In response to the Supreme Court’s recent decision upholding the constitutionality of Obamacare, Texas Congressman Ron Paul issued a statement that was unpredictably critical.
“Today we should remember that virtually everything government does is a ‘mandate.’ The issue is not whether Congress can compel commerce by forcing you to buy insurance, or simply compel you to pay a tax if you don’t,” said Paul. “The issue is that this compulsion implies the use of government force against those who refuse. The fundamental hallmark of a free society should be the rejection of force. In a free society, therefore, individuals could opt out of ’Obamacare’ without paying a government tribute.”
And he is absolutely right. The Affordable Care Act, while promising to attack the myriad of problems associated with our health care system, lower costs, and expand coverage, will do the exact opposite for precisely the libertarian objections Paul raises. The fundamental flaw in this legislation is that it will be using the same powers — government intervention, regulation, and central planning — that have created the problems in the first place.
Paul’s criticism, unlike many of his fellow Republicans, comes not from a partisan opposition to a Democrat’s health care proposal but from a principled rejection of government force as the solution to social problems, like health care, “solutions” that have been slowly growing for 100 years.
For example, socialized and corporatized medicine didn’t start in 2008. In the early 20th century, the American Medical Association (AMA) was formed, and soon began the practice of licensing doctors through the results of the “Flexner Report.” All throughout history, cartels have been used to control or limit supply and prevent competition from entering the market. This was done laregly out of a fear of women and minorities offering low-cost, specified health care. But without an AMA “license,” nurses were soon (and still are) prevented from opening up their own practices to say, fix broken bones, offer pediatric care, and basic health care needs with low overhead. This was the start of a long-line of trends restricting the openness and competitiveness of the market.
During World War II, the U.S. government instituted price-and-wage controls, preventing businesses from offering incentives, like higher salaries, to hire scare labor. But if an employer offered medical insurance to their employers, it was tax-deductible. The consequences of this policy created less discrimination by both consumers and employers in health care costs, and provided greater incentive provide medical treatments that are only marginally more effective but with a much higher cost, precisely the opposite of what a market pricing system does. This also tied employment to health care coverage, meaning individuals and families were hit twice when losing their job. Just imagine what would happen to the cost and allocation of groceries and gasoline if they were forced to be paid for by a third-party.
Then came Medicare, which extended this “employer-provided” health care insurance only that the employer was the U.S. government. This further allowed medical care to be governed by political, rather than economic, interests, where elected officials (and those looking to replace them) offer expanded coverage to the elderly with simultaneously shrinking deductibles, continuing the centralizing process of what markets do: allow individuals to discriminate on price and cost in a competitive market.
And as Murray Rothbard pointed out decades ago, the creation of modern corporate medical “insurance” is the result of state intervention into the market, continuing to disenfranchise the consumer and turn control over to large insurance companies and government bureaucracies.