A major source of objection to a free economy is precisely that it … gives people what they want instead of what a particular group thinks they ought to want. Underlying most arguments against the free market is a lack of belief in freedom itself.
– Milton Friedman. Capitalism and Freedom (1962).
Most Americans are still rather awestruck by the fact that the new health care legislation has entered previously uncharted territory, by giving government the power to force people to purchase health insurance. Never before had the federal or any state government wielded that level of control over the general population.
Although a striking example of the unchecked and growing power of government, this move also raises an important question. The market economy is sustained on the premise that individuals are voluntarily engaging in transactions which will consequentially make both parties relatively better off. In other words that individuals engaging in transaction – rather than government (a third party) – have the knowledge to make value-creating exchanges. When there is no expected value from a transaction, consumers will not buy and producers will not sell, and resources will be used in a more profitable way.
It seems straightforward enough. Yet it is a concept our government is unwilling to accept. An article today in the Wall Street Journal reports that in Massachusetts, not only is the government forcing everyone to buy health insurance, it is also mandating insurance providers sell, even if such transactions result in bankruptcy. What is left when all private insurance providers are priced out of the market by the government? Sounds a lot like a single payer, government-run health insurance system.
Massachusetts was one of the first states to mandate the purchase of health insurance, and now it is experiencing all of the symptoms of a faulty and perhaps irreparable system. More importantly, however, it stands as a forewarning of a greater national health care conundrum.