Artur Davis: The Mandate’s Very Bad Day

At the risk of reading tea leaves from two justices, the ever pivotal Anthony Kennedy and the magisterial but cautious John Roberts, the game seems up on the health insurance mandate.

In casual parlance, they seemed to get it—the “it” being that a government with the power to compel a consumer to enter a market is as omnipotent economically as it wants to be. That government is not only theoretically free to pursue a range of things it won’t do, from making Prius purchasing, Iphone carrying, broccoli eaters of all of us—but, as Kennedy especially seemed to intuit, its also capable of doing something more realistic and more substantial, which is collapsing the zone of economic autonomy to almost nothing, in the name of making the economy look the way government thinks it should.

David Brooks, in his latest column in the NY Times, puts the mandate in the familiar context of the Obama Administration’s penchant for centralized bureaucracies, and he is certainly right about that.  Given its druthers, and more votes in Congress, the president would have almost certainly followed that trend into a full scale public option that would have arguably refashioned healthcare delivery along the lines of the fraying, cost-exploding model that is Medicare. For good measure, this White House would have done the same with cap-and-trade and the market for carbon emissions, and they have certainly run the same play in the context of the Dodd-Frank reform by carving out an aggressive new regulator for consumer financial products.

In Brooks’ analysis, the mandate is just the leading edge of the liberal preference for achieving policy goals through centralized, regulated means. But there is another, much more unconventional set of footprints behind the mandate that most of its critics have missed. It is the conversion of liberalism from a shield against the most jagged imperfections in the marketplace, into a proactive lever that remakes the market to fit a set of specific public values. If Medicare and Medicaid were conceived as a hedge against a free market’s inability to absorb the impoverished and the high cost elderly, the Affordable Care Act is a bridge that goes further. The Act theorizes that the voluntarily uninsured are a drag on market and price stability, and makes the age old free rider problem a civil violation.

The defenders of the mandate try to refashion it as just another regulatory tool.  But As Justice Kennedy artfully pointed out, regulators govern markets, they don’t make them. Once government segues into making markets, or better yet, re-making markets by using its powers coercively and not just protectively, it is in decidedly unorthodox territory for a non command economy.  In the limited instances when we have ventured so far, the results have been short-lived and have back-fired: think of the aborted move in the seventies from laws that prohibited race discrimination to quotas that aimed at workforce and academic parity, a transition that has been all but abandoned and one the left seems in no hurry to resurrect.

The defenders of the mandate have invariably argued, first, that the radical outcome would be to strike down a product of the legislative process. Second, they have resorted to the special circumstances case, which paints healthcare as a uniquely collective section of the economy, where one individual’s inactivity ratchets up costs for some of the rest of us. The encouraging development is that on Tuesday, five justices saw this blending of “business as usual, but we won’t ever need to do it again” as the shakiest of foundations.

(Cross-posted, with permission of the author, at OfficialArturDavis.com)