Government and Healthcare

Note this is the last post I'm going to make on Blogger. Power of Liberty is moving to WordPress at http://www.powerofliberty.com (not up yet)


There's a reason why I never subscribe to extremes -- mainly because I always find something wrong with them. Which is why I never bought fully into classical liberalism. Which is why I never bought fully into neoliberal (or socialism). Same reason why I never bought into conservatism. And I can go on and on.


This post is indirectly about the Supreme Court (unsurprisingly) upholding the Affordable Health Care Act or better known as Obamacare. A couple of friends of mine shared a link to an effective summary of the law, which you can access here. What I am going to go into is discuss two schools of thought.


The first school of thought, shared by many libertarians and conservatives, is that health care should be treated solely as an economic good. Well-written, well-thought out articles have been written on the Mises Institute website that I have taken a little bit of time to read when I'm in between building websites. One thing  that a lot of these posts noted (I read so many I couldn't remember exactly which one), is the number of Americans that were actually insured heading into the 1960s (nearly 3 quarters of Americans had some form of health insurance). There are two major caveats to that -- both of which that I am going to get to later. However, they characteristically blamed government intervention for health care costs spiraling out of control.


The second school of thought, shared by some moderates, liberals, and even socialists, believe that health care is a service that a central government has a moral responsibility to provide to its citizens in the name of general public welfare. It is this mindset that has created a drive for a government sponsored health care system, which has fared well in places such as Australia, Canada (health care provisions are largely delegated to the provinces), Germany, and Taiwan, and not so well (in terms of being problematic) such as Britain. The mechanisms as to why it works with efficiency in some countries and why it does not in others, has a lot to do with how medicine is practiced in each country. More or less, if there has to be a common denominator, it is that these countries for the most part do not see medical care as an economic product, but just a service.


There's two things I've noticed in the debate between deregulated health care and nationalized, centralized health care systems: one, it is a matter of a state of mind, and two, as a corollary to that, the state of mind will either elicit a logical or an emotional response: generally the lassiez-faire health care argument is more of a logical response and the centralized health care argument is more an emotional response. It is one of those two things that everyone has been caught up in -- from the late Ted Kennedy to everyone that works at the Mises Institute.


Here's something else that should be really considered: politics. Believe it or not, the political systems of Australia, Canada, Germany, and Taiwan all have something in common -- governments that largely aim for problem solving more so than just demographic appeasement. For example, when Canada faced its fiscal crisis during the 1990s, it was Jean Chretien's Liberal Party (similar to the American Democratic Party) that led the charge in terms of cutting spending (granted, what really solved Canada's fiscal woes is the Bank of Canada slashing interest rates which made it attractive to investors) -- the Liberal Party dominated Canadian politics until it crumbled under Paul Martin in the mid 2000s. The real lesson there was that party leaders were able to set aside ideology to solve problems, which is something that really has not happened in the United States since the Civil Rights Movement of the 1960s.


So what has all of that have to do with the American health care system? The system of appeasement (or politicians being paid off, or whatever the hell you want to call it), actually did more damage to the American Healthcare system than the general entry of government into it. Why? Because when any government moves away from problem solving and goes towards demographic pandering, it creates bad, inconsistent outcomes.  The disasterpiece, if you will, that is the American health care system is more of a political problem than it is an economic problem. Which goes back to the major caveats to the libertarian and conservative argument of blaming the government: for one, commercial insurance was popular during the 1950s and 1960s because of the tax breaks given by the government to individual and company taxpayers along with additional competitive advantages, and two, the advance in medicine and medical equipment would have to be taken into consideration, because a lot of pharmaceutical and medical equipment health companies factor research and development costs and general product effectiveness into their pricing. It's not the economics of government intervention, it's the politics of it.


At the same time though, American politics, from those in power to the constituency, are quite frankly too immature to even effectively provide manageable health care services, unless there's a massive fundamental shift in political thought. And when I say political thought, I'm not necessarily meaning ideology, but an actual, constructive approach to how healthcare should be seen in general. Government intervention can work, but there has to be a degree of constructive maturity, from politicians to the constituents, into how to approach various means and solutions of implementation.


It's hard to sit here and say that lassiez-faire health care is the gold standard form of health care because almost every country in the world besides the United States guarantees health care for its citizens, however, that's because in most of these countries, health care is seen as a service and not strictly and economic product. At the same time though, with the way the political scene is here in the United States, the American government is definitely not mature enough to even effectively manage one.