What is a Progressive?
A professor at one of our leading universities teaches a course in health policy and decided to assign my book, Priceless, to his class. He also contacted some prominent “left-of-center” health economists to see if he could balance my book with something from the other side. Here was his query:
People like Peter Orszag and Uwe Reinhardt have said that even though they don’t agree with everything in Goodman’s book, it is sound economics and definitely a book that should be read. Is there a left-of-center book that is like Goodman’s — one that is economically defensible, but one that scholars like Goodman, Mark Pauly and Steve Perente would admit are worth reading?
The answer was “no.” There is no such book.
I find this rather amazing. It is no secret that 99.9% of the health policy community is liberal — or if you like, “progressive.” So why is there no book describing a liberal approach to health policy?
As I began to reflect on that fact, it occurred to me that this phenomenon goes way beyond health care. Milton Friedman’s Capitalism and Freedom is a classic example of using economic analysis to make the case for a free economy. In it, Friedman argues for school vouchers, a flat tax, an end to occupational licensing, private savings rather than Social Security, a monetary rule, etc. Is there any comparable book on the left, using economics to defend liberal institutions against these reforms? I believe the answer is “no.”
Just what the truth is
I can’t say any more.
Let’s put this a different way. Given that liberalism is the dominant political ideology and given that it largely replaced 19th century classical liberalism, is there a place I can go to find why the proponents think it’s so much better than the ideology it replaced? If the answer is “no,” why is that?
The answer, I believe, is that liberalism is not an ideology at all; it is a sociology. The same may be said of conservatism. (Incidentally, Friedman did not call himself a “conservative;” he called himself a “classical liberal.”) I’ll save the conservatives for another day.
An ideology is a set of ideas that cohere. Socialism is an ideology. So is libertarianism. Suppose I told you that socialists believe the government should nationalize the steel industry and the auto industry. You would have no difficulty inferring what their position is on nationalizing the airline industry. Right? Suppose I told you that libertarians believe in a free market for tinker toys and ham sandwiches. You would have no difficulty inferring that they also believe in a free market for Rubik’s Cubes.
Sociologies are different. They represent a set of ideas that are often incoherent. These ideas are likely to come together not because of reason, but because of history or happenstance. Not only do the ideas not cohere, they may be completely contradictory.
Take the issue of preschool education ― forcefully endorsed by the president the other night. As David Brooks explained, the issue is really about allowing poor children to escape from the anti-education atmosphere of their homes to a place that will at least give them a chance to learn. Given a person’s position on preschool education for four year olds, shouldn’t you be able to predict how he will think about allowing poor six- and seven-year-old children to escape from bad schools? As it turns out you can’t.
Brooks explains the preschool issue this way:
This is rude to say, but here’s what this is about: Millions of parents don’t have the means, the skill or, in some cases, the interest in building their children’s future. Early childhood education is about building structures so both parents and children learn practical life skills. It’s about getting kids from disorganized homes into rooms with kids from organized homes so good habits will rub off. It’s about instilling achievement values where they are absent.
Okay, so how is that different from the situation faced by slightly older children trapped in lousy schools where teachers couldn’t care less what they learn? It isn’t. Yet many of those who favor preschool education (a new and expensive entitlement) are reliable opponents of vouchers or charter schools or just about any other escape route that offends the teacher’s unions. And that includes President Obama.
Then there is the issue of the minimum wage. (See Greg Mankiw’s summary of the economics literature here.) The minimum wage does almost nothing to relieve poverty. That’s because almost no one who is a head of household is earning the minimum wage for any length of time. However, I think it is fairly well-established that a higher minimum wage gives teenagers in above-average income households more pocket change, even as it closes off job opportunities for poor, minority teenagers. (The black teenage unemployment rate is about twice that of whites.) If you want to maximize job opportunities for low-income youngsters, as President Obama says he does, you certainly wouldn’t want a minimum wage standing between a minority youth and his first job. Yet creating that barrier and making it permanent is part of the Obama agenda for the labor market.
A related issue is public policy toward unions. There is no mystery about what a union is. It is an attempt to monopolize the supply of labor to employers. In most all cases, unions confer special (monopoly) status on workers who are solidly middle class, allowing them to seek above-market wages by closing off competition from those who earn less and have less. Yet encouraging labor unions is another core pillar of the Obama presidency.
Our federal deficit is almost totally caused by entitlement spending on the elderly. Our government routinely sends Social Security checks to billionaires and pays their medical bills to boot ― paid for in part by a 15.3% payroll tax imposed on the parents of the children to whom the president would like to provide preschool education.
The zip codes in America where people cash the largest Social Security checks are the very same zip codes where Medicare spends the most dollars on the average enrollee. And unlike the income tax, every worker pays the payroll tax ― no matter how poor. Yet these are the programs that President Obama resists reforming ― even as he rails on about how the rich aren’t contributing their fair share.
In health policy I have had personal experience trying to understand left-of-center thinking. In the 2008 election, John McCain offered by far the most progressive health plan. By that I mean it offered a much better deal to most below-average income families and it involved far more redistribution from high-income to low-income families than ObamaCare. (BTW, this isn’t even a close call.) However, you would never know these things reading an analysis of the McCain plan by Sherry Glied and her colleagues ― who somehow managed to convince themselves that the McCain plan was actually worse than the status quo!
Some readers will be quick to point out that the Democratic Party ― dating back to the days of Franklin Roosevelt ― consists of a coalition of interests and that winning elections requires satisfying each of those interests. Fair enough. But we are here talking about thinking, not winning elections.
Politicians will invariably search for some intellectual justification for what they do. Since their policies are incoherent, no ideology will serve their purpose. What they need is a sociology ― a way of thinking about the world that defends the indefensible ― espoused by intellectuals who will apologize for the mixed economy welfare state without any obvious sense of embarrassment.
For the Obama administration, that sociology is liberalism. Its adherents once called themselves “liberals.” Today, they are “progressives.”
Avoiding the coming debate over competing ideologies and FDR..
Congrats, move over Bible.. when it comes to Obamacare, you’ve written THE book.
In my opinion, the reason most liberal economic policies lack a coherent defense in a well-reasoned framework of economic analysis is very simple: those policies are contradicted by economic science. In the absence of significant market failures, the market does a fine job of allocating resources and products. We have Nobel-prize winning theorems about that. Government intervention not only is unnecessary, it is almost certainly harmful. Liberalism is all about the government directing or even running everything, so a science that says such intervention is bad, not good, is not going to provide an analytical framework for justifying liberal policies.
A major exception to the foregoing, of course, is environmental policy. Externalities such as air and water pollution really do exist and, because they are market failures, they cannot be fixed by the market itself but instead require government intervention. That is not to say that the government in reality intervenes in the correct way, but at least in principle government intervention to correct externalities makes economic sense.
Health policies and most other liberal economic policies do not enjoy the same consistency with economic science. That is why I keep asking Uwe Reinhart to point out the market failures that justify the kind of socialized medicine he favors and why he never points them out: there are no such failures of that have been shown to be of any empirically significant magnitude. Similarly, there is no labor market failure justifying the minimum wage, no market failure justifying tax credits for college education, etc., etc.
So the reason there is no book like Capitalism and Freedom on the political left is that no such book can be written.
There is a lot of secrecy not just in ammunition purchases from the government but lots of other issues that date back decades and past presidencies. It is not just an Obama administration issue, it is an issue with the way we’ve been allowing the federal government to sway the media to divert certain issues from becoming public awareness.
I haven’t done the adequate research to really deem there being no other worthy book with a more Keynesian view on health care economics. However, I would expect there being plenty of sociology and political science books that are respected in their fields addressing these topics. With numbers though, I believe anything can be reasoned through and backed up, so I’m sure such a book exists or can be created. However, an interdisciplinary study I think would end up being more adequate for address policy issues.
I think you are being polite calling it sociology. It isn’t even that. Any “ology” implies the study of something. Here there is no study of anything. It is raw politics, plain and simple. It is giveaways to constituencies. Most of the policies are adopted in spite of a wealth of evidence that they will not, and can not, work to accomplish the stated goals. They do, however, enrich the chosen few on the way to failure.
Nice post.
What passes for social policy often boils down to mere redistribution for the purpose of vote buying. Much of the Democratic establishment is being rewarded with jobs and the resources to survive in their preferred field. If you don’t want to work in corporate America, what are your opportunities? There is local, state and federal government. There are educational and non-profit organizations. These all rely on spending OPM — other peoples’ money. There are many bad policies that Democratic Members of Congress probably realize are bad. But they support them because their constituent base needs the money to survive. Notice I’ve talked about Democrats, but Republicans are almost as bad in their own way.
Unfortunately, this is an incomplete analysis. Early childhood education isn’t about educating anyone or providing opportunity for those who otherwise wouldn’thave it, because, specifically, the call is for UNIVERSAL pre-school. It is also irrelevant to those who propose it that it doesn’t work to close achievement gaps in education. The point is that government controls childhood indoctrination from the earlliest years, and gets to pay a lot more people to babysit on the government dime who are then voters who support leftist big government and vote Democratic. It’s all about political power. Remember, one of the 10 points of the Communist manifesto was that government educate (indoctrinate) children, to undermine the family. The point is the replacement of parents with government. The same with labor unions. The point is to enhance leftist control of power. Opposing and mis-representing McCains healthcare plan was simply to avoid getting outflanked to the left by a leftist Republican who seems to agree mostly with the leftist agenda of bigger government, regardless of his oft-confused rhetoric that utterly misrepresents his positions–but you have to forgive McCain because he just really doesn’t know what he is talking about. If you want incoherence, McCain and Obama are peas in a pod.
The term “Progressive” came to be a euphemism for s Stalinist in America in the first half of the 20th Century. When “liberal” became a bad word in the Reagan era, liberals began to call themselves ‘Progressives” again because of the historical amnesia of America. But it is a fit title for a nation led by one who is left of FDR and an avid endorser of unlimited government, who seems to believe the greatest threat to the Republic is the citizenry of America–at least the ones who have any cognizance of the US Constitution.
The myth that America is a “right of center” country is an absurdity, as both Democrats and Republicans embrace ever larger government. Democrats simply want to grow government a lot faster than Republicans, but they are both on the same track, which is the wrong one.
Great post John Goodman, and a fine dissection of an ideology and what you refer to as a sociology (although Scandlen has a point about the “study” thing).
But I would emphasize (and you noted briefly in the third to last paragraph of your post) that the overriding motivation of the politicians currently in power is to perpetuate that power and everything it means to them personally. This is how it is feasible for them to ignore the facts and logic that you have demonstrated in this piece.
If there is an “ideology” or even a “sociology” that is practiced by the current political power, it is one that believes the “intellectual” elite should always hold power over and protect the proletariat. As such, it is imperative the voting public be sedated with and hooked on various entitlement “drugs” in order to curry favor.
If we define “ideology” as “a set of ideas that cohere”, I think the “Progressive” concepts fit quite nicely if we recognize the actual aims and intentions of its proponents. The goal is to control the Great Unwashed, and if that entails lying and misrepresentation of reality that is part of the process to realize the goal. It’s all window dressing and smoke and mirrors for the useful idiots.
Nice post, good subject. How to explain the Progressive “ideology.” I agree with Greg that sociology is too generous a term. In my view the Progressive world view is mostly a set of values (rather than ideas) — communitarian (v. individualistic), egalitarian, a stress on “fairness” (rather than effectiveness), major emphasis on the normative, ‘what should be,’etc.. And the Progressives have a passionate view that only those who share their values should govern — and governing is one of their highest values, for it allows their values to be imposed on the whole society — thus leading to the ever great perfection of the human condition. To all of which the classical liberal says, “what are they thinking?!”
I asked a liberal and they said that “The Affluent Society” by John Kenneth Galbraith is a progressive counterpoint to Capitalism and Freedom.
” Is there any comparable book on the left, using economics to defend liberal institutions against these reforms? I believe the answer is “no.”
Well, you’re not looking to hard then. Are you kidding? Is this a Poe? You don’t think there are liberal economic textbooks, or polemical writing? Are you just covering your ears and going “nanananannanana”? Do you lack access to google? To amazon?
Googling “liberal” and “economics” one immediately finds, “Liberal Economics and Democracy: Keynes, Galbraith, Thurow, and Reich”, or a search at Amazon immdiately unveils Paul Krugman’s conscience of a liberal, a search for “progressive” and “economics” at amazon provides a few dozen relevant results.
Why don’t you try a minimal amount of diligence before declaring defeat and giving up?
You’re assuming the other side reads…
The problem is with the term “liberal”. As I understand the term, “liberal economics” means “conservative” or “libertarian.” At least the term “progressive” is merely self-serving, rather than misleading.
I suppose “conservative” can mean multiple things as well, but that’s another topic.
John,
This is amazing and should be broadly publicized!!!!
If I may, I know that the health care industry is not unionized, but still, it is highly monopolized. In many ways it is an inefficient system that is protected from market competition. This should change, yes?
I think when you become a sociologist, you are mostly unemployable in the private sector, and so, you tend to have a strong leaning for public programs to take care of you.
John,
Few individuals are better at explaining social dynamics and the market process at work than sociologists who understand micro and public choice economics. Sociologists think about social organization. Econ organizes their analysis and constrains them from much silliness, e.g., supporting such idiocies as rent control and minimum wages.
They comprise a small but not a null set. Consider James Coleman (Chicago) , Marion J. Levy, Jr. (Princeton), & Dan Chirot (U Washington). The last named produced a book, The Crisis of Leninism and the Decline of the Left, whose introduction is spectacularly good. Admittedly, these guys are either dead or old.
(And BTW, Gary Becker has a joint appointment with sociology.)
Since sociologists rarely consort with economists and seldom encounter reality checks on their visions (perhaps like economists who indulge in recreational mathematics), many suffer from culturally induced stupidity. This leads many others to discount the discipline too highly.
There really is some value lurking in the field of sociology. You will probably that Tom Wolfe, although his Yale Ph. D. is American Studies, not straight sociology, has far better insights on how the world works than 98.4% of the economists we know and admire.
Cheers!
John
PS May we post your piece?
You know, you’re right on the issues but this doesn’t carry any weight with the electorate. Any ideas on why “the people” are, well, resistant to this sort of thought?
Studebaker’s comments are right on point about big government as a jobs program for liberal arts grads.
However,Dr Goodman mischaracterizes the main point of Sherry Glied’s opposition to the McCain health care plan.
Read her piece again if you wish. Her main point was that McCain would have moved millions of workers into a very unrealiable individual insurance market.
I have sold individual insurance. Companies have practiced ruthless underwriting, bait and switch premiums, and unjust claims denials. For 60 years.
Republicans have shown no inclination toward serious federal regulation of individual health insurance. Until they do, liberal like Glied are correct to be suspicious.
Defenders of individual coverage like Mark Pauly and Richard Epstein have, in general, been covered by group policies all their adult lives.
Garrison Keillor once said that a liberal is a conservative who has been through treatment.
Health care is the same way.
Bob Hertz, The Health Care Crusade
@Bob Hertz
I too have been in the insurance business for longer than I would like to admit, and I can attest that there is “some” validity in your assessment of individual insurance. What you are not recognizing is that the world in which your stated shortcomings of individual health insurance would not exist if a “Coburn” style health reform were implemented. The healthcare system has always been designed for employer sponsored coverage, with all tax advantages and underwriting consideration concentrated on same.
If tax treatment were equalized underwriting advantages would follow. Put another way, the disadvantages of individual health insurance are the direct result of regulatory favoritism, not predatory insurance companies.
By the way, I have always found that “unjust claim denials” are usually better defined as application of contract provisions.
Frank, I agree with what you say about claims. A few small insurers do try and delay every claim, but that is the exception.
However I disagree that tax consideration is the key factor in making group coverage work better.
Large groups are just plain cheaper to cover. There is very little antiselection where only the sick persons choose coverage. Premiums are paid reliably every month on the due date in one check from a payroll service. Agent commissions are minimized. A large group can accept a new employee who is older and sicker without a large impact on premiums.
These factors would exist no matter what the tax treatment happened to be.
Ask anyone over 55 who has had to go from corporate group coverage to an individual policy. The point I took from the Glied article was that the McCain plan did nothing to protect this category of individuals.
I might also add that John McCain himself (who I admire) has been in group coverage his whole adult life also.
Bob, C’mon, to single out 55 year-olds who switch to individual for the first time is disingenuous.
I agree that there are some advantages to group coverage, but I think you overstate it.
— The employment group is already “underwriting” its members. It doesn’t hire people who are too sick to work.
— Broker commissions are lower, but these days with on-line buying that advantage should be greatly reduced.
— Part of the reason commissions are lower is because the employer is absorbing many of the administrative functions an agent does for individuals. The cost is still there but hidden in the HR department.
— Reliable premium payment is a big advantage, but one that can be mitigated by quarterly billing and/or EFTs.
But with all these advantages, why do they also need the tax advantage?
In fact, I argue that with a level playing field most of the problems with individual would go away.
— Strict underwriting happens because the pool of applicants is by definition high risk, either financially or medically. They are people who cannot get employer coverage. The individual market works like a residual market for employers. If the individual market consisted of average risk people, the cost of strict underwriting would not be justified.
And the advantages would be substantial
— Complete portability as you change jobs or have other life changes (unemployment, return to school, etc)
— Pick the benefits plan that best suits you, including the level of cost-sharing you are comfortable with.
Bob, I want to reiterate that individual health underwriting is most certainly a problem, and has been for as long as the individual product has been sold. That does not mean that individual health insurance as an option for coverage is inherently unworkable. Going further than the subject of unequal tax treatment, we can talk about risk pools and how re-insurance is managed, and its impact on medical underwriting. There are multitudes of ways to make individual health insurance viable as a market product if those of us in the benefits side of the business were allowed to make recommendations to politicians who actually want solutions rather than furtherance of political agendas.
The advantages to “group” insurance should not be risk based advantages. Rather (as Greg pointed out) they should merely be the convenience of pooling administrative and communication needs. In the big picture that is helpful but by no means exclusionary to other administrative and communication methodology.
One thing is certain and that is a “one size fits all” centrally planned solution is no solution at all.
Good points, Frank. This country is full of bad drivers, and any tickets they have ever received are certainly no secret to insurance companies……but there is virtually no public comment about market failure in auto insurance.
I suppose that is partly because most auto claims are manageable in dollar size. A company that insures a bad driver might pay $5000 more in claims for crashes….but a company that insures a future cancer victim might pay $1 million in claims.
Still and all, the auto insurance industry seems to handle this with a minimum of fuss.
Also, some conservative proponents of individual insurance have stalwartly supported government risk pools for the truly uninsurable. Since some states are extremely stingy about spending any money on these pools, the funding must be federal. My only complaint is that some conservatives were not explicit that this had to be done through federal income taxes.
Among the many mistakes of the ACA will be the mainstreaming of the persons in these pools today into the health care exchanges. Another cost explosion is coming.
Greg and Frank, I think that you do not sufficiently confront a major problem with individual health insurance……….
which is that premiums rise with age. The true cost of insurance is about 6 times higher for a male age 60 vs a male age 30. (The female cost trend is different due to maternity.)
In a purely private market, those older persons whose incomes do not rise will tend to drop their health insurance as premiums go up. (Unless they are in the middle of heart or cancer treatments.)
The net result is that the persons who need health insurance the most do not have it.
This result also occurs to varying degrees with term life insurance, disability insurance, and long term care insurance as well.
That is why we have social insurance, wherein a 90 year old pays the same premium for Medicare part B as a 65 year old.
I am open to different solutions for this problem with private insurance. Governmental regulation is certainly not the sole answer.
But I do pipe up on this blog and anywhere else when I feel that the problem is not being addressed.