Posted on June 12, 2006

Kevin Drum and Uwe Reinhardt on social insurance


Washington Monthly
Political Animal

By Kevin Drum
June 11, 2006

THE S-WORD.…Ezra Klein, practicing for his career as a TV talking head, responds to a question about whether national healthcare is socialist

“We should stop running from that moniker. If we’re going to call what Canada, France, Germany, England, Japan, and essentially every - actually, not essentially, just every - other industrialized nation offers socialized health care, but they cover all of their citizens with better outcomes and lower costs than we do, then I’m happy to associate myself with that.”

OK, it was only a training session. But still. Can I suggest something a wee bit different?

“Socialist” is a scare word conservatives use when they’ve run out of serious arguments. But national healthcare isn’t socialism any more than Medicare is. It’s just a practical and efficient way of providing medical treatment for everyone in the country, the same way that interstate highways are a practical and efficient way of providing roads for everyone in the country.

The facts are simple: A well-designed national healthcare plan gives you greater choice of doctors, it’s less expensive than private insurance, it helps rein in spiraling costs, it keeps you covered even if you temporarily lose your job or have a preexisting condition, it helps out small companies that can’t afford to provide health coverage for their employees, it helps out big companies like GM and Ford that are nearly bankrupt because they do provide health coverage, and it covers everyone all the time.

And best of all, it gets rid of the bureaucratic hodgepodge we have now:
Medicare for the old, employer coverage for people who work for big companies, 50 different versions of Medicaid for the poor, emergency rooms for the destitute, and no coverage at all for people who are unlucky enough to work for Wal-Mart. It’s an expensive mess that drives doctors nuts and provides most of us with mediocre care.

Or something like that. In any case, the basic answer to “Is national healthcare socialist?” should always be no, not yes. We are not in favor of command economies, ownership of the means of production, or state control of doctors, and that’s what most people think of when you say “socialist.”

And that’s Kevin’s media training for the day.

-Kevin Drum

Uwe E. Reinhardt, Ph.D., James Madison Professor of Political Economy, Princeton University, responds:

“Socialism” is an arrangement under which the means of production are owned by the state. Government-run health insurance is not “socialism,”and only an ignoramus would call it that. Rather, government-run health insurance is a form of “social insurance,” that can be coupled with privately owned for-profit or not-for-profit health care delivery systems.

Conservative critics of “social insurance” often forget that they benefit from many other forms of “social insurance” — e.g., the principle of limited liability of shareholders, which is the rockbed of capitalism. In a real sense, the national defense system also is a form of “social insurance” against threats from abroad. People in the farmbelt may never rail against “socialized medicine,” because so much of their income is protected by another form of social insurance, agricultural price supports and import restrictions (like the sugar quota.)

In fact, none other than Hank Greenberg, former CEO of the huge AIG insurance company, asked for government help to protect insurance companies from catastrophic losses such as those following 9/11. That, too, is “social insurance.”

I have gotten tired of ignoramuses who call social insurance “socialism,”
all the while being beneficiaries of it. One has the right to argue with them quite aggressively and ad hominem (or ad feminam), if the case fits.

Republican Governors think nothing of going to Washington, hat in hand, demanding federal emergency funds after a natural disaster has struck their state. Well, breast cancer or severe neonatal illness is a natural disaster too, and there is nothing socialist about an individual in Texas or Mississippi asking her fellow Americans for helping financially with coping with that natural disaster as well.

Perhaps I am wrong, of course, in my assumption that this is a nation, and not just a bunch of people sharing a geography, and that the “national” flag we may not burn actually means something. I grew up in nations — Germany and Canada — where the idea of nationhood and the national flag do mean something (even though there one may burn the flags, I believe). I haven’t a clue what Americans actually think of that big blob of land south of Canada and north of Mexico.

-Uwe Reinhardt