State-administered medical care: not exactly a low-cost panacea
I have a lot of arguments with Keynesians, the first being that they are not really speaking of economics, per se, but rather concentrate upon the administration of state power. To a Keynesian, there are no real costs, no real prices, and money simply is something to be manipulated by state authorities in order to facilitate wealth transfers.
Keynesians, from what I can tell, really have no idea how wealth is created, and in the advocating of the “euthanasia of the rentier,” they really mean the doing away with entrepreneurship altogether and replacing it with a form of central planning. When Keynes wrote in the German edition to The General Theory that it would be easier to implement his ideas in a dictatorship than is a democratic state, he was not giving his stamp of approval to Hitler, but rather was saying that government economic planning would be easier when people did not get in the way.
Although much of the economy does not have the hardcore central planning that Keynes and his followers might have wanted, one area where socialism effectively has been implemented has been medical care. In fact, American medical care is one portion of the economy in which the staples of a free economy — free prices and private property — pretty much do not exist. Yes, there are things we call prices and there are some privately-owned portions of the medical system, but they are controlled or monitored by state authorities to a point where a market hardly is recognizable.
To Paul Krugman, this is a wonderful state of affairs, except that the government really should have even more control, all in the guise of reform. In his most recent column, he claims that Obamacare somehow is making the medical system better, controlling costs, and proving that socialism really does work in medical care.
I’m not going to get into a spitting match over the Republicans versus the Democrats or the latest numbers from the Congressional Budget Office. There is a larger issue here, one that Krugman and the rest of Washington, D.C., ignores, and that is the fact that state-sponsored medical care always will be more costly and less-effective than medical that is not state-run.
Now, I don’t mean the present system with third-party payments, strict licensing requirements, price controls, allocation controls, and a horde of bureaucrats poring over every decision and second-guessing doctors. I am not speaking of a system that is full of government mandates, from certain kinds of screenings, mandatory injections of children with Lord-knows-what, government favortism, and requirements that taxpayers fund birth control so that college students can have a subsidized hookup culture.
Look at those industries which have been relatively free. Over time, quality and service improve, and prices to consumers go down. Now, Krugman will argue that medical care is DIFFERENT, and that it is not subject to the laws of economics. Hmmm, in other words, medical care is not an economic good, which only could mean that it is not scarce. Or, he might argue, government regulatory burdens and government price controls and mandates somehow can overcome or eliminate the reality of scarcity.
When Krugman writes of costs, he means administered numbers, not opportunity costs. When he calls for mandates, he means that consumers should not have free choice and that the state should choose, since a Progressive state is wise, as long as it is populated by people who “believe in government.”
So, we will have the forever spitting matches in which people like Krugman will claim that things are getting better and that one day, we can be like Europe. That the state can magically do away with scarcity is just one more Keynesian fantasy.
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William L. Anderson is an author and an associate professor of economics at Frostburg State University in Maryland. He is also an adjunct scholar with the Mackinac Center for Public Policy as well as for the Ludwig von Mises Institute in Alabama.
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