Social Costs & American Healthcare
By J.M. Hamilton (6-27-2020)
Social costs are the expense bore by society, at large, for the production of certain goods and services; and yet, these costs, or future liabilities, generally, are not factored into the retail price of the good or service. As ninety-nine percent of American society is disenfranchised by the political duopoly (i.e. Establishment Dems and GOP), social costs are a topic that is, conveniently, rarely discussed.
And yet, these costs, or liabilities, are both real and can be astronomical.
JMH has written about social costs before... perhaps not directly, but certainly touched upon the subject in write ups on Big Oil and Gun manufacturing. Read here and here.
Take U.S. Big Oil, for instance… the modern-day Death Star of our times. Here, the social costs for producing gas & oil not only includes planetary destruction, disease & fatalities from pollution, but for American citizens, endless Middle East war (and the resulting austerity and lack of social services that are cut off, as a result of the cost for these wars).
The social costs associated with the Big Oil industry run in the tens of trillions, minimum… merely, by assigning $50,000, per head, to the lives of the planet’s 7.8 billion human occupants.
In the past, JMH has recommending imposing strict liability and criminal sanctions on Boardrooms and C-suites, as a means by which to address social costs. But if we really want to call attention to social costs, we should assign expense, liability, & numbers. Moreover, we should allocate social costs – not only to the businesses, themselves (say Exxon Mobil’s financial statements) - but to a US government that is, ultimately, responsible & captured by this industry.
Since multinationals, in this example, can’t bear the social costs of its business model, those costs will ultimately fall upon the US taxpayer for cleanup and remediation. Social cost, unaccounted for in the retail price of a product or service, is just one more means by which the wealthy privatize profits, while socializing losses; one more means by which toxic liabilities are transferred from private ledgers to public balance sheets.
Taken to its logical conclusion, if unfunded liabilities – resulting from social costs – were to suddenly appear on America’s Federal balance sheet, the US government would be bankrupt. No amount of money printing (aka debt monetization by the FED) could cover these liabilities and future fiscal outlays, w/out serious ramifications for the dollar as a storehouse of value and as the global fiat currency. And given the acceleration of climate change, arguably, this is a bill that is rapidly coming due.
There are many, many industries generating astronomical social costs. Start accounting for social costs, and the path to real economic reform, and structural change, may begin in earnest.
If we take nothing else from today’s piece, please remember this: Social costs, picked up by taxpayers, are just more welfare for big biz & Wall St. As we let the concept of social costs sink in, and the assignment of liability … think about all those billionaires and multinationals who are pushing to reopen the economy – in the middle of a pandemic – and America’s failing for-profit healthcare system.
Why would these businesses, and billionaires, want to risk harm to the American consumer and the labor pool, by reopening the economy prematurely?
To answer that question, we have to ask: Who pays for American healthcare? We know the taxpayer pays for publicly provided healthcare (see Medicare and Medicaid); and we know billionaires and multinationals do everything in their power to dodge taxation and increasingly, pay less and less US taxes.
We know that US employers have increasingly shifted the cost of private healthcare insurance onto the backs of America’s - disenfranchised - labor pool.
The bottom line: billionaires, multinationals - pushing to reopen the US economy – increasingly, are NOT responsible for medical costs (except to profit by them). As with taxation, the oligarchy has become extremely adept at dodging US medical expense, as well as, the social contract.
That is to say, the social costs of opening up the economy prematurely – w/out adequate medical care for the resulting viral catastrophe – are borne on the backs, and lives, of the American consumer and taxpayer (who cannot dodge taxation or medical expense).
This callousness, greed, & myopia is setting America, the US economy, and labor up for a great, great fall. All so that some highly, non-essential, C-suites and billionaires can make their quarterly targets.
Does America’s, owned, political duopoly – Establishment Dems & GOP – care about any of this? Absolutely not. They’re too worried about their stock portfolios.
So how do we make this right?
Assign medical costs - in this instance, the social costs for a premature restart - to the donor class, billionaires and multinationals, for a grossly incompetent and negligent economic reopening. And suddenly, we may see an oligarchy that actually cares about something more than their bonuses, capital gains, and financial engineering.
Who knows? The oligarchy might actually insist upon a highly efficient, single-payer, healthcare system.
Such is the, potential, power of placing a number on social costs, and making sure these liabilities are borne by protected industries & plutocrats (or allocated to the Federal balance sheet, already very much encumbered by long term debts accrued bailing out the financial aristocracy & Wall St.).
Copyright JM Hamilton Publishing 2020
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