Kevin Williamson has taken some time to write a let’s-get-right-down-to-it column working through the way in which the economy shuffles costs around. A basic premise of free-market types is that the economy is far too complex to control, so Williamson’s column is necessarily simplified and hypothetical, but it gives a sense of the folly of attempting to force changes on the market. The key point is where the consequences flow:
The economic literature isn’t actually very good on this question, from what I’ve seen, which is understandable, because the world of human material endeavor is very large and complex. There have been some snapshots taken: For example, policymakers are keenly interested in the question of whether and to what extent hospitals and other health-care providers who get screwed by Medicare (which “reimburses” hospitals less than the cost of actual care, meaning it doesn’t actually reimburse hospitals) push those costs onto other consumers, especially private insurance companies, which then (you won’t be surprised by this point) pass them on to their customers. The answer seems to be yes (though some progressives, who love love love love Medicare, dispute this) but there are pretty seriously conflicting views about how and how much. And of course the hospitals aren’t just passing Medicare screwage on to insurance companies; presumably, they’re passing it on to the janitors and orderlies and gauze-bandage makers and everybody else they can. This probably isn’t even a conscious thing in many cases: It’s not that Joe Hospital gets up one day and says, “Medicare is shorting me 9 percent of what it costs to treat these oldsters, so I’ll pass 1 percent along to the doctors, 3 percent to those insurance rat-finks, 0.55 percent to the bandage guys . . . ” …
And who pays for all of that? Everybody. It’s a kind of inverted Marxism. It isn’t “From each according to his means,” it’s “From each according to how little power he has to pass the cost on to some other poor bastard.” There’s no such thing as “raising taxes, but only on the rich” or “passing regulations that only cost Big Business.” Everybody is always and forever on the same hook.
This should be obvious. Progressives hop and skip a whole bunch of logical steps when they somehow move from the observation that our system is rigged to funnel a bunch of money and power to a small segment to the conclusion that the answer is to consolidate power over everybody in the hands of… a small segment.
Some believe that politicians can transform poor people’s voting power into economic power by converting the former into the latter through welfare programs and other direct benefits, but if we’re being specific (and we have to be, on this topic), the incentive for politicians who claim to give power to the powerless isn’t actually to give them power, but to make them feel like they’re giving them power. A politician who lets the powerful keep what they’ve got while making the powerless feel like he’s their guy gets the best of both worlds.
This is an ongoing negotiation, but in brief, economics rules. Even for politicians, the rich and powerful have (duh) money and power, so the politicians’ role in this giant collection of exchanges is to gain the votes of the poor and powerless as cheaply as they can and exchange the power “profit” for real money and power from the rich and powerful. The only way out of this fix is actually to empower individual people by limiting to a bare minimum the number of things the government tells them they have to do and the amount of money the government takes away from them.
Let “the janitors and orderlies and gauze-bandage makers” find ways to earn more money (even if by driving an Uber car on the weekends) or let people who are actually satisfied with such jobs even if they pay less move into those positions. Let a bare-bones doctor take what patients want the sort of care that he or she offers at the price that he or she is able to charge.
Trying to manipulate the economy doesn’t makes inequities go away, it just moves them away from the most obvious spot on the board and makes it impossible for anybody (much less the average workaday family) to know what the underlying problem is or who’s to blame. The real question is this: Do the relatively powerless have more power in a rigged system or in their value as autonomous human beings?
In a world of hundreds of millions of people, there will be hard cases, to be sure, but I’d say folks who start out on the bottom end of the economic distribution will have more power, and more opportunity, to the extent that we allow them to be kings of their own castles.