July 22, 2009

Why Obamacare Cant Work: The Hayek Argument

Two days ago I posted an argument against Obamacare from the Mises Institute that showed that the plan to fix healthcare isn't addressing the central problem; that government intervention in the system what is driving the healthcare "crisis". (scare quotes courtesy B.HO)

Today John Stassel makes what I think is the most cogent argument against government healthcare which is what Economist Fredrick Hayek described in "Fatal Conceit, the Errors in Socialism". A market economy is like a living breathing ecosystem and intervention within the system creates not only inefficiencies as the Mises article pointed out but also creates unforeseeable and potentially dangerous reactions that no person or group of persons can foresee or control. Government lending money to people that can't afford a house for example.

The biggest conceit of American Socialists is that despite overwhelming evidence that what they want to do has failed miserably where ever it has been tried and has caused more death and suffering than any previous social system they feel that they are somehow smarter and will not make the same mistakes. Or they believe, despite the evidence presented, that socialism must necessarily be better than the system we have now because there is still suffering in the world. It never ceases to amaze me that leftists see themselves as the people of reason and those on the right are the irrational ones.

From RCP:

Like the politicians, most people are oblivious to F.A. Hayek's insight that the critical information needed to run an economy -- or even 15 percent of one -- doesn't exist in any one place where it is accessible to central planners. Instead, it is scattered
piecemeal among millions of people. All those people put together are far wiser and better informed than Congress could ever be. Only markets -- private property, free exchange and the price system -- can put this knowledge at the disposal of entrepreneurs and consumers, ensuring the system will serve the people and not just the political class.

This is no less true for medical care than for food, clothing and shelter. It is profit-seeking entrepreneurship that gave us birth control pills, robot limbs, Lasik surgery and so many other good things that make our lives longer and more pain free.

To the extent the politicians ignore this, they are the enemy of our well-being. The belief that they can take care of us is rank superstition.

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