Public Competition Isn’t Socialism

Spending isn’t the problem in America. Not in healthcare, education, infrastructure, or housing.

We’re hearing a whole lot about socialism again these days. That’s the refrain from Republicans and the right wing whenever anybody suggests an alternative to complete privatization. Before we get too deep into socialism or communism, it’s worth understanding what the American system actually is.

I’m talking about the thing Alexander Hamilton built. One of the key things Hamilton understood is that for a country to build wealth and industry, it needs government support. The government has to be a builder, an investor, and a purchaser. That’s not socialism. These industries were often private, but they had backing from the United States government. Other times these industries were so critical that you wouldn’t privatize them at all.

This happened over and over in America. It happened building New York City’s subway. It happened building our aqueducts and water systems. Same thing with healthcare. In many cases across states, massive amounts of our healthcare infrastructure was owned by the state, the county, or the city. The doctors, the nurses, the technicians were employed by the government.

Were they the only game in town? No. There were private hospitals, nonprofits, clinics, testing sites. But the existence of public options created real competition. Competition is the engine that makes capitalism work. Without it, the whole thing grinds to a halt.

We’ve privatized so many of our basic necessities that they’ve become massive monopolies. They’re almost single payer entities, except instead of being a government-backed single payer where you have some accountability through voting, it’s a corporate single payer that you have zero accountability with because it’s the only game in town.

When there’s only one provider for healthcare, education, utilities, you don’t really have options. The sheer size of what you’re competing with makes it nearly impossible to enter those markets. Go out and start your own hospital. That ain’t easy. Rural and low income urban hospitals are closing. If it was easy business, everybody would do it.

The most direct way to fight corporate power is taking market share. That’s how Netflix destroyed Blockbuster. The easiest way to rebalance corporate power in our system is direct competition. Capitalism needs a competitive public sector.

Here’s what too many Democrats miss. If government just acts as a purchaser, writing blank checks to corporations, all it does is drive prices through the roof. When government money chases private goods without creating additional supply, you get an affordability crisis. That started in the 1960s and it’s been accelerating ever since.

Take food processing. A handful of companies control the entire supply chain from seed to shelf. Or utilities—you get one electric company, one gas company, take it or leave it. But healthcare is where this hurts the most. Medicare and Medicaid pump money into a privatized system, so providers raise prices to capture that government spending. Obamacare was sold as helping people afford private insurance with caps on profit margins and regulations. But the industry gamed the system with prior authorizations, narrow networks, sky-high deductibles. It became a lawyer-written complicated mess instead of simple old-fashioned competition. You make your mousetrap, I’ll make mine, let’s see who does better.

Government doesn’t have to be a job killer. It can be a job creator. Government can be a builder. There’s nothing inherently better about a corporation than a county. We need both, but we can’t just write checks. When government spends money, it needs to produce things. That’s what the New Deal did. That’s what the Arsenal of Democracy did.

We abandoned that playbook. Worse, we taught it to countries that are now lapping us. China is producing 80% of their new energy in renewables. They’re building high-speed rail. They’re not just buying stuff from private companies. They’re building capacity, creating alternatives, forcing private actors to compete or get left behind. They learned this from us. They’re using the American system while we rot from the inside out.

We still have advantages they don’t. We’ve done capitalism longer. We have the world’s reserve currency. We have democracy, if we can rebuild it and reclaim it. But we’re losing because we stopped building.

When you hear people saying AOC or Bernie Sanders is a socialist because they’re talking about taking back some of our sold-off capacity, remember these services used to be public. We’re reclaiming what we once had. There’s no way to rebuild our country without doing it.

If we can’t get healthcare to become substantially cheaper, I’m talking about half the price, we’re in big trouble. You can see around the globe that’s absolutely possible, but it’s not gonna happen through a purely private system with government just acting as regulator. When government only regulates and doesn’t compete, prices go up.

The government needs to ensure competition exists. When it can’t happen naturally, government has to inject it. Everybody wants common sense solutions. Here’s the most common sense solution. If somebody’s charging me $1,000 for insulin and I can make it for four dollars, let’s make it. If somebody is charging me $150,000 for a quadruple bypass but it only costs $15,000 to do it, we need to build our own capacity.

When you get pushed up against the wall by a contractor telling you a bathroom remodel is gonna cost you $15,000, you don’t just say OK. At some point, if there’s no other game in town, you learn how to build it yourself.

When government competes in markets, costs drop and quality rises; not because bureaucrats are smarter, but because public alternatives don’t extract profit for shareholders.

Some evidence:

• Public power utilities in Nebraska and municipal systems across the country consistently deliver lower electric bills and higher reliability than private companies.

• Chattanooga’s public broadband provides gigabit internet for around $70/month, while private Internet Service Providers often charge more for slower connections.

• The VA healthcare system delivers comparable or better outcomes than private insurance at lower per-patient cost when properly funded.

We’ve sold this country off for scraps for decades. We gave away what was built by generations of blood, sweat, tears, and sacrifice. If we need to get to the moon, we don’t need Jeff Bezos or Elon Musk. Most of the technology they’re using was built by NASA.

Don’t confuse insane privatization and the giving away of our capacity with capitalism. That’s just as destructive to capitalism as communism would be because it yields similar results. An ultra wealthy, ultra powerful top. An ultra poor bottom. A few people in the middle doing pretty well. That’s not capitalism. That’s feudalism.

Feudalism didn’t have competition either. Just inherited power and people getting squeezed. Real capitalism requires real competition. Sometimes the only way to ensure competition exists is for the people, through their government, to provide it themselves.

In solidarity,

Corbin Trent

This is the sixth essay in a 12-part series where I lay out how we got to where we are and the next steps required to move forward. You can find them here: first, second, third, fourth, fifth. The seventh essay will be published at America’s Undoing on Sunday November 23rd.

On December 9th I’ll be announcing a new initiative designed to bring power to the people.

Please join me on the journey by subscribing and sharing, and let me know what you think in the comments.