The Medical Socialism of V.I. Magaziner

By Llewellyn H. Rockwell, Jr.

Bill Clinton wants to nationalize one-seventh of the American economy. If he gets away with it, the culprit will be the sinister figure in charge. That's not Hillary, but her control, Ira Magaziner. A former consultant, he is now a full-time troublemaker at the White House.

Before getting his current job, Magaziner bamboozled big business into paying him millions of dollars for unworkable reorganization plans. Meanwhile, he was co-authoring a book with now Labor Secretary Robert Reich, which advocated a new federal "centralized agency" to impose a "rational industrial policy."

To understand Magaziner, we have to go back to the late 1960s. After graduating from Brown University, Magaziner received a Rhodes Scholarship to study at Oxford. Instead of attending his classes – which he criticized as too steeped in history, literature, and religion, i.e. Western civilization – he listened to socialist lectures at the London School of Economics and organized anti-American protests with Bill Clinton.

Ira had big dreams: the destruction of bourgeois society. But he and his cronies decided they would start "small," by taking over a city.

"It was about resisting conventional job tracks," Magaziner cell member Peter Laarman recalls, "rejecting conventional electoral politics, finding some way to use our skills and our education to effect some sort of social transformation."

Brockton, Mass., an Italian working-class city and the birthplace of Rocky Marciano, was the target of their social experiment. Magaziner and a dozen friends, driving Swedish cars, arrived the fall of 1971.

They knew they couldn't storm the Winter Palace in Brockton, so like other Menshevik and Fabian socialists, they adopted a go-slow approach that relied on trickery.

Magaziner and his politburo began by insinuating themselves into the daily life of the community. Some became bank tellers and store clerks. Others became construction workers and truckers. Still others worked in libraries and schools. Magaziner, the Lenin of the plot, worked on a loading dock at night, and spent his days "analyzing" the "power structure" of the city.

The conspirators also published a newspaper., Unlike Lenin's Spark, it didn't openly advocate communism. Instead, it agitated against the "elites" in this settled ethnic community. Editorials sought to set tenants against landlords, homeowners against new businesses, teachers against parents, and, of course, workers against owners.

While they didn't bring the gulag to Brockton, the Saab socialists did manage to stop a private housing development and start a money-losing food collective. But they left in defeat, unfortunately not on a rail. "It became clear," said the Washington Post, "that the economic forces that controlled the fate of the city were outside of Brockton. Magaziner set out to understand them."

Indeed, and he is following much the same model in health care. The healthcare revolutionaries under Magaziner's direction have insinuated themselves into national life to effect a social transformation. They have given us a new vocabulary that few people except themselves understand. And they are setting employees against employers, big companies against small, doctors against patients, the insured against the insurers, and the old against the young.

If we cut through Hillary's obfuscations and the Republicans' accommodations, we can see that Magaziner is not proposing a program to improve the nation's "health." He's not even pushing a plan to have the government pay for everyone's health care. As someone consumed by egalitarian envy, he is motivated by hatred of the middle class and the market, and his plan is designed to injure both.

We already have the fundamentals of such a system in place. The Great Society gave us Medicare and Medicaid, two experiments in redistribution, and their present cost is equal to the entire federal budget in 1974.

The Magaziner plan will cost much more, of course. It is, after all, universal, and the demand for "health services" at zero price is unlimited. Resources will be allocated not through the market, but by government edict. Those with politically correct health problems will be made better off through coerced transfers (i.e., theft), while the rest of us will he tossed by the wayside.

Magaziner's scheme is even worse than the socialist systems in Britain or Canada, which at least allow people to purchase private care outside of the system. He will force everyone, doctors and patients alike, into regional collectives. Private practitioners will be forbidden from accepting "bribes" or "gratuities" from patients, that is, from being paid the market price. Under Magazinerism, health care will be delivered in the way Marx said all goods and services should be delivered, to each according to his need (as defined by the government, of course). It's why some doctors are talking about offshore clinics.

The Magaziner plan will also tear open racial wounds in the same way that redistricting has. States may not, according to the plan, "concentrate racial or ethnic minority groups, socioeconomic groups, or Medicare beneficiaries." And since the Medicaid experience has shown that minorities are potentially disproportionate consumers of medical services, premiums will skyrocket, and home values will plummet, for those living in collectives linked to inner cities.

Even the administration, speaking anonymously, recognizes that the U.S. faces demographic difficulties that other countries do not. That is why socialized medicine, American style, will be more expensive, wasteful, and gruesome than in other Western countries.

Under a market system, people face built-in incentives to do their best to stay healthy, for they are punished by the price system when something goes wrong. For example, the uninsured think twice before going to the doctor because they have to pay him out of their pocket.

This is as it should be. Even "private" health insurance, where the premiums don't reflect risk, is a product of government intervention. Initially offered by unions, it was expanded to circumvent wage and price controls.

Insurance only makes sense if it is profitable. And it's only profitable when the insurer pays out less in claims than he takes in through premiums. To do that, he must put together risk pools of people who will, on average, cost less than their payments. Otherwise insurance is only a mistake or, in the case of government, a welfare subsidy.

Under subsidized insurance, a vast amount of health resources are used up by government on people who prefer crack cocaine to fresh fruit, or television to a brisk walk. This makes neither moral not economic sense.

Every time a new socialist proposal is advanced, I turn to Ludwig von Mises's Socialism. Written in 1922, it's still the best guide to the schemes of the Left.

The destructive "aspect of accident and health insurance," Mises wrote, "lies above all in the fact that such institutions promote accidents and illness, hinder recovery, and very often create, or at any rate intensify and lengthen, the functional disorders which follow illness or accident.....

"By weakening or completely destroying the will to be well and able to work, social insurance creates illness and inability to work; it produces the habit of complaining – which is itself a neurosis – and neuroses of other kinds. In short, it is an institution which tends to encourage disease, not to say accidents, and to intensify considerably the physical and psychic result of accidents and illnesses. As a social institution it makes a people sick bodily and mentally, or at least helps to multiply, lengthen, and intensify disease."

While a junior at Brown, the man who would complete this process in America, engineered a revolution in the curriculum, virtually abolishing grades and required courses. Ira Magaziner organized the students to bring this about. He recruited a task force to write a 425-page "study." He hosted collating parties, and persuaded students to drop his report on the desks of professors and administrators, with intimidating looks, words, and demands. He called out mass demonstrations and harangued them through loudspeakers. As left liberals, the faculty was already morally and intellectually disarmed, and they voted for it. Today, this great university is still blighted by its Magaziner curriculum.

With no grades, excellence is not rewarded and laziness is not punished. Everybody is promised a free ride, and the net result is increased waste, sloth, and demoralization. As well, under Magaziner's socialist health proposal, formally introduced in Red October, those who work hard and take care of themselves are forced to pay the medical bills of those who don't. The incentive structure works in reverse, and almost everyone ends up worse off, especially those who need and would like to pay for the special care that the state won't provide.

In 1965, to entice students to go along with his grade egalitarianism, Magaziner put on a left-wing festival featuring "poet" Allen Ginsberg, "musicians" James Brown and Dizzy Gillespie, and non-stop movies of the Marx Brothers trampling on manners and morals, destroying the property of the rich, and stealing through trickery what they didn't wreck. When Magaziner asked the culturally corrupted stuletariat, whipped up into an anti-bourgeois frenzy, whether they favored ending grades, they screamed, "Yeah!"

In 1993, Americans at large are being tricked by promises of eternal health at no cost. May they react like the working men and women of Brockton instead of the spoiled hippies of Brown.