Health care and the communism of the welfare state

April 14th, 2011  |  Published in Politics, Socialism

So it turns out that Matt Yglesias advocates replacing Medicare with cash grants to senior citizens. Tyler Cowen agrees from a libertarian perspective, but suggests this be presented as an alternative to traditional medicare rather than forced on everyone.

Cowen cites Paul Krugman’s comment about government-provided healthcare, that “what would terrify the right . . . is the likelihood that genuine socialized medicine would actually win that competition” with private insurance. Cowen responds that “What would terrify the left . . . is the likelihood that genuine privatized cash would actually win that competition.” This strikes me as a case of the common political fallacy where the motivations of one’s political opponents are assumed to be the inverse of one’s own: if conservatives are in favor of less government, the left must be in favor of more government. But this isn’t very plausible; most liberals and leftists that I’m aware (including me) see government as a means of achieving social justice and equality, not as an end in itself.

In general, I’m very much in favor of doing redistribution by just handing people unconditional cash rather than subjecting them to bureaucratic tests and restrictions. In the specific case of health care, however, I’m not persuaded. This is not because I think government health care is inherently desirable, but because I think just giving people money to purchase their own health care violates the communist principle that underpins social rights in the welfare state.

What does it mean to say that social rights are communist, with a small “c”? Only that they are based on the principle of from each according to ability, to each according to need. In a capitalist society with an unequal distribution of income, “ability” becomes “ability to pay”. This principle, that contributions to the welfare state should be proportional to income, is well established– although in practice it is of course deeply contested. What is more difficult is determining what qualifies as “need”.

The simplest way to deal with this is to say that the state should be neutral about what specific things individuals “need” to live a decent life, and should instead just give everyone the means to procure whatever they view as their basic needs–in other words, we should just give everyone money. This is the principle behind the Basic Income, which is based on ensuring that everyone in society receives some baseline income irrespective of work and which is something that I strongly support as a long-term goal.

However, simply giving everyone an equal amount of money is a solution that breaks down in cases where, for reasons that are basically outside the control of individuals, needs are very unequally distributed. And health care is the pre-eminent case of this. Some people simply require more health care than others, whether because they happen to be genetically predisposed to illness, or because they get hurt in an accident, or because they get cancer, or because they happen to be a woman.

This is why it makes sense for Medicare to be organized the way it is: from each according to their ability to pay (though this principle is compromised because not all income is subject to Medicare taxes), and to each according to their need for health care services. Setting things up this way creates political and policy problems, of course, because someone has to decide what counts as a health care “need”. Hence all the debates we’ve been having about Cadillac health plans, comparative effectiveness research, death panels, etc. Moreover, there will inevitably be a struggle to define just which health conditions are truly involuntary, and which reflect individual decisions regarding, e.g., diet and exercise.

But handing people checks is no substitute at all. If you just hand people money and tell them “go buy some health care”, you’re doing an injustice to those who have higher health care costs through no fault of their own. If you tell them to “go buy some health insurance” instead, then you either create a market where insurers will only take healthy applicants, or you go in the direction of mandates on insurers to accept people and mandates on individuals to buy insurance. At that point, you’re basically back to guaranteeing people access to the health care they need, rather than telling them to buy as much health care as they want.

Things like health care are a challenge for the way I like to think about the welfare state. My preference is for a kind of communist-libertarian synthesis in which we are all guaranteed substantive equality without requiring the state to micro-manage our decisions. The best way to do that is through simple, unconditioned transfers like Basic Income. However, such schemes will always be complicated by the ways in which needs are substantively and quantitatively unequal, and thus formal equality of income results in substantive inequality of condition. To deal with health and illness is to deal with the biological level of human existence in a way that leftists are often somewhat reluctant to do. From a Marxist perspective, you can look at this the way Sebastiano Timpanaro does:

Marxists put themselves in a scientifically and polemically weak position if, after rejecting the idealist arguments which claim to show that the only reality is that of the Spirit and that cultural facts are in no way dependent on economic structures, they then borrow the same arguments to deny the dependence of man on nature.

The position of the contemporary Marxist seems at times like that of a person living on the first floor of a house, who turns to the tenant of the second floor and says: ‘You think you’re independent, that you support yourself by yourself ? You’re wrong! Your apartment stands only because it is supported on mine, and if mine collapses, yours will too’; and on the other hand to the ground floor tenant: ‘What are you pretending? That you support and condition me? What a wretched illusion!’ . . .

To maintain that, since the ‘biological’ is always presented to us as mediated by the ‘social’, the ‘biological’ is nothing and the ‘social’ is everything, would once again be idealist sophistry. . . .

. . . it must be added that although the biological level has virtually no importance in determining traits distinguishing large human groups (there is, for example, no correlation between membership of a certain race and the possession of certain intellectual or moral gifts), it does again have a conspicuous weight in the determination of individual characteristics. Humanity is not made up of individuals who are all equal in psycho-physical constitution, differentiated only by the social environment in which they happen to find themselves.

Recognition of these brute physical facts of existence forces us to confront the complex texture of human needs. Thus while the formal economic equality signified by the basic income is an important general principle, it must be supplemented by direct provision of services in areas like health care, where needs are seriously unequal. This is, among other things, something that differentiates the left-wing and Marxist-influenced conception of basic income from the right-wing version propounded by someone like Charles Murray.

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