Saturday, March 27, 2010
Repeal vs. Reform, Update
The intellectual momentum within the conservative/libertarian movement is for repeal of Obamacare. The political reality, over the next three years, or more, might be different.
Yuval Levin, a thoughtful and prolific thinktanker at the Ethics and Public Policy Center, makes a forceful case for repeal; he has written cover story of the April 5 issue of The Weekly Standard, entitled, simply, "Repeal: The Overthrow of Obamacare." No doubt Levin is correct when he suggests that Obamacare will raise prices and degrade coverage and treatment.
But a dilemma is seen early on in the piece. Levin sets up a dichotomy between liberals, who favor government-mandated universalism, and conservatives, who favor a free market. As we shall see, conservative thinking is a bit more complicated than that. But let's let Levin make his case:
Liberals argue that the efficiency we lack would be achieved by putting as much as possible of the health care sector into one big “system” in which the various irregularities could be evened and managed out of existence by the orderly arrangement of rules and incentives. The problem now, they say, is that health care is too chaotic and answers only to the needs of the insurance companies. If it were made more orderly, and answered to the needs of the public as a whole, costs could be controlled more effectively.
So liberals heart "one big system." But then Levin sets up the conservative view, describing it as the hope that healthcare would be the sum total of private-sector choices, choices to be clarified by more transparent pricing. That's the ideal, anyway, according to Levin:
Conservatives argue that the efficiency we lack would be achieved by allowing price signals to shape the behavior of both providers and consumers, creating more savings than we could hope to produce on purpose, and allowing competition and informed consumer choices to exercise a downward pressure on prices. The problem now, they say, is that third-party insurance (in which employers buy coverage or the government provides it, and consumers almost never pay doctors directly) makes health care too opaque, hiding the cost of everything from everyone and so making real pricing and therefore real economic efficiency impossible. If it were made more transparent and answered to the wishes of consumers, prices could be controlled more effectively.
And so, Levin concludes, "Liberals and conservatives want to pursue health care reform in roughly opposite directions." Yes, there's plenty of division between liberals and conservatives, tut there's more to what conservatives, and their business allies, think. Many free-marketeers also favor universalism, aka "one big system," and they think, correctly, that government action can help establish universalism; indeed, government action should establish univeralism.
That's why many--although by no means all--conservatives and liberarians have supported the interstate commerce clause of the Constitution, so the individual states could trade freely with each other. Such a focus on universality has also spearheaded the efforts, over the centuries, to harmonize and rationalize railroad gauges, commercial law, weights and measures, time zones, and production standards. And that's why, today, most libertarian theorists have joined with the business community--at least the big business community, the businesses that are most heard in Washington DC--to support free trade and free trade treaties and umbrella groups, such as NAFTA, CAFTA, and the World Trade Organization. Libertarians embrace the theory, while big business, and many small businesses, may or may not embrace the theory, but they definitely embrace the idea of big market. For the past 60 years most big businesses, for example, have supported European integration, including the European Union.
In other words, many on the business-oriented right embrace "one big system," because it's good for business, by creating a large and predictable common market, even if critics say that such integration comes at the expense of national sovereignty.
And back in the US the same phenomenon could happen on healthcare. Levin and many others want repeal of Obamacare, but the US Chamber of Commerce doesn't, or at least won't work for it, according to USCC president Tom Donohue. Plenty of businesses, and others who count themselves on the side of large-scale harmonization and rationalization, might well decide that they like the new system, or will find themselves in the "reform" camp, but not the "repeal" camp.
Posted by James P. Pinkerton at 11:08 AM