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Health Care And Small Business

Ryan Cooper unearths video of Herman Cain, back in his pizza CEO days, debating Bill Clinton on the merits of his proposed health reform back in 1994:

This relates back to one of the most fundamental non-convergences of thinking in American political life. Every progressive thinks the construction of a proper universal health care system would be a boon to small businesses. As Cooper writes, “Health care price increases disproportionately affect small businesses, mostly due to their lack of bargaining power — large companies, with their bigger pools of employees, can negotiate better prices.” What’s more, a large firm has an inherent cost advantage in trying to turn itself into an insurance pool since the whole idea of insurance is that you need to aggregate a large number of individual risks. Consequently, organizing a health care system around the idea of tax subsidies for employer provision of health care is a disaster for small business.

In practice, small business owners and their organizations basically never see it that way. Any kind of universal health care system involves some kind of higher levels of taxes and formal spending, and it’s anathema. Of all the possible stakeholders it’s small business owners with who it’s consistently impossible to form any kind of compromise. Maybe that’s because liberals are just out to lunch on this. But I think it’s mostly the economic culture war at work. Business owners have the strongest conservative ideology of any occupational category, and in America, opposition to universal health care is an important building block of conservative ideology. In other western countries where universal health care is taken for granted and the dispute is over how to organize its provision, I think business owner views would be more closely tethered to a concrete assessment of what’s good for the bottom line. But in America, there’s a higher-order ideological issue that dominates.

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