill of Rights (the most famous statement of Classical Liberalism) are alien to this tradition. Indeed this tradition would tend to see such things as the Bill of Rights as something to be “got round” (as with the recent Californian effort to de fact ban hand guns by demanding that hand guns do X, Y, Z) rather than things to be revered and followed

    It is possible for a utilitarian to come to the non aggression principle (at least for a “rule utilitarian” to do so) – however, the Bleeding Hearts seem to more sympathetic to the J. Bentham and Edwin Chadwick intervention-for-the-good style of utilitarianism.

    On the original post…….

    Citing E. Klein (who is so such of a leftist he has been replaced by the new regime at the Washington Post) and a Princeton University Prof (Princeton used to be a good university, back in the days of James McCosh, but that was more than a century ago) is odd – but no odder than Kevin’s normal practices.

  5. On the specific question of an income guaranteed by the state – this would appear to be “Speenhamland” type thinking (if I have spelt that village name correctly).

    This is bad thinking – very bad.

    If the state does get involved in the relief of poverty(this is not automatic – for example must of Scotland did not have a compulsory Poor Law till 1845 and France did not have it till the 1890s) it should be done in ways that deter (rather than encourage) people coming to the state.

    Arguments for a government poor law often involve basic historical (as well as economic) errors.

    For example, the myth that the terrible events in Ireland in the 1840s justify both a Poor Law and government “infrastructure” projects..

    In reality the Poor Law was adopted in Ireland BEFORE the famine (not after it) – the Royal Irish Police went round riding around (with rifles on their backs) demanding Poor Law taxes from landowners (landowners, not tenants, were responsible for paying the Poor Law “rates” in Ireland , there are no private “bailiffs” in Ireland to this day, unlike England, Wales and Scotland – after all unarmed people banging on doors and trying to take goods, would not tend to live very long in Ireland – one thing that Catholics and Protestants can agree on ) – not exactly a picture of “lasses faire” to me. And, on top of this. Ireland was full of governments “infrastructure” – “roads to nowhere” and “bridges to nowhere” are actually Irish sayings.

    The utter failure of such government projects in the Highlands of Scotland (some years before) did not stop the whole mess being tried again in Ireland.

    In Scotland the landlords involved in the “Highland Clearances” tended to go bankrupt (raising sheep in Scotland was never going to work in competition with England – better weather and better soil here).

    As for Ireland – an Irish land owner(Protestant or Catholic) has always been known for two things “pride and poverty” (the “grand house – with the roof that leaks”).

    Although there are a couple of (eastern) counties were this was not true – where proper “mixed farming” (rather than peasant plots – the product of 1700s “Penal Laws”) were the norm.

    Ulster (at least eastern Ulster) is a world of its own – very complex and confusing.

    A different culture – both from the rest of Ireland (for example my Catholic Irish grandfather, James Power, explained to me the Southern custom of “smile and hit” – winning the confidence of a target before attacking them [for example the foe will be bought drinks in a public house - and then set upon, by his new "friends", when he leaves] , “smile and hit” is not the custom on Ulster, indeed is considered bad conduct) and Britain.

    I have already mentioned how the British concept of a “bailiff” is alien – “why are they not killed?” (a question that is actually asked politely) basically sums up the different culture.

    However, the different way of dealing with disliked immigrants is also worth noting.

    The English way is to “grumble” (and then not do anything), The Ulster way (which is also true in the Republic) is to “burn out” newcomers who are disliked.

    This is done by asking newcomers (who are not liked – not ones who are liked) to leave (this will be done politely – perhaps a truck will turn up with “we are here to help you move”).

    However, if the polite request is ignored – a firebomb will be thrown through the window.

    I suspect that the violent culture is bad for long term economic development – although it does produce soldiers with a strong spirit.

    Ideally what is needed is courage and a willingness to fight (something we rather timid and conformist Englishmen tend to lack – at least in modern times), but only in the defence of property (not just one’s own – but in defence of other people’s bodies and goods) NOT in attacking the property of others.

  6. The sort of character that Gary Cooper, James Stuart and Audie Murphy played (and, more importantly, actually were in real life) is really neither “British” or “Irish” – it is a hybrid form.

    What so many men aspire to be – and so few of us actually achieve.

  7. It should be pointed out that the leading “Bleeding Heart” (the California based man) is a fan of John Rawls. He even claims that F.A. Hayek was. He does this by quoting the page in “Constitution of Liberty” where Hayek says nice things about John Rawls – carefully omitting the words only a few lines later where Hayek says he has not studied the recent work of John Rawls such as “A Theory of Justice”.

    I rather doubt that J. Bentham or Edwin Chadwick would have been a fan of John Rawls – not even his 1950s article on Kant (which is what Hayek actually had read), certainly not “A Theory of Justice” – a classic Social Justice work that summed up the sort of thing that Hayek was against.

    Almost needless to say…….

    A libertarian would be even more hostile to “A Theory of Justice” than a moderate Classical Liberal such as F.A. Hayek.