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Why Left and Right Make Sense

And why “defined contribution” matters.

8:27 AM, Jan 6, 2011 • By WILLIAM KRISTOL
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Our parties today actually embody this division better or more clearly than they used to. There have always been conservatives and liberals (or progressives) in American politics. But until fairly recently, there were some of each in each party, so the parties didn’t so much embody as contain our deepest ideological divisions. Today, the parties come much closer to embodying those divisions, so that we really have a conservative and a liberal party. In the course of the second half of the 20th century, the conservatives were made to feel unwelcome in the Democratic Party, as it grew more culturally liberal and more aggressively technocratic. Friends of the market and friends of the family, threatened by a common enemy, found common cause in the conservative camp. This in turn made the Republican Party more decidedly conservative, and therefore made many liberal Republicans feel unwelcome, and turn to the Democrats.

So we find that the various social, cultural, demographic, and economic distinctions that fall along the axis of ideas that has given shape to Western politics for more than two centuries now fall pretty neatly along our partisan axis as well. Our parties are increasingly divided between adherents of expert management and pseudo-scientific rationalism in politics on the one hand and defenders of traditional mediating institutions and self-organizing markets on the other. Obviously tensions remain within each camp: the family and the market are not always natural allies, and neither are technocracy and equality. But there is both a historical and a philosophical logic to this division, it speaks to the debate at the heart of modern life, and so it persists. It has made our conservative party increasingly populist and our liberal party increasingly elitist, and it has made our politics increasingly sharp and clear (or, if you like, polarized and divided).

All of that is both good and bad, like everything else in life. But, to return to your question, it means that our partisan divisions today actually capture quite a lot of underlying social, cultural, and historical divisions. I think left and right mean more in American life today than they ever have before....

RS: Let's say Obamacare were repealed tomorrow and conservative voters wanted to pick up their phones and tell their Representatives what they want instead - but didn't know exactly what to say.  If you were advising them, what would tell them?

Yuval Levin: Two plain and boring words: defined contribution. That is the key to the conservative approach to reforming American health care.

The problem with our health-care system is that costs are rising too quickly, and therefore both bankrupting government and preventing too many people from being able to afford insurance. How do we keep costs down in our kind of economy? The left and the right each has its answer. The left’s answer is you force them down by government policy—put government in charge of purchasing coverage for everyone and let it set price controls that then shape the market. The right’s answer is you create a consumer market in which providers have an incentive to offer a better product at a lower price....

Conservatives would transform each of these from an open-ended benefit to a defined contribution: in each case, the government would provide consumers with a pre-defined amount of money to spend on health insurance (in addition to any of their own money they want to spend), and those consumers would then choose among an array of insurance options—options which would be regulated by the states, as insurance is now, but not micromanaged by the federal government. The purposes of today’s policies—to make sure that the elderly and poor can get insurance and to help the middle class afford it—would still be served, and indeed would be served more efficiently at lower cost. And market incentives would be aligned to promote lower costs more generally, rather than higher ones. The cost of the most basic or minimal coverage for catastrophic care would be likely to drop precipitously, to the point that just about everyone could afford it (if the exclusion for employer-based coverage were transformed into a tax credit and every family got $5,000 they could only use to pay for insurance, you can bet that $5,000 minimal insurance policies would emerge, neither consumers nor providers would leave that money lying on the table), and more expansive coverage would be within the reach of more families.

There is much more to be said about the details, of course (here is one very good paper to read). But moving from open-ended benefits to defined contributions is key. 

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