In today’s New York Times, in an article titled “A False Balance,” Paul Krugman seems to claim that corruption on the part of Republicans and “conservatives” is something special, apparently attributable to their being Republicans or “conservatives.” And since Jack Abramoff happens to be a Republican and a “conservative,” that’s a good enough excuse, according to Krugman, for throwing out any efforts at balanced reporting that may have been made in response to the embarrassment that Fox News network’s stress on “fair and balanced” has caused to the notoriously left-wing media in this country.
Krugman wants the media to harp on the fact that the current lobbying scandal is a Republican scandal and argues that those journalists who don’t “are acting as enablers for the rampant corruption that has emerged in Washington over the last decade.”
The truth is, as Mises showed, that corruption is an inevitable by-product of an interventionist economy. Every act of government intervention constitutes harm to someone or benefit to someone at the expense of someone else, who is thereby harmed. Naturally enough, people want to avoid being harmed and are eager to obtain benefits. To the extent that politicians and government officials gain discretionary power to inflict harm or bestow benefits, they are in a position to extort money from the citizens, who will pay to avoid being harmed and pay to obtain seeming benefits.
If one is serious about fighting corruption, the first and most important thing that must be fought is all discretionary power on the part of the government and its officials. The powers of Congress, state legislatures, and city councils must be strictly limited to protecting the citizens against the initiation of physical force (including fraud), and nothing else. The more the government is pressed back within these limits, the less will be the problem of corruption. This is because the less will be the discretionary power the government and its officials will have to inflict harm or bestow benefits, and thus the less will be the need and the opportunity for citizens to bribe them. As part of the same process, elections will cease to be bidding wars between pressure groups. The pressure groups will dissolve once the government loses the power to harm or benefit them.
This article is copyright © 2006, by George Reisman. Permission is hereby granted to reproduce and distribute it electronically and in print, other than as part of a book. (Email notification is requested). All other rights reserved.
Monday, January 30, 2006
The New York Times on Health Care Costs
On page 1 of today’s New York Times, there is an article titled “Health Care, Vexing to Clinton, Is Now at Top of Bush's Agenda.” Typical of The Times and the Left, the article treats the continuing rise in health care costs as a phenomenon of the free market and presents government intervention as the solution.
The article is an illustration of the massive ignorance and evasion that prevails on this subject. The truth is that the rise in health care costs is exactly what one should expect from the government’s long-standing policy of collectivizing the cost of medical care. This is a policy it has carried on since World War II, when it first began to foster medical “insurance.”
Under so-called medical insurance, the typical insured patient pays little or nothing of the cost of any medical treatment, however routine it may be. Such medical “insurance” is comparable to “insurance” for food purchases. It simply means that there is little or no cost to the individual when he buys medical care.
I used to ask my students to imagine that one night the class would go to a restaurant for dinner, on the understanding that everyone would be free to order whatever he liked but that the bill would be evenly divided. Thus, if there were thirty students in the class and someone ordered a $20 steak instead of a $5 hamburger, the additional cost to him would be 50 cents. Under such an arrangement, it's clear, everyone would have the incentive to order anything he wanted, because he would bear very little of the cost. But since everyone would soon do this, the cost to everyone would end up being far higher than it would have been had everyone had to pay his own way.
Now think of the consequences of the check being split a million, ten million, or a hundred million ways and you can see what’s actually wrong with our present system of collectivized medical care.
This is a subject I’ve written about at much greater length, in a pamphlet titled “The Real Right to Medical Care Versus Socialized Medicine” and in my book Capitalism: A Treatise on Economics. I’ll return to it in future posts.
This article is copyright © 2006, by George Reisman. Permission is hereby granted to reproduce and distribute it electronically and in print, other than as part of a book. (Email notification is requested). All other rights reserved.
The article is an illustration of the massive ignorance and evasion that prevails on this subject. The truth is that the rise in health care costs is exactly what one should expect from the government’s long-standing policy of collectivizing the cost of medical care. This is a policy it has carried on since World War II, when it first began to foster medical “insurance.”
Under so-called medical insurance, the typical insured patient pays little or nothing of the cost of any medical treatment, however routine it may be. Such medical “insurance” is comparable to “insurance” for food purchases. It simply means that there is little or no cost to the individual when he buys medical care.
I used to ask my students to imagine that one night the class would go to a restaurant for dinner, on the understanding that everyone would be free to order whatever he liked but that the bill would be evenly divided. Thus, if there were thirty students in the class and someone ordered a $20 steak instead of a $5 hamburger, the additional cost to him would be 50 cents. Under such an arrangement, it's clear, everyone would have the incentive to order anything he wanted, because he would bear very little of the cost. But since everyone would soon do this, the cost to everyone would end up being far higher than it would have been had everyone had to pay his own way.
Now think of the consequences of the check being split a million, ten million, or a hundred million ways and you can see what’s actually wrong with our present system of collectivized medical care.
This is a subject I’ve written about at much greater length, in a pamphlet titled “The Real Right to Medical Care Versus Socialized Medicine” and in my book Capitalism: A Treatise on Economics. I’ll return to it in future posts.
This article is copyright © 2006, by George Reisman. Permission is hereby granted to reproduce and distribute it electronically and in print, other than as part of a book. (Email notification is requested). All other rights reserved.
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