November 13 2013
How to Think about ObamaCare
If you want to get to the heart of the matter of what ObamaCare is and why it is destined to fail, Lee Harris’ must read piece “When Nudge Comes to Shove,” published over at The American, is the place to start.
Within the first few weeks of its rollout, Obamacare began to show the telltale signs of social engineering: nothing worked the way it was originally planned.
Soon the words “debacle” and “fiasco” were being routinely employed by the mainstream media to describe Obamacare’s first dismal month — the same words that have been so appropriately applied to the ill-fated social engineering ventures of the past.
ObamaCare, Harris explains, is “old-fashioned social engineering dressed up in trendy new clothing.”
Social engineering has been around since Plato—and somehow, it just never works as planned. This is ironic since the essence of social engineering is central planning.
People (including those who foisted ObamaCare on a reluctant nation) don’t often use the term social engineering nowadays—the history of social engineering has been too disastrous. One of the most notorious modern examples is the Soviet experiment in collective farms that starved millions. The experiment was built on the notion that Soviet farming needed reform (true) and it “looked absolutely fabulous on paper.”
Why did this beautiful plan fail so miserably and cost so many lives? Harris writes that many thoughtful observers of the Soviet experiment laid the failure at the foot of unintended consequences. No central planner, no matter how brilliant, could anticipate all the unintended consequences. Sound familiar yet?
Nevertheless social engineering didn’t die with its failures—it merely got a new name. It morphed into “libertarian paternalism,” the concept behind Cass Sunstein and Richard Thaler’s bestselling book Nudge: Improving Decisions about Health, Wealth, and Happiness. Sunstein served as administrator of President Obama’s Office of Information and Regulatory Affairs. (He is married to another prominent Obama official—U.S. Ambassador to the U.N. Samantha Power.)
“Nudge” is the key word here, as Sunstein makes clear when he writes that “the basic idea is that private and public institutions might nudge people in directions that will make their lives go better, without eliminating freedom of choice. The paternalism consists in the nudge; the libertarianism consists in the insistence on freedom, and on imposing little or no cost on those who seek to go their own way.” Whereas earlier forms of paternalism shoved people into their centrally planned schemes, as the Russian peasants were shoved into their collective farms, this new form of paternalism — often called “soft paternalism” — would only give people a gentle, barely perceptible push in the right direction. Of course, those being pushed may not at first perceive it to be the right direction (indeed, they may even push against it), but once they have been nudged into their appropriate place, they will recognize that this is where they wanted to be all along. Indeed, it is essential to soft paternalism that people may only be nudged into doing what they would do if they were perfectly rational actors — that is, what they would do if they only were as rational as those nudging them.
If you are one of those millions of U.S. citizens who has just had your health insurance policy cancelled, to nudge you to buy a policy of which the administration approves, you are likely to feel that you have been shoved--and quite brutally so.
While the old Soviet system rested on the idea that peasants would make rational decisions and thus benefit from the experiment, the libertarian paternalists assume that most of us make irrational decisions and need guardians to help us out here. ObamaCare designed a set of choices for the rest of us—the only problem is that we don’t like our choices.
Viewed in this light, ObamaCare is clearly destined to fail. The only question is how much suffering it will cause before it fails. Let us hope that it will be a short-lived social engineering experiment—e.g., Prohibition—instead of one that last for years. No doubt, the architects of ObamaCare are going to want to be the ones to fix it. We should make sure that this doesn’t happen. If we get another shot at reforming the health system anytime soon, let’s do something incremental. We do not need another vast experiment in social engineering.