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Democratic War Socialism and "Medicare for All"

My friend, Irfan Khawaja has an interesting thread on his "Policy of Truth" blog: "In Defense of Democratic War Socialism." I've posted a comment there, after some discussion about the meaning of "capitalism" versus "socialism" and the historic sins committed in the name of each, and how this debate frames the discussion of "Medicare for All." Here is what I had to say:

I’d like to make just a few points about terminology and finally, about the context that has led us to the proposition that “Medicare for All” is somehow a panacea for our current healthcare woes.

1. Friedrich Hayek once pointed out that the very word "capitalism" was introduced by socialist historians; it's not a term I like to use for a variety of reasons that I explain here.

The U.S. had a relatively freer economy in the nineteenth century, but markets have never been truly free, and the U.S. has progressively moved in the direction of a neo-fascist, corporatist state. As Hayek once said, when political power comes to dominate social and economic life, political power becomes the only power worth having. And those who are most adept at using political power usually end up leveraging the most influence in matters of political economy. That's why, as Hayek put it, the worst get on top. I see no difference between that process in a society that ostensibly began with 'freer markets' (like the United States) and 'socialist'-leaning societies in which the state is at the center of decision-making. In both cases, the dynamic is such that the worst almost inexorably get on top.

2. One thing clear from U.S. history is that war has typically been an enemy of free trade; and yet, it has been key U.S. wars that have vastly expanded not only the role of government, but also the advance of the corporate state. The Civil War was the first nightmarish advance in this regard; the North, dominated by a Republican party committed to income taxes, excise taxes, tariffs, land grants, and subsidies to transcontinental railroads, also embraced significant forays into the centralization of banking, which wasn't fully realized until the years prior to U.S. entrance into World War I. (One could argue that Trump is a truer Republican than those who paid at least lip service to free trade during the Reagan era; he harks back to the nationalist, tariff-driven, protectionist roots of the Republican Party.)

The expansion of the regulatory state, as documented by New Left historians such as Gabriel Kolko, James Weinstein, and others, was the result of larger businesses using government to destroy rivalrous competition in the relatively freer markets of the nineteenth century, which were generating rising wages and falling prices. The thwarting of freer markets was fully institutionalized in the twentieth century by the establishment of the Federal Reserve System (and the 'boom-bust' cycle that it could engineer), and the U.S.-corporatist experiences during the "war collectivism" of World War I, the New Deal, and World War II (in which businesses closely aligned with government provided the industrial czars who consolidated the gains from the emergence of the regulatory state).

3. Since war is a state-guided policy, differing only in terms of its profiteers from country to country, it's not hard to understand why state-guided policies are, essentially, built on the principles of militarization (see especially Don Lavoie's book, National Economic Planning: What is Left?). Whether those principles are aimed outward, manifesting themselves in "perpetual wars for perpetual peace" (which enrich those industries closely aligned with the production of munitions, the 'military-industrial complex' warned against by none other than Dwight D. Eisenhower), or inward, manifesting themselves in state-guided economic 'plans' (which enrich all those interests that benefit from the regulatory state that they themselves helped to design), the bottom line is the same. If you believe in human liberty, it is the principle of militarization that must be combated in all its forms, whether "capitalist" or "socialist."

4. Since we should not kid ourselves about the history of "capitalism" and its war against free markets, let's not kid ourselves either with regard to the history of "socialism", which has little to do with what Marx envisioned, and which only illustrates further how economic militarization eradicates markets and destroys the price system upon which entrepreneurial creativity rests, leading to calculational chaos and economic devastation, while showing its most "efficient" side in the building of weapons of mass destruction and vast gulags to control its dissidents.

5. And so we finally get to health care. The same pattern of militarization within the health care industry, which has led to escalating costs and nightmarish choices for consumers, began during the Progressive Era during which medical suppliers acted on the same anti-market principles as their industrial counterparts: first, through the usage of medical licensing laws to limit the supply of doctors (and thus raise the price of medical care), gaining control over accreditation of medical schools, and crowding out schools dedicated to homeopathic and preventive treatments; the state-sanctioned rise of Big Pharma, which used patents to destroy competitors, and the rise of quasi-monopolistic health insurance companies (nearly all of whom were silent in the lead up to Medicare, Medicaid, and Obamacare, since each program helped to further socialize their risks).

The movement away from free markets led to the crisis in healthcare, just as it has led to economic crises across all sectors of "capitalist" economic systems. Since it is not on the political agenda to remove all the regulations that have led to the crisis of healthcare (and to crises across U.S. political economy), we are simply advancing one more step toward total calculational chaos and poorer delivery of healthcare services by embracing "Medicare for All".

In any event, given the current political dynamics in this country, don’t expect "Medicare for All" to be instituted until or unless those on top figure out a way to make it work for them rather than the vast majority of people who need quality healthcare.

On these issues, check out these two short pieces here and here.

Ed: I should add that for those who have trouble getting healthcare insurance, none of what is said above is a moral indictment of doing whatever you can to get yourself insured. We all live in a particular time and place and we don't control the effects of the system in which we live. Milk the inner contradictions of the system for all they're worth when the choice is between health or illness, life or death. The problems are systemic; the human lives affected are precious and it is no sacrifice of principle to seek out whatever you can to get the healthcare you require.