Papa Johns, Denny's and the Morality of Obamacare

Matt Yglesias leads us to the (hopefully short-lived) phenomenon of business owners kicking up a storm and raising prices because of Obamacare. As he writes,

The No. 1 consequence of Obama’s re-election is that it essentially guarantees his signature health care law will be implemented. And not everyone is happy about it. Zane Tankel owns about 40 Applebees franchises. He says that as a result of the law’s penalties on employers who don’t offer health insurance to their workforce “we won’t build more restaurants, we won’t hire more people.” John Metz owns about 40 Denny’s outlets, several Dairy Queens, and is the brains behind the Hurricane Grill & Wings chain is even blunter. He says he’ll be tacking a 5 percent surcharge onto customers’ bills in order to defray the costs of Obamacare.

If you’re not happy about that surcharge, he’s got an answer for you. Cranky customers “can reduce the amount of tip they give to the server, who is the primary beneficiary of Obamacare.”

Due to the nature of American partisanship, these little tantrums aren't receiving any condemnation outside of the usual sources. It's a little disappointing. As Heather Knight in the San Francisco Chronicle points out, the only purpose that these price increases serve is to pad the wallets of these business owners. The exact same thing happened in San Francisco a few years back, when it passed a similar law. As she writes, "In addition, 101 of the 172 employers who levied surcharges on customers' bills to pay for employee health care said they didn't spend all that money on health care."

While it's a little anachronistic to point out, condemnations of avarice date back all the way to the Bible, whose authors found greed and inequality disruptive to a functioning society. I find it painfully ironic that the right, who claim to embody traditional Christian values, find it so very convenient to justify behavior of guys like Tankel and Metz. Then again, the right seems to have a bit of reality problem these days, so I shouldn't be surprised.

Conservatives and libertarians tend to think that they're maximizing freedom when they advocate lasseiz faire. That's obviously not true, and any decent student of John Rawls would be able to point that out. Equality and freedom cannot exist independently of one another. When we sacrifice equality, we also sacrifice freedom. As Daniel Little writes,

The core idea is that Rawls believes that his first principle establishing the priority of liberty has significant implications for the extent of wealth inequality that can be tolerated in a just society. The requirement of the equal worth of political and personal liberties implies that extreme inequalities of wealth are unjust, because they provide a fundamentally unequal base to different groups of people for the exercise of their political and democratic liberties. As O'Neill and Williamson put it in their introduction, "Capitalist interests and the rich will have vastly more influence over the political process than other citizens, a condition which violates the requirement of equal political liberties."

Rawls is often misread as a supporter of total equality, a type of east coast Marxist that thinks that people only go into business to altruistically provide for others. No one said that. Rawls would say its fine to make your own money.  His that you can accept differences in wealth as long as it doesn't lead to suffering among the poor. When the average CEO makes 10 million dollars a year, and yet tens of thousands of people still die each year due to a lack of health insurance, you fail that test. A society that unequal is morally reprehensible.

Rawls' moral argument is also supported by the research of economists, psychologists and sociologists that focuses on well-being and happiness. There is nearly conclusive evidence that people aren't happier because they're richer. After a certain sustenance level, additional income earned brings almost zero additional happiness. People don't want to be rich. They want things like freedom, the opportunity to spend time with their families, finding a sense of meaning in their work. In short, they want more leisure, that all-encompassing economic term for the many things that we find good in life. Because leisure is such a valuable thing, people actually work less once they start to make more money. None of this is controversial among economists.

While studies of well-being provide the broadest understanding of money and happiness, you see the same thing among entrepreneurs. Most people start their own business to get a sense of personal fulfillment, and less than 20 percent of small business owners identified "getting rich" as a motivating factor. Entrepreneurs go out on their own because they enjoy the risk. They want to leave some sort of legacy, gain recognition, or get rid of their annoying boss. There are countless stories of consultants, lawyers and bankers leaving their high paying jobs to go take up artisanal barbecue, fashion design or some other relatively low paying job, just because it makes them happy.

An entrepreneurial society and a sense of economic justice are not mutually exclusive. In fact, they're conducive to one another. A stronger safety net actually encourages people to take the risk to try something on their own. Not only can we live in a country where we don't worry about suffering at the hands of inequality, we can live in a place where people have more opportunities to get the kind of entrepreneurial freedom so many desire.

To get there, you need to drop the nonsense that says greed is good and inequality is fine. No one wants to take away someone's opportunity to make an honest living. The right has invented a false dichotomy in order to let a limited number of people actually profit from depriving others of their freedom. By praising inequality and raging against social justice, they don't support liberty. They support feudalism. It's time we all started to recognize it for it actually is.