Christine Yuan ECON BC 3041 Theoretical Foundations of Political Economy Essay #2: On Smith and Obamacare According to the

BLS, According to rising health costs . In the face of rising inequality in the United States, the Affordable Care Act (ACA) is being implemented as a possible solution to the problem of unequal health care distribution and increasing inability for individuals to attain health care services A. Adam Smiths thriving societyon the health insurance exchanges Adam Smith begins The Wealth of Nations by claiming that the collective, productive labor of a nation fundamentally supplies its constituents with the goods and services they need and want. The wealth of nations is therefore a function of two means of production, labor and natural resources. Smith focuses on labor because it changes dynamically while natural resources remain static at a given time. All people could choose to work with the limited amount of natural resources in the world to provide for themselves; they would be part of the rude state. Alternatively, the division of labor could lead workers to specialize their work to specific, simple tasks which would produce more overall. Productive workers in civilized societies employ the division of labor to the benefit of the entire society as the immense increase of production from the division of labor can provide more goods and services to both employed and unemployed members than they could consume in the rude state. These numerously produced goods and services would be distributed according to the principles of the free market, wherein the supply of output produced is dictated by the effectual demand for it. Within this context of Adam Smiths understanding of society, Smith purports that the best society is a thriving society where the effectual demand for labor is increasing, driven by capital accumulation. Given this criteria for a thriving society, Smith would support the Affordable Care Act (ACA) should it promote an increasing demand for labor. The ACA offers a health insurance marketplace for health coverage plans; these public insurance plans are the produced goods subject to the demand for health insurance in the U.S. The government website regulating these plans in accordance with the ACA is simply a central distribution vehicle for these insurance plans. Since the health insurance marketplace opened on October 1st, 2013, more than 360,000 people have signed up for health insurance. This number indicates the current demand for health insurance, which suggests a concurrent increasing demand for the health care services such insurance provides. A nave reader may infer that insofar as the ACA is promoting increasing production of healthcare services, Smith would support the ACA-mandated health insurance marketplace. Smith may, however, pose a number of questions while assessing the ACAs health insurance marketplace. First, he may question whether the market of health insurance or the market of health care services is the relevant market in question. B. Adam Smiths political economyon the ACA mandates The Affordable Care Act is contentious because it is not merely a conduit for health

insurance exchanges; it is a government mandated law for all individualsemployees and employers, especiallyto promote universal health care coverage. Rising Inequality ACA Justice Buying Insurance Division and allocation of labor Denial of Coverage-->Interventions