Today I received in my e-mail inbox a commentary on political news that made some references to proposed reform of the United States Postal Service. Now, talking about the mail is not the most interesting subject around, but one aspect of the postal service and its protected monopoly reminded me of the ongoing debate over socialized medicine, and that was the problem of the universal mandate. In the context of those bills (and maybe a few others), I would like to examine the problem of the universal mandate both as a moral and as an economic/political problem and see how it relates to the crisis of the legitimacy of government.
Both the post office and socialized medicine have the problem of universal mandates. That means that to be genuinely socialist they have to cover everyone. Without exception. That is the whole moral appeal of such programs. The whole reason why a universal mandate exists for both socialized health care and the United States postal service is that the poor old man who lives fifty miles from nowhere in North Dakota or on some bayou in Louisiana or on top of some lonely peak in West Virgnia is the “poster child” for mobilizing public support in favor of a postal service. Likewise, it is the young man who is uninsurable because of being autistic, with ADHD, along with having Krohn’s disease (I had an ex-coworker in this situation who was a really decent and awesome young man, so I am not making this up) who becomes the poster child for socialized medicine because he is clearly worthy of health care, it is just that no insurance company is going to cover him because of the certainty of very expensive payments.
There are no easy solutions to these problems. For the most part, people boil down into two camps–either they end up supporting socialism (in some form) because of the desire not to be cruel, or they end up supporting libertarianism (in some form) because of their abhorrence of the expense of paying for those they think to be freeloading bums, with the corresponding loss of efficiency. Either we end up being wastefully extravagant or cold-hearted and cruel. I’m not personally satisfied with either problem, but the dilemma one has to wrestle with is immense. At any rate, let’s look at both situations and at least try to untangle the problems that result in both areas both causing people to urge and recoil from universal mandates.
First, let us tackle the (simpler) problem of the postal service. Right now the United States Postal Service (and postal services in other countries; I just happen to be American) has a monopoly on mail, and is a quasi-federal company like Fannie Mae and Freddie Mac and so forth. Part of that universal mandate requires that the USPS deliver to every physical address, so long as there is a mailbox. Another part of that mandate right now requires Saturday delivery, even though it is ungodly and even though it is unprofitable (I care more about the first–people interest in post office reform are, more naturally, interested in the second, but both are legitimate concerns). Additionally, the postal service has immense expenditures on post offices because it seems to be a point of pride for every community (no matter how small) to have their own post office. Thus the postal service has a lot of buildings that receive rather limited use but have heavy expenses (including HVAC). Sadly, and this is speaking from personal experience, it is often the post offices that are the most wasteful economically that are the most charming as well as the most politically popular (this is one of the more notable aspects of the problem of the universal mandate–the problem of constraints between political support and efficiency).
How does one solve these problems. If one is a post office supporter, one seeks bailouts (often disguised as ‘reform bills’) that reduce liabilities and give billions of dollars for the Postal Service to burn through like logs in the fireplace on a cold winter’s night. If one is a Republican congressman, the response is to treat post offices like old military bases that need to be shuttered to consolidate operations . What would it mean to completely privatize the mails? Well, some areas would almost certainly not get covered. You live in the country and want to get mail? Sorry, you need a P.O. Box because it is not economical for a postal carrier to drive that far, or you need to pay higher prices (like a “gas surcharge”) to make up the costs for the delivery of your mail and the marginal labor cost of delivering mail to your address. For businesses it is the bottom line that matters most of all–for governmental (or quasi-governmental) agencies it is the political benefit of serving marginal people that matters most of all. These interests are mutually exclusive. If one wishes to serve the interests of people who are marginal, either because of location or any other quality, those people are going to be served at a loss, and the only way that can be justified is on moral grounds that trump mere economic efficiency, or on expedient political grounds (that are only expedient as long as the number of people who are passionate about serving such interests is greater than those who are bothered by the economic inefficiency and the tax liability of serving that interest).
This problem, already present in debates over the post office only become much more intractable when one deals with a subject with the emotional resonance of health care. I will speak bluntly and personally here–since 2009 I have been without health care because such jobs as I have had in the time since then have not provided health care (or, with one notable exception, a steady income, which is something else that really bothers me), because the jobs did not provide it and because I could not afford such insurance myself as a single payer. The whole economic basis of insurance (which is uncomfortably like gambling) is the law of large numbers, in that insuring large numbers of people allows one to decrease risk to the point where the insurer always makes money. As a person getting health insurance of almost any kind, you lose either way. You lose by getting sick or injured and making a claim on insurance (especially because it often causes your rates to increase because you are no longer a safe bet. You lose by having pre-existing conditions that companies refuse to cover (of which I have many, ranging from TMJ to PTSD to chronic depression to gout, among others). If you don’t lose for those reasons you lose because you spend money that you do not recover in benefits. There are no winning options.
In such a case where expenses increase on average about 15% or so a year, and where there are no winners except for doctors and insurance companies, and where there are a lot of people (like myself) who are screwed by the current system, there are a lot of people potentially interested in a solution that makes better economic sense for customers. The problem is in the numbers. Insurance companies charge higher rates the fewer people are covered. This disproportionally affects workers of small business (or the self-employed) because such people are not part of a larger whole where risk decreases and so does cost. There are solutions that would not require universal mandates, but they would require cultural changes so that companies band together voluntarily as a way to save money for themselves and their employees (and right now companies don’t seem to care very much for their employees, especially those who get shafted by being called independent contractors, but that is a rant for another time). In other words, the current health care crisis of the United States is one that is, in the main, the fault of businesses in looking after their own bottom line rather than the well-being of their employees or (potential) customers. By externalizing the risk of disasters or even routine medical care on people who often lack the means to fulfill that risk, they create a huge political demand for government action.
To solve these problems requires a greater understanding of the whole system. If one opposes government involvement in health care, which (to an even higher degree than the post office) involves a tremendous amount of waste and inefficiency (see Medicare/Medicaid), and one does not wish to be heartless or cruel to those people on the margins of society, one has to address the systemic problems. These problems include externality problems, or companies trying to decrease their own expenses and “overhead” by increasing risk to their employees without increasing the ability to handle that risk. They also include the problem of aggregation, where companies lack the asabiya (or social cohesion) to work together with others to decrease costs for all of them in a voluntary fashion. They also include the failure to work on prevention and the preference for dealing with problems when they appear, and when they are more expensive to deal with. Solving these related problems requires a sense of moral decency on a part of everyone (including firm and enforceable commitments not to smoke, do drugs, get drunk, or eat poorly on the part of employees), and it also requires the ability to cooperate and work together with others for mutual goals. Sadly, few people, it seems, think in terms of systems, but rather only in terms of their own immediate concerns. This creates huge inefficiencies for others (including governments) as a result.
And this is where the problem of universal mandates becomes intractable. You can try to legally force situations where everyone is covered, but that requires a certain amount of political will. In the absence of social cohesion (which the United States appears to lack at this cultural moment of Texanization *shudders*) then people who fall in the cracks will get left behind. If the political and moral will exists to help out and care for everyone, then it can be done in ways that are both “free” (i.e. that do not involve government mandates) as well as “efficiently.” But that requires the moral will do so. In the absence of morality basic moral mandates can only be achieved at extreme costs. The fault for this lies not in government, but in ourselves, because of our our resistance to helping others at some small expense in time or effort or money to ourselves. If people are unwilling even to help out their own family members, they will not help out total strangers, particularly those who are poor or minorities or ill or otherwise needy. And that is the deeper problem. Because we do not care sufficiently about others on our own, voluntarily, we create a prisoner’s dilemma where the only solutions are either immense cruelty and the resulting threat of social unrest or wasteful inefficiency due to the increased activities of an overly paternalistic and tyrannical government. And, in the end, nobody wins in either scenario. We only win when we prevent the problem from cropping up in the first place through proactive and voluntary action. But how many are willing to do that, especially in these evil days?