A CAP Analyst’s Red-Baiting Book Accidentally Makes the Case for Socialism

Warren advisor Ganesh Sitaraman and Yale Law School professor Anne L. Alstott bend over backward to fix capitalism. And prove they can’t.

Phyllis Eckhaus September 23, 2019

(Illustration by Koko Lee)

To expe­ri­ence social­ism is akin to being slow­ly boiled alive — so awful, our pro­tec­tive instincts would kick in to help us escape before its dan­gers over­took us.

It’s human and especially American to want choices. But some choices are scams, dangerous to the public welfare.

Or so The Pub­lic Option: How to Expand Free­dom, Increase Oppor­tu­ni­ty and Pro­mote Equal­i­ty tells us. Co-authors Ganesh Sitara­man and Anne L. Alstott present this book as an unblink­ered analy­sis of how we might guide pub­lic pol­i­cy toward greater equal­i­ty in the pre­sump­tive­ly Trump-free years ahead. Intend­ed to jump­start a nation­al con­ver­sa­tion about what we owe each oth­er,” the book defines and defends the con­cept of the pub­lic option,” explores past and cur­rent exam­ples, and pro­pos­es new pos­si­bil­i­ties, from child­care to retire­ment sav­ings to high­er ed and beyond. The book shines an impor­tant spot­light on the ben­e­fits that gov­ern­ment-con­trolled pro­grams can pro­vide for the gen­er­al pub­lic. And yet, the authors offer a red-bait­ing dis­missal of social­ism so out­ra­geous it’s almost fun­ny. Sitara­man and Alstott define a pub­lic option as a pro­gram that guar­an­tees access to impor­tant ser­vices at a con­trolled price” and coex­ists (or could co-exist) with pri­vate pro­vi­sion of the same ser­vice.” The U.S. Postal Ser­vice, for instance, pro­vides mail ser­vice to every­one at a rea­son­able price, and it cov­ers even remote (and urban) areas that pri­vate firms shun.” They empha­size, how­ev­er, that their goal is not to chal­lenge cap­i­tal­ism but to improve mar­kets in cas­es where they aren’t com­pet­i­tive or are found­ed on tox­ic inequality.”

It’s encour­ag­ing that pub­lic options are being dis­cussed on the Left as a poten­tial solu­tion to eco­nom­ic inequal­i­ty, espe­cial­ly in the lead-up to the 2020 pres­i­den­tial elec­tion. But, as the health­care debate high­lights, there is fierce ten­sion with­in the Demo­c­ra­t­ic Par­ty about whether the gov­ern­ment should offer a pub­lic option with­in an oth­er­wise pri­va­tized mar­ket (advo­cat­ed by cen­trists such as Joe Biden) or do away with pri­vate options alto­geth­er in favor of uni­ver­sal pro­grams like Medicare for All (a plan Sen. Bernie Sanders has open­ly called demo­c­ra­t­ic social­ism”). The fact that the cen­trist Demo­c­ra­t­ic posi­tion is a pub­lic option marks a sig­nif­i­cant shift to the left in the party’s pol­i­tics — in 2009, a push to include a pub­lic option in Oba­macare failed—but sup­port­ers of Medicare for All argue that pri­vate options per­pet­u­ate inequal­i­ty because pri­vate cor­po­ra­tions will always pri­or­i­tize prof­its over the well-being of people.

The lib­er­al Cen­ter for Amer­i­can Progress (CAP), a pol­i­cy insti­tute close­ly allied with the cen­ter-lib­er­al Demo­c­ra­t­ic estab­lish­ment, has been a flash­point for intra­party debates, and health­care is no excep­tion. Rather than sup­port­ing Medicare for All, CAP strong­ly favors a plan called Medicare Extra, which would cre­ate a pub­lic option while main­tain­ing pri­vate insur­ance. It’s worth not­ing that Sitara­man is a senior fel­low at CAP. He is also a for­mer pol­i­cy direc­tor for (and now long­time advi­sor” to) pres­i­den­tial can­di­date Sen. Eliz­a­beth War­ren (D‑Mass.), who wavered between a pub­lic option and sin­gle-pay­er before unequiv­o­cal­ly sign­ing on to Sanders’ Medicare for All plan in June. Sitaraman’s role on Warren’s cam­paign has raised con­cern among pro­gres­sives about her com­mit­ment to left prin­ci­ples — as has her procla­ma­tion that she is a capitalist.

Enter The Pub­lic Option, which could be seen as a shot across the bow by cen­trist Democ­rats who want to embrace the role of gov­ern­ment while swear­ing off social­ism. Sitara­man and Alstott assure read­ers that, con­trary to urban myth,

Frogs, like peo­ple, are com­plete­ly capa­ble of telling the dif­fer­ence between cold, warm and boil­ing water. And when the water gets too hot, frogs jump out. Pub­lic options aren’t designed to be social­ism, and if they’re start­ing to become social­is­tic — or if some­one pro­pos­es social­ism under the guise of pub­lic options — every­one will be able to tell the dif­fer­ence, and then jump out.

It’s par­tic­u­lar­ly galling that The Pub­lic Option dis­re­gards social­ism with this rhetor­i­cal sleight-of-hand, giv­en how the book nev­er actu­al­ly defines the buga­boo of social­ism. Arguably, social­ism” is like democ­ra­cy” — a term defined by its advo­cates more as a direc­tion and aspi­ra­tion than as a sim­ple pro­gram. While there’s no sound­bite-friend­ly def­i­n­i­tion — not in Jacobins elo­quent but lengthy social­ist primer nor the Demo­c­ra­t­ic Social­ists of Amer­i­ca plat­form—social­ism, as under­stood by its friends and foes alike, runs counter to cap­i­tal­ism, with the goal of min­i­miz­ing cor­po­rate and elite eco­nom­ic and polit­i­cal power.

As a cen­tral part of their argu­ment, Sitara­man and Alstott wax rhap­sod­ic about gov­ern­ment-sup­port­ed pro­grams that have his­tor­i­cal­ly pro­mot­ed pub­lic wel­fare by offer­ing free or low-cost ser­vices: libraries, land-grant col­leges, 30-year fixed mort­gages, Social Secu­ri­ty, Medicare. From their book’s first paragraph:

We stop by the local post office to mail a let­ter, with­out reflect­ing on the pub­lic sup­port that makes it pos­si­ble to send that let­ter any­where in the coun­try for less than a dol­lar. We drop our kids at the pub­lic school and take the sub­way, train or high­way to work. Many of us have attend­ed state uni­ver­si­ties, and many more have vaca­tioned at a nation­al park or cooled off at a pub­lic swim­ming pool. And we count on Social Secu­ri­ty and Medicare to pro­vide secu­ri­ty for us after we retire.

Bernie Sanders calls such gov­ern­ment offer­ings social­ism”; Sitara­man and Alstott call them pub­lic options.” Sanders is cor­rect. Though there may be pri­vate options avail­able — e.g., pub­lic libraries ver­sus book­stores — these pub­lic pro­grams were not designed with that com­pe­ti­tion in mind. In keep­ing with social­ism, they exist sep­a­rate from and out­side the pri­vate mar­ket, intend­ed sim­ply to serve the pub­lic good.

And yet The Pub­lic Option bends over back­ward to avoid the das­tard­ly taint of social­ism. Whether this ver­bal runaround is intend­ed to win over mod­er­ates isn’t clear, but what does become clear is that the authors, almost despite them­selves, have faith in the mar­ket. They hope their pro­posed pub­lic options will dri­ve the worst play­ers in the pri­vate sec­tor out of business.

As friends of cap­i­tal­ism, Sitara­man and Alstott insist they don’t want to kill the beast, just tame it. Yet in their eager­ness to win con­verts across the polit­i­cal spec­trum, they mis­lead. They count Social Secu­ri­ty and Medicare as much-beloved pub­lic options” — option­al only because the devout, self-employed Amish can legal­ly opt out. Bizarrely, they also tout Medicare for All as a pub­lic option, even though that slo­gan typ­i­cal­ly sig­ni­fies Sanders’ uni­ver­sal sin­gle-pay­er plan with­out pri­vate insurers.

If Social Secu­ri­ty and Medicare (and poten­tial­ly Medicare for All) suc­ceed, it’s because they are not option­al; they are essen­tial­ly manda­to­ry. The priv­i­leged can­not sim­ply opt out of pay­ing. These huge pro­grams have cor­re­spond­ing­ly huge clout and con­stituen­cy, which allows them to pro­tect the most vul­ner­a­ble. Impor­tant­ly, these pro­grams are not run by pri­vate cor­po­ra­tions, which prof­it at the expense of others.

Indeed, there is tac­it ten­sion between pub­lic” and option.” Make a pro­gram option­al, and the pub­lic inter­est is often under­mined; the option” ends up absorb­ing the more expen­sive or risky clients reject­ed by the pri­vate sec­tor, rais­ing the pub­lic cost while decreas­ing its qual­i­ty. With­out manda­to­ry uni­ver­sal health­care cov­er­age to spread the risk among the well and the sick, and to give the gov­ern­ment clout to set price con­trols, the peo­ple with chron­ic health con­di­tions and dis­abil­i­ties get denied cov­er­age because they pose too high a risk” to pri­vate insur­ers’ prof­its. This implic­it under­stand­ing informs the require­ment for every­one to be held respon­si­ble for pay­ing into Medicare and Medicaid.

Con­sid­er char­ter schools, which raise a host of prob­lems. Even good” char­ter schools cause sys­temic harm: Char­ters rel­e­gate the hard­est-to-teach stu­dents to the pub­lic schools while drain­ing those same schools of resources. The most vul­ner­a­ble stu­dents are made more so. Indeed, though not men­tioned in the book, char­ters actu­al­ly re-seg­re­gat­ed Delaware’s pub­lic schools, which had pre­vi­ous­ly achieved remark­able suc­cess at deseg­re­ga­tion. Elite” char­ter school admis­sion pre­req­ui­sites kept poor Black and Lat­inx chil­dren out.

Pri­vate options exac­er­bate inequal­i­ty, both by pre­serv­ing exploita­tive jobs that could instead be well-pay­ing pub­lic jobs, and by draw­ing con­sumers away from the pub­lic options, there­by drain­ing pub­lic resources. Look at the pri­vate options com­pet­ing with pub­lic trans­porta­tion: ser­vices like Uber and Lyft. Sitara­man and Alstott cite Uber as exem­pli­fy­ing the gig econ­o­my” — com­pa­nies that don’t pro­vide their work­ers with ben­e­fits. Ride-hail dri­vers are among the many who could ben­e­fit from gen­er­ous gov­ern­ment-spon­sored pub­lic options in health­care and retire­ment, the authors note. But ride-hail ser­vices also drain fares from the pub­lic tran­sit sys­tem, lead­ing to less fund­ing and high­er over­all costs for con­sumers, who are then dri­ven to use the pri­vate ser­vices. And since the busi­ness mod­el for Uber and Lyft is geared toward an even­tu­al shift to dri­ver­less cars, these com­pa­nies are active­ly invest­ed in replac­ing work­ers with robots. 

To scru­ti­nize the pri­vate option is to see the malev­o­lence of cap­i­tal­ism hid­ing in plain sight. It’s telling that the authors devote a full chap­ter to flesh­ing out a pub­lic option” pro­pos­al for child­care, and that their pro­pos­al is entire­ly gov­ern­ment-oper­at­ed. Child­care, they assert, is too impor­tant to be left to the high cost and uncer­tain qual­i­ty that the pri­vate mar­ket pro­vides.” Sure­ly, this cau­tion is appro­pri­ate to vir­tu­al­ly all ser­vices basic to a decent life: school­ing, health­care, retire­ment ben­e­fits, elder­care — the list goes on. All of these are vital to our sur­vival. They are all too impor­tant to have the pri­vate sec­tor screw them up.

It’s human and espe­cial­ly Amer­i­can to want choic­es. But some choic­es are scams, dan­ger­ous to the pub­lic wel­fare. Pri­vate cor­po­ra­tions run mis­lead­ing mar­ket­ing cam­paigns, their alle­giance not to con­sumers nor the pub­lic, but to their share­hold­ers. Mean­while, con­sumers floun­der, unable to nav­i­gate com­plex choic­es in a way that ulti­mate­ly helps the pub­lic good, or even their own good.

Sitara­man and Alstott have opt­ed to pro­mote a we’re all in this togeth­er” vision that empha­sizes the pow­er of gov­ern­ment to advance the com­mon good. They clear­ly believe that West­ern Euro­pean-style social wel­fare pro­grams are pos­si­ble for the Unit­ed States, just so long as they’re sold as choic­es” that will not lead to wrench­ing upheaval or struc­tur­al change. Their kum­baya sales pitch has feel-good appeal.

So, yes, let’s re-envi­sion gov­ern­ment as an appro­pri­ate source of cru­cial, life-affirm­ing social pro­grams. But maybe we’re not all in this togeth­er. Maybe our cor­po­rate over­lords are per­fect­ly pre­pared to sub­vert the pub­lic wel­fare for their own per­son­al gain. And maybe wrench­ing upheaval looms ahead as cli­mate change roils the plan­et, bring­ing even greater pow­er to the rich and mis­ery to the poor. If that’s the future, we’ll want to know all our options. And maybe opt for socialism.

Phyl­lis Eck­haus is an In These Times con­tribut­ing edi­tor who has writ­ten essays and book reviews for the mag­a­zine since 1993, cov­er­ing every­thing from the his­to­ry of Mad Mag­a­zine to the eco­nom­ics of ter­ror­ism. Her work has also appeared in News­day, The Nation, the Guardian (U.S.) and the Wom­en’s Review of Books, among oth­er pub­li­ca­tions. Trained as a lawyer and social sci­en­tist, with degrees from Yale, Har­vard and New York Uni­ver­si­ty, she works in non­prof­it man­age­ment and lives in New York City.
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