Tuesday, October 7, 2008

A Short Public Service Announcement

/begin rant

Appropos of nothing more than this evening's ISC chat regarding the merits of socialized health care: remember that the government creates nothing. Wealth does not come from "the government," money to purchase goods and services does not come from "the government," and health care does not come from "the government." Short of indentured servitude, all transactions are based on voluntary trade; both parties have to be better off. The one exception to this rule does involve the government: the government can use its power to confiscate and redistribute wealth.

So: "government health care" just means "redistribution of income" plus "inefficiency." Anyone who cares to is entitled to argue that more equal distribution of health care is worth the inefficiency and the confiscatory nature of (additional) taxation. I happen to disagree, but I respect honestly held opinions on the socialist side. But please don't insult our collective intelligence by saying that there can be equal access to health care without (a) confiscation and (b) the costs associated with a monopoly provider of services.

Relatedly, health care services are like any other normal good - as the price falls, people demand more. This implies some sort of rationing is needed. In most markets, we let price regulate the balance between supply and demand. If we have publicly-provided health care, then some other mechanism must do so. Generally this is done through lengthy waiting lists. If that is what a country desires, bravo. But again, please do not pretend that rationing does not occur one way or the other.

/end rant

Thank you, and have a pleasant evening.

Edit on 10/8/08 to add the following:

In thinking about this issue a little more overnight - a polite way of saying "stewing over the issue and remaining hopping mad" - it occurred to me that the apologists for socialism have now claimed somewhere around 80% of my after-tax expenditures as "human rights":
  • Food
  • Shelter
  • Utilities
  • Education
  • Health care
  • Retirement

And I'm one of the lucky ones; for some, I imagine that figure is closer to 100% of after-tax expenditures.

I feel compelled to point out all the ways that socialism has been a miserable failure over the decades. Eventually, incentives or lack thereof play an important role in determining the economic path of a country (or smaller organizational unit). Qualifying to be a physician, for example, takes many years of training, and many aspects of the job are unpleasant, I would imagine. If physicians do not earn a suitable rate of return on their investment, fewer people will make the investment. (One sees an aspect of that even now, where rural areas often have trouble attracting enough medical professionals. I would guess that the non-pecuniary aspects of compensation, including the amenities available in urban areas, play an important role in where doctors choose to live.) A sufficiently coercive government could then determine who goes to medical school, who goes to engineering school, and so on...thus solving the problem of labor supply by restricting individual liberty. (An aside to the young lady who equated fee-for-service health care with "slavery" - I'm afraid you had that one backward, my dear.)

The sad part is that the people squeezed by these lurches toward socialism are the middle class. The poor are better off, certainly, by taking money from everyone else and providing the above-mentioned services for those who could otherwise not afford as much of them. The very wealthy - the football stars, the entertainment stars, the financiers, and so on - are worse off, but not by much. They can afford to subsidize health care for the poor, buy their own private health care, and still vacation in St. Moritz every winter. Those in the middle take it on the chin.

Thus endeth my sermon on the subject.

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