Healthy Profits

October 2nd, 2009 § 4 comments

Yesterday the Guardian revealed the sheer magnitude of the sums of money spent by Lobbyists on both sides in the great healthcare debate in the US:

Lobbyists representing the commercial interests of those who are opposed to the introduction of public health insurance have spent a grand total of $380 million on advertising campaigns, lobbying and direct political contributions, whilst those supportive of the bill, such as the Pharmaceutical companies, have stumped up $150 million.

These methods of lobbying have been described as ‘morally suspect’, rather an understatement of the situation, and indeed cast yet another dark cloud over the mechanisms of democracy, and the brand of democracy that the US are attempting to export all over the world.

What this shows us, alongside yet another damnation of the current democratic system, is that the Capitalist system is so wasteful and incapable of satisfying even the most basic of human needs. Anne Kruger, a famous neoliberal and pro-capitalist academic, wrote about ‘rent seeking’ in the 1990’s, arguing that rent-seeking, defined as the quest for access to  ‘super profits’ (profits gained over and above the profits one would expect to receive in a perfectly competitive market), is wasteful to the economy, as Firms compete for these super profits at the expense of investment. Kruegers’ original model was used to criticise certain countries in the Developing world for the non-market policies that they implemented. Supporters of the efficiency of the market would yet again hold up this model, and argue that the public medical insurance scheme proposed by Obama is government intervention is anti-market, which in a sense it is. The $430 million spent by the Firms in competing for the super profits could have been used more productively if it were invested.

So far so good, Ms Krueger, you almost have us convinced that Obamas’ proposed reforms have actually contributed to a reduction in the efficiency of the market. If you are arguing that this sum could have been invested in the  public healthcare system, not made it’s way into the pockets of the already super -rich that inhabit Capital Hill, sorry, Capitol Hill, then that is very admirable of you.

However, this kind of argument is consistently used to hide that basic fact that the market is simply defunct as a system that can fulfill even the most basic of human needs.  Another finding of Kruegers’ model is that the amount that Firms are willing to spend on competing for the super profits will eventually equal the amount of super profits available to them. As the legislation has not been passed yet, and we do not know how much more will be spent, what we can say is that there is at least $380 million in super profits up for grabs.

We can also say that without the proposed legislation, these $380 million worth of profits implicitly coexist,  and rely on the fact that an estimated 46 million of the poorest Americans are excluded from the healthcare system as they are unable to afford either the private medical insurance or the fees.  To put it bluntly, the ‘efficient’ market outcome trades off $380 million in profits against the healthcare needs of the poorest 15% of the US population. This is what ‘efficiency’ means in real terms, and is characteristic of the market outcomes that we see all over the world. It is one of the starkest examples of how the capitalist system places profit above human need.

§ 4 Responses to Healthy Profits"

  • I read this too, horrible stuff, it surprises me that many American people still don’t get it and it seems that the public option is all but gone.
    .-= Daniel Hoffmann-Gill´s last blog ..Barack Obama’s Amazingly Consistent Smile =-.

  • marlin says:

    The public option needs to be gone, we have too much corp influence in our government, and adding this would give the big lobby more power over the people in basic decisions in our lives.

    We need to outlaw corp lobby, stop the back door deals and get the politicians working for the people.

    You brought up some good points, but miss the core of the arguement. We know that there are two sides looking to gain over this, so I ask one question. Who wrote the bills? not who sponsored them, but who wrote them. That is the question, and the next one is “why” did they write them and get a paid off politician to sponsore it?

    This will likely lead you to the truth.

    [edit: links removed as it’s late and I’m drunk and not sure if it’s spam or not. Got a problem? No? Good]

  • Marlin says:

    You must have been drunk, you can not tell a personal written comment? Fuck you for even assuming it was spam you idiot!

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