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Musings Report 2024-26 6-29-24 The Simple Reason Nothing Is Fixable: Addiction Capitalism
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The Simple Reason Nothing Is Fixable: Addiction Capitalism
To say that nothing is fixable is anathema to the dominant zeitgeist, which holds that 1) there is a technological fix to every problem and 2) anything less than enthusiastic optimism about the future, stressing hope and opportunity, is defeatist.
Among all the possible choices for zeitgeist default settings, these two are pretty good options, for they have a solid foundation in history--the amazing advances in technology--and psychology: a positive mental attitude is far more likely to generate positive results than entitlement, resentment, indignation or resignation.
But neither technology nor positive thinking are enough by themselves: there has to be a system that enables adaptation, a.k.a. problem-solving, and the sharing / propagation of solutions, and a set of commonly shared incentives and values that maintain the system's integrity (what we can also call its coherence) and utility.
In the broad sweep of history, Modernism and Capitalism arose in complementary harmony: Modernism elevated the individual and Capitalism elevated self-interest--the economic perfection of individualism.
Just as Capitalism famously melts all traditional social and economic structures into air--family, community and society are all subject to the demands of capital to increase efficiency to increase profits--Modernism expanded into the vacuum left as traditional constraints on individuals' freedom of movement and expression were swept away. Anything goes, and the purpose of life is to get rich and express your individuality: have it your way.
The mythology--there is no other description that isn't some form of sugarcoating--of Modernism and Capitalism is, like all mythologies, compelling and powerful: the pursuit of individual self-expression and self-interest magically create a vibrant, self-organizing society and economy that naturally benefit everyone.
In classical economics, this self-organizing magic is called "the invisible hand" of the market: as we each scramble to optimize our own self-interest, everything gets better for everyone: new innovations emerge, costs and prices fall, and whatever is scarce is replaced by some new product or service which is abundant due to its immense profitability.
This self-serving fantasy conveniently overlooks that Capitalism arose within an institutionalized, coherent system of law, finance and commerce that had developed over several centuries within Great Britain, which bequeathed these institutional structures and the values they embedded to its breakaway colonies in America.
These structures were like the water the capitalist fish swam in: they were taken for granted, as natural as self-interest itself. But these structures arose in specific times and places; they are not inevitable "laws of Nature."
But even these structures are not enough; as I explained in The Glue Binding Democracy and a Free Economy Has Melted: societies require shared values that manifest as civic virtue and social contracts, shared interests that place limits on greed / self-interest being the sole pursuit of life.
The single-minded pursuit of self-interest does not automatically generate a stable social order; rather, self-interest leads to attempts to bypass rules, rig the system to private advantage, bribe officials and fashion monopolies and cartels that are exempt from the competitive pressures that guide "the invisible hand" to become more efficient and productive.
If the single-minded pursuit of self-interest automatically optimizes the organization of society and the economy to ever-improving efficiencies that serve the common good, then how do we explain America's healthcare system, which costs more per capita than any other developed nation while delivering extremely uneven results in terms of the overall health of the populace, even as it generates billions of dollars in private profit?
If the profit motive by itself supposedly organizes society to the benefit of all participants, why does US healthcare display so many characteristics of a racket rigged to benefit the few at the expense of the many?
If we ask "how can we radically reduce the costs of healthcare while radically improving the overall health of the American public?", we quickly find reform is essentially impossible due to the single-minded pursuit of self-interest: every entity gorging at the feeding trough refuses to budge, for why should they? It's cheaper to bribe officials and politicians with hundreds of thousands to continue the flow of billions.
Rather than seek efficiencies, the system is choked by special interests each seeking to defend their slice of the $4.7 trillion pie (on its way to $7 trillion in a few years) by any means available.
Let's propose three thought experiments to help clarify the fundamental nature of our healthcare system.
Thought Experiment #1: If the government "got out of healthcare" and there were no healthcare insurance companies, how long could the healthcare system charge consumers the current prices without going bankrupt? In other words, the patient and their family would be expected to pay in cash the $5,000 ambulance ride, the $12,000 emergency room visit, and the $5,000 tests, and the $70,000 or $120,000 procedure and hospital stay.
We all know the answer: the system would be bankrupt within two months, as no more than 10% of the populace--and quite possibly only the top 5%--can afford to pay US healthcare out of pocket and not be driven into bankruptcy.
Consider a comparison between the costs of obstetrical services (delivering a baby) and a private hospital room in 1952 and today. The private room was $19 a day then, $225 in today's dollars (i.e. adjusted for inflation). Obstetrical services were $30 then, the equivalent in today's money of $355.
What are the current costs for Obstetrical services?
How Much Does It Cost to Have a Baby in America Now?
"In 1950, it cost my grandmother $131.84 to have a baby. That works out to about $1,667.12 today. Before insurance. And she stayed in the hospital for seven days!"
Meanwhile, when my daughter was born in 2020, the total cost of her birth was nearly $90,000. Two years later her brother, a much simpler delivery at the same hospital, cost around $26,000."
Now consider my 2009 essay, The "Impossible" Healthcare Solution: Go Back to Cash.
Thought experiment #2: a newly minted MD wants to establish a sole-proprietor "family doctor" practice. Nowadays this is essentially impossible due to the crushing costs of malpractice insurance imposed by our legal system, and impossible-to-comply-with-everything regulatory thicket of compliance and rule-following that soon ensnares MDs who spend more time with patients than completing paperwork.
What was once the norm has been eradicated by the legal and regulatory systems which act as gatekeepers to protect the existing mega-cartels and monopolies from any competition.
Thought experiment #3: a group of community leaders wants to establish a community-owned hospital. Community-owned hospitals were once the norm, now they are rarities. It's not hard to figure out why when we consider construction costs and regulatory / operational costs. The University of California at San Francisco (UCSF) medical center is world-renowned. It is a state-owned facility. UCSF has plans to build a new 15-story hospital, at a cost exceeding $2 billion. How many entities or institutions can afford a $2+ billion investment? How much income did the UCSF analysts reckon the hospital would collect from the federal government (Medicare, Medicaid, etc.) and private insurers?
On a smaller scale, our local hospital is adding a wing thanks to a $50 million donation from billionaire Marc Benioff, a sum matched by the state. So $100 million for a new wing. How many entities or institutions can afford a investment on this scale?
The problem with the single-minded pursuit of self-interest self-organizing the society and economy is that self-interest optimizes the protection of existing concentrations of wealth and power. I call this model Addiction Capitalism, as it is organized around creating dependencies--insatiable needs or desires--and gatekeeping / toll-gating the few pathways that are left after a ruthless consolidation has eliminated competing pathways.
In other words, first herd the entire populace onto privately owned pathways they must use and then set up a tollgate to charge the now-dependent populace for the use of systems they cannot avoid without extreme sacrifices.
For example, healthcare.
For a non-medical example, consider how tech companies sell a basic accounting software system for a small sum until it becomes a standard for households and small businesses. Then eliminate outright purchase of the software and switch to a high-cost subscription model. Nice little history of all your financial records you got there; it would be a shame to lose all that by refusing to pay our monthly fee.
As for healthcare, consider the enormous percentage spent on "lifestyle" diseases generated by unhealthy diets of highly processed foods and poor fitness. The corporate purveyors of highly processed foods intentionally design their products to be addictive by hijacking the pleasure centers of our brains that are hard-wired to respond to heavy doses of sugar, salt and fat, all of which are scarce in nature.
So the foods (using the term loosely, as highly processed products don't qualify as real food) being marketed are addictive, which generate diseases which make the patient dependent on medications that must be taken for the rest of one's life--not a subscription model, but close: a prescription model of dependence.
Dependence is another term for addiction: the "consumer" / patient becomes dependent on products and services which are only offered by a monopoly or cartel.
That's Addiction Capitalism in a nutshell, and it's the dominant model of insuring profitability in America's economy.
This is not to say there isn't a role for the pursuit of self-interest in a healthy society and economy. The point here is that it must be restrained / balanced dynamically with the need to maintain institutions and social structures that keep unlimited self-interest from organizing the society and economy to serve those who have already concentrated the wealth and power.
Highlights of the Blog
10 Geopolitical / Financial Risks to the Global Economy 6/27/24
"Why Are You So Negative?" Good Question. 4 Answers from Real Life 6/25/24
So Sorry, But Every Inch of You Is Toxic 6/24/24
Podcast:
10 Geopolitical / Financial Risks to the Global Economy
Best Thing That Happened To Me This Week
Patron / reader Kelly Z. sent me a very moving message about the value of my work to her life / career path. She completed a difficult transition, establishing a new life for herself in another country. I am honored by her praise and proud of her accomplishments, all of which required many sacrifices, hardships and uncertainties.
What's on the Book Shelf
I've been thinking about the parallels between the work of Christopher Lasch and Ivan Illich (Shadow Work 1981) regarding the ways economic structures undermine community and health.
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From Left Field
NOTE TO NEW READERS: This list is not comprised of articles I agree with or that I judge to be correct or of the highest quality. It is representative of the content I find interesting as reflections of the current zeitgeist. The list is intended to be perused with an open, critical, occasionally amused mind.
Many links are behind paywalls. Most paywalled sites allow a few free articles per month if you register. It's the New Normal.
America's Income Crisis: How It's Triggering a Collapse in Birth Rates (via Derek)
How Do You Stack Up To the Average Income in Your State?
One chart shows exactly why inflation is making everyone so miserable
Long Covid expert: all infections have "prolonged consequences"
Dell said return to the office or else--nearly half of workers chose "or else": Workers stayed remote even when told they could no longer be promoted.
Could you patent the sun? How vaccine patent waivers would save lives
Why Don’t U.S. Medical Schools Produce More Doctors? (via Tom D.)
Snitches Give Stitches: Oregon Moves To Make Reporting Microaggressions Mandatory For Doctors
Why Civilizations Collapse (Samo Burja)
Johatsu--Vanishing without a trace in Japan (47 min)
Commencement address by Steve Jobs (2005)--worth re-reading once a year....
Why Southeast Asia Is Crying Over This Movie: A tear-jerker from Thailand, 'How to Make Millions Before Grandma Dies,' has become a surprise hit across the region. Its theme is universal: bonding with family.
"In a consumer society there are inevitably two kinds of slaves: the prisoners of addiction and the prisoners of envy." (Ivan Illich)
Thanks for reading--
charles |
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