George Will, on Elizabeth Warren’s plan for Medicare for All:
Warren cheerily says, “No one gets left behind. . . . Some of the people currently working in health insurance will work in other parts of insurance, in life insurance, in auto insurance,” which supposedly will suddenly need the 370,000 people who today work in private health insurance. She sees society as a Tinkertoy for clever people like her to disassemble and reassemble, shuffling around hundreds of thousands of people.
Joseph Schumpeter (1942) on the capitalist process of economic change:
The opening up of new markets, foreign or domestic, and the organizational development from the craft shop to such concerns as U.S. Steel illustrate the same process of industrial mutation—if I may use that biological term—that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism.
George Will’s recent critical piece on Elizabeth Warren takes her to task for a plan that, he says, would throw 370,000 people out of work. Never mind that some of those people would end up working for Medicare. The central point is that such a radical change in a major part of our economy cannot be done because it would deprive some significant number of their livelihoods.
Parallel arguments can be heard against other major initiatives like the Green New Deal: think of the fossil fuel workers who would lose their jobs if we converted to renewable energy.
Any serious reform plan, whether for health care or green energy, must think through how these workers are to be helped. I think Warren and Bernie Sanders do fairly well in thinking through this challenge.
Now, these are real people with real jobs; any serious reform plan, whether for health care or green energy, must think through how these workers are to be helped. I think Warren and Bernie Sanders do fairly well in thinking through this challenge.
The larger issue is, shall we allow ourselves to be scared off of audacious plans because they might disrupt existing industries and might cost the jobs of some workers? Will we surrender ourselves to an addiction to the status quo?
Evidently, the people (government and business leaders) who negotiated the World Trade Organization (WTO) or the North American Free Trade Association (NAFTA) had no such qualms. They were confident that on balance everyone, everywhere, would be better off with free trade. There would be both lower prices and more jobs—on the whole. And on the whole, they were right. They just didn’t worry overmuch about the Detroit autoworkers or Kannopolis textile workers who would lose out.
When it comes to business, as Schumpeter pointed out in the quotation above, innovators need not worry about collateral damage. Did Henry Ford lie awake at night worrying about the wheelwrights, harness-makers and blacksmiths? Do WalMart or Amazon ease up so they won’t hurt Main Street merchants? We take it for granted that innovation for profit will hurt someone. It’s too bad, but as they say, if you want to make an omelette, you have to break some eggs.
Why is it that we have this attitude about for-profit innovation, but insist that innovations that promise to serve the public good should only be undertaken if they don’t hurt anyone? Medicare for All would insure universal access to affordable health care at much lower cost than what individuals, insurance companies, state and federal governments now spend. Is this not worth putting a few private, for-profit insurers out of business? The Green New Deal is literally the key to confronting the challenges of global climate change, and doing so in ways that would actually provide millions of new jobs. Is saving civilization not worth shutting down the very fossil fuel industries that have done so much to put us in our present perilous position?
We must analyze every proposal for reform with the same critical eye that we use on the status quo. But we should not shrink from change because somebody might get hurt.