Number 330 May 19, 2006

This Week:

Quote of the Week
Off the Front Page: Welfare Reform and Poverty
Vaccines, Incentives, and Human Nature: Part II in the "How Ideas Affect Policy" Series


This week is the second installment of the "How Ideas Affect Policy" series.  That is, how "what we believe" relates to "what we do."  I always get a little nervous when I try to explain the complex relationship between ideas and actions, because it is so easy to get all nit-picky and academic, and it can quickly become quite tedious.  And the last thing I want Nygaard Notes to be is tedious!

Having said that, I don't think there are too many things more important at this point in time than to try as hard as we can to get clear on what we believe, what we value, and how to build support for those beliefs and values so that we can see them take root in our culture.  This series, as with many installments of Nygaard Notes, is intended to help readers do two things: A. Start seeing how you got the ideas you have, and B. Become better able to imagine new and better ideas.

You may, of course, define "better" differently than I do.  Coming to agreement on what is really better will be a task for all of us to undertake in the process of the radical social transformation that I hope will come sooner rather than later.  For now, we can only start imagining what it might look like.

See you next week,


"Quote" of the Week:

"...every individual necessarily labours to render the annual revenue of the society as great as he can.  He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it.  By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.  Nor is it always the worse for the society that it was no part of it.  By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.  I have never known much good done by those who affected to trade for the public good."

That's Adam Smith, writing in 1776 in Book IV, Chapter II of his classic "An Inquiry into the Nature and Causes of the Wealth of Nations," commonly known as "The Wealth of Nations."

Off the Front Page: Welfare Reform and Poverty

On page 19 of the May 17th New York Times (All The News That's Fit To Print!) there was a story headlined "For the Neediest of the Needy, Welfare Reforms Still Fall Short, Study Says."  The study comes from the Chapin Hall Center for Children at the University of Chicago, and is entitled "Findings from the Milwaukee TANF Applicant Study."  (TANF stands for Temporary Assistance for Needy Families, which is what most people call "welfare.")

The Chapin Center introduces its study with these words: "A study of Wisconsin welfare applicants shows that welfare reform efforts did little to improve the economic well-being of families seeking government assistance.  Many continued to face multiple barriers to employment and remained poor long after they sought help."

Good for the Times for giving coverage to this report--and they were pretty faithful to the somber tone that the authors took--even though they stuck it on page 19.  My local paper the Star Tribune (Newspaper of the Twin Cities!) had nothing.  In fact, the Star Trib has run a grand total of 1 (one) staff-generated story on welfare reform and poverty over the past year.  In contrast, the Star Trib has run no fewer than 379 stories featuring a new sports stadium for Minnesota.  Hmmm....

Not to pick on the Star Tribune.  A national database search looking for the words "welfare reform" and "poverty" in the lead of news articles for the past year yields a mere 14 stories.  A search for the words "tax cuts" doesn't even work, as the Lexis/Nexis database will not display searches that turn up more than 1,000 articles.  You get the idea.

Since it was so far off the front pages, here are just a few of the more important points from the Times' story:

* "The overhaul [of the welfare system in the 1990s], in Wisconsin and other states, helped place more single parents in jobs.  But the new study points to another national legacy: the often critical needs of those still seeking aid, who may encounter profound barriers to work that include disabilities or problems with mental health or substance abuse."

* "Wisconsin ha[s] improved its social services for recipients but said many other states had not done nearly as much.

* "Most of these TANF applicants were no better off, and in many cases they were worse off than when they sought assistance"

*  Studies that followed [the 1996 welfare "reform" act] found that large numbers of single mothers around the country did enter the work force, though few escaped poverty.  One of the most visible changes was a huge drop in the number of welfare recipients, by more than half nationally..."

How federal welfare policy affects poor people should not only be an issue for the front pages, but it should be an ongoing issue at the top of the nation's news agenda.  Apparently, it's not.


Vaccines, Incentives, and Human Nature: Part II in the "How Ideas Affect Policy" Series

In the last issue of Nygaard Notes I talked about vaccines and how we don't have enough of them.  I also talked about the millions of newborns and mothers who die every year for lack of sterile medical supplies, antibiotics, and so forth.  What I hope was clear from those stories was that there is no controversy at all about three simple facts: 1. There are some common and recurring diseases and health threats facing us, here in the U.S. and around the world; 2. Effective solutions exist that are inexpensive and easy to provide, and 3.  Those who currently have the means to provide those solutions are not providing them.

Those are some important things to agree on!  And I'm guessing that most people also would agree that we should "do something" about this reality.  But, what?  This article is about the ideology and philosophy behind this state of affairs.

On the Agenda: "Incentives"

When we start to talk about what to do about the problem, we see that the public debate basically revolves around how to "stimulate" or "encourage" or "incentivize" into action those who have the means to address the problem.  (Yes, people really do use the word "incentivize.")  Those who have the means at the moment are, for the most part, large corporations.

In the last issue I mentioned the Infectious Diseases Society of America, which is an education, research, and advocacy group of health care professionals concerned about infectious diseases.  IDSA says that since "market forces alone are not going to solve this problem," what we need is "innovative federal policy to protect public health."  Very typically, IDSA ideas for "innovative" policy are all about "new incentives--such as tax credits, strengthened intellectual property rights, liability protections, or some type of federally guaranteed purchase program--to make the infectious diseases market more attractive to industry."

The most typical thing about IDSA's "innovative" proposals is that they focus on "incentives"--that's a key word.  Here's another example: The Director of the U.S. Centers for Disease Control (CDC) testified to Congress in March on a potential flu epidemic, saying that "A significant priority for CDC is "to increase the supply and use of annual influenza vaccine ... by stimulating manufacturers to produce additional vaccine in the event of a pandemic during the influenza season..."  He went on to say that some CDC funding will be used to "provide incentives for manufacturers to make [anti-flu chemicals] available when needed."

If you look at any of the legislation before the Congress in recent years that has to do with vaccines, you will see that they all rely on "incentives" or, as IDSA puts it, on "removing financial disincentives that have caused pharmaceutical companies to leave the vaccine market."

What is it with these "incentives," anyway?  Some people--I think, a lot of people--might say "Isn't the prospect of saving millions of lives enough incentive in itself?  If these corporations aren't going to do what's right, let's get somebody else to do it."  To understand why such an idea not only doesn't get much support, but rarely even comes up, requires a quick look into the Mind of America.

The Dominant Ideology

I believe that we have a dominant ideology in the United States that I have called "Individualist and Competitive" or IC.  It's so dominant, in fact, that I think it can be said to have achieved "cultural hegemony," which is what you have when a certain set of attitudes, beliefs and conceptions about the world becomes so widely accepted in a society as to function essentially as the  "organizing principles" of that society.  (For more on this, see Nygaard Notes #312: What is "Hegemony?"  And Why Do I Care?)

The IC folks believe that society is basically made up of individuals who are each looking out for their own welfare, in a fierce competition to survive in the world.  Part of the philosophy that underlies this ideology is the idea that people are basically selfish, so they base their actions on whatever is best for themselves, especially in the material sense.  That is to say that, given the choice, people will devote all or most of their energies to behavior that will do them, personally, the most good.  Or, as economists say, they engage in behavior that will "maximize their self-interest."

Although they may not be conscious of it, people who adhere to this philosophy are buying into a theory about human nature that is sometimes called "rational choice theory."  This theory says that, given the choice, people will make "rational" decisions to act in ways that they think will make themselves  better off.  In the philosophical world, this is sometimes known as "egoism." Unlike  "egotism" (which is a different animal), "egoism" says that "each person has but one ultimate aim: her own welfare."  Therefore, any action that a person takes that does not "maximize one's self-interest" is, in fact, "irrational."  (This is from the Stanford Encyclopedia of Philosophy.)  In other words, anyone who acts in the interest of others at their own expense is, by definition, a little nuts.  Or, at least, they will be a tiny minority, since that's not how people, in general, operate.

If this is how you think the world works, then the only economic system that could possibly make any sense to you is one in which people are allowed the maximum freedom to do what they will, by their nature, do anyway: Look out for Number One.  And, in fact, this is a large part of the theoretical basis for capitalism, as you see in this week's "Quote" of the Week.  Smith's comment that "By pursuing his own interest [an individual] frequently promotes that of the society more effectually than when he really intends to promote it" is taken by some to be the perfect argument to justify a push to endlessly individualize and privatize the economy.  This, it is said, will "free" the people with money to do what they want, which is to make more money.  It's not a bad thing, after all, to be selfish--it's just human nature!--and everything will be OK if we can just remove the "distortions" caused by do-gooders who interfere with the "invisible hand," which is "more effectual" in meeting the interests of society.  Or so the theory goes.

While not everyone goes around quoting Adam Smith, many of the policies that are being talked about seem to make a lot of sense only if you believe in the "invisible hand."  A few  examples: "Consumer-directed health care" is based on everyone trying to get the best "deal" on their health care, in competition with others, which is supposed to bring down prices and improve quality;   Tax cuts will "free" rich people and corporations to more effectively "maximize their interests," which will leave everyone better off;  Privatization will foster competition in the marketplace, to everyone's benefit; The patent and copyright systems are supposedly intended to provide "incentives" for people to invent and create things.  (This issue--of so-called "intellectual property"--is a subject unto itself, to which I will return later in this series.)

In summary, then, here's one way of looking at how we got where we are in the health care realm in the United States: We start with a philosophy that says that it is "human nature" for every individual to make decisions based on their own, narrowly-defined, "self-interest;" We then put into place an economic system based upon that philosophy (capitalism fills that bill); Next, we  argue that anything that interferes with the "natural" operations of individuals each competing for survival--that is, any social or public attempt to meet human needs--is bound to make everything worse.  The next thing you know, we're talking about "incentives" and stimulus, and tax credits.

Looked at through this lens, the United States--or any society--begins to look like nothing more than a big "marketplace" filled with "consumers."  And the job of a government becomes nothing more than helping individual "consumers" succeed in this competitive market.

Can't we do better than this?  Yes, we can.  It all starts with a different philosophy, one that believes that human beings are interested in more than their own "self-interest."  Starting from that different philosophy, everything changes, and what we end up with is not "consumers" who live in a marketplace, but rather human beings who live in a society.  Pretty soon you find yourself  going 'way beyond "Democrats versus Republicans," or "Left versus Right," or even "Good versus Evil!"   I'll explain what I mean in Part III of the "How Ideas Affect Policy" Series, in the next issue of Nygaard Notes.