Inequality As A Public Policy Choice: Should We Import Doctors, Dentists, and Lawyers or, High Technology?
Don’t buy the myth that we lost so many manufacturing jobs because of free trade. That didn’t happen.
So long ago, I read an interesting book on economics, “The Conservative Nanny State”. It was an early version of an idea and a set of facts put forth by senior economist Dean Baker with the Center for Economic Policy and Research. The basic idea promoted by that book is this: Conservatives enjoy government intervention in the market just as much as liberals do. The difference between them is that conservatives promote public policy outcomes that distribute the national income upward. In their minds and out of their mouths, conservatives say that anything that does not distribute income upward is “socialist”.
For example, where liberals tend to promote higher taxes and the welfare state, conservatives promote lower taxes and free markets and trade, or so they say. But a discerning observer will notice something that most people do not. Conservatives love free trade as long as it puts American manufacturing labor in competition with third world countries and their cheap, abundant labor. Conservatives are loathed to put doctors, dentists, and lawyers in competition with people from other countries who can do the same job for a fraction of the money that the top 1% earners in said professions currently enjoy.
Notice that I make no distinction between political parties here. That’s because there is a breed of Democrat that is confusing to the average voter. That type of Democrat, we call them “centrists” these days, talks about things like “Hope” and “Change”, and “Putting people first” and “For people, for a Change”. Yet that same breed of Democrat has no problem removing limits on corporate tax deductions for executive compensation so long as it’s stock options. That same kind of Democrat has no problem putting American manufacturing workers in competition with China, South Korea, Vietnam, the Philippines, and Thailand just so long as they honor American patents and copyrights. That same kind of Democrat will work with Republicans to cut Social Security and Medicare, refuses to increase the cap on income subject to the Social Security and Medicare taxes required to support said programs, and expresses worry that someday soon, Social Security and Medicare will go bankrupt. That’s a centrist Democrat.
Curiously, to conservatives, Democrat and Republicans alike, free trade is cool as long as it endangers the jobs of middle-class American workers. But they are silent on the matter of “free trade” if such trade should endanger the incomes of doctors, dentists, lawyers, and other highly paid professionals.
For example, I have yet to hear any currently active politician seriously suggest that if we increased the number of doctors in the market enough, that our health care costs would come down. Zero politicians have suggested that we should create a common international standard that would allow a doctor from India (or China) to come here and practice medicine — for a fraction of the cost of an American doctor. I know of zero politicians who would encourage medical tourism for expensive medical procedures to be performed in high-quality hospitals in foreign countries, for much less than the cost of doing them here.
But there is one economist that I know of who actively promotes the ideas of medical tourism and of training foreign doctors, dentists, lawyers and other professionals in their home country, so that they could come here to practice their profession: Dean Baker. The idea of meeting demand with greater and lower-cost supply for health care services is a recurring theme that runs often on Baker’s blog, “Beat The Press”, and at least three of his books, “The Conservative Nanny State”, “The End of Loser Liberalism”, and “Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer.” In all three of those books, we see Baker actively promoting free trade in health care and other professional services.
Over the years that I’ve spent promoting Baker’s ideas of free trade in health care services to my social circles, I’ve noticed a rather consistent argument in opposition to that very idea: You can import electronics, clothing, and cars, but you can’t import a doctor. That argument has been on my mind for years now and I’ve been without a counter-argument until now.
I believe that now, we actually have somewhat freer trade in professional services now than before. I believe that immigrants from the nation of India provide an excellent example of how we have been importing professionals from that great nation to work here, in a highly professional capacity. I’m not sure if they’re doing the same work for a fraction of the cost of their American predecessors, but they are from a foreign country, meaning that they are “imported” and they are doing the work that an American professional used to do.
I draw your attention now to the following page:
Meet the Indian CEOs of some of the world's best-known companies
Read more about Meet the Indian CEOs of some of the world's best-known companies on Business Standard. Laxman…
On that page is a list of people from the country of India, who are well placed at firms like Microsoft, Google, Adobe, Nokia and Amazon. They are presidents, CEOs and on the board of directors. That these immigrants have managed to find their place so high on the corporate ladder belies an argument I have heard over and over again: You wouldn’t want someone from India performing brain surgery on you. Yet, some of the largest tech firms in the world have found executive talent from India to be perfectly suitable running a multinational, multibillion-dollar company. And I submit that running a giant company is far more complex than the work of a cardiologist, brain surgeon or orthopaedist.
If an Indian immigrant is good enough to run a giant corporation to the satisfaction of the shareholders of the world’s biggest tech companies, then certainly, immigrants born in other countries, trained to meet exacting American standards, can practice medicine, dentistry, and law here, for a fraction of the cost of an American. That’s free trade, right? Where is the objection to that?
We find objection coming from the people who live here, who were born here and raised by wealthy families to go to prestigious schools of medicine and law. Those people have the power and connections to prevent real foreign competition in their professions. And they exercise that power against the wishes and the interests of the people they so passionately claim to serve. They do not seek or even want a free market if that would adversely impact their fortunes.
This issue, free trade in professional services, is missing from and should be central to the discussion of how the national income is distributed in our economy. We should be discussing this topic in the presidential debates this year. It is simply a farce to say that extreme inequality is how economics works when the invisible hand of wealthy families and professions can tip the scale to decide who they get to compete against. This is how an aristocracy works, not a free market.
See, there is a lot of talk about billionaires, but that talk obscures the efforts of thousands of millionaires and their families who would dearly love to go unnoticed. They want us to believe that the market is acting as it should. These members of the professional class would like us to not notice their influence in public policy decisions that have the effect of protecting their professions and their incomes from the way that markets are normally supposed to work.
These same people have near-zero guilt over thrusting American manufacturing workers into competition with China, Vietnam, Mexico, and Thailand. They talk a good game about free trade until the subject turns to their trade, their profession. And then they go quiet, or they change the subject. They will happily send hundreds or even thousands of dollars to political campaigns for the protection they need from the competition, foreign or domestic, and still wax eloquent about the virtues of the free market.
One other point that Baker often notes: Progressives fall into this trap laid by conservatives all the time. Progressives will talk about higher taxes and a bigger welfare state without actually pointing out the root cause, the rules as they are written — rules that needlessly protect high wages for professional services. If the services provided by doctors, dentists and lawyers are so good, they should be able to command a high price without government intervention in the market. They should be able to withstand foreign competition as a check on their ever-escalating fees. But we won’t find that out unless we have someone in the White House and in Congress who is willing to talk about the hidden symbiosis of the centrist and neoliberal politician and their top 1% partners.
The best person to do that, to raise this issue right now, is Bernie Sanders. Trump won’t touch it. Joe Biden dare not speak of the topic. The elites in both parties depend on the money of the highly protected, high earners in the health care and legal professions for their bread and butter. At the same time, with every contribution from a millionaire or billionaire, a politician feels obligated to serve the interests of the millionaire over the people who make an average contribution of $21 to Bernie Sanders campaign.
Of all the candidates still running for the Democratic nomination, Bernie Sanders is the greatest proponent of Medicare For All (M4A). But Trump and his many very conservative and Republican friends will tell you that Sanders is a socialist. Nevermind that the rules as they are written for the benefit of doctors, create artificial scarcity in the market. Trump will tell us that M4A is a socialist plan for a government take over of the health care system, when the reality is that the government took over the health care system long, long ago. They just made public policy choices that enrich doctors and insurance companies at the expense of everyone else. That’s what Bernie Sanders calls, “Socialism for the rich.”
I think that M4A is a great idea and that the time is ripe for implementing such a program. But it’s useless as a tool for social and economic justice if we do not address the root cause for the high cost of health care in America: the influence of big money in politics. The effects of the hidden hand of the health care industry on the way the laws are written must be shown as a form of socialism where they privatize the profits and socialize the risk. That’s a form of socialism that few conservatives are willing to discuss in an open debate in front of millions of people on FOX News. We must rise to that debate.