This Week: Powerful Myths and Lessons from Chile

"Quote" of the Week

Health, Security, and Mandates: The Chilean Experience

Achieving (Which?) Goals by "Putting Ideology Aside"

Greetings,

This week marks the fifth anniversary of the U.S. invasion of Iraq. It is difficult to refrain from focusing in every issue of Nygaard Notes on this criminal enterprise, as the outrages and heartbreaks are constant.

Yet I do refrain from constant coverage, and one of the reasons is that I think it's not that hard to find decent non-Nygaard sources of information about most aspects of the occupation. I'll focus my attention in the coming weeks on whatever aspects I think are not receiving the attention they deserve.

My apologies to those who may have referred people to the website to subscribe. Due to an error on the server's end, the "subscribe" function wasn't working for a while. It's working now, so tell all your friends.

Happy Spring to all!

Nygaard

"Quote" of the Week:

This is the astounding headline that appeared on the front page of the February 16th edition of the New York Times:

"U.S. Struggles to Tutor Iraqis in Rule of Law."

Health, Security, and Mandates: The Chilean Experience

On March 12th a very tiny news item appeared here and there in the nation's media that—it seemed to me—deserved to be a bigger news item. Here's the entire tiny item that appeared on the back page of my local newspaper:

"Chile: Pensions Granted to About 600,000 Poor. Nearly 600,000 poor will receive monthly pensions starting in July under a law signed by President Michelle Bachelet. The 42-billion-a-year program covers groups left out by private pensions—the poor and self-employed, street vendors and farmers who saved little for investment."

A couple of years ago this probably would have been bigger news, back when the privatization (I call it individualization) of Social Security was still being seriously talked about in this country. Back then the privatized Social Security program in Chile was held up as a model for other nations to follow. Former Minnesota Republican Senator Rod Grams was saying things like "Chile provides a good model and proof that privatization [of Social Security] can work." And the architect of the privatization in Chile, José Piñera, not surprisingly, used to like to say that "The success of the Chilean private pension system is beyond dispute."

That claim was not beyond dispute for everyone, I should point out. I, myself, disputed it back in 1999. Here's what I said back then about the Chilean plan: "The private system in Chile is a ‘defined contribution' plan. This means that the amount each worker pays in is required by law, but what you will be entitled to receive in benefits is not. Under such a system, there are no guarantees. In fact, estimates are that 30 to 60 percent of Chilean workers will not qualify for even the minimum pension under the new system."

Now, twenty five years after the 1981 inauguration of the Chilean privatization plan, the Inter-American Development Bank tells us that "the privately managed accounts only covered 55 percent of workers—a percentage greater than privately-managed pension systems in other countries but below Chile's expectations." (Note that 55 percent coverage leaves 45 percent uncovered, a number that is exactly in the middle of the "30 to 60 percent" range that I cited nine years ago.) As the tiny article in my local paper said, the "groups left out by private pensions" are poor people. What a surprise.

The Lesson For Health Care

This tiny news item from Chile should be a bigger news item not only for what it tells us about the "good example" of privatization of Social Security, but also because of the lesson it offers for those following the health care reform debate in the U.S. Here's why:

In 2005 Social Security privatization/individualization was at the top of the Bush administration's agenda. CBS News at the time (after dutifully repeating that "advocates of privatization deem Chile a success story") summarized the essence of the Chilean "reform" like this: "In 1980, Chile's traditional pay-as-you-go social security system was about to go under. In response, the government created a program that required workers to save for their own retirement through private investment accounts."

In other words, the Chilean government passed into law an "individual mandate" that required workers to take care of their own retirement needs.

Now, if that sounds familiar, it's because it's just like the "mandates" that are popular in certain circles when talking about health care reform in the U.S. The Massachusetts plan, the California plan, the Hilary Clinton plan—they all require, or would require, individuals to purchase insurance. Obama's not that different. According to Anthony Wright, Executive Director of Health Access California, "Obama does not say he opposes the individual mandate—he said repeatedly that he would consider it—but his first goal is to make coverage affordable."

The most well-known "individual mandate" plan is the Massachusetts Health Care Plan, which was voted into being three years ago next month. The plan has subsidies for poor people, makes some reforms to the private insurance system, and includes an individual mandate for health insurance, which the Washington Post summarizes as "buy insurance or else." The deadline for people to buy insurance was December 31st, 2007, but not everyone bought insurance and, as the national non-profit advocacy organization, Community Catalyst, said in a study of the plan in recently, "it is likely that a large number of low-income people will remain uninsured."

According to the Concord (New Hampshire) Monitor, "The Massachusetts plan ... has had to exempt an estimated 20 percent of its population from the mandate because they can't afford to participate. And the cost of subsidizing insurance for the many low-income residents who signed up for the plan greatly exceeded predictions, and that's before the double-digit increase in rates insurers are expected to charge next year."

The Monitor reminds us that "Government mandates have been used to force people to buy auto insurance, immunize their children, pay child support and pay workers a minimum wage. But compliance rates ... are far from universal." This leads the Monitor to conclude that "Mandates, as their track record has proven, fall far short of guaranteeing universal participation."

That track record now includes the record of individualized Social Security in Chile. It would be good for people to know about this, as the "mandate" idea seems to be alive and well in this country when it comes to health insurance.

In a visit to Chile in 2004, George W. Bush spoke about Social Security, saying, "Frankly, the Chilean model serves as a good example" for the United States. I agree. In fact, I think it's a great example. A great example of the problems we run into—again and again and again—when we approach social problems as if they were no more than a collection of individual failures.

A retirement system can only work when a secure retirement is understood to be a human right and not an individual privilege. It doesn't work—as the Chilean example shows—when based on individual decisions. When we agree on this principle, as a society, then we agree to share responsibility for it, and not leave it up to millions of individuals to make the "right" decision.

This is not because individuals cannot be "trusted." It simply acknowledges what our experience shows: that not all individuals will act in the best interests of the community all of the time unless the community as a whole, through a democratic process, decides to make it happen. In terms of health care, a couple of obvious solutions present themselves: Either a fully-socialized health care system, or a single-payer system, both of which would simply say that we all chip in so that everyone gets health care when they need it. Everybody in, nobody out.

Individualized solutions to social problems leave people out. This is the very important lesson offered by Chile's recent experience with individualized Social Security. Too bad the lesson was relegated to 47 words on the back page.

Achieving (Which?) Goals by "Putting Ideology Aside"

On February 27th a very lengthy article appeared on the front page of the New York Times with the headline, "Hints at Change, but Cuba Remains Wary." The first two paragraphs came complete with a bit of mythology that is very widely-held in the United States. So widely-held, in fact, that I doubt most people reading it even noticed it. Here are the two paragraphs; see if you can notice the very bizarre myth that is assumed by the writer to be true:

"In his first state reception as Cuba's president, Raul Castro met Tuesday not with leftist Latin American leaders like Hugo Chavez and Luiz Inacio Lula da Silva, nor with Chinese officials, but with the secretary of state of the Vatican, a traditional enemy of Communism and a critic of Cuba's record on human rights.

"Mr. Castro's decision to begin his tenure by meeting the Vatican's top diplomat, Cardinal Tarcisio Bertone, a possible go-between with the United States and Europe, reflects his practical, no-nonsense style as well as his greater willingness to put ideology aside to achieve his goals than his brother often showed."

The mythology to which I refer is that last point, the one about "putting ideology aside to achieve his goals."

To see why this is a myth, first we have to understand the word "ideology." What is "ideology"? There are varying definitions, but I have referred to it as a "set of ideas" or a "way of thinking." A dictionary like the Oxford English Dictionary says that the word "ideology" means "A systematic scheme of ideas, usually relating to politics or society, or to the conduct of a class or group, and regarded as justifying actions..."

The Powerful Myth

The mythology that is apparently believed by the Times—or at least that is passed on by the Times, whether they believe it or not—is the idea that political "goals" can exist apart from "ideology." How bizarre! What would such a "goal" look like? And how would one set a "goal" without a "systematic scheme of ideas" to help prioritize and organize one's complex choices about goodness, worthiness, importance, needs, and values? Such organizing ideas are the essence of "ideology." A goal, after all, is itself an idea, connected to other ideas like these.

Such bizarre thinking is not new at the Times. Early in the last presidential campaign, in 2003, the Times covered a debate among the Democratic candidates. Their headline was: "Pragmatism Meets Ideology: Democrats Draw Battle Lines." The "pragmatic" candidates were the ones who "stressed positions that are decidedly more moderate than those of many Democratic primary voters." The "ideological" candidates, in contrast, were "trying to tap into [a] deep anger" that was "stoked by the conservative policies Mr. Bush has embraced."

Get it? It's "pragmatic" to be "moderate" and it's "ideological" to be upset.

The word "pragmatic," according to Oxford, means "aiming at what is achievable rather than ideal." Another word for this is "practical." The Times considers this to be in opposition to "ideological," which simply means "having to do with ideas."

It's entirely possible that writers for the Times don't know what these words mean. While that's a serious problem for a writer, for our purposes let's assume that they do know the meaning of the words they are using. The Times is saying here—and it's simply assumed, not up for debate—that "moderate" positions in politics are "achievable" and stronger positions, ones having to do with ideas, are not.

From a propaganda point of view, the most important thing to notice here is the implied notion that "moderate" positions do not have to do with ideas. They are simply "pragmatic."

A propaganda system is successful when the people within the system accept existing conditions—including the prevailing ideology—so totally that they cannot imagine things being any other way. I'm reminded, once again, of my ill-fated attempt at getting a college education. (I lasted only one quarter.) I took a class at a major university called "Principles of Macroeconomics." It soon became clear that the class would only discuss capitalist economics, yet I appeared to be the only student who noticed not only that capitalism is but one particular ideology with particular "principles," but that something—anything—was missing from this introductory course. An "honors" course, no less! That's evidence of a successful propaganda system working where it matters most, in the minds of the educated classes.

It was once famously said in a Star Trek episode that "Resistance Is Futile." If a propaganda system can get people to believe that, then few people will bother to resist. But it is even better, in propaganda terms, if people can't even imagine any real alternatives to the existing system. Then resistance goes from being futile to being unthinkable.

The Myth Is Conservative

The myth that we can have goals without having ideas is not simply weird. It's also fundamentally conservative, which Webster's defines as "disposed to maintain existing views, conditions, or institutions."

In order to change things, one must be able to imagine things being a different way. That is, one must have a "set of ideas" about what a different world might look like. To maintain things as they are, in contrast, requires no particular "ideology." Passivity will do.

The mythology at the Times—and in the U.S. as a whole, to some extent—is that conservative or moderate positions are not "ideological," since they do little or nothing to change what already exists. Such a decision to leave things as they are can seem like "no decision," but in fact it is highly ideological, since it amounts to a choice to support the existing order, which is not neutral.

Small tinkering with things is widely seen as "achievable" in the U.S. political context. Politicians can thus talk about such things as more or less regulation, slightly higher or lower taxes, or how to require people to get insurance from existing corporations. Since many voters believe, according to the polls, that a successful politician must be able to "get things done," it is often seen as a good thing for a candidate to be "pragmatic" by limiting his or her proposals to such tinkering. Longer-term, visionary proposals, ones that seek to change how power and wealth are distributed in society, or how resources are controlled, are "ideological," so poll-conscious leaders learn quickly not to talk about this kind of Big Idea. Acceptable Big Ideas must be sufficiently big as to be meaningless. "Change!" "Experience!" and so forth.

When the Times, and other powerful institutions directly and indirectly reinforce the bizarre myth that the only way to "achieve goals" or to be "pragmatic" is to "put ideology aside," they are, knowingly or unknowingly, limiting our ability to imagine a different world. That is powerful propaganda.