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Was The New Deal A Disastrous Sellout?


In comments, McManus points us to what he considers a good progressive argument against passing the health care reform bill.   The argument, I think, can be fairly distilled into this point:

The Senate bill further entrenches the private health insurance system. It continues the terrible pattern of privatizing our social safety net in such a way that business skims 20% off the top.

This kind of heighten-the-contradictions argument has a certain power — if you can construct a plausible scenario under which an actual president, an actual majority of the House of Representatives, and an actual 60th most liberal member of the Senate would vote to create either a single-payer system or even a Swiss-like system of very tightly regulated non-profit private insurance. The argument not only fails but is deeply irresponsible because such a scenario is in fact wildly implausible, and while we would be playing Vladimir and Estragon a great deal of preventable suffering and death would occur. The simple fact is that high-veto-point American political institutions protect the status quo in general and powerful vested interests in particular. It’s not just that times when even significant incremental change is possible are rare — the American welfare state was basically constructed in two 2- or 3-year periods following historically unusual landslides in all three branches. It’s that even in those periods, reform involved compromises as bad or worse than what’s being contemplated in the current legislation.

Let’s take the New Deal. The parts of the New Deal that didn’t involve the creation of corporate cartels — the enduring parts — were not only incremental reforms but were all deeply compromised with interests much more morally odious than insurance companies: Southern segregationists. Social security and unemployment benefits both, through discriminatory labor definitions and by allowing for discretion in local enforcement, gave many more benefits to whites even though they would have gotten proportionately less in a fairly constructed and administered system. The New Deal not only further entrenched but disproportionately benefited the apartheid power. And yet not only FDR (who, in truth, was even more tepid on civil rights than was politically necessary) but most of his African-American supporters understood that the programs were a good deal on balance: it wasn’t a choice between a discriminatory welfare state and a non-discriminatory one; it was a discriminatory one or nothing. And they were right.

The fact is, compromises with venality and/or evil are almost always necessary in the American political system; it’s virtually impossible to accomplish anything without buying off powerful interests. Getting anything like universal health coverage is going to require giving protection money to insurance interests. This is nothing to be happy about, but arguments that fail to recognize this aren’t going to be very useful.

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