The Roles of Gubment: Predator Protection

To start wrapping things up for now on the health insurance reform bill--the first of two observations on the roles of government.

In terms of what it does best for American society, government has two basic functions: it does for the country what individuals and smaller groups cannot do for themselves, and it protects individuals, groups within the society, and the society as a whole, when no other institution or entity can (or will.)

Individuals, groups and other institutions benefit from both functions, including businesses. Without government building and maintaining infrastructure--the roads, bridges, ports etc.--or performing necessary support and regulatory functions to keep vital institutions running--businesses would not prosper. Without government setting the rules that all businesses must adhere to, the competitive necessity would sooner or later drive them all into helpless destruction and self-destruction. When not playing political games, businesses know this, and they look to government to fulfill both functions.

But government also protects citizens from the harmful effects of predatory capitalism. That capitalism is predatory isn't controversial; using different words perhaps, it's capitalism's proudest boast. Dog eat dog. Survival of the fittest--it's no wonder that Darwin got his first and most enthusiastic hearing among American robber barons and other 19th century capitalists, who embraced especially the Herbert Spencer interpretation and its application to society known as Social Darwinism.

The mechanism of predatory capitalism is simple, and there's no better recent example than health insurers. Thanks in part to the 1990s debate on health insurance and the ultimate failure of the Clinton plan, new and old health insurance companies coopted the new and apparently efficient system known as HMOs--Health Maintenance Organizations. At first a thousand such flowers bloomed, but not for long. The logic of predatory capitalism is for small companies to merge until they become big enough to simple absorb smaller companies--the big fish eat the little fish, until there are only a few fish in the sea, or in the case of health insurers, just one or two fish in each lake (or state.)

At first, in order to grow and establish market share, these companies offered lots of services at affordable rates. But as they ate up the competition, they took tighter control of services, cut costs while raising prices. That's the privilege of monopoly, and monopoly is the natural goal of predatory capitalism.

Only government can protect people against the excesses of predatory capitalism. It's a dynamic and messy process most of the time. Government bureaucracies commit their own excesses, but at least government has mechanisms of accountability, like courts and elections. Health insurers are the latest monopolies to operate outside and above the law, in the ways that counted most. They are in the best business in the world--they charge money for services they refuse to render. Well, the best outside war zones: outfits like Blackwater and Halliburton that steal billions, as well as arms manufacturers who can count on repeat customers since their products are immediately destroyed.

I saw President Kennedy in 1962 speak with disgust that the U.S. was 30 years behind England and years behind most of Europe in providing health care for its citizens. But maybe even more to the point, such is the power of predatory capitalism in the U.S.--economic, political and power over the imagination--that we've actually allowed a predatory capitalist business to traffic in human life and suffering.

So maybe this law doesn't do enough to see that decent health care is provided to all Americans, absent at least a public option. But it does attempt to de-fang the predators known as insurance companies, and offer protection to citizens. And the one policy that did get bipartisan support--ending their anti-trust exemption--may turn out to be a pretty good tool as well.