It’s a fascinating study in human nature that at the corporate level profit is stigmatized, but at the individual level it’s immunized against criticism, regardless of whether it’s legitimate or fabricated. Indeed, when you force a universal motivation, such as the pursuit of profit, to bear the political burden of a specious moral crime—in this case, the abuse of the common man—you can be assured it will limp dejectedly off the field of competition.
That, of course, is what the left is spending sleepless nights doing with respect to health insurance companies. As Rick Newman reported this week in US News & World Report,
President Obama has already singled out insurers as the villains responsible for exorbitant healthcare costs that are bankrupting families and businesses and making care unattainable for millions.
Since the left has been especially adept at exploiting our cultural tendency to conflate an entitlement to services with those we’re obligated to purchase, it’s easy for them to argue that insurance companies are abridging our rights with their draconian rules and regulations.
In the heat of that battle they insidiously inject the notion that such companies are only motivated by profit—read greed—which is leveraged against the innocent masses that have no recourse. Therefore, although, as Mr. Newman further reports, the profit margin for insurance companies is only 3.4 percent (just 1.2 percent above the median), thanks to the media’s scandalously biased characterization of them, the public instinctively consigns them to one of Dante’s inner circles, along with cigarette manufacturers.
It’s apparently fine for Google and Microsoft to have profit margins of 20.6 and 24.9 percent respectively, because in the public’s view, they run beneficent companies that improve our lives. The practical application of products and services of such companies when juxtaposed to those in health care clearly plays a role in this. Indeed, contrast using Google to find a nice Italian restaurant to having a colonoscopy and you quickly understand the difference.
What steel hardens the vilification of the profit motive is the deliberate bastardization of competition. As Nobel laureate F.A. Hayek wrote:
Competition is valuable only because, and so far as, its results are unpredictable and on the whole different from those which anyone has, or could have, deliberately aimed at.
The result is that the ebb and flow of supply and demand and the allocation of market resources is at once a dynamic and evolving process. An incessant serious of simultaneous transactions, the result of complex consumer decision making, handicaps products and services and provides either profit or loss, which companies tally at the end of each quarter. This works with stunning efficiency, with successful companies reaping the rewards and unsuccessful ones fading unceremoniously into the hazy horizon.
What’s remarkable is that the same process at work in the clothing industry is lauded as a boon for consumers but is savaged in the health care industry. That, as we know, is due to the left’s dream of a non-profit insurance industry, with the obvious, if lamentable goal of the same superbly mediocre services we’ve come to expect from the post office.