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When US Presidential
Press Secretary Robert Gibbs
lost his temper this past week, railing against his boss’s
left-leaning critics and saying, among other things, “They will
be satisfied when we have Canadian healthcare,” it was a burn
felt across the nation. Those same critics fired back and
suggested Gibbs take a permanent vacation. This prompted the
Press Secretary to apologize and promise to play nice from now
on.
What I did not
notice in the backlash were very many of those critics saying,
“Hell yes, we want Canadian healthcare!” A few probably did, and
if I tried harder I could probably find them, but that wasn’t
the message percolating to the top of the news cycle. My guess
is that our problems (waiting times, doctor shortages) are as
well known to them as their problems (soaring costs, the
uninsured) are to us. Large segments of the populations on both
sides of the border seem perfectly happy to play up this false
dichotomy, when in fact, there exists an option that would trump
both systems handily: an actual free market in health care.
Of course, many people
fail to realize that the American healthcare “market” has been
hamstrung by an ever-growing tangle of regulations for three
quarters of a century now. But beyond this, there is a
widespread notion that must be combated, especially here in
Canada, before a truly free market in health care could ever
again become palatable to anything more than the libertarian
fringe: the notion that it is wrong to profit from the misery of
others.
This idea was on display
in reactions to the
CMA’s latest policy document, released in anticipation of
the group’s annual meeting next week. While very tame by
libertarian standards, the document’s recommendations
nonetheless elicited strong opposition. Len Rose, Executive
Councillor of the B.C. Nurses’ Union, argues
in a letter to The Vancouver Sun that “Canadians know
that profit-driven health care vacuums up huge sums of money
from taxpayers and deposits these in the vaults of corporate
executives and shareholders,” and worries that “amputating more
of our public system and turning it over to profiteers will give
Canadians fewer services at a higher cost.” Drs. Danielle Martin
and Irfan Dhalla of the group Canadian Doctors for Medicare,
while applauding the CMA’s
shift away from privatization, nonetheless find fault
in some proposals that will “result in a massive transfer of
wealth away from individuals and governments toward insurance
companies.” They worry that due to such remaining vestiges of
formerly more aggressive privatization proposals, “we will end
up paying more for the same services.”
While couched in practical terms of cost and efficiency,
quotations like these are dripping with condemnation of
corporate executives, shareholders, insurance companies, and
other “profiteers.” In order to defuse some of this antagonism
toward profit in medicine, it is necessary to examine what,
exactly, profit is. Without getting too technical, profit can be
understood as total revenues minus total costs.
This represents the return successful business owners receive
for running a business. Unsuccessful business owners receive
losses (or in a mixed economy, subsidies). Alternately, profit
can refer to the return to investors who lend money to a
business, but then, these investors are not so different from
shareholders, who are another kind of owner. (And if loans are
not repaid, investors can become actual owners, too.)
The antagonism toward
business owners making a profit is grounded, I am convinced, in
the notion that businessmen and businesswomen don’t really do
anything. They are not the ones assembling parts on the factory
floor, or manning the phones in the call centre, or cooking for
and waiting on rowdy customers in a bar. They just sit back and
rake in the surplus value created by their exploited employees,
to put it in Marxist terms.
The reality, though, is a
far cry from this caricature. Business owners are the ones who
organize all of the different factors of production according to
their best judgement of the demand for their products or
services and the supplies of sundry inputs. And it is their
accumulated wealth on the line if they misjudge any of these
elements. If this is truly worth nothing, then workers are free
to organize themselves and stop getting ripped off!
The situation is a little
different with large corporations where shareholders and
investors delegate their organizing duties to professional
managers. They are being paid solely for the risk they take with
their accumulated wealth. Anyone who objects to this in
principal, though, is basically objecting to the idea of earning
interest. But why should someone who delays his own enjoyment of
his wealth and risks losing it altogether not be
compensated? And just on a practical level, how much saving and
investment would occur if, in accordance with the ancient law of
Moses, it were forbidden to collect interest in return for
delaying one’s gratification and risking its loss?
There are people, though, who understand all of the above—who
think that it is both right and practical to reward owners,
managers, and investors for their work and trouble and risk—and
yet still feel funny about the idea of profiting from the
misery of others. Normal profit is okay with them, but
profiting from other people’s misery just feels wrong.
There is a sense, of
course, in which doctors and nurses profit from the misery of
others. They do so by receiving payment for their services, and
none but the most diehard socialist begrudges them this. But if
it is acceptable for doctors and nurses to benefit from the
misery of others through the earning of wages, why would it be
unacceptable for the owners of hospitals, insurance companies,
and pharmaceutical companies to benefit through the earning of
profits, or for investors and shareholders to benefit through
the earning of interest? For someone who understands the general
rationale behind profit and interest outlined in the previous
section, what reason is there to conclude that in this
case, they’re bad?
Perhaps the very phrase
“profiting from the misery of others” is to blame. It makes it
sound as if someone is gaining while someone else is losing. But
of course, this is not the case. Doctor and patient both gain
when patients get treated and doctors get paid. It’s a win-win
situation just as clearly as when I get milk from my grocer and
he gets paid. The owner of a hospital, then, benefits its
patients in the same way as the owner of a grocery store does.
We have another,
different phrase to describe the situation of someone gaining
and someone losing: it’s called profiting at the expense of
others. That is something worth condemning—and workers,
owners, and investors in such activities as grand larceny, for
instance, deserve our contempt. But alleviating suffering is a
valuable service. Not only those who provide the service, but
also those who organize the factors of production involved in
its delivery as well as those who lend their wealth to finance
it, deserve all the rewards they can earn from voluntary
participants in a free, competitive market. |
