Smith, Madison, and Roosevelt
In the wake of NFIB v. Sebelius -- the Supreme Court's decision on the Affordable Care Act -- I've been doing some serious thinking about political philosophy and, in particular, about the roles of government.
A public policy goal of universal health care or insurance, in my view, must presuppose one of two things: either health care is a non-excludable good, in which case the free operation of market forces does not produce a socially-optimal price/quantity combination, or there is an economic right to health care.
As a matter of fact, both arguments have been advanced.
The former posits that government intervention is required for economic efficiency. The Economist's "Democracy in America" blog has argued that health care is a common good -- that is, rivalrous but non-excludable -- which makes sense, given the fact that it is illegal for hospitals in the United States to deny emergency medical care to anyone. The work of the most recent John Bates Clarke laureate Amy Finkelstein provides further rigorous treatment of the complexity of the health care and insurance markets.
The latter argument isn't about efficiency or welfare maximization; rather, it is about rights and normative judgment. When Barack Obama was the Democratic nominee in 2008, for example, he argued in a presidential debate that there exists an economic right to health insurance.
The debate over the Affordable Care Act is just a pixel in the bigger picture, however, of the functions of government and their evolution throughout history. I contend, in fact, that they divide into three broad categories, which I would call the Smithian, the Madisonian, and the Rooseveltian.
Smithian functions are those in which government is a response societies have evolved to problems faced in an anarchic void -- depending on your favored terminology, substitute "state of nature" or free-market equilibrium. In my mind, these functions boil down to the resolution of externalities. Most notably, Smithian government controls non-excludable goods by providing public goods and regulating the use of common goods. The reason I call it "Smithian" is not because Adam Smith invented efficient government, but because his Wealth of Nations outlined national defense, internal police, and public works as its three essential functions. I would go a little bit further than Smith in that I see his vision of government as entirely about his third stated objective, -- i.e., that national defense, internal police, and public works are fundamental non-excludable goods which create positive externalities. Since Smithian functions of government are why government need exist, they tend to appear early in the development of civilizations and widely across cultures. Smithian functions also include central banking, public education, public health in cases of epidemic disease, patent law, a place of register for contracts, a court system, public libraries, lighthouses, etc.
Madisonian functions are those in which government establishes and protects negative civil rights. I call them "Madisonian" because in my mind, such protections are embodied by the Bill of Rights -- freedom of speech, assembly, and religion, etc. What distinguishes Madisonian functions from Smithian functions is that the former does not concern welfare maximization. In Nozick's language, Madisonian functions of government create "side constraints," i.e. realms which when violated create a claim for the violated against the violator, whether an individual or the state. Unlike Smithian functions of government, they took much longer to emerge; in the Western world, it took the Enlightenment. Madisonian functions are not "why government exists" from a social-evolutionary view; however, I would argue that modern civilizations have found that governments which exercise Madisonian functions end up more stable and more prosperous in the long run, despite a short-run tradeoff between security and freedom. Madisonian functions include public defenders, legislative bodies, representative assemblies, elections.
Rooseveltian functions are those in which government establishes and protects positive economic rights. I call them "Rooseveltian" because in the United States, it took the Roosevelt administration during the Great Depression to firmly establish the idea. More pointedly, Roosevelt wanted to create a "second Bill of Rights" which guaranteed remunerative employment, housing, medical care, etc. What distinguishes the Rooseveltian functions from the Madisonian, while both create "rights," is that the former creates claims between individuals which will be enforced by government, whereas the Madisonian does not create any claims. This is the idea of "social justice" as opposed to that of justice as individuals, which falls within the Madisonian functions to establish and protect. The Rooseveltian functions of government are historically new and remain deeply controversial -- they tended to appear roughly a century ago across countries, whether in the United Kingdom under David Lloyd George, or in Germany under Otto von Bismarck. Rooseveltian functions include disability and unemployment insurance, public pensions, universal public education, universal health care, protections against discrimination in private business, etc.
I wanted to discuss the roles of government rigorously because I regard the Affordable Care Act as a fascinating moment in the evolution of Rooseveltian functions in the United States. It is distinctly possible that we as a social entity are deciding whether or not we will collectively regard health care beyond emergencies as a positive economic right, as we did public pensions when Social Security was established.
And there is something interesting about the "discovery," if I can use that word to describe this process, of positive economic rights. Is it possible to explain rigorously why there exists a right to X, but not a right to Y, when both X and Y are (at least in large part) excludable goods?
For instance, if there is an economic right to health care, is there a right to air conditioning? A right to roads and transportation? A right to internet access? A right to clean stoves? A right to clean water and sanitation? These are not easy questions. I do not have the answers to them. That's why the comments section exists.