A Former British Commie Says Yes to Profit in Health Care
Leave it to a Brit who used to be a communist to support relying on the profit motive to improve health care. Writing in the Guardian, Richard Smith argues:
Profit is a filthy word for many health campaigners. It evokes fears of the rich getting better treatment than the poor and of shareholders fattening themselves on money that should have gone to sick children. Sadly, this is a wholly erroneous and very English way of thinking – driven, I believe, by the Romantic poets (better hills than profits) and snobbery (it’s people in trade who care about profits). The reality is that profit benefits health care just as it does all other enterprises.
I was once secretary of the Greenwich Young Communist League and deplored profits, although I knew nothing about economics. Twenty years later I was learning economics at the Stanford Business School when the Berlin Wall came down. Planned economies, we all came to realise, don’t work. We need a mechanism to drive up quality and value and drive down costs – and competition combined with investment and profit is the most successful mechanism. Adam Smith worked it all out more than two centuries ago.
Most of us thus accept that the majority of our products and services are delivered by profit-making enterprises. My food, water, pens, books, music, phones, flowers and computers are all delivered to me by profit making companies. As I look around my study I can’t immediately identify anything that comes from an enterprise unconcerned with profit. I see a picture of my dead father painted by an old girlfriend of my brother’s, but she was paid more for the picture than it cost her to paint it – profit. For that’s what profit is – a payment for something that exceeds my costs. I sell my labour for profit. Indeed, no enterprise – charity, hospital, doctor, or health service – can continue if expenditure exceeds income. “No margin, no mercy,” say the nuns who run a large US hospital.
When will America’s lefties have the same insight?