Book Reviews

Public Futility

Public options in a range of areas can be part of a smart domestic policy mix, but choice alone is not enough.

By Vanessa Williamson

Tagged Public Policysocial justice

The Public Option: How to Expand Freedom, Increase Opportunity, and Promote Equality By Ganesh Sitaraman and Anne L. Alstott • Harvard University Press • 2019 • 296 pages • $24.95

Ganesh Sitaraman and Anne Alstott’s new book, The Public Option, organizes a series of progressive policy proposals around a single framework: giving Americans the choice between public and private services. The premise of the book is useful and timely; the authors connect the dots between government programs that are familiar, like libraries, and proposals that will strike most Americans as novel, like postal banking. This book could have been a very valuable intervention, creating a convincing narrative in support of an array of policies that would strengthen the American safety net while reinvigorating a stalwart defense of government intervention in the economy on behalf of poor, working-, and middle-class people. The book could have helped to combat the tendency for progressive policy platforms to read like a diner menu, with plenty of offerings apparently unrelated to one another. Unfortunately, the book feels hastily written, at times profoundly ill-considered, and oddly trapped in a conservative worldview that starkly limits its analytic value.

The book begins by laying out the concept of “the public option,” and follows with applications of this mechanism to a variety of policy areas. Most readers will remember the phrase “the public option” from the 2007-10 debates over health-care reform; precursors to the Affordable Care Act included a Medicare-like public insurance plan that individuals or businesses could choose to purchase. But the idea of a public option is not unique to health care.

In many arenas, Sitaraman and Alstott explain, Americans already have access to both public and private services. They can borrow a book from a public library or buy a new copy from a store; send a child to a free public school or pay for a private education; mail a package via the Post Office or via FedEx; and receive retirement benefits via Social Security in addition to their 401(k). All of these government services share a core idea: providing universal access to a good for free or at an affordable price, while allowing private actors to offer alternatives or add-ons to those who may wish for them. Public options, the authors argue, push private enterprises to improve their quality and ensure basic goods are available to all. Why not, then, extend the public options available—in retirement, child care, personal finance, and of course, health insurance?

The authors seem well-positioned to build a careful and well-reasoned case for such an ambitious program. Ganesh Sitaraman is a law professor at Vanderbilt University and served as policy director for Elizabeth Warren’s 2012 Senate campaign, as well as senior counsel in her Senate office. Anne Alstott, a professor of law at Yale, has a long history of producing interesting social welfare proposals and analyses, particularly in the area of taxation.

But, despite the credentials of the authors, the book fails to live up to its potential. After outlining the principle of the public option, the authors provide a sketch of its historical role in American public policy. This analysis is blurry at best. At one point, the government’s investments in “roads, canals, railways, and other infrastructure” are described as “public options,” an assertion that seems to stretch the term beyond any useful definition.

Ironically, after describing the public option as traditional to American policymaking, Sitaraman and Alstott then go on to overvalue the novelty in their own proposals, particularly in areas where a public option already exists. In their chapter on retirement, the authors suggest a policy that would supplement Social Security and offer an alternative to private investment plans: a mandatory public savings account that would provide an annuity to all workers at retirement. The obvious question, left unaddressed by the authors, is why this program would be preferable to an expansion of the existing retirement program they define as a public option: Social Security. Similarly, in their chapter on higher education, Sitaraman and Alstott propose a new “Adams University,” named after John Quincy Adams, who called for the creation of a national university. Their Adams U. would be run entirely online, and they offer no explanation of why such an untested proposal would be superior to reinvestment in community colleges and public universities, the longstanding public option in higher education. More convincing are their proposals where public options do not currently exist: a publicly run network of child care centers, and a basic banking system operated through the Post Office (a good idea that used to be a part of the American banking system, and has recently been championed by law professor Mehrsa Baradaran, as well as Senator Bernie Sanders).

The book’s sharpest analysis comes in its critique of market price-based alternatives to public option systems. In many social policy arenas, vouchers, tax incentives, subsidies, and the like are intended to nudge private actors to achieve the same ends as direct public programs. But they often end up lining the pockets of the wealthy while failing to guarantee universal access to essential goods and services. For instance, tax breaks to encourage retirement savings are supposed to increase Americans’ nest eggs. But in point of fact, there is no evidence that tax benefits for private retirement savings have actually made Americans save more; instead, they have provided a windfall for wealthy people who were going to save their money anyway, while doing almost nothing for lower-income people facing the financial necessity of working into old age. Moreover, as Sitaraman and Alstott persuasively argue, subsidies are difficult to set at the correct level to change behavior, cannot easily address situations where the supply of a good is limited, and discourage accountability because their impact (for good or bad) is difficult for citizens to perceive.

Compared to their trenchant critiques of market subsidies and other right-wing policies, Sitaraman and Alstott are markedly less adept in their consideration of policy plans from the left. This gap in their analysis is symptomatic of a more fundamental issue that undermines the book as a whole.

Fundamentally, the authors seem less interested in “the public option” as a policy mechanism than as a rhetorical strategy aimed at convincing conservatives. Though it is hard to conceive of many ardent foes of government picking up this policy book by two liberal law professors, the authors’ apparent desire to placate this imagined audience leaves oversights in their analysis that range from the frustrating to downright embarrassing.

With their eyes cast toward the right, the authors do not engage seriously with the third set of potential policies alongside public options and subsidized private provision. These are policies we might describe as “the public mandatory.” In major arenas of government action, private options have been (almost) entirely outlawed: national defense, the court system, and the printing of money. The authors also refer, only in passing, to nationalization and other forms of public ownership. “Some have proposed nationalizing the three credit bureaus,” they note, before proposing that a “public option may be worth considering.” On the advantages and disadvantages of nationalization or other forms of mandatory provision relative to a public option, however, the authors simply say, “[Q]uestions like these are hard.”

These questions are indeed hard. But a stronger book would have at least grappled with when government should hold a monopoly, and when a public option approach is preferable. Such an analysis would also have allowed the authors to do a better job of clarifying exactly how “optional” they think public options should be; for instance, the authors present two versions of a public option for Medicare, one a Sanders-style “Medicare for All” and the other a variation on “Medicare for All Who Want It,” but they make no effort to adjudicate between them. To assess when and how much choice is beneficial would require a much more serious examination of the relationship between individual decision-making and societal good.

Sitaraman and Alstott place great confidence in the power of personal choices to create healthy competition between public and private options. Public options, they assert, “prompt markets to function better” because consumers and citizens can choose the better venue for their needs; “exit is a pretty good mechanism for feedback,” they claim.

That faith in individual choice as an accountability mechanism sits uncomfortably with one of the primary rationales for public options. When it comes to complicated things like retirement and health insurance, it is unreasonable to expect every individual or family to be able to assess the plans marketed by for-profit companies looking out for their own bottom line. In principle, a public option provides a safe choice not only for those who can not afford private alternatives, but also for those who prefer a benefit that has borne public scrutiny and is subject to public accountability. In other words, one reason for public options is precisely because there are limits to individuals’ capacities to make effective choices.

But the problem with relying on individual choices to improve the provision of public goods does not end with complicated decisions like comparing health insurance plans. The fact is, privileged people, the wealthy and the white, tend to opt out of public goods that would bring them into contact with marginalized groups, especially poor people and people of color.

For example, the integration of American public education triggered whites to transfer en masse to private schools. That is, white families exercised the principle of the “public option” in the service of maintaining racial segregation when they opted out of sending their children to school with black children. When parents make school choices today, their decisions still take account of the racial makeup of the school, creating schools that are more segregated than the neighborhoods where they are located. To be clear, segregation is not simply the result of the aggregation of individually racist choices; for instance, the federal government’s mortgage policies in the mid-twentieth century legally enforced residential segregation. But it is an uncomfortable truth that the freedom to choose can also mean the freedom to discriminate. And when the wealthy choose to exit from public services, the quality of those public goods often erodes—both because it is harder to provide public goods like education to a population suffering from concentrated poverty, and because without upper-class people in the system, the political will to maintain quality erodes.

Sitaraman and Alstott recognize and express concern about the connection between the choice mechanism at the heart of the public option and racial and class segregation, but they offer no proposal to address this very fundamental failure. That is likely because policies that address segregation are distinctly nonoptional: redrawing attendance boundaries to make school catchment areas more diverse, instituting district-level policies that prioritize integration over parental choice, enforcement of desegregation orders, and of course, busing. The authors do not consider any of these policies, not even to dismiss them as politically too difficult to achieve. They merely note—correctly—that voucher systems would make the problem worse.

Sitaraman and Alstott’s repeated nonanswers on how much choice is good, and their nonengagement with mandatory solutions, are all the more striking given their protestations that the programs they advocate are not “socialist” and that “socialism isn’t our agenda.” Whether the question of public-option versus public-mandatory is difficult or not, the authors clearly have a position but have not taken the trouble to justify it.

In so doing, the authors miss out on contributing to a vital conversation about when public control produces high-quality and egalitarian benefits, and just as important, when democratic institutions give citizens, and especially marginalized citizens, greater capacity to exercise their political voice in the design and oversight of public programs. Instead, despite their own critiques of market-driven policies, the authors dismiss policy proposals to the left of their recommendations with Reaganesque pablum about the dangers of “big government.”

Insisting on one’s opposition to “Soviet-style state monopoly” feels anachronistic nearly three decades after the fall of Communism but is part and parcel of a theme throughout the book: attempting to reassure readers, however implausibly, that the authors’ positions are moderate and unthreatening to corporations and the rich. “We are fine with the wealthy having, say, more BMWs and more caviar than everyone else,” Sitaraman and Alstott take pains to clarify. And if FedEx or JPMorgan Chase provide better service than the Post Office and a public retirement system, “We are cool with that.”

These phrases are tone deaf in more ways than one. In the contemporary United States, the extremes of wealth and corporate power are so great, and they exist alongside such appalling poverty and marginalization, that the conspicuous consumption of the rich is not, in fact, “fine.” It is unconscionable. Moreover, the capacity of the wealthy to distort the economy results both in the surfeit of luxury cars and the immense shortage of high-quality child care. Because they are both symptoms of a single systemic problem, garish displays of wealth simply cannot be cordoned off analytically from the poverty and disadvantage that Sitaraman and Alstott wish to address. Similarly, the rise of corporate power and the decline of public goods are not just coincident phenomena, they are causally related. The idea that major corporations will be content to compete fairly alongside public options, rather than trying to undermine them at every turn, is at best profoundly naïve.

The capacity of the wealthy to distort the economy results both in the surfeit of luxury cars and the immense shortage of high-quality child care.

But the authors seem committed to denying any tension between corporate power and the social safety net; instead, they emphasize the appeal public options should have for American businesses. Major corporations spend enormous resources managing benefit plans for employees, Sitaraman and Alstott note. In 2008, for example, “Starbucks spent more money on health care than on coffee.” Affordable public health insurance and child care would also make for healthier and more reliable employees, they explain.

Of course, these arguments will in no way convince the business lobby. Groups like the national Chamber of Commerce are deeply ideological and partisan entities that have devoted enormous resources to weakening social safety net proposals, no matter how moderate. The health insurance industry, for example, directed more than $100 million to the Chamber to pay for ads against the Affordable Care Act, the very legislation that brought the phrase “public option” to national prominence.

Moreover, unless one assumes against all evidence to the contrary that business owners are faithful stewards of broadly shared economic growth, employers have plenty to dislike about the effects of public option programs. First off, government programs are typically funded by taxes, anathema to many among the business elite. Even more important, public benefits undercut employer power. The less beholden employees are to their employers for necessities like affordable health care, the freer workers will be to leave for other employment options, and to agitate for better working conditions and higher pay.

Still, the authors’ economic arguments may be compelling for readers who have been encouraged for decades to worry about the impact of government action on purported “job creators.” And, for those of us who do not wish to assess policies based on how much they encourage Americans to be busier worker bees, Sitaraman and Alstott do, at least briefly, make the moral case for public programs. They argue that “[P]ublic options encourage an active and committed citizenry, which is the essence of a free republic.”

Unfortunately, the authors’ appeals to moral authority consistently slip into a race-blind ahistoricism—perhaps another side effect of the authors’ focus on appeasing conservatives. These wildly inaccurate assertions about American history are genuinely jarring to read. Most inexcusable is the line that opens a section entitled “Freedom and Opportunity”:

“Since the founding of the country, the government has acted to secure the preconditions of freedom for all Americans.”

It is difficult to wrap one’s head around the magnitude of the error here. It is only compounded by the paragraphs that follow. The example Sitaraman and Alstott use to back up their claim of the longstanding benevolence of the American state is the purchase, by Thomas Jefferson and his successors, of lands in the West, and the funding of an army to remove Native Americans from those lands in favor of white settlers. Only parenthetically do the authors mention that the U.S. army behaved “often unjustly and viciously.”

To say the very minimum that must be said: The United States was, from its founding, dedicated to the preservation of human slavery and, later, to the perpetuation of white supremacy, which persists in our institutions and which was explicitly enshrined in law within living memory. The most obvious precondition of freedom, bodily autonomy, has never been secure for women, even for those women with the privileged status of whiteness. And the centuries-long war against native people in America was not “often” unjust, it was genocide. (None of this is said by Sitaraman and Alstott.)

These facts are commonplace. In 2019, there is no need, and no excuse, to bury them in nostalgic foolishness. We can recognize the progressive potential of our history without pretending America has lived up to its ideals. We can celebrate the promissory note of the Declaration of Independence without acting as though the check cleared.

Elsewhere, only marginally less egregiously, the authors assert that in the mid-twentieth century, “Americans could expect to participate in the good life as long as they were willing to work.” News indeed to the millions of Americans who spent the 1950s living, apparently voluntarily, in the deepest poverty. Again, the authors confuse “Americans” with a narrow and privileged subset of white American men. The authors’ caveat that the good life required one to “marry a worker, in the case of many women” is presumably an effort to contextualize their sweeping claim of a just past. It instead demonstrates that the authors know the history but prefer the fairy tale.

Given the reputations and other work of Sitaraman and Alstott, it is inconceivable that the basic contours of American history are news to them. I am left to conclude that these startling errors are an effort to reach their readers where the authors imagine them to be.

There is a condescension inherent in this myth-making, as though Americans cannot love the public library, or place a value on Medicare, without first being assured that George Washington never told a lie. There are few issues more crucial than the revitalization of the public sphere, but as the authors themselves put it, “[N]ostalgia is rarely a good guide to public policy.” Neither is this promising but ultimately disappointing book.

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Vanessa Williamson is a fellow in Governance Studies at the Brookings Institution.

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