The public option

Robert Reich (Bill Clinton's Secretary of Labor) gives us a bunch of good reasons to keep the public option part of health care reform. (You should read his blog to monitor both the sensibility and the ineffectuality of reformist capitalism.)

It's clearly in the interests of the people to have a public option. However it's not in the interests of the American Medical Association (i.e. physicians), Big Pharma, and the biggest insurance companies. Shocking news, I know.

It's in the interests of physicians to have tens of millions of working people locked out of health care. Without a public option health insurance will simply be too expensive for these people; any "mandates" that everyone must buy health insurance (similar to auto insurance mandates) will get watered down or ignored completely. A guy making $7.25/hour is not going to drop two weeks' pay on a monthly health insurance premium, whether he "has to" or not. A subsidized public option will put pressure the health care industry to lower costs and lower profits.

Theoretically, under capitalism, you would expect tens of millions of people who want health care and are willing and able to pay for it to constitute an untapped market: demand creates supply. Imperialist capitalism (the dominance of financial and monopoly capitalists) however, is as much or more against actual free market economics as the most doctrinaire Marxist. Truly free market economics brings the exchange value of every commodity, including health care, into equilibrium with its true cost, either by lowering the exchange value to the cost, or by raising the cost to the exchange value.

A truly free market is not in the interest of any owner of capital, except insofar as he wants his competitors subject to free markets. But when capitalists of some industry do not face competition, they have zero interest in free markets. Interests always trump "principles".

If some commodity is relatively scarce, i.e. demand exceeds supply, then the supplier can demand a price (exchange value) much higher than the cost, generating profits. Under free market economics, this gives other people an incentive to allocate more capital and labor to supplying that commodity, either lowering its price or raising its cost, thus reducing profits.

However, if a capitalist can somehow maintain the relative scarcity, by externally restricting the supply, then higher prices and higher profits can be maintained indefinitely. Relative scarcity, though, never distributes the scarcity evenly; instead, some people get a lot and others get nothing. If health care were distributed to everyone, then the price of health care would fall to what the poorest people were willing to pay (or what the people were willing to pay in taxes to provide the poorest with health care). There would no longer be a scarcity to prop up higher prices and higher profits. The capitalists who own the government will make damn sure this scarcity remains. They are no longer naive, as they were when Lyndon Johnson created Medicare — they know they can just buy more congressmen and senators, and the profits are so huge that money is no object — and they are facing no threat of revolution or severe civil unrest.

One ironic thing about the health care debate is that ordinary physicians themselves are participating in maintaining scarcity to prop up their own individual profits. But what they do not realize is that they work for a living (technically physicians are petty capitalists, since they necessarily own their own training, but petty capitalists face the same pressures as ordinary workers, and end up in the same place), and they require enormous amounts of external capital to work: not just their own training, but the equipment they use directly, drug development and manufacturing, and medical technology in general. As the computer programmers have discovered, the owners of the financial capital underlying all of this investment will eventually appropriate the physicians' surplus labor, either directly by lowering their pay or indirectly by raising the cost of education, insurance premiums, use of medical equipment, etc. They may be the last to go, but they will go: medicine isn't that difficult, and there are enough people desperate for even the lowest rung in the professional middle class to do the work for the lowest prices.

We will not see anything resembling universal health care from the Obama administration. We will see at best only a few token reforms. And when the next Republican administration and congress is elected, the physicians will be the next to get the shaft. Don't say I didn't warn you.