Neoliberalism, liberalism, neopurconliberalism and why some people hate the ACA (pt II)

This was originally part of another post, but I cut it from that one. There’s a bunch of stuff floating around these days about how we shouldn’t use the term neoliberalism, as well as a lot of flinging the term at fellow lefties with whom we disagree, though, so I thought I’d go ahead and post it.

Elsewhere, I argued that the GOP objection to the ACA is grounded in the just world hypothesis—the notion that good things happen to good people and bad things happen to bad people–and so good things (money, healthcare, food) should only be given to good people. If people want healthcare, for instance, they should get a job. If they don’t have a job, they aren’t a good person, after all.

There’s also the argument that many of the GOP objected to ACA only because it was Obama who supported it. And that’s a reasonable argument. It was based, after all, on the recommendations of a very conservative think tank and Mitt Romney’s healthcare plan in Massachusetts. The argument is that they didn’t want any Democratic plan to succeed because our political landscape is so rabidly factionalized that parties are willing to do harm to the country as a whole rather than let the other side succeed.

And that rabid factionalism certainly mattered, but I think there is also a sincere ideological objection, having to do with hostility to third-way neoliberalism (explained below), and the rise of what might be called neopurconliberalism because it’s a muddle of various philosophies.

Loosely, Obama’s healthcare plan was a classic example of his tendency toward what political theory folks call “third-way neoliberal.” Although in popular usage, “liberal” means people who believe in a social safety net (and tend to vote Dem or Green), in political theory, “liberal” means people who accept the Enlightenment principles of universal rights (especially property, due process, and fair trial), a separation of church and state, minimal interference in the market, and a separation of public and private. Until very recently (the 2000s, really), most GOP and Dem voters were liberal, and it was the dominant lay political theory (meaning how non-specialists explained how a government should work). There were lots of arguments as to what “minimal interference” meant, and what is private (for instance, for years, wife-beating was considered a private act, and outside the realm of government “interference”). So, most people agreed on the principle but disagreed as to how the principle plays out in specific cases.

The other category that matters for thinking about hostility to Obamacare is democratic socialism, which is often used to describe systems in which the government is democratic (little d) and the government provides an extensive safety net. Democratic socialist countries tend to have high taxes and excellent infrastructures.

In the 1970s or so, a lot of economic theorists began arguing for what is often called “neoliberalism,” which is not “liberal” in the common sense–in fact, it’s deeply and profoundly opposed to the principles of someone like LBJ, JFK, or FDR. Neoliberalism says that the market is purely rational, and we should take as much as we can away from the government and put it into the private sector. Neoliberals don’t vote Dem, and they don’t fit the common usage of liberal–they tend to vote GOP or Libertarian. Supporting neoliberalism requires ignoring the whole field of behavioral economics and all the empirical critiques of the fantasy of the rational market, but neoliberalism and neoconservatism both got coopted by people whose political and economic theories are purely ideological (in the sense that their claims are deduced from their premises, and their premises are non-falsifiable–that is, there is no evidence they would accept to get them to reconsider their premises).

On the far right, there emerged an ideology that might be called neopurconliberal, a reemergence of one very specific aspect of early American Puritanism (that wealth is a sign of saintliness), entangled into the neocon assumption that the US is entitled to dictate to all other countries how they should do things–an entitlement that should be enforced through a domination-oriented “diplomacy” and the continual threat of intervention (so, shout a lot and carry a big stick)–and the neoliberal notion that as many social practices should be thrown into the market as possible (so there is no such thing as public goods that should not be sold). Or, more accurately, the far right thoroughly and completely endorsed the “just world hypothesis” (that everyone in this world gets exactly what we deserve).

Neoliberals (who aren’t necessarily religious at all) and neopurconliberals found common ground on public policies like deliberately underfunding public schools, universities, the arts, the USPS, Social Security, and Medicare–the neoliberals because they believed (in a non-falsifiable way) that the market is always better, and the neopurconliberals because they won’t want a secular government that provides goods, and want the goods of the world (healthcare, education, retirement benefits) connected to being what they consider a Christian.

Third-way neoliberalism has two defenses. One is that, given that we are in a post-Citizens United world, no one can win without a lot of money because low-information voters are persuaded by ads, no matter how misleading or rebutted. And while it might be nice to imagine that a political figure could get elected by getting all the necessary money from the 85% and members of the 15% who happen to be committed to democratic socialism (probably not a large number), the pragmatic solution is to make sure that the Dem candidate can make large numbers of very wealth people believe that they will thrive under Dem policies. So, the pragmatic version of third-way neoliberalism says it is a compromise we need to make.

The other version says that the information economy changes everything, and that the Democratic values of honoring workers, having a strong social safety net, being inclusive, having a bright line between religion (private) and secular activities (public), investing in infrastructure, creating stable and productive relationships with other countries, and enabling social mobility can be achieved in partnership with the kinds of industries that would also benefit economically from such values being common.

If you think about it in terms of healthcare, you can see how these ideologies play out. Democratic socialism would have in place single-payer health care, most healthcare provided by the state, and paid for by taxes of some kind. Neoliberalism would leave it all up to the market with little or no governmental control of insurance companies or healthcare providers. Third-way neoliberalism would try to develop a system that created profit incentives for insurance and healthcare providers to serve everyone—more governmental control (such as mandates) than neoliberalism, but not by providing the insurance or healthcare directly (as would happen in democratic socialism).

I really like Bertrand Russell’s argument for socialized medicine. Here’s the problem every healthcare plan faces: it’s the problem of a gambling establishment because insurance is just legalized gambling If you are running a casino, you need to make a prediction as to how much you will pay out, and you need to ensure that you will take more than you have to pay out. So, you have to have a system that collects enough from losers to pay out the winners.

Russell’s argument was exactly right: casinos work because losers pay into the system more than the winners take out. And that’s how insurance works. You have a lot of people who pay to play on the grounds that they might be someone who later gets a lot. You pay a dollar for a lottery ticket, not because you’re certain you’ll win the lottery, but because you’re willing to pay for the chance that you might win. You pay into a benefits pool, not because you’re certain you’ll win, but because you think you might.

The argument about healthcare is an argument about how to gamble. Russell saw that.

What Russell didn’t predict is how ingroup/outgroup preferences would impact healthcare decisions. We always see outrageous expenses on the part of beings with whom we identify as justified. The GOP made a big deal about death panels at the same that it was the party that had put such panels in place by reframing the issue as Obama would kill your grandmother, and many in their audience believed it because Obama is outgroup. They either never mentioned the GOP-supported death panels, denied they existed, or characterized them as just fiscal responsibility.

Looking at the issue the way Russell describes means just doing the math, and not worrying about whether the people winning at the tables are good or bad people, whether we think they “deserve” to win. Neoliberals hate the ACA because it doesn’t leave things to the market, and neopurconliberals hate it because it is not grounded in an obsession with whether healthcare is only going to people who “deserve” it.

So, this is also an argument about what we think the government should do, and how we should think about policies—in pragmatic terms, or in terms of punish/reward. Whether third-way neoliberalism is inherently bad or good from the perspective of social democrats is an interesting question, if not engaged in a purely ideological way. Can it be a bridge? Can it lead to social democratic policies? The right certainly thinks it can, and that’s why they oppose it. And we should engage the argument in pragmatic ways.

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