Why Economic Justice Matters: This Machine is Worker Owned (Part 4)


IMG_0039As we’ve seen thus far, the income inequality in the United States (and really, worldwide) is an issue that is leading to stagnating and destructive economic results. One possible solution is to cap the ratio between CEO pay and worker pay. There is, however, another alternative.

 

Worker-owned and operated co-ops, where workers own actual equity in the company and vote on management and executives, have proven to be quite successful worldwide. The best example is the Mondragon Institute where workers vote on their wages, vote on who their managers are, vote on who gets to be CEO, vote on the pay of the CEO, and all worker-owners have a share in the profits generated by the co-op. There are, of course, other examples out there.

 

The overall point is that we need a system where workers benefit from their labor. Under our current system workers are merely parts to an overall machine. They are not individuals, they are not important, they do not matter; a factory worker quits one day and is replaced the next, much like if a cog were to break, it would be removed and replaced. There is a dehumanizing aspect to our labor, which is why we pay substandard wages for that labor. Corporations release a constant stream of emails to employees about the corporate success, about how much profit the corporation has earned, about how much the stock has increased, and expect the workers to actually care. But why should they care? The corporation has increased profits off the backs of the workers, profits the workers will not enjoy (though executives will). Why should the workers care?

 

To take the modern system further, even in a system where workers get a small share of the profits, they have no say in how the company functions. While corporations use empty terms like “team members” and tell workers that their feedback is important, the fact is that even if 98% of the workers thought something was a bad idea, the corporation would do it if they saw a chance for a profit. The ever increasing desire to impress stock owners and drive up stock value – sometimes by creating short term gains at the cost of long term consequences – has crashed many companies and continues to harm our economy.

 

So, if setting ratios isn’t your thing, perhaps this is: Worker Ownership. Worker ownership is exactly what it sounds like, where the workers own the corporation. The only equity holders in the firm are those who have not only invested their money into the company, but have also invested their labor into the company. In such an economy, there would be two types of worker-owned companies:

 

Family business/co-ops – small, family run businesses are without a doubt essential to any local economy. A local economy built on family-owned businesses typically has a sustainable economy. One can imagine what would happen in poorer communities, whether urban or rural, if there was more economic development for local businesses. Of course, some family-owned businesses need a support system. This is where co-ops would work in lieu of corporations. The co-op would be composed of different farmers, different distribution companies, and different grocers. They would all work together to provide produce throughout the region (or nation) and could even work with other co-ops around the country to exchange produce. In the co-op, the different businesses within the co-op would all have a vote and a voice on how the co-op would function. Rather than having someone in New York decide what works best for farmers and grocers in North Carolina (as might happen with a major corporation), the business owners and farmers in North Carolina would be able to give a stronger voice for what policies work best in their area.

 

Think of a co-op as a type of confederacy, where there is a union and all the different organizations work together, but all are also at the same time autonomous. All contribute to the profit of the co-op and receive profit dividends from the co-op, but can also act independent of the co-op when it comes to their own store policies.

 

Worker-owned corporations – the family-owned business can only go so far. While I’ll get my food from a mom and pop store, I wouldn’t want that same place making my car. When it comes to cars, major construction ventures, making commercial airliners, and the like, businesses are necessarily large. There are certain endeavors that simply require a large corporation. A small business or even a collection of businesses (co-op) isn’t sufficient or efficient for certain industries. In instances such as these, corporations would be massive, but owned by the workers. Rather than being abstract, let’s use Ford as an example:

 

Imagine tomorrow that Ford was sold entirely to its workers. This would mean that all management and executives would be voted on by the workers. All profits would be distributed to the workers. The company could never move jobs overseas because worker-owners aren’t going to move their own jobs. There’d be no need for unions because the workers couldn’t go on strike against themselves. They’d vote on what wages should be for each position, on their own wages, and so on. It’s a form of direct democracy in the workplace, or democracy on a small-scale (the only place where democracy works best).

 

How both of the above solve for income inequality is that for the majority of workers – not everyone could become a worker-owner, especially at a younger age – would have the right to vote on their own salary as well as the salary of the CEO. If the workers decided to let the CEO earn at a 200:1 ratio, then that’s their choice. It wasn’t forced on them. But more than likely, the CEO pay would be much closer to a manageable rate. Productivity would increase as well due to the simple fact that an increase in profits would be shared amongst the workers. Thus, if workers wanted a bigger bonus each quarter, they’d push harder to increase the profits for that quarter. By actually seeing the fruits of their labor they’d work harder to see bigger fruits.

 

The benefits of this system are as follows:

 

  • Income inequality is no longer an issue. When most workers are also owners, they choose the income that occurs. For family-owned businesses the issue of a wage is no longer an issue.
  • Their jobs would be secure. Worker-owners won’t outsource their own jobs, they won’t lay themselves off to increase profits, they won’t recruit cheaper labor from a foreign nation to drive down wages, and so on. They’ll continue to innovate and improve because when the company succeed, their checkbooks will feel it.
  • They’ll be far more environmentally conscious. Part of the reason these companies have no issue polluting or destroying the environment in rural areas is because the executives and upper management don’t have to live in those rural areas. Worker-owned companies, however, would have owners who live in the local areas, who have to drink the water, who have to breath the air, and have to live with the consequences of their environmental impacts. While none of this promises complete environmental safety and we would still need regulations, environmental disasters or practices harmful to the local environment are less likely to occur because the workers don’t want to see their families harmed.

 

Of course, between the ratio system and the worker-owned system, there are some common themes.

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A Pro-Family Economy? On the Importance of Family Values over Market Values


DSC02081A 40 hour work week is considered normal and desirable within the United States. While other nations might laugh at so few hours, most industrialized nations work less (in some cases far less) than the average American. Of course, while 40 hours might be the expectation, it’s not abnormal for Americans to work upwards of 70-80 hours a week (either in one job or with two jobs); the reasons could be an ambitious young person trying to advance in a career, a lawyer running up against deadlines, or a single mother just trying to put food on the table. While Eastern Europe – known for its economic struggles – posts higher working hours on average than the US, Western Europe – known for a stronger economy – posts lower working hours.

In the United States, of course, we value hard work. We think of early in our foundation of farmers, cobblers, shop owners, and the like working long hours in order to support the family. Even today there are small business owners who dedicate almost every waking hour to keeping their company going. Yes, a typical 40 hour work week leaves a person tired at the end of the day and distant from the family, but that’s the price to pay for progress, correct?

The problem with such thoughts is they ignore that the typical job in the modern age takes a person away from the family. Yes, farmers, cobblers, shop owners, and others might have worked longer hours, but they did so mostly from home and with their family. The “job” they worked was a family job, putting the husband in contact with the wife and his children. Rarely did anyone have need of leaving the home for work. At one point in our history the economy centered around the family, not the consumer, and that made all the difference in both the work week and the type of work accomplished.

Post-Civil War America saw a change in the goal of the economy; rather than existing ultimately for the benefit of the family (in most cases), it began to exist for the benefit of the individual, namely the wealthy individual. The husband ceased to be a person, but rather a “good,” something in order to help wealthy men grow in their wealth. Men began to leave the family farm, the family shop, and the family itself in order to put food on the table; the cold irony of the new Capitalistic endeavor is that in order to sustain their families, men had to abandon their families. Since that time, men fought for worker’s rights, sometimes winning but mostly losing. Women, in turn, began to question why they had to stay at home while men “fulfilled” their lives. The individualistic approach drove a spike between husband and wife and rather than becoming one in all things – including economic gains for the family – they became economic partners attempting to bring in a fair share. To this day feminist fight for equal pay for women and equal placement within the corporate world, and if this is the system we are to have then women ought to be equal, but how come no one has stopped to ask if we should truly have this system? If the system is unjust, why do we seek to increase the influence of the system?

Some might ask, “So you think women should stay at home for work?” To which I respond, yes, I believe that the human ideal is for women to work from the home. Yet, I would say the same for the men. Both are to work from the home and sustain the family. Of course, that is the ideal and in an industrialized society not completely attainable, but certainly we can do better than what we have. Currently people spend more time at work than they do with their families, at least if we discuss quality time. Most families are involved in so many after school/work activities, or go and do their separate things when getting home (watching tv, playing video games, and so on), that the modern family is nothing more than strangers sharing the same space and DNA. In the pursuit of fulfillment in a job we no longer find fulfillment in having a family; indeed, having a family is not a very Capitalistic thing to do as it can take away from one’s personal goals. This is why so many complain about having children, complain about a wife, a husband, and so on. We speak of family values, but we abandoned our family values long ago when we decided that the dollar was more valuable than the home.

From a Christian perspective the family functions as the beginning of everything on this earth. While we are made in the image of God and therefore he directs our purpose, that purpose is first acted out within the family. Both father and mother work in their own ways to raise the children properly. Children learn how to function as good human beings within the family setting. The family itself is, in many ways, the “first church,” where true spiritual discipline takes place. Only when different families come together do they begin to form a community; a small secular gathering, a church, a school, or anything along those lines. Those communities eventually form societies, which form cultures. If, therefore, our own economic system functions in a way that it destroys or makes impossible the idea of a nuclear family then it follows that eventually communities will collapse, and soon after societies and cultures.

What, then, is the solution? I’m not sure on a pragmatic area (though I’d argue that Distributism is our best bet to get close to the ideal of a family-centered economy), but I do know it’s time Christians divorced themselves from Capitalism. Capitalism relies on and focuses on the individual, not on the family. Christians must support family values over market values, they must support what is best for the family and not a system that promotes low wages and high hours. We can’t support a system that intentionally keeps people in poverty and puts power in the hands of the wealthy over the hands of the family (or community). If Christians truly wish to follow through on a pro-family worldview, they must extend this view to the economy, otherwise the family will continue to waste away within the American experience.

The Regress of Progress or, The Poverty of Wealth (A Poem)


DSC01993Hope springs forth or so I’m told
From joy and love a bountiful well
The pessimist to the optimist scold
Reminding them of this world, this hell

What is our purpose in this busy life
We fight traffic to a job we hate
And fight traffic back to a home of strife
Awake, for this night you cannot overtake

To run away to something meaningful
To run across the fields and hills
To discover in this world something beautiful
And cease relying on our cures and our pills

A man used to plow a field that was his own
As his family was with him in his vocation
We once understood the meaning of home
It was more than an address, a location

The world has itself in a damn hurry
We are only racing to our graves
Impossible to leave all the bustle and scurry
We are all fools and knaves

Buy the farm, build a skyscraper, and call it progress
Put the children in school and the parents at work
Our advanced civilization is a facade and a mess
Suppressed are our dreams, deep down they lurk

Created free, to progress we are now enslaved
We make great paper money and wage
But our master’s name upon us we engrave
And have traded nature’s freedom for a corporate cage

We are rational animals, soulful beasts
But we seek to deny both in the pursuit of wealth
Frozen dinners and fast food replace feasts
The beauty of this world is now hidden, it is stealth

Rise up above the skyscrapers and corporate chain
Reclaim your rationally savage essence
Pursue a life of living, one not in vain
And be happy as you grow in senescence

Rethinking our economy


Imagine you live in a town where everyone needs to have widgets. Because everyone needs to have widgets, there are about twelve different companies dedicated to making widgets. Since all these companies compete against each other and the supply matches the demand, the price of widgets is low. But then one company becomes innovative and creates a higher quality widget at a relatively cheaper price. As time goes on, only about 2-3 companies are left who produce the widgets. Since these 2-3 companies all produce equal quality widgets, they each claim they have to raise the price of the widgets because the quality is so high. While the owners of each company never talk to each other, they watch each other and keep the prices of the widgets about the same, slowly raising the price.

The workers, seeing their bosses make more and more money from the widgets, demand that they get a share of the profit. They go on strike until the bosses begin to share their profit with the employees via benefits and an increase in wage. The bosses, however, don’t want to give up their total profits, so they increase the prices of the widgets. The workers realize this and demand more money and benefits; after all, the cost of living in the town has gone up because the price of a necessary item (the widgets) has gone up. The cycle continues until the bosses realize that the widgets are going to simply cost too much.

Thus, the bosses begin to have the widgets produced overseas at a much cheaper price, but keep the price of the widgets the same. Because people in the town are now out of jobs (since the 2-3 widget producing companies are the only ones left and they’ve shipped the jobs overseas) they struggle to pay for the widgets. The bosses open stores in the town where people can buy the widgets and employ the people to work in those stores, though at a reduced rate and with no unionized labor; thus, the employees are at the mercy of the stores.

People begin to rise up against these bosses and demand the government do something. The bosses, realizing the government could bring an end to all their profit-making ways, contribute money to politicians. Two companies contribute funds to one politician while another company contributes money to another politician. Either way, whichever politician wins will owe his victory to one of the companies, meaning he won’t be able to come down against them. And even if he can, there are multiple politicians in the town; so long as the company can purchase the majority of them, nothing can be done to the companies. The town is then left without recourse to change the way things are.

What is sad about the above scenario is that it’s not hypothetical; I believe it adequately summarizes the United States’ economy post-WWII. Since WWII, more and more small businesses and small corporations have been consumed by bigger corporations. In doing this, we’ve moved from a three class system (rich, middle-class, and poor) to a two class system: Job creators and the employed. Some may not see the problem with having these two classes, but think on it for a moment.

A job creator has no reliance on the employed. If he opens his business in America he is typically leaving it open for skilled labor only. Even then, if he can ship it overseas to make money then he will do so. Thus, the employed are almost literally a dime a dozen, but completely reliant upon the job creators. Why do we value the job creators so much? Because we apparently base the strength of our economy on the number of people employed, or number of people who have jobs. But this is a false measure for the strength of the economy. Having a job is nothing more than being a wage slave – your income is completely artificial and in a bad economy, that income is cut. Thus, you may have a “job,” but that doesn’t mean the economy is healthy – we could employ all the out of work people in America and put them on minimum wage, but it wouldn’t mean our economy is healthy.

To go back to our analogy, let’s assume that a mid-level manager for one of the widget companies makes a comfortable salary because he’d educated. Yet, within 10 years the majority of the town has the same education, meaning there are others out there who are willing to work this manager’s job for less pay. He is then left with having to take a major pay cut or lose his job entirely. This is why being paid a wage isn’t always ideal, that same wage can be devalued in an instance even if the product you sell isn’t.

Instead, the real measure of a strong economy is how many people own capital producing property. This means that, in some way, they have control over their income through being part-owners in a business or complete owners in a business. In this case, one’s income is only reduced when (1) the demand for the product is reduced and/or (2) a better product comes along. Thus, to paraphrase G.K. Chesterton, the problem with Capitalism isn’t too many capitalists, it’s too few. Or, the problem isn’t that people own private property, it’s that too few people own private property. We are the town in the analogy where only a handful of companies ultimately run everything, meaning that capital producing private property is held by a few people. To liberals this is a social injustice, but to conservatives this must be understood as the destruction of the free market. In other words, the current system we have in our nation is not a free market system; it’s something that neither conservatives nor liberals can tolerate (hence the Tea Party and Occupy protests being so similar in their complaints, but different in their solutions).

The reality is we need a complete reformation of our economic system. The practical aspects of that can be debated and discussed by economists, but I believe the following philosophical principles need to undergird it:

  1. There is no utopia. Any system we developed will have inherent flaws to it, corruption will still exist, and injustices will still happen. The goal is to create a system that minimizes these realities and does all it can to delay them. Within the system there should be a series of checks that allow for penalties when corruption is found, but we should acknowledge that corruption will never be completely eradicated. There will always be the rich and the poor, the have and the have-nots, Peter will always make more than Paul, there will never be economic equality, and so on. The goal is to lessen these realities, not eradicate them.
  2. Any economic system we develop must value human beings as people with inherent rights. In other words, they cannot be part of the collective as they are in Communism, nor can they be means to an end as they are in Industrial Capitalism (or Objective Capitalism). The primary motive in any economy cannot be profit; while it must be a motive, it cannot be the motive. The primary motive needs to be the betterment of individuals and the local community.
  3. We must allow for the free market, but in a true sense of the word. The free market is the best way to value human beings because it allows them to make something of themselves. But the free market must truly be free; when left unregulated or free from government involvement, eventually the free market collapses. When only a handful of companies control the market, it’s not a “free market.” Thus, the government has the obligation to protect the free market, by limiting the growth of certain companies, or by ensuring that in corporations that are necessarily large (such as car companies) the overall power of the company is in the hands of the many and not the few (more on this later). At the same time, this means the government must keep their hands off small businesses and let those businesses develop within reason. It means the government’s job is to protect and support the ownership of private property, not make it more difficult via taxation. Thus, the system cannot be socialist, but it cannot be capitalist (as presently understood) either.
  4. In necessarily large corporations, the power within the company must be divided. While we need leaders and people who are visionaries, as a company grows, so too must its ownership. This simply means that the workers ought to get a share of the profit via direct profit share, not through wage increases. In many ways, this makes all the workers types of owners. On big decisions, such as moving the company or the like, everyone should be allowed to voice their opinion. While this allows for corporations, it takes away the power of the corporations and especially of those at the top – the richest people in the corporations still don’t have enough money to influence elections. It also lowers the gap between rich and middle class (which is a problem). While the owners and CEOs will still make quite a bit of money, in having to share the profits of the company with the workers, that gap is reduced. Furthermore, when people know that working harder will bring in a higher profit bonus, most people will be motivated to do so, which makes for better products put out at a faster rate, which does make for a better economy.
  5. The government must regulate the market to protect the free market. That is, they must protect the market against monopolies and de facto monopolies (when 2-3 companies rule an entire region). In cases where a monopoly become inevitable – such as an energy company – the government holds the job of regulating the cost and preventing the cost from getting too high. They also hold the responsibility to ensure that in large corporations the workers are given a profit share and treated as co-owners.
  6. The government must watch its regulation and not peddle when some companies fail. Failure is a good thing because it allows for learning and growth. While painful it is a necessary part of an economy. Thus, if a company is about to fail, let it fail, even if it’s a large company. The temporary pains won’t destroy the economy, but the government getting involved and ruining the free market will destroy an economy.

The goal in all of this is really to respect and protect the dignity of man. The most important point that I did not include is that we must have a moral society. We must drop the moral relativism that we’ve bought into and realize that objective moral values exist, naturally so, and that when we abandon them there are negative consequences to be had. While the above points would make for a better economy, what would ultimately help the economy is for people to realize that acting ethically allows for a more sustainable economy. Acting ethically may cap a business owner’s income to a few hundred thousand instead of a few hundred million, but it will allow for a stronger economy for everyone else and still give him enough money to live comfortably. But we have to be willing to do what is right and that requires us to reject subjectivism when it comes to ethics.

Thus, if we wish to fix our economy and overhaul it, the first step has to be an ethical one. It has to be a commitment to doing what is right and encouraging others to do what is right as well. The economy we have today was founded in the 60s and 70s, the self-love and individualistic ethos. To fix our economy we have to fix our social ethic, I’m just not sure anyone is willing to do that.

The Problem of Healthcare: A Christian View and General Solution


Today the Supreme Court essentially upheld most of the Affordable Healthcare for America Act (AHAA). While I do disagree with the individual mandate as being Constitutional (as a tax, yes, but as a mandate, no), to me the biggest problem is in the wisdom of the legislation. While the practicalities of such legislation are complex, the underlying issues behind healthcare are pretty simple. From the Christian perspective we should desire that healthcare be available and, more importantly, affordable to all.

For Christians, all humans are made in the image of God, thus all humans have intrinsic worth. This means that while all life is a gift, human life is seen as unique and special. Therefore, when we see that someone cannot get medical treatment for the simple reason that they lack money, we should see such a thing as an injustice. It’s simply not right for a human to be denied healthcare because he cannot pay for it. While we wouldn’t call the denial of an elective procedure that has no real health benefit (such a plastic surgery) an injustice, any denial of service that can lead to more serious health issues is a massive injustice; not to mention that it does violate the Hippocratic oath (how is one to treat patients if one refuses to see them due to lack of payment?).

The above is why some people have said that the healthcare system in America is broken and the AHAA (or derogatorily, “Obamacare”) is the solution. Of course, both aspects of that argument are absolutely wrong. First, the healthcare system is no more broken than a Mercedes is broken; the problem isn’t the quality of the product, it’s the cost of the quality. Thus, Obama’s solution, while possessing some good things in it (such as making it illegal to refuse insurance for pre-existing conditions), doesn’t do much to address the actual problem in our healthcare system. The AHAA may lower the cost of insurance, but it won’t lower the cost of quality care. In other words, bringing more people onto insurances without lowering the cost of the healthcare service is either going to (a) bankrupt the insurance companies, (b) eventually drive the cost of healthcare up, to the point where hardly anyone can afford it yet will be penalized due to the individual mandate, or (c) result in the government having to provide universal healthcare. Option C is what many people naively think is best, but it doesn’t work because the government either goes bankrupt (government’s do not have unlimited funds) or it has to cap the price of medical procedures, which of course drastically lowers the quality of healthcare.

Such a system might work in smaller nations or in nations geared more towards socialism, but it will not work in America. While it works in Norway, Norway isn’t the United States; there are certain cultural ideals, economic beliefs, and so on that allow such socialized medicine to work in one nation but not in the other.

At the same time, we have to do something to make medical procedures cheaper. Making insurance cheaper makes little sense – so long as the medical procedures cost money and the cost rises, so too will the insurance. Car insurance is cheap because there’s a natural cap to it; the average person will only spend $10,000 to fix a car. Any more than that and the insurance will simply cut a check and the person gets a new car. In other words, the idea behind the AHAA that car insurance is cheap because a lot of people buy it (and are forced to if they own a car) is somewhat false; while more people in the system helps, the real reason that car insurance is affordable is because there’s a natural cap within the industry. Within health, however, such a cap doesn’t exist because the average person cannot simply replace their body or life. Thus, it tends to be quite a bit more expensive, to the point that even if more people buy in it won’t have a significant impact. Not to mention that the most affordable of car insurance hardly covers anything; shall we desire the same thing for our health?

From a Christian perspective we want to create an option that maintains the quality of healthcare (and improves it) while making it cheaper. The point in making it cheaper isn’t just so that more people can afford health insurance, but so that charities can do more to help those who can’t even get cheap health insurance. Making healthcare cheaper benefits everyone. Yet, all of this must be done while respecting the dignity of being human, that is, we cannot tax the people into oblivion to accomplish our goals. We cannot nationalize private industries in order to make them cheaper as this robs people of their well-earned property. In short, we can be neither socialists or pure capitalists. We cannot trust socialism as this would rob people of their property and rob the market of its resources to continue to research. At the same time, we cannot simply leave healthcare to the market and let the market decide because supply and demand doesn’t work when it comes to essential services. The government has always had to regulate essential services, even in the early days of our Republic.

In addition to the above, the Christian view of man is one that views man as both angel and demon, both good and evil. This means we cannot suppress the profit motive within the business and expect everyone to perform medicine out of the goodness of their hearts, but we also cannot expect people to be motivated by more than profit. Within the socialist approach, the motivation for the doctors should be the greater good of society, not their own income. But no one goes into a business to break even; everyone wants to make a profit. In healthcare making a profit is vital because a lot of that profit goes back into research and development for better medications and treatments. At the same time, we don’t want our doctors to be solely motivated by profit. When motivated solely by profit people will cut corners and cheat their way to more money. No one wants a doctor that is in it solely for the money because the doctor, at the end of the day, could care less if the patient is healthy or not.

With the above foundations for healthcare, which stem from the Christian perspective (though they are not exclusively Christian), I think there are a few very broad practicalities that could help lower the cost of healthcare while maintaining the integrity of our healthcare system (and even improving upon it). I leave the specifics to the politicians, but I think some generalized solutions could possibly get people going:

Eradicate the Patent System for Drugs and Medical Equipment  – before the conservatives jump down my throat on this one, I’m not saying we should eradicate profit. Rather, I’m pro-free market because this fits best with the dignity of man. A patent, on the other hand, is not a free market solution. A patent allows the developer to hold a monopoly over their invention for quite some time, allowing the company to charge whatever price they want to gain back the money that went into developing the item. 

The problem should be obvious – if Company A can charge whatever they deem necessary to recover their research, then the price of their product will increase. Now, some argue that the market is a natural check on patents and in some cases it is. If Apple has a patent for a new iPhone, it means no one can copy any innovative component of that iPhone for the duration of the patent. Of course, Apple can’t in turn charge $30,000 for the iPhone because they’d never gain their money back; no one could afford the iPhone at that point and thus no one would buy it. In cases like this where competition exists a patent has a natural check on it.

In the medical field, however, where there is no natural check (remember, insurance companies will pay for it because they have to pay for it; the medicine is essential), a monopoly causes the price of medication to rise up. In such a system you really have only two options: a free market solution or a regulated solution. The regulated solution is one that most people would reject, which is where the government puts a limit on how much medication can sell for. Thus, if a company puts $100 million into developing a drug and it will take them 15 years to gain that money back, but they sell it at a price so they’ll gain it back in 10, the government would come in and force them to go with the lowest price. This solution would work, but it wouldn’t be as efficient as a free market solution; it would provide less incentive to develop a drug if the maker figured they’d never make a return on it, likewise it wouldn’t make things cheaper because the cap would still be relative to the amount of money put into developing it (if anything, creative companies would fudge the numbers to make it look like they put more into the development than they actually did, thus increasing their cap).

The better solution is to eradicate the patent system entirely with drugs and medical equipment and instead force them to create a license. In a license, a royalty fee has to be paid to the creator of the drug/equipment by any manufacturers. Under a licensing system, some companies could simply move into research and development and simply forgo manufacturing their drugs or equipment; they could instead license out their discoveries to multiple manufacturers. In turn, the license would last longer than a patent allowing the company to make back their money and then make a profit. The best benefit, however, is that if you end up with 10 companies manufacturing the same drug, all with the same licensing fee, the original developer will make their money back, yet the drug will be cheaper due to competition. Obviously drugs would still be expensive, but they wouldn’t be as expensive as they are now. It would lower the cost and make it far more affordable, which is what we’re aiming for.

Multiple Safety-Nets for the Uninsured – Right now if a patient goes to a hospital and cannot afford treatment, there’s no established system to help him find a way to pay for his treatment. This is one area where the federal government and state governments could really help out. The state governments should create a database of charities that help people who need healthcare coverage. These charities would simply register with the state or the federal government, depending on if they intend to help people in their state or nationwide (thus, a local collection of churches may only help people in their city, but the Catholic charity may help people from any state). 

Each hospital, in turn, would then help the uninsured go to these charities first. The person would help with paperwork, help them fill the paperwork out, and exercise all private options first before turning to a government option. The government option would be either the government simply pays for the debt, or the person can enroll in a government loan (if eligible) that can be paid at a minimal payment relative to the person’s income.

The reason for the above is that right now if someone doesn’t pay, that cost is passed onto the next patient. In other words, we already have universal healthcare coverage, it’s just not structured and it’s poorly designed. If we were to put together a cohesive system where charities could be contacted or some accountability is built in for the person paying the bill, we could limit how much (if any) unpaid bills get passed on to other patients. This would lower the cost of healthcare and insurance, since insurance companies wouldn’t have to pay for other patients. This is where the AHAA works as a short-term solution; if most people have insurance, less unpaid bills are passed around, which lowers the cost of healthcare. But this one component doesn’t fix the cost of the entire system (as I explained above).
Create More Competition – there needs to be more competition between hospitals, between insurance companies, between medical manufacturers, and so on. Competition creates cheap prices. The more natural competition that exists in a field, the cheaper products are in that field. How this competition is to be created is up for debate; as a distributist I would support the idea of constructing medical guilds, each one in competition with the other, where they are in charge of handing out licenses and then creating degrees of licensing. While there would be government oversight of the guilds (to prevent them from turning into monopolies), the guilds would essentially be left determining the quality of their doctors. In doing so, competition would exist. But I don’t want to get bogged down in details on this point because I first have to defend having guilds and then defend placing guilds within the medical community.

In short, the above three solutions are not perfect. But they hold to the basic principles that everyone deserves healthcare, but we don’t have to destroy individual freedoms to secure it. Certainly the above would require much debate, some things changed, but overall it’s a solution that I think goes to the heart of the issue while trying to appeal to both liberals and conservatives. Most importantly, however, is I believe it’s part of an overall system that respects the dignity and freedom of man.