There are two ways to organize economic resources in a society. On one hand are market forces guided by millions upon millions of individual decisions made by consumers. This type of social organization rests on freedom, as the late Milton Friedman said, the freedom to choose. On the other hand, we have collective decisions. Absent unanimity, which simply doesn’t happen in a diverse nation of more than 300 million souls, collective decisions require some sort of coercion or force to implement. For this reason, we have laws and governments. On health care, Americans can go the route of markets, innovation, flexibility and efficiency, or we can turn to government agencies, one-size fits all programs, rigid payment schedules, formularies and wasteful rent-seeking.
Senator Clinton’s positions on healthcare need no introduction. Senator Obama made the point during last night’s candidate debate about the major differences he has with Senator Edwards on the issue. Despite these differences, all three Democrats favor a larger role – they call it, universal health care – for governments in the provision of healthcare. Their proposals would socialize costs when we should be going exactly the opposite direction with policy. It is time to remove the tax advantages given to employer-provided health care and to expand personal medical accounts. Until we remove the artificial walls of separation between consumers and medical providers, the magic of competition which will lower prices, innovate new services and deliver health care more broadly to society will be unnecessarily delayed.
Long ago, Milton Friedman also pointed out that no one spends someone else’s money as wisely as he spends his own. Last night, Democrats outlined several proposals for spending more taxpayer money, including “universal healthcare.” This country already has government provided universal healthcare – Medicaid – which has failed to serve us well. My point is simply that we can do better than to ask for more of the same. While members of my party tend to be better on health care, they often chart the wrong course. For example, one need look no further than the recent Medicare expansion. I’ll be blogging all week, and more observations on the curious behavior of politicians of all stripes will be posted soon.