Saturday, August 22, 2009

Why a "Public Option?"

The centerpiece of Obamacare is the so-called "public option." This is the heart of what the Left wants and it is no surprise that it is stirring up a tremendous amount of controversy. After all, the US is still a center-right country despite being governed, for the moment, by a very left-wing administration. But why is Obama so wedded to the "public option?"

He says that the government has to provide choice and competition by starting a government-run health insurance company to compete against the privately-owned companies out there now. This is clever, justifying the partial socialization of the health insurance industry by an appeal to "competition" and "choice," which, of course, are what the free market provides.

Is it the role of government to compete with private enterprise? Can private enterprise ever hope to compete with an entity that does not pay taxes, has unlimited resources behind it and can simply ask its owner to change legislation to favor it when the going gets tough? Oh, that is not what we plan to do, says Obama. It will be run just like any other private company. Really? Then why bother? No wonder so many see this as the camel's nose in the tent, the start of the fast evolution to a single-payer system.

If the goal is to get those without health insurance covered, why not mandate that all health insurance companies offer some sort of basic personal insurance coverage that everyone can buy and pay for on a sliding scale depending on income with government subsidizing the individual, who is legalized required to be insured, but who gets to choose his or her insurer? Why not do that? Because that would not give the government the kind of control it seeks.

What kind of control does government seek, then? Obama has told us repeatedly. He wants to make health care less expensive by leveling it down and rationing. No more shall the majority have "Lexus" care while a minority has "Toyota" care. Instead, everyone gets Toyota care. But how can government mandate that? It can't - unless it is both the insurer and the regulator of levels of care. That is where all the talk of "independent panels" which decide what is "fair" comes from. And that is why a "public option" is so necessary.

In a free market system the government has a role to play and that role is to be the regulator of the marketplace so that social goals like universal coverage and minimum basic level of care can be ensured. To fulfill this role, the government has to be the "honest broker" not one of the competitors in the marketplace. But that requires the government to stay out of the details and leave it to the market to decide how much care for whom at what cost. The Left is not satisfied with that role for government. It wants to be able to decide as we go along what individuals deserve in terms of care and at what cost. This is supposedly more "efficient" and more "rational."

F. A. Hayek, in his marvellously lucid book, The Road to Serfdom, clarifies the difference between the liberal and the collectivist way of making decisions. In the liberal vision it is the individual making rational choices that determines the level of coverage, the kind of care etc. and the government sets the ground rules in advance - blindly in a sense. The rules are "blind" in the sense that they are not made with any particular individual in mind. They are general and the same for all. In the collectivist vision, however, it is the central planning authority that makes the rules and they have to be made, not in advance, but on the fly because conditions and circumstances are constantly changing. The rules are tailored to individual cases because they aim not at treating everyone "fairly" according to some abstract principle, but at equality of outcomes for all regardless of individual circumstances. Thus, the rules must not be either blind or fixed in advance. In the collectivist vision, the Rule of Law has to be replaced by central planning.

Two competing views of justice are engaged here in a titantic struggle. The collectivist vision, born in the thought of the 18th century French philosophes and put into practice in the French and Russian Revolutions, has already engulfed most of the Western world and the US is practically the lone holdout - the last bastion of the kind of liberalism that arose out of the English constitutional tradition from the English Revolution to Edmund Burke and the conservative wing of the American Founding Fathers such as John Adams.

The choice is (confusingly) between a socialism that calls itself liberal and a liberalism that is now espoused only by conservatives. The former has a view of justice that aims at equality of outcome, that is, everyone gets the same health care. The latter has an abstract and principled view of justice that aims at equality of opportunity, which means that not everyone gets the same care, but everyone gets the same basic care and what he or she gets beyond that depends on the rational choices of the individual.

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