2016-08-26

EpiPens, Economic Ethics, and the Health of the Body Politic


Recently Bizarro reposted the 2013 cartoon shown above in response to the 2016 kerfuffle over the price hikes in the EpiPen (access to which can be an actual life or death issue for people with severe allergies). In response, a good friend of mine who is a staunch defender of free market libertarianism sent me this National Review article and asked for my response.

So, I wrote the following response which gave me a chance discuss the moral value of economics. This is something I've been meaning to do for a while. I don't write or teach systematically about the intersection of theology and economics, so this gave me the opportunity to organize some preparatory thoughts from my perspective as a professional pastor, and a very amateur economist.

First, a note on Bizarro comic I posted. What I find interesting-- and why I posted it-- is because these Big Pharma stories are so endemic and systemic. They regularly occur. And even the comic itself was written in 2013. So whatever is going on, we keep coming back to it like Groundhog's day.


Second, let me say that the tone of the article was a bit bombastic and the actual arguments were disconnected and scattered, hidden among non-sequitur invectives against the Democrats. It reminded me of the tone I might find in clickbait from AlterNet (far left) or Brietbart (far right). Neither Clinton nor Sanders "want to kill our children", nor would I accuse Trump or Cruz of something so absurd. Principled public discourse should not stoop to such hyperbolic rhetoric (including the unfounded labeling of leaders as Nazis or fascists).

Furthermore, contrary to the writer, I don't expect elected public servants-- whether Republican or Democrat-- to make, produce, or create anything. I want them to govern. Which is a categorically different activity. And while the writer is correct that I'm not going to call a politician to help in a medical emergency, I'm also not going to call a doctor to help when my house gets flooded, my tap water gets polluted, my road has potholes, or crime is getting out of hand in my neighborhood. I'll call my elected official, not my banker, or my baker, or my doctor.

So, his absurdities and bombastic comments aside, the best I can tell is that his argument runs along these lines: Price hikes on the EpiPen are justified because they contribute to medical research, and by the way, the price hike was enabled because of Obama Care (it's always Obama’s fault, you know).

In order to evaluate this particular instance of economic activity, I have to first talk about how I evaluate any economic activity. Theologically and pastorally, what makes for "good" economics? I start by not defining "good" in terms of a certain system: Capitalism is good and Socialism is bad, or vice versa. Rather, it is the physical and moral effects of a system on persons that makes it good or bad. Jesus and the New Testament have almost nothing to say about how to organize an economic system. But they have volumes to say about what is good for human persons and communities. Goods for persons include physical health and healing, moral integrity, and spiritual freedom from bondage. Goods for communities (i.e. the "body" of Christ) include empathy, compassion, mutual concern, and expression of gifts and talents for the common good (or edification, or building up) of the whole. Thus economic activity should be a means to the end of attaining health and flourishing for persons and communities, rather than the end of wealth accumulation in itself.

Taking the "body" insight, we could formulate the following analogy: The worthiness of a diet and exercise regime should be judged by the health of the body, beginning with its effects on the most vulnerable systems in the body. A good diet and exercise program is what actually makes you healthy. If what you are doing is making you unhealthy in practice, it is by definition bad no matter what you think of it in theory. For instance: Methamphetamene may make someone feel energetic for a time, but at the expense of other vulnerable systems in the body. Eating three cheeseburgers every night may make you feel very full and satisfied, but at the expense of obesity, diabetes, hardened arteries, and hypertension. The examples are boundless, with fairly obvious applications to the health of social systems.

In the same way, the worthiness of an economic system should be judged by the health of the body of people it serves, beginning with its effects on the most vulnerable persons in that body (especially the elderly, the young, and those without social supports).

In this, I am both utilitarian and deontological. I'm utilitarian in the sense that I affirm that what brings about the most good for the most people is generally best, so long as "good" is not defined as mere units of pleasure (otherwise we put everyone on a slow drip of morphine and be done with it). Rather, good should be defined in terms of overall health, flourishing, and fulfillment of potential. I'm deontological in the sense that what I said above has to be qualified in this way: The system that brings about the most good for the most people, while treating them all as ends, and never as means, is the best system. In other words, the system should not be built in such a way that the good of the many necessarily entails the unwilling abuse or oppression of a minority.

Thus an economic system that could bring about an average of 60% human flourishing for 100% of the population would be morally superior to a system that brought about 95% human flourishing for 95% of the population at the expense of oppressing and abusing 5% of the population.

As a corollary to the "most good/least harm" standard I have set for judging economic systems, I would also say that a good economy distributes goods to people as they have need, as multiplied by their abilities. To start with "as they have need". Each person is a child of God and inherently deserves their daily bread. This is clear from the teachings and feeding miracles of Jesus, and enshrined at the heart of the Lord's Prayer. Thus the best economy is going to provide all people access to at least the minimal resources they need to be healthy and whole. Perhaps we might talk about this as a living wage of sorts.

This value is not only Biblical, but also rooted in the founding documents of our Democracy. Our Declaration of Independence proclaims that it is "self evident" that all persons have not only a right to liberty and the pursuit of happiness, but also a right to the material conditions that make such pursuits possible: Namely a right to life. A dead person, starving person, or someone suffering from an easily preventable disease, is in no position to pursue their right to liberty and the pursuit of happiness. Such a human right cannot merely be abstract for embodied human persons. Such a right must include access to all resources legitimately needed to provide for human life, otherwise we simply cannot live. This again results in the need for a kind of living wage, although this may not be paid in money per se, but in communal access to the material means to human flourishing. And more importantly, a living wage does not imply all should have the same wage.

This is because the New Testament, and human experience, shows us that people have different gifts. Talents and abilities being myriad, let's limit this to just gifts regarding acquisition and management of fiscal resources. We all know people who cannot even keep their checkbook balanced, and those who have an almost miraculous ability to manage scarce resources to create manifold abundance. It would be a moral evil to mandate that both of these kinds of people be limited to exactly the same resources. While both deserve "daily bread" as persons made in God's image, clearly the second person should be entrusted with more resources, because they will be able to manage it in such a way as to bring greater prosperity to the entire body. And since such a vocation (yes, vocation, given by God) requires more time, special expertise, and greater resources to support it (for instance in terms of travel, hospitality, and communication), these people should share in a greater amount of the wealth they have been providentially used to create.

So, while I am for every person having access to daily bread-- and I would include not only food and water, but shelter, education, and basic health care under that rubric-- I am by no means for collective ownership of the means of production, or equalization of wages. That would put incompetent people in charge of resources that could be better managed by others with greater economic gifts. But, on the other hand, these gifts should only be rewarded in people who demonstrate they use their gifts for the edification of the communities they serve. They must be actual "job creators", not merely self serving hoarders of wealth for a privileged kleptocracy. As St. Paul says: Let all things be done for the edification of the body. The proven ability to edify, build up, and bring prosperity to the body politic should be rewarded with access to greater resources commensurate with abilities. And, of course, the best and only way to demonstrate economic talents is to have free markets in which actual competition proves who is worthy of being entrusted with greater resources.

With that value system in place, I am all for different economic systems competing to see which benefits human flourishing the most, while systemically oppressing people the least. Which is able organize and mobilize the most resources, in the most efficient manner, to benefit the most people, while harming the least? Let's pit Feudalism, Mercantilism, Socialism, Distributism, Capitalism, Communism, and any other distinct economic systems we can find, against each other. History is a free market of sorts in which different kinds of systems compete to demonstrate effectiveness.

I'm pretty sure-- although not yet fully convinced-- that a system with robust and free markets in most industries is going to perform best overall by the standards I have set. But I also would wager that there would need to be robust and democratically-transparent systems of regulation for these free markets. I also would wager that some goods would have to be democratically managed as "utilities" for the public good. I'm pretty sure that "utility" is the wrong word to use here, but I'm not sure of the correct economic term. I use utilities to refer to that category of goods such as public water and sewers, roads, communications, and power systems, necessary to ensure a functional society. And most radically, I would consider basic medical care-- but not all medical care (especially cutting edge research)-- to be a public utility. But that is getting ahead of myself.

Competently and democratically regulated capitalism, with its free markets, has done a great deal of good for a great many people. It has raised the standard of living in many countries. But not without cost. Sometimes segments of a population, or even whole developing nations, are subjected to a Dickensian nightmare to benefit others across the country or across the globe. Globalized capitalism has not brought about the “end of history” prophesied by Fukiyama, but has de-localized economic activity in such a way that those who consume and those who produce are no longer linked together as part of the same social system. I think this social distance makes it even harder for us to be accurate and empathetic about the effects our economic activity on all those involved. All of this is to say our system is not perfect. It does not deliver all the good it can, in the most efficient way, making the best use of all resources. To some degree, it relies on the diminution of some producers to elevate some consumers. Thus, this system can and should be improved.

However, for me the most pernicious problem with our current economic system comes in terms of moral formation. It tends to encourage greed, and thus incentivize the correspondent apathy and entitlement that accompanies greed. Our current system rewards and celebrates greed as a noble quality to be pursued. And greed is to the body politic what gluttony is to the individual body. It causes some parts to over consume and bloat at the expense of making the overall body less healthy. Free markets do not have to be inherently socially corrosive, but the way we formulate free markets trends toward a basic expectation of such moral corruption. We naturally assume that economic actors, especially wealthy ones, are “just in it for the money”, and given the chance will “put profits over persons”. But does it have to be this way?

While bad actors will be found in any social system due to human sinfulness, we should not intentionally design a system to encourage the most antisocial and vicious qualities of human nature. And capitalism, as formulated over the last two centuries, has posited greed and endless desire for acquisition as the primary motives for economic activity. But humans are not just motivated by self-interest, lest parents would not parent, soldiers would not soldier, and teachers would not teach (just to name a few vocations where material acquisition is not the prime motivating factor). There has to be a way to formulate free market economic activity, without assuming that greed is the only or primary motivating factor, and without stacking the deck to reward those who act in the most greedy and vicious ways.

Which brings me at long last to the absurd prices charged by Big Pharma for certain drugs, often in ways that disproportionately affect vulnerable people, so that an already incredibly lucrative business can become absurdly lucrative. This is highly problematic both from the standpoint of "most good/least harm" principle I outlined above, as well as from the evidence it seems to be just a greedy profit grab enacted on the backs of some of their more vulnerable consumers. Similar to Skhreli's shenanigans last year, and whoever else the year before that, and the year before that.

Martin Skhreli was not funding research by jacking up the price of AIDS medications. He was filling his own pockets. And it is absurd to assume it is any different with the EpiPen price hike. To recite the unfounded claim that they were just doing these things to fund research is to engage in myth making to smooth the moral conscience. I wish we lived in a system where prices of medications were somehow directly and transparently tied to research costs for new beneficial treatments. And I also wish that prices in other industries were directly and transparently tied to actual job creation and community development. But the sad thing is that they aren't, and the most plausible explanation for the more egregious actions of large corporations is simply greed and profits for a few, rather than any immediately traceable benefit for society.

As for whether this price hike was enabled by Obama Care, I cannot evaluate. I do not know enough about the prescription agreements, and how Insurance company bargaining power is leveraged with Big Pharma companies. I do know there are other more socialized health systems in Northern Europe and Canada where the bulk purchasing power has led to decreased prices in SOME medical equipment and medications (similar to how Walmart has more power to negotiate deals with suppliers than the local Mom and Pop store). So perhaps if we had a single payer system for health care, and got rid of the cacophony of insurers, we could negotiate better prices for American consumers. But realistically, any single payer system that would come out of Washington DC would probably be so corrupt and bloated and compromised, that could never happen.

Lastly, there is a final facet to these ongoing Big Pharma outrages which illustrates that monetary value is not the only currency at stake in economic systems. The social currency of trust and goodwill from consumers and employees is at least as important as the abstract numbers on a balance sheet. Because without this social currency, the monetary currency will eventually dry up and migrate to other businesses who have greater social capital. And how do companies earn social capital? By making economic decisions that logically, directly, and transparently contribute to social good, rather than merely generating profits for a few. If these price hikes were actually tied to some sort of social good (greater employment, more research, etc.), then it should be rather easy for the corporate managers to make the case in a way that the majority of rational people would say "Oh, the price makes sense: I trust them". The fact that over and over again the Big Pharma managers cannot make such a public case demonstrates that they are either incompetent managers of social capital, or that they really only care about accumulation of monetary capital, or both.

So we shouldn't blame the consumers or even the media when outrages like this happen. We should take it as signs that corporations are governed by inept managers with short sighted and ill conceived economic goals, who fail to competently manage the social and material resources of the corporation. Again: It is free market economics. The best managers are those who increase not only the material resources of the company, but it's social currency as well. Those who cannot do this should find other jobs doing things they are good at. These outrages will stop gaining public traction when there is a revolution in the goals, values, and management strategies of individual corporations, and the economic system as a whole, as we make full human flourishing for all of God's children the expected outcome for economic activity.
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This is a bunch of stuff to make us think hard about our incredible love affair with the God of the universe, our astounding infidelities against him, and his incredible grace to heal and restore us through Christ. Everything on this site is copyright © 1996-2015 by Nathan L. Bostian so if you use it, cite me... otherwise you break the 8th commandment, and make God unhappy. You can contact the author by posting a comment.