written 22 March 2020
published 29 March 2020
Logic is based on axioms: fundamental assumptions. Given a different set of axioms, the logical conclusions are vastly different. Capitalism assumes all people are selfish and autonomous, that all values can be reduced to a fiscal quantity, and the only goal of business is maximum profit.
The logical consequence of these assumptions is a globalized economy constantly striving to reduce fiscal costs. Union busting and automation have reduced labor costs, but eliminated living wage jobs. "Just in time" shipping has eliminated stored inventory costs. The result is an economic infrastructure that has little capacity to rapidly respond to changes in demand. "Free market" philosophy says that when demand exceeds supply capacity, prices will rise, reducing demand to a level that production can satisfy. But that assumes the demand is flexible and totally driven by cost. While this works relatively well for most goods and services, it is totally inadequate for robust public health.
We have a private capitalist health system in America, which is lean enough to make it profitable most of the time. As a result, we have less capacity per capita than other industrialized nations, with fewer than one million hospital beds for a population of 325 million. The "just in time" production model means essential materials are not stockpiled anywhere. All spare capacity in the system has been intentionally removed for increased profitability, but it is incapable of rapidly increasing capacity when needed. In normal conditions this makes sense, but leaves the healthcare system vulnerable to collapse, with lethal consequences, when dealing with an accelerating pandemic.
The current demand for acute health care is not price driven, but needs driven, so the limited supply will have no effect on reducing the demand. Instead, the health consequences will be much worse, as people who could survive if given some health care will die without it. As I write this on 22 March, the health care system in New York city is on the verge of being overwhelmed, with over 9,000 cases so far.
The market theory of supply and demand is incapable of meeting the needs of public health because the assumptions are wrong. In the face of pandemic, we are all in this together, not autonomous. We are all vulnerable to infection if anyone is infected, so the solution must be inclusive. A public health system must take into account what might happen, not just what is likely or desirable, so "profitability" must look long term, not just this quarter. It makes sense to have excess capacity that can be utilized quickly when needed. Stockpiles of critical materials make sense, even if the need is very intermittent. Long term, large scale, planning is necessary in order to have the capacity to deal with rapidly changing circumstances. Learning from the past helps prepare for future events.
Unfortunately, none of these essentials are part of American healthcare today. In addition, we have federal leadership that incapable of dealing with any reality that reflects poorly on the president.
After the 2014 Ebola outbreak in Africa, the government established apermanent epidemic monitoring and command group inside the White House National Security Council and another in the Department of Homeland Security, informed by scientific and public health advice. In 2018, Trump shut down the entire group, reassigned the leaders, which have not been replaced, and laid off most of the staff. He stated at the time that "he didn't want to pay for thousands of people to sit around." The White House has also reduced national health spending and cut global disease-fighting budgets.
Rather than taking a leadership role, coordinating federal, state and local responses to the virus, guided by knowledgeable scientific and public health experts, the president has made things worse. From the beginning he minimized the issue, more concerned with his image than the unfolding disaster. As the stock market reacted to reality, he focused on the financial collapse rather than the pending medical collapse. He has consistently given out wrong or misleading advice, forcing staff "corrections". He has abandoned all responsibility, ceding effective leadership to state governors.
The wrong economic model, combined with incompetent federal leadership, means that America will have a worse experience with this virus than most of the rest of the world.
