Statism, insurance, and dependency

I'm back! I apologize for my absence; a combination of personal business, actual work, and my old motherboard's treacherous decision to stop working have been keeping me away from this blog for much too long.

One of the things I've been following in the news is the controversy over requiring employer-provided health insurance policies to cover birth control pills in the face of objections from employers who are morally opposed to birth control, most notably the Catholic Church and other Catholic institutions. I am opposed to laws that make an insurance policy illegal because it doesn't cover everything the government thinks it ought to, so I'm on the anti-mandate's side as far as the substantive policy question of whether or not employer-provided insurance should be required to include contraception is concerned.

My reasons for that belief are already well-expressed in Sheldon Richman's articles on the subject at The Freeman here and here, so I'll not reinvent that wheel. There something else about this controversy worth commenting on, however.

One of the most conspicuous elements of the whole controversy is the conflation of government- mandated provision of birth control by insurance companies with access to birth control, and the lack of such a mandate with actively preventing- or allowing employers to actively prevent- women from acquiring it. (This article at Salon is nicely representative.) This is not surprising, since many people have an extremely state-focused conception of human life and society that elides the difference between not having something provided by the government and forcibly depriving people of it. In this case, however, I think there's an additional factor at work fueling the conflation. Namely, what do Americans typically mean when they talk about health “insurance?”

The purpose of insurance is, or at least was, to reduce risk- you pay a relatively small, predictable cost on a regular basis to protect yourself from the financial consequences of large, unpredictable losses.

In purely dollar terms, this is a losing proposition, since over a lifetime you're much more likely to pay more money than you receive. However, certainty and predictability have value in themselves. Eliminating or at least reducing the risk of sudden, unpredictable losses make it easier to form and execute long-range plans, and of course there are also psychological benefits. Additionally, the declining marginal utility of money means that the difference in lost well-being between a small financial loss and a large one can be many times greater than the difference in dollars.

Now, what's conspicuous when considering birth control pills in light of the above is that it just doesn't make much sense for them to be covered by insurance, especially if they're actually being used for birth control. They are a regular, predictable, and (compared to treatment of many serious illnesses or injuries) relatively minor cost, and the condition they are most commonly used for is highly predictable- being a sexually active female of childbearing age isn't an exotic disease.

That's not unique to birth control, by any means; many medical goods and services covered by insurance share these qualities. There's no risk of financial loss being managed- bringing insurance into the picture just adds an extra pair of hands that the consumer's money passes through before she gets the product. (Or, if the cost is not ultimately borne by the consumer, simply gives a pseudomarket veneer to what is essentially a government welfare benefit.)

This outcome is not the product of a free market, and would almost certainly not occur in one. There are tax benefits to paying employees part of their compensation and health insurance instead of money, so many employers do precisely that. Wages that travel from the employer to the employee to the healthcare provider are taxed, while wages that travel from the employer to the employee to the employer's health insurance company to the healthcare provider aren't, so it makes makes sense to pay for things that aren't really insurable through insurance companies despite the cost of adding a middleman. Some jurisdictions push this further by actually punishing employers above a certain size that don't compensate their employees in this fashion. Once the recent health "reform" legislation goes into full effect, that will become the case nationwide.

Further, every state has a list of things of things that an insurance policy must cover, many of them quite extensive, and policies without them are illegal, so even if you are buying insurance yourself an insurance policy that is limited to actual insurance rather than serving as a middleman for regular healthcare expenses isn't an option. Since insurance coverage is not the magical money fountain many people seem to think it is, this tends to make it more expensive.

And meanwhile, the huge amount of healthcare consumption filtered through third parties combined with huge amount of medical spending paid for by government benefits drives up consumption and reduces sensitivity to cost- and thus incentives to control those costs- by weakening the link between how much a person consumes and how much it cost them. Which makes health care in general more expensive and the cost of treatment for serious illnesses or injuries even more potentially ruinous for the uninsured.

Those are some of the economic effects government intervention has had on healthcare in the United States, which many people have previously pointed out. What doesn't get mentioned much are the cultural effects, which I think are being demonstrated in the birth control mandate controversy. (And in many debates over health care in this country in general.)

In short, health insurance is now seen not as a way of managing the risk of unexpected medical expenses, or even as a way of paying for medical expenses in general, but as the thing all medical care comes from. Insurance is so pervasive in the healthcare system that the two are commonly seen as inseparable, or not even seen as distinct concepts at all. This pervades political arguments for the subject, with having “insurance” routinely treated as interchangeable with having access to medical care.

(Now, if you were to ask someone who thinks this way, point-blank, if it's possible to buy medical care directly, they'll no doubt agree that it is. But being aware of a fact when your attention is specifically called to it is not the same thing as having that fact in mind whenever it's relevant. Similarly, treatment and insurance are implicitly acknowledged as not being equivalent in arguments over the recently passed requirement that everyone buy health insurance, where the tens of of millions of poor souls who don't have proper health care because they can't afford insurance suddenly are able to afford it, and must be compelled to buy it so that they can't continue to leech off of the rest of the country by selfishly dumping the cost of their medical care- which they apparently have been getting, after all- onto the healthcare system. However, the inconsistency is almost never pointed out by anyone in the mainstream, and that bit of doublethink is largely allowed to remain safely sealed away in its own little bubble.)

In this light, the often bizarrely overwrought response to the idea of letting employers who provide insurance choose whether or not that insurance includes contraception- claims that this would interfere with or violate a woman's right to birth control, or that it would mean giving employers control of the medical and reproductive decisions of their female employees, or is somehow analogous to laws outlawing (as opposed to merely not requiring) insurance provision of drugs like Viagra- start to make a good deal more sense. After all, most Americans receive health insurance through their employer, something the government actively encourages and something the typical liberal/progressive supporter of the contraceptive mandate for insurance policies thinks the government should encourage, at least as a next-best solution if single-payer isn't on the table. (If I had a dime for every progressive complaint about how awful it is that this or that employer pays its employees with money rather than a combination of money and insurance benefits, I'd probably have enough money to make this whole issue moot by building my own pharmaceutical plant and just giving birth control pills away.)

In that context, if health insurance and access to healthcare are indeed one and the same, allowing employers to refuse to provide coverage for birth control actually is more or less equivalent to letting employers decide whether female employees are allowed to use contraception or not, and the claim that opposing mandatory birth control coverage is an attack on women's sexual and reproductive autonomy becomes much more defensible. Thus, while I still think much of the rhetoric to that effect is a matter of specifically political assumptions- that something not being done by government equals it not being done, period- a lot of it is probably cultural, and is the product of assumptions that are common among the public in general. Decade after decade, more and more people have been conditioned to think of health care as something that always comes through some sort of bureaucracy, either government or corporate, that stands between the consumers and producers of it, which the consumers of it are often utterly dependent on- and it gets harder and harder for people to imagine getting it any other way.

Kick him when he's down

There's a very interesting article by Art Carden and Steven Horwitz at The Freeman Online called "Eugenics: Progressivism’s Ultimate Social Engineering" about Progressive Era legislation and the arguments made in favor of it by its original supporters, some of whom supported economic statism not because they didn't understand what its real effects would be but precisely because they did. As Carden and Horwitz put it it:

In other words, what we today think of as the unintended consequences of laws supported by today’s well-meaning but economically uninformed Progressives were actually the intended goals of some of their intellectual ancestors a century ago. Early Progressive economists understood the effects of these interventions, but they thought those effects were desirable.

For instance, one of the principle arguments against minimum wage laws is that increasing the minimum wage will make workers whose productivity is not high enough to make them worth hiring at the new minimum unemployable. Thus, they are deprived of both their wages and the opportunity to gain skills and experience that might help them improve their lot. The victims will be disproportionately found among those who are already at a disadvantage, which opponents of minimum wage laws regard as a bad thing- but not everyone has agreed.

As you probably already know,  many leading Progressives were eugenicists. (As were as many of their close cousins, such as Fabian socialists in Great Britain. For the purposes of this post, I'm using "Progressive" in a somewhat broadened sense so that I don't have to write "anti-market, anti-individualist, nominally democratic advocates of extensive government economic planning and social engineering controlled by expert government technocrats" over and over.) They supported government action to control the gene pool by discouraging or preventing people they typically considered inferior and thought America and the world could do with less of- blacks, Chinese, Southern and Eastern European immigrants, the mentally ill, the psychologically abnormal or socially maladjusted, people with congenital disabilities or deformities- from reproducing

As Horwitz and Carden explain it, the problem they faced was that too many of the people eugenicists considered unfit weren't, and were doing too well in the relatively free markets in the United States at that time. They were successfully competing with (the right kind of) white workers, which lowered the latter's wages through competition and- even worse- allowed them to survive and raise families, propagating bloodlines the eugenicists would have preferred to see die out. Restrictions on immigration, while popular among eugenicists, would not solve the problem of the millions of immigrants who had already arrived, the black population, or “defective” persons of more acceptable racial stock who were able to find employment.

Making these things a problem that needed to be solved required some rather extreme liberties to be taken with the English language. This resulted in idiosyncratic definition for words like “unemployable” and “parasitic,” by which Progressive eugenicists meant something like “Not making enough to singlehandedly support a family at a standard of living native-born whites would consider acceptable." (Called, familiarly enough, a “living wage.”) Thus, an itinerant worker with no permanent abode who supported himself doing odd jobs was “unemployable” no matter how much work he did, a “parasite” taking work from the more deserving. If an immigrant family was completely self-supporting but depended on the wages of more than one family member, it was a family of unemployable parasites no matter how much work they were actually doing.

(This also reflected the disapproval of many Progressives for native-born white women working outside the home, something that simultaneously roused conservative- which many Progressives were, in a paternalist, aristocratic way- fear of weakened traditional roles, chivalrous horror at the prospect of subjecting women to the cold, unfeeling world away from hearth and home, and eugenic objections to having the “Mothers of the Race” distracted from their more vital task of outbreeding the mercilessly industrious wolf baying at America's door.)

The industrious and frugality common among immigrant workers was seen not as a benefit for the country, but a curse, because these were seen by eugenicists as inherent racial traits that would allow these groups- considered morally and intellectually inferior to the Anglo-Saxon but better-suited to drudgery, subordination, and squalor- to outbreed their superiors, damaging the gene pool and eventually bringing about the “race suicide” of the higher races. Too many of the unfit were working hard and being productive, and free markets were rewarding that behavior.

It wasn't just a matter of race or ethnicity, of course. The free market was also doing too much to support defective members of the white, Western/Northern European-derived population as well. Many "feeble-minded" or otherwise unacceptable people were still capable of working, taking wages away from the sort of workers the eugenicists liked and- in the worst cases- propagating their own kind. People who are self-supporting are people who aren't desperately crawling into the government's waiting arms, and that was a problem.

Some of the commentary on this issue was amazingly perverse. Consider what Sidney and Beatrice Webb had to say, in their classic Industrial Democracy, on the matter of how "the sick and the crippled, the idiots and lunatics, the epileptic, the blind and the deaf and dumb, the criminals and the incorrigibly idle" and the "deficient in strength, speed, or skill" were best dealt with:

These physical and moral weaklings and degenerates must somehow be maintained at the expense of other persons. They may be provided for from their own property or savings, by charity or from public funds, with or without being set to work in whatever ways are within their capacity. But of all ways of dealing with these unfortunate parasites the most ruinous to the community is to allow them unrestrainedly to compete as wage-earners for situations in the industrial organisation.

Note, again, the perversion of language: A disabled person who supports himself by working for wages in a competitive market, like any other worker, is being "maintained at the expense of other persons."

And yet, if you accept the premise that the class of workers that eugenicist Progressives and socialist considered "fit" favor ought to have a monopoly on wages, without competition from their inferiors, it actually makes sense. In that case, the wages earned by the defective worker actually rightfully belong to his betters, and archaic individualist quibbling about the fact that he earned them with own productive labor for a willing employer doesn't change that.
 
(It also makes sense if you hold whoever you've identified as defective in such contempt that their attempts to participate in human society as if they were actual people are an unacceptable affront to you, of course.)

That was the problem. Minimum wage laws offered a possible solution. Workers from “unfit” populations were generally less valuable to employers than native white labor on an hour-to-hour basis ,for various reasons, but since they were generally willing to work for less there were many situations where hiring them made economic sense. If working for such low wages became illegal, they would be stripped of their advantage, becoming less attractive compared to costlier higher-skilled workers or, if their value to an employer is less than the minimum, completely unemployable. They can't work, can't earn a living, can't support themselves, can't propagate their kind. It would also, by creating a readily identifiable, economically dependent class of permanent “unemployables,” make it easier to single such people out for stricter control, isolation from society at large, or sterilization.

In short, if making a living was especially hard for you, the goal of many Progressives was to make it even harder -ideally, impossible- until they had forced you out of the labor force entirely and stripped you of whatever income, autonomy, and dignity being able to work had given you. This would raise wages for the workers who were left, redistributing resources upwards. The fact that minimum wages are disproportionately harmful to the employment prospects of the most disadvantaged members of society was a benefit because it was the most disadvantaged members of society that eugenicist Progressives wanted to harm.

The “problem” that the minimum wage was supposed to solve for many of its supporters was that a free market in labor was too good for the people on the bottom. Even in an only relatively free market operating in a society where racism was rife in both law and culture, there was still too much money being made by the poor, too much opportunity for outsiders, too much of a tendency to reward people for their productivity instead of irrelevant characteristics, too much acceptance of difference, too many chances to gain experience, skills, or savings that might allow the people so many "reformers" despised to make better lives.

The advocates of this were not fringe figures. Eugenics was a recurring theme of the still-extant and eminently respectable American Economic Association, a progressive institution through and which proclaimed at its birth that “the doctrine of laissez-faire is unsafe in politics and unsound in morals.” Proponents of the idea included: Richard T. Ely , the Progressive leader and Social Gospel leader who was a founding member of the American Economics Association and the Christian Social Union, served as AEA president, and actually has a feast day on the Episcopalian liturgical calender. Henry Rogers Seager, another president of the American Economics Association and one of the country's most influential proponents of social insurance- his entire book on the subject is available at the Social Security Administration's official website, in honor of his memory. Sidney Webb, pillar of the Fabian Society, Labour MP and author of the original version of Clause IV of the Labor Party's constitution. And many more.

(If this post seems especially acerbic and unpleasant, I imagine that's why. Spending hours immersing yourself in the thoughts of people who despised you and what you are to the point of making ridding the world of your kind an integral part of a political philosophy to which they dedicated their lives can do that, particularly when the people in question are widely hailed as moral visionaries and their efforts to create a world that nobody would have to share with anyone like you are considered a noble struggle for decency, humanity, and "social justice.")

It's bitterly amusing to think that Herbert Spencer- a libertarian who endorsed charity and mutual aid, and believed that a free society based on voluntary interactions would lead people to develop greater and greater sympathy for others by making fulfilling the needs and desires of others essential to your own economic self-interest- is slandered so often by people on the Left for supposedly believing that the "unfit" should be abandoned to their fates so that they would be removed from the gene pool. Slandered, in other words,by people whose own recent ideological forebears would in many cases have considered even the position falsely attributed to Spencer to be too kind, and wanted the state to actively prevent the "inferior" from being able to support themselves out of the fear that they wouldn't die out if left on their own.

I should note that I certainly don't think that the typical American left-liberal or self-identified progressive today would endorse the sort of program that originally accompanied and animated some of their ideas, or is driven by the same  motives. Instead, it's an example of how incredibly flexible justifications for statism can be: Liberal/progressives support for the minimum wage is rock-solid a century later despite the fact that the arguments given in its support have not merely changed but actually inverted.

Still,  the fact that so many early Progressives were both economic statists and eugenicists was not an aberration or a fluke or an incidental result of the fact that racism in general was more acceptable at the time. Why would someone who had a strong confidence in the desirability of “rational” government management of society under government-appointed intellectuals, trusted in the mainstream science of his times as a guide for his country's technocrats, and rejected the classical liberal/libertarian conception of rights have been anything else? The eugenicists were more consistent thinkers than most people are today; they did not declare that coercive government management of human life was better than the chaos of laissez-faire, reject individualist objections to using state coercion to interfere in peaceful people's lives, and then arbitrarily declare that the gonads were off-limits just because. Coercive eugenics was simply Progressivism applied directly to the human body.

What I hadn't previously appreciated was the way in which Progressive support for eugenics not only sprang from the same basic philosophical roots as Progressive economic statism, which is immediately obvious, but helped motivate it. Makes sense, in retrospect, but it's still a bit jarring to learn; residue of public school propaganda about American history that still hadn't been scraped out, perhaps. (I recall once saying to someone that the purpose of liberal economic interventions like minimum wages seemed to be singling out people with almost nothing and taking it away from them, but it was supposed to be a joke.)

Of course, the fact that many of some form of market intervention's biggest intellectual advocates happened to be despicable assholes with appalling motivations who supported the law precisely because they knew that it would serve the appalling motivations that made them despicable assholes in the first place does not, in itself, prove that the intervention is a bad thing. But a huge amount of economic statism's persuasive appeal, at least in the United States, is built less on the arguments for individual policies than it is on the popular mythology of the noble, righteous reformers who fought to create the modern interventionist state and saved us from the horrors of laissez-faire, and one of the most pervasive and pernicious effects of that mythology is that it encourages the presumption that greater government interventionism in the economy is something that favors the weak against the strong.

I strongly encourage you to read the entire article, available at The Freeman. There are several papers written or co-written by Thomas C. Leonard available online, Economics and Eugenics in the Progressive Era, Excluding Unfit Workers: Social Control versus Social Justice in the Age of Economic Reform, and More Merciful and Not Less Effective: Eugenics and American Economics in the Progressive Era, that are also worth checking out.