Not a Free Market Today

On the topic of health care, we have the following from Bob Burg:

In fact, the Pro-Universal Crowd has done a brilliant job of framing a false argument:

“Do we stick with a Free-Market Healthcare system which is not working?”

or…

“Do we at least do something to try and help; for example, go to a system of Universal Healthcare?”

And (anti-Constitutionality aside), that question would make sense, except…

WE DON’T CURRENTLY HAVE A FREE-MARKET BASED HEALTHCARE SYSTEM. (Sorry for shouting but has nobody noticed that??!!)

Actually, we haven’t had a market-based healthcare system in over 50 years. When we did, it worked magnificently well for everyone, including the financially disadvantaged. Only after government first inched its way in and then eventually controlled nearly every aspect of it did we find ourselves in the predicament we are currently in, with the masses now asking the government to solve the very problem they created (I can’t think of anything more nonsensical).

He’s absolutely right. A system which has some remnants of a free market approach is not not free any more than a barn which has some remnants of that 20-yr-old paint is properly considered painted. As Mr. Burg notes further down in the piece, there are more than 135,000 pages of health care regulations–leading  us to believe that maybe the market is seriously constrained (the opposite of free).

I am reminded how much this argument on the part of the President and his supporters is part and parcel of the argument that was given for bailing out taking over financial institutions (and yes, I know that GW Bush had previously said much the same thing). That argument was this: It is obvious that the free market is not working, so we have to do away with it in order to save it.

Mr. Burg’s thoughts would apply to that scenario as well. WE DIDN’T HAVE A FREE MARKET WITH REGARDS TO BANKING/FINANCIAL INSTITUTIONS. We had the remnants of a free market, eroded by generations of regulation and government oversight. So, to tell us that the free market did not work is to tell us that the barn had been painted at one point in the past and it was therefore the fault of the paint that the rain got in. This leaves out the understanding that markets, like everything else in our universe, are subject to the law of entropy.

A free market is, practically speaking, a productive market. People of all stripes are attracted to productive (read “moneymaking) markets. Desires to take over the market, direct the market, make the market do different things than it is currently doing are all part of the dynamics of the market. The problem arises when a government entity is able to do all of the above because it has given itself the power of life and death over the market. As noted in a previous post, capitalism will still be there, because that tends to be the best approach for people who wish to transact business; however, it can be subjugated to the point that it is too dangerous for all but the foolhardy to engage in unsanctioned commerce (black markets).