May 17, 2006
Health Care III Posted by Joshua Zeitz at 01:00 PM EST I’m looking forward to reading more from John Steele Gordon on the question of health care. The issue is sufficiently complex and important as to defy the normal, rigid ideological divisions between left and right. One need only look to Massachusetts, where Ted Kennedy and Mitt Romney, two leaders from opposite sides of the political spectrum, recently forged a comprehensive plan to insure almost every resident of the state. Though we appear to agree on quite a few points of public policy, John Steele Gordon and I disagree a little about the history behind the question. Particularly, Mr. Gordon takes issue with my characterization of private-sector and public-sector motives. Insomuch as these blog posts are, by necessity, short, he is right, of course. My categories of analysis were sweeping. Nevertheless, I think I can defend them. First, and most specifically, the general agreement known as the Treaty of Detroit was not limited to General Motors and the UAW. Because UAW chief Walter Reuther and GM president Charles Wilson ironed out a pioneering series of agreements between 1948 and 1950—involving health care benefits, a defined benefits pension plan, and cost-of-living-adjustments (COLAs) pegged to inflation—Motor City was honored with the title. But labor historians use the term, “Treaty of Detroit,” more generically, to describe similar agreements struck between organized labor and large private-sector employers in a wide range of industries (rubber, steel, the needle trades, etc.). So when Mr. Gordon writes, “The deal cut between General Motors and the UAW bound GM and the UAW (and, in effect, the rest of the auto industry), not ‘the private sector,’” he is half-right and half-wrong. The deal became the prevailing model for labor relations and the provision of welfare benefits in the large, unionized industries. That said, in the post-war period union membership peeked at just 34.7 percent of the non-agricultural workforce, so many workers did not enjoy representation. But the industry standards set by companies like GM encouraged even many non-union employers to follow suit. More generally, Mr. Gordon’s assertion that I vastly over-simplify terms like public-sector and private-sector is of course right, but not entirely fair. The American Heritage Blog doesn’t allow for a great deal of specificity, as we tend to keep these exchanges short. But my analysis rests on a host of studies by labor historians like Nelson Lichtenstein (U.C. Santa Barbara), Lizabeth Cohen (Harvard), Robert Zieger (University of Florida), and Jennifer Klein (Yale), and political historians like Jonathan Bell (University of Reading) and Alonzo Hamby (Ohio University), who have painstakingly demonstrated the ways in which private-sector businessmen, businesses, and trade groups lobbied against the expansion of the welfare state in the 1940s and 1950s and insisted that the provision of health care and supplementary pension benefits could best be provided by employers, not government. Mr. Gordon writes: “Again, ‘the private sector’ cannot promise anything. In this case, Mr. Zeitz seems to be using the term as a synonym for ‘corporations.’ They, too, never acted in concert (which would have been illegal in any event).” But this isn’t entirely true. Thousands of trade groups, as well as umbrella business organizations like the Chamber of Commerce and the National Association of Manufacturers, have long coordinated the actions of large and small corporations, and professions, on matters of public policy and partisan politics. While such groups represent a diversity of interests and often clash, on a few questions—namely, whether FDR’s New Deal should be extended to encompass state health insurance, whether to raise the minimum wage, whether to keep provisions of the 1935 National Labor Relations Act(aka the Wagner Act) intact, whether to expand the reach of Social Security, and whether to pass “full employment” legislation resting on Keynesian economic principles—in the 1940s and 1950s these groups acted in concert. They almost always opposed these measures and lent their considerable financial and political clout to legislative and electoral struggles over them. Mr. Gordon is right in calling for more nuance, but I think we can make some generalizations about the working of interest-group politics in America. As for Mr. Gordon’s point about unions, and their half-clean hands, I’m happy to concede the basic point. When I argued, for instance, that the patchwork system of employment-based insurance left many women and African-American workers out in the cold in the 1950s, I might have gone further and explained that union locals—even those affiliated with nationally liberal labor organizations like the UAW—often played an aggressive role in maintaining rigid workforce segregation. Finally, I think Mr. Gordon’s critique of Paul Krugman was a little gratuitous. Say what you will about his New York Times columns, Krugman is a distinguished and widely respected economist. I’m not certain that I agree with his call for a single-payer system (that is, I think I disagree with him on this question, but I’m interested in knowing more about how the French system operates—from what my European friends tell me, it works far better than the English system). But Krugman is fundamentally correct in pointing out the wasteful administrative costs associated with our free-market health care economy, and since Mr. Gordon didn’t take that point on directly, I’m assuming that he, too, is begrudgingly in agreement with Krugman on that point.
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