Currently,
many experts are denying the claim that a government run healthcare service
would need to ration out care to patients. However, this impossible. Just like
the free-market, which "rations" according to ability and willingness to pay, a
government healthcare service does not have unlimited resources (although it
may be well-funded), so it must also ration care to its clients. Therefore, the
question is not whether there will be rationing, but how it will occur and who
will guide it. In itself, this doesn't show that free-market healthcare or
government healthcare will be inherently better. But we can use the insights of
public choice and standard theory to show that, at the least, we shouldn't
expect the government to outperform the market without extremely extenuating circumstances.
In particular, without real market entrepreneurs guiding the healthcare process,
it seems unlikely that a dynamic system with ever-changing and improving
medical technology would result. As Lachmann constantly emphasizes, the marketplace
is a zone of incredibly dynamic and often unpredictable progress, guided by entrepreneurs
who must interpret data and form expectations in accordance with their accumulated
knowledge. Government, on the other hand, often seems to be in a sort of
stasis, only changing at regular intervals and unbothered by the threat of
competition.
The School's...
View of the scope of Economics: science
of human action, science of objective wealth, science of scarcity and
allocation, etc.
Method of formalism: verbal logic,
mathematical logic, acceptance of ambiguity and lack of formalism
Basic assumptions about rationality: perfect
rationality, bounded rationality, reasonable rather than rational, irrational
(driven by animal spirits)
Use of time: comparative statics
(extremely limited use of time), equilibrium (out of time), real time
(Bergsonian time)