Belmont Club

The Man of System

Leo Linbeck III

President Obama, in his State of the Union address this week, proposed myriad programs to, as he put it, “to reignite the true engine of America’s economic growth” in a way that “are fully paid for and fully consistent with the budget framework both parties agreed to just 18 months ago.”

Among the systems he listed over the course of an hour:

– A network of 15 manufacturing innovation institutes
– A bipartisan, market-based solution to climate change
– An Energy Security Trust for auto research and technology development
– A “Fix-It-First” program for our most urgent infrastructure needs
– A home mortgage refinancing assistance program
– A program to make high-quality preschool program available to every child in America
– A competition to redesign America’s high schools
– An increase to the minimum wage
– Federal support for the 20 hardest-hit towns in America to help them get back on their feet
– A non-partisan commission to improve the voting experience in America

This is not a comprehensive list. But how could it be? There is a virtually limitless list of needs where The Man of System is called on to supply a program, a solution, or a system (take your pick).

Of course, any time such a list is proffered, there will be those who ask: how we will pay for it? But worry not, dear reader, for the President “assured his audience that “nothing I’m proposing tonight should increase our deficit by a single dime.”

Whew! That’s a relief.

But wait a minute: this stuff may not increase the deficit, but the deficit is already $1 trillion. Shouldn’t we be looking for ways to decrease the deficit before adding new initiatives? And what about future deficits? Won’t they be a problem when “the biggest driver of our long-term debt is the rising cost of health care for an aging population”?

Again, not to worry: the Man of System already has his plans in place. The Affordable Care Act, aka Obamacare, is in place and starting to work. Costs are being controlled. Waste is being eliminated. Ill-gotten profits are being disgorged. And it was designed by experts, so we know it’s right; we simply need to give it time, give it a chance.

This might be hard to do, however. We’re told by the folks over at Talking Points Memo that there are still obstacles to Obamacare’s success. Serious obstacles.

TPM highlights four obstacles in particular, or as its heading put it “Four Ways Obamacare Could Still Fail.” Here are the four (the possible solutions are mine):

1. Ongoing Disapproval of the Law. According to TPM, two leading health policy experts argue that the overarching threat to Obamacare is the fact that many Americans continue to disapprove of it.

2. States Declining to Expand Medicaid. Obamacare relies on states expanding Medicaid. Not every Governor is on board with this expansion.

3. States Refusing to Build Insurance Marketplaces. As is the case for Medicaid, Obamacare relies on states to set up health insurance exchanges. Some states appear to be reluctant to do so.

4. Nullification of the Medicare Cost-Cutting Board. The architecture of Obamacare requires the hard decisions about what is covered and how much is paid to be made by a 15-person Independent Payment Advisory Board. Health insurers hate the IPAB, as does Congress, including some House Democrats.

So, other than Governors, Congress, and the people, everyone’s on board and things are looking up!

Seriously, this is just the way these things always seem to go. A problem is identified by experts; those experts convince the central authority to create a system to solve the problem; the system, because it is centralized, is understandable only to other experts, so other views are ignored or dismissed; unintended consequences ensue, along with complaints by the aforementioned experts that there was poor implementation/irrational behavior/corruption/etc.

The simple fact of the matter is that for health care there is no workable centralized solution. It’s not that the experts came up with the wrong solution – it’s that no such solution exists. Not Obamacare, not the Ryan Plan, nothing. That’s why an approach like the Health Care Compact – now passed in 7 states and being considered in more this year – is the only rational way forward. The enormous, intractable problem must be broken down smaller, tractable parts.

But, alas, the Man of System never sees this as an option. He knows the right answer, and the people/governors/industry simply need to get with the program. His program. Now.

Of course, the Man of System is not a 21st Century innovation. It’s been with us for a long, long time. Adam Smith wrote about him in his Theory of Moral Sentiments:

The man of system, on the contrary, is apt to be very wise in his own conceit; and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. He goes on to establish it completely and in all its parts, without any regard either to the great interests, or to the strong prejudices which may oppose it. He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess–board. He does not consider that the pieces upon the chess–board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might chuse to impress upon it. If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder.

Some general, and even systematical, idea of the perfection of policy and law, may no doubt be necessary for directing the views of the statesman. But to insist upon establishing, and upon establishing all at once, and in spite of all opposition, every thing which that idea may seem to require, must often be the highest degree of arrogance. It is to erect his own judgment into the supreme standard of right and wrong. It is to fancy himself the only wise and worthy man in the commonwealth, and that his fellow–citizens should accommodate themselves to him and not he to them. It is upon this account, that of all political speculators, sovereign princes are by far the most dangerous. This arrogance is perfectly familiar to them. They entertain no doubt of the immense superiority of their own judgment. When such imperial and royal reformers, therefore, condescend to contemplate the constitution of the country which is committed to their government, they seldom see any thing so wrong in it as the obstructions which it may sometimes oppose to the execution of their own will. They hold in contempt the divine maxim of Plato, and consider the state as made for themselves, not themselves for the state. The great object of their reformation, therefore, is to remove those obstructions; to reduce the authority of the nobility; to take away the privileges of cities and provinces, and to render both the greatest individuals and the greatest orders of the state, as incapable of opposing their commands, as the weakest and most insignificant.

Ladies and Gentlemen, I give you Adam Smith: a man of remarkable insight, even 250 year later.