I am a fan of capitalism. A big fan. It is an economic system that can actually create wealth by harnessing talent, intelligence, and hard work, and in the end, everyone experiences the benefits. I like the fact that Wall Street executives get huge, ridiculous bonuses for doing a good job (although what happened recently was an outrage because many executives got enormous bonuses for doing a bad job). If you are good at your job, and your job is important, I have no problem with you getting rich. I like, for instance, that Steve Jobs and Bill Gates have more money than they know what to do with.
However, just because capitalism is appropriate for some situations, we cannot assume that capitalism is appropriate for all situations. Take for instance the health insurance industry. Conservatives are angry because a public health insurance option may put private insurers out of business eventually, and honestly, I think they are right. But so what? What’s so great about health insurance being subjected to capitalism?
Consider this difference: Steve Jobs had to be really smart to start a company that eventually gave us the iPhone. His intelligence, skill and hard work were rewarded by market, and he got rich. Good for him. But why in the world are there rich insurance executives? America is the ONLY country on this earth that has multi-millionaire insurance executives. The average pay for upper-level management is 12 million per year this year. But don’t they deserve their wealth, the way (some) Wall Street executive do?
In a word - NO! Health insurance isn’t chess; it's checkers. You get a certain amount of money coming in each month from premiums – let’s call that x, and you pay out a certain amount each month in claims – let’s call that y. In order to make money, your x has to be higher than your y. So what do you do to make that happen? Well, sometimes it happens naturally, and sometimes you have to deny a certain number of claims. That’s it. Someone please tell me why people deserve 12 million bucks a year for making that happen. Sure, you need a few competent people running your company and you have to have some good accountants, but their intelligence is just not irreplaceable enough to warrant giving them all that money. Capitalism just doesn’t make sense here, the way it does for financial markets, computer design, etc. We should take a cue from the rest of the world: no one needs to become a multi-millionare for figuring out how many claims to pay out.
