Adam Smith Meets the Rich Young Ruler: Health Care and the Common Good

Callahan makes some important points and I think conservatives have been all too willing to brush aside the role of morality, but I do question his use of the Walmart analogy. It seems to me more like an all you can eat buffet, where once you pay at the door, everything is "free." With fundamentally different views of the problem, is it any wonder that we can't come together to find a solution?

A handful of judges who disagree does not change the meaning of the intention of the original authors.

Callahan makes some important points and I think conservatives have been all too willing to brush aside the role of morality, but I do question his use of the Walmart analogy. It seems to me more like an all you can eat buffet, where once you pay at the door, everything is "free." With fundamentally different views of the problem, is it any wonder that we can't come together to find a solution?

When Adam Smith prescribed a society as quoted in this article, he was writing in the context of a free society with minimal government involvement in what we now view as "social justice." How often do people blow off the notion of doing charitable activity with, "Doesn't the government have something for them?" It's easy to ignore the poor when the government ostensibly does something.

Neff also touches, but does not explicitly mention, the concept of property rights. Classical liberals are very much in tune with the notion that property rights set the boundaries of order in a society very well. History has proven that such rights lead to an orderly society and one that sees an increase in the standard of living for all. When she poses the question, "Why not help [the poor], as many European countries do, by restricting doctors' income and insurers' profits?" Because, Ms. Neff, the doctors are your neighbors, too, and you must love them equally as you do your poor neighbor.

Another question that comes to my mind in all of this debate over health insurers' profits is, "If these companies are indeed so evil, and don't need every penny of their profits, why isn't anybody with a moral spine starting a company that takes in fewer profits, does not discriminate about pre-existing conditions, and has a policy of 100% coverage?" Surely such an entity would be the envy of the country, and we would all flock to the lower-cost, lower-profits, morally-based "insurance company." It seems to me like a very easy market. But guess why that cannot happen. Government regulation. Insurance companies have heavily protected themselves with government in such a way that you cannot be nice and still stay afloat. More government in this area is counter-productive because it is precisely why these problems exist in the first place. We only have votes (which are mathematically useless) and Big Insurance, Big Pharma, et al have money... and lots of it.

As for the idea of "common good," by whose definition are we to enact legislation that is for the "common good"? In the United States, we have a Constitution that specifically states what Congress can and cannot do with regards to "general welfare." Health care is not one of them. It is an issue reserved to the individual states. So is education. And yet the two areas in need of the most reform in our nation are these two areas, which have massive involvement from the federal government. Coincidence? I don't think so.

For another thing, Ms. Neff butchers Adam Smith. Smith's notion of empathy and fellow feeling was one that expressed itself through private acts of charity as much as through government.

LV

We see how open the rich young ruler was to what Jesus said!

Adam Smith might commiserate with former Fed chairman Greenspan, who said he failed to realize that the wealthy wouldn't restrain themselves, after the recent debacles he had done nothing to resist.

...a change in national priorities away from endless war and the number of people lacking health care becomes a majority, in just the same way it takes to elect a President.

Last I checked, neither of those two things are affected by a "majority," but rather a decisions by those in power to do what they are able with the money and support of constituents who have a stake in the outcome of policies designed ostensibly in the interest of the common good, but are nothing of the sort. Elections aren't won by majorities, nor is a majority inherently a better way of pursuing an ethical and just change.

The Great Depression was not ended by World War II. Taking out the vast majority of the work force to create bombs and produce war materials by either going into debt or printing the money itself is not a recovery. War doesn't produce any goods, it destroys goods, both of the enemy's and of those goods that reside at home. All of the work force that could have been producing things for a peaceful society were instead redirected to non-peaceful and unproductive uses for the war.

The problems are indeed large, and are large because of government central planning and empire-building, both overseas (Iraq, Afghanistan, and other areas where we have a military presence) and on our own shores (education, health care, everyday business). If you've never heard of the depression of 1920, it was sharp and painful, but had a quick recovery because it wasn't padded over by so much government "assistance" and stimulation. The market corrected itself rather quickly and effectively.

"If these companies are indeed so evil, and don't need every penny of their profits, why isn't anybody with a moral spine..."

One might as well similarly lament the offshoring of jobs to where labor is far cheaper, benefits nonexistant and costs are lower. Companies here lay off 12,000 engineers and move their work to places like Shanghai.

If you wanted to hire all these surplus useless eaters who used to be valued financial contributors to our society, you would go out of business. Even if you got to make a smaller profit, enough to employ them and keep selling your product that wouldn't be enough for the shareholders. The returns would be even greater by laying them off and management would be found, or the company acquired by leveraged buyout, to enable just that.

In the same way, the current system has its own economic imperatives.

Government, per se, is not intrinsically more unjust than cartels run by a plutocracy. However, it's guaranteed that plutocrats are less accountable than democratically elected governments are to the same demographic defined as voters.

If you don't think so, then one does not need democracy, republican institutions or government at all to be free. A polity where there is no government but competing corporations, all privately held and unaccountable except to property, that is, owners, and to purely private gain, would give according to such a belief even greater freedom. Perhaps this is why totalitarian and authoritarian countries are so favored now by investors?

"Smith's notion of empathy and fellow feeling was one that expressed itself through private acts of charity at least as much as through government."

That's true, LV, but Smith did acknowledge that there are services that only the government was capable of providing, since it was not in the nature of the free market to supply them. These included, famously, public education. Why not public health care? Neff is absolutely correct that the situation says more about our lack of a national belief in the common good.

It's a lot easier if you live in Denmark, where everybody is more or less Danish, to believe in the common good as something that affects us all. For all the advantages of our multi-cultural society, this is one thing we seem to have lost.

The enormous waste of unproductive activity did prolong the Great Depression, evidenced by its length during FDR's interventionist policies.

WWII was followed by an economic boom because the government brought back thousands of productive workers, and only until 1946/1947 was the country released of its wartime obligations and government control over the economy.

How you define the end of the Depression is key to answering the question as to when it ended. If you define it by unemployment, then of course the answer would be WWII; but employment is not inherently productive, and employment to destroy assets and people is certainly not productive.

In sum, when the troops came home, they went to work, produced things, and the economy recovered.

Comparing us to Denmark is a good idea, mostly because it sheds light on the complex nature of existing in a society such as ours. I surely cannot speak for the founding fathers, but my hunch is they had a sense of where things would go because of their ethic of freedom and desire to see people immigrate (emigrate?) here. The Constitution was written so that the states would make the vast majority of the decisions about what is good for its people, therefore (theoretically) making it easier to have government do what little it can to improve society. Today, however, we have a huge federal government imposing itself into the states' business where it has no Constitutional authority. Education and health care are simply two of those areas.

"Will we do nothing, hang on to our possessions, and go away sad, leaving health care unreformed and the poor uncared for?"

Yes, and many will not even go away sad.

Things will not change at least until two things happen: a change in national priorities away from endless war and the number of people lacking health care becomes a majority, in just the same way it takes to elect a President.

First there needs to be a commonly accepted end and then the requisite means to achieve it. Neither the consensus nor the means currently exist.

Unfortunately, for a long time warfare and militarism have been seen as key to prosperity. The Great Depression was ended by the conflagration of mass killing that was World War II. In 1950, the national security state was founded with one of its precepts being that the vast expenditure of militarism would not lead to bankruptcy but leverage and multiply prosperity. Today, we have huge and unsustainable expenditures by our military-industrial-congressional complex. The conundrum is that in a time of generationally unheard of unemployment that continues to rise, there is no pain-free way to beat swords into ploughshares, even if one could get agreement across the board, which cannot currently occur. Doing so would result in politically unsustainable rises in unemployment and poverty. There is literally no industrial recovery to easily put people to work to generate the income necessary to pay for a fair and just health care system.

The problems are large, daunting and currently insoluble given the circumstances and the various political and financial interests involved.

Suffering, disease, and death are our common lot. They ought to be dealt with as our common problem... A construal of the common good as the freedom of consumers to get what they want, indifferent to the fate of others, is a cheap substitute for the real thing.

This sounds really nice and attractive, yet it is nothing more than an appeal to use the term "common good" to advocate more social control by one group of persons over that of the rest of society. Or, at least, that is often the justification for such power-over solutions.

Those who advocate for freedom cherish the rights of the individual, and advocate liberty because it is to be a given in society. "Indifference to the fate of others" is a personal issue (sin?), and is no more part of a philosophy of liberty and human rights than air density is to the clarity of my car's windshield (physicists please correct me). What is indeed a cheap substitute is not freedom over common good, but a definition of common good that essentially abrogates the rights of the egg in order to make an omelette.

We see how open the rich young ruler was to what Jesus said!

Adam Smith might commiserate with former Fed chairman Greenspan, who said he failed to realize that the wealthy wouldn't restrain themselves, after the recent debacles he had done nothing to resist.

But that simply begs the question, "Why couldn't they restrain themselves?" Greenspan's own policies of monetary expansion and easy credit should be an obvious answer to that question. When George W. Bush said, "Wall Street got drunk," nobody bothered to ask who provided the alcohol because the scapegoat was already chosen.

Wall Street certainly was responsible for its own actions. But that doesn't negate the responsibility of the government to protect the principles of sound money and banking, which it did not do.

"Smith's notion of empathy and fellow feeling was one that expressed itself through private acts of charity at least as much as through government."

That's true, LV, but Smith did acknowledge that there are services that only the government was capable of providing, since it was not in the nature of the free market to supply them. These included, famously, public education. Why not public health care? Neff is absolutely correct that the situation says more about our lack of a national belief in the common good.

It's a lot easier if you live in Denmark, where everybody is more or less Danish, to believe in the common good as something that affects us all. For all the advantages of our multi-cultural society, this is one thing we seem to have lost.

The enormous waste of unproductive activity did prolong the Great Depression, evidenced by its length during FDR's interventionist policies.

WWII was followed by an economic boom because the government brought back thousands of productive workers, and only until 1946/1947 was the country released of its wartime obligations and government control over the economy.

How you define the end of the Depression is key to answering the question as to when it ended. If you define it by unemployment, then of course the answer would be WWII; but employment is not inherently productive, and employment to destroy assets and people is certainly not productive.

In sum, when the troops came home, they went to work, produced things, and the economy recovered.

"How you define the end of the Depression is key...
If you define it by unemployment, then of course the answer would be WWII; but employment is not inherently productive, and employment to destroy assets and people is certainly not productive."

This explains exactly why Wall Street is exuberant about a recovery that still has millions losing jobs, having pay reduced, and the number growing ever greater and according to the same folks won't begin to recover until 2017. This reduces their labor costs, allowing them to become more efficient at keeping more of the overall financial resources to themselves.

I was an executive at a Fortune 500 company. There was enormous waste in the various V-P's departmental capital budgets, but no one wanted to reduce it for the size of those budgets was a measure of each exec's clout. On the other hand, we sought to eliminate as many employees as we possibly could, via outsourcing and offshoring. However, the corporation's overall expenditure on pay did not decrease, because the executives all absorbed the savings into their own remuneration. Needless to say, this "Standard Operating Procedure" did not make it into the corporation's high-minded statements in employee handbooks.

Now, you can say that what moral compulsion says that employees in America are more worthy of having work than those in authoritarian countries where there are no labor standards?

There should be no moral claim that Americans are more worthy than others. But the intention of employers is not to be moral, but to treat a labor force as a mere commodity, to pay as little for as possible, realizing that in this country it's not possible to pay them as little without benefits as they can there. Of course, eventually, the workers of this country may become sufficiently desperate by being pitted against the bottom that wages here will be competitive and leveled. This certainly is not a problem that management or investors worry about at all. Quite frankly, a situation where they remain well-off while most others do not, is not something that they care about. They are for themselves and use the considerable resources available to cosset themselves in that circumstance.

I really don't care how much this is supposed to be natural; it's evil. It is really just more "Am I my brother's keeper?" avoidance of responsibility. Not caring whether others live or die, because the employment system they have become dependent upon moves opportunities to elsewhere because it's more profitable to you personally, is tantamount to having murder in your heart.

Wall Street certainly was responsible for its own actions. But that doesn't negate the responsibility of the government to protect the principles of sound money and banking, which it did not do.

One of the factors the article doesn't deal with is the issue of voluntary acts for the common good. Many Americans don't feel that the government, with all of its rules and regulations, will be the best institution to act for the common good. My first instinct is to want to contribute to my church, to othere private institutions to act or provide for the common good. I don't haefv a feeling of "I've got mine, screw the others!" Instead, I h cve a feeling that if my taxes get raised, I'll have little if any control over how my raised taxes get spent.

Much of this has to deal with the endless war-making that our government (both during Repub and Dem administraions) has been engaging in. France, England, Canada, Switzerland, and otehr countries don't pour thousands of troops and munitions into overseas wars.

If the U.S. weren't so engaged in trying to perform as the Morality Thought Police of the World, we could put into place a health plan that would insure that no one would go without health care do to lack of funds. Either we could lower taxes to such an extent taht people could afford health care, or else we could keep taes the same but spend the revenue on health care rather than on sending troops and munitions overseas.

Come to think of it, the rationale used to send troops all over the world usually consists of "it's for the common good, to fight terrorism (or communism or fascism or whatever). It's as if many people in the U.S. don't mind having their tax money taken involuntarily from them to spend on overseas military ventures. But not for taking care of our own through some sort of univerrsal health plan -- either private (by reducing taxes or allowing for 100% tax exempt health savings accounts of unlimited size) or public (using tax revenue to implement some sort of puboic health plan.

"The government's only method of action is violence, even if it is padded by all sorts of other things. Privately-held companies, if they are not already protected by the government, would truly be accountable to "the people" because they would simply go out of business if they do not provide a good or service that the people wanted."

That used to be true. However, with the development of what Eisenhower so aptly named, "the military-industrial complex," government has handed over the force option to certain cartels of enterprises that are supposed to be private.

Fast-fowarding to today: I just found out on a TV show last night that health insurance companies are exempt from any of the anti-trust provisions of law. So it's perfectly legal for health insurance companies to form a monopoly cartel and fix the prices. With this system of a health insurance monpoly cartel, there is no free market, there is no competition -- and therefore, no capitalism. I've heard talk about legislation to revoke the anti-trust exemption for health insurance companies. I wonder if this legislation would go any further than the proposed legislation to revoke major league baseball's anti-trust exemption.

There is also the more recent concept of companies "too big to fail" so they have to be bailed out by taxpayer money. Were health insurance companies made exempt from anti-trust laws because of this concept?

The free market works if we have a free market. Which we don't in this day and age.

One of the factors the article doesn't deal with is the issue of voluntary acts for the common good. Many Americans don't feel that the government, with all of its rules and regulations, will be the best institution to act for the common good. My first instinct is to want to contribute to my church, to othere private institutions to act or provide for the common good. I don't haefv a feeling of "I've got mine, screw the others!" Instead, I h cve a feeling that if my taxes get raised, I'll have little if any control over how my raised taxes get spent.

Much of this has to deal with the endless war-making that our government (both during Repub and Dem administraions) has been engaging in. France, England, Canada, Switzerland, and otehr countries don't pour thousands of troops and munitions into overseas wars.

If the U.S. weren't so engaged in trying to perform as the Morality Thought Police of the World, we could put into place a health plan that would insure that no one would go without health care do to lack of funds. Either we could lower taxes to such an extent taht people could afford health care, or else we could keep taes the same but spend the revenue on health care rather than on sending troops and munitions overseas.

Come to think of it, the rationale used to send troops all over the world usually consists of "it's for the common good, to fight terrorism (or communism or fascism or whatever). It's as if many people in the U.S. don't mind having their tax money taken involuntarily from them to spend on overseas military ventures. But not for taking care of our own through some sort of univerrsal health plan -- either private (by reducing taxes or allowing for 100% tax exempt health savings accounts of unlimited size) or public (using tax revenue to implement some sort of puboic health plan.

"The government's only method of action is violence, even if it is padded by all sorts of other things. Privately-held companies, if they are not already protected by the government, would truly be accountable to "the people" because they would simply go out of business if they do not provide a good or service that the people wanted."

That used to be true. However, with the development of what Eisenhower so aptly named, "the military-industrial complex," government has handed over the force option to certain cartels of enterprises that are supposed to be private.

Fast-fowarding to today: I just found out on a TV show last night that health insurance companies are exempt from any of the anti-trust provisions of law. So it's perfectly legal for health insurance companies to form a monopoly cartel and fix the prices. With this system of a health insurance monpoly cartel, there is no free market, there is no competition -- and therefore, no capitalism. I've heard talk about legislation to revoke the anti-trust exemption for health insurance companies. I wonder if this legislation would go any further than the proposed legislation to revoke major league baseball's anti-trust exemption.

There is also the more recent concept of companies "too big to fail" so they have to be bailed out by taxpayer money. Were health insurance companies made exempt from anti-trust laws because of this concept?

The free market works if we have a free market. Which we don't in this day and age.