PROFITS, NON-PROFITS AND PROPHETS

Two exceptional pieces entered my line of vision earlier today that are extraordinarily on point.

The first is the regular weekly column of one Reg Henry that appears in the Pittsburgh Post-Gazette. He addresses non-profit organizations sometimes generating enormous profits, particulary the the Pittsburgh health care behemoths; Highmark Blue Cross Blue Shield/Allegheny Health Systems and UPMC, which is the medical arm of the University of Pittsburgh that has its own health insurance. http://www.post-gazette.com/opinion/reg-henry/2013/10/23/Nonprofit-world-seems-enticingly-lucrative/stories/201310230056

These combatants have been in the news for awhile now as they scheme and plan to steal patients from one another. (The new Pittsburgh Stealers?). UPMC has existed for some time while the Highmark/Allegheny alliance is of more recent vintage.

While this would ostensibly be a local Pittsburgh issue, it is indeed  indicative of larger problems nationwide.

Both these entities produce enormous profits on paper, but both manage to largely, if not completely, escape the taxman.

Remarkably UPMC, now engaged in a battle with the city over paying taxes (about $1 billion profit—high paid execs—no taxes paid on its enormous real estate holdings within city limits) in a court hearing represented with a straight face that the 55,000 doctors, nurses, housekeepers, technicians, clerks, etc. working in its various hospitals and clinics are not employed by it but by a number of separate companies.

Reg Henry laughs at this assertion, noting accurately that in its current ad campaign to sway public opinion in its favor in its fight with Highmark UPMC emphasizes the number of jobs it provides in the region.

Contrast this with the op-ed writings of Amia Srinivasan  who explores the morality of free market advocates vis a vis profits for profits sake in a dog eat dog world where the rich have no responsibility to those who have not achieved or cannot achieve the same level of financial success http://opinionator.blogs.nytimes.com/2013/10/20/questions-for-free-market-moralists/?_r=0

Truly Reg Henry in his column foreshadows the companion piece with this bit of wisdom.

Readers not from Pittsburgh may wonder what this local dispute has to do with them. I would say consider the context. This health care Armageddon is being fought according to the capitalist virtues we know and love — ruthlessness, greed, misinformation, monopolistic thinking, etc. — in the supposed era of government health care. Hey, somebody forgot to tell the government.

Srinivas expounds on the oppositional books published in the 1970’s by John Rawls and Robert Nozick.

Rawls, wrote A Theory of Justice in 1971. As explained by Srinivas

Rawls proposed that the structure of a just society was the one that a group of rational actors would come up with if they were operating behind a “veil of ignorance” — that is, provided they had no prior knowledge what their gender, age, wealth, talents, ethnicity and education would be in the imagined society. Since no one would know in advance where in society they would end up, rational agents would select a society in which everyone was guaranteed basic rights, including equality of opportunity. Since genuine (rather than “on paper”) equality of opportunity requires substantial access to resources — shelter, medical care, education — Rawls’s rational actors would also make their society a redistributive one, ensuring a decent standard of life for everyone.

On the other hand Nozick, in Anarchy, State, and Utopia

…argued that a just society was simply one that resulted from an unfettered free market — and that the only legitimate function of the state was to ensure the workings of the free market by enforcing contracts and protecting citizens against violence, theft and fraud. (The seemingly redistributive policy of making people pay for such a “night watchman” state, Nozick argued, was in fact non-redistributive, since such a state would arise naturally through free bargaining.)

Recent political developments suggest that Nozick was quite the prophet when propounding on profit. After all reports are that Democrats in Congress, and possibly even President Obama himself, are considering some types of cuts in Social Security, our most basic, popular, and successful safety net program.

Such cuts would dovetail into the Novick philosophy though, in truth, Social Security is minimally redistributive, if at all so. To the contrary,  Social Security is regressive instead of progressive in that the taxes assessed to support it are placed on only earned income and then with a cap on it.

What concerns me is the morality displayed in Novick’s world and in the world of UPMC. There is absiolutely nothing wrong with earning a profit from one’s endeavors. What is wrong is, as UPMC is doing, is achieving such success by taking advantage of its position as a nominal non-profit which entitles it to freedom from most taxes other businesses are subject to.

In Nozick’s world there is no place for anything but a voluntary effort to see to the less fortunate. Anything else is an unacceptable intrusion into the hallowed free market.

We seem to have far too many people in power who are trying to move us in that direction.

It’s time for a detour.