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Gore Endorses Canada's Medical System

Mises Daily: Wednesday, November 20, 2002 by

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In a recent newspaper interview, Al Gore finally came out of the socialist closet and declared that the "solution" to what he deems as a "crisis" in U.S. medical care is for the government to impose a "single payer system."  While some folks might consider Gore's remarks a setback to the possibilities of actually establishing free market healthcare in this country, actually I believe it presents an opportunity for advocates of freedom and private property to make the case that should have been made all along.

It would seem to the casual observer that Gore's remarks come at a curious time, his party having suffered some terrible electoral defeats in the last election cycle.  Furthermore, a proposal to create a Canadian-like system in leftist Oregon was defeated 80–20 at the polls.  Surely if Oregon voters, many of whom are as left-wing as their counterparts in San Francisco, were not willing to impose a socialist system in their state, I doubt that the majority of American voters are going to imitate Canada.  Then again, never underestimate the awful possibilities that democracy can create, especially since the driving force of modern politics is raw envy.

At the same time, it seems that Gore has forgotten that the present Republican majorities in Congress are due in large part to the failed "HillaryCare" initiative of nearly a decade ago when the Clinton Administration attempted to de facto nationalize the health care industry.  Therefore, it might seem that Gore might be fighting an uphill battle, but I have no doubt that no matter how flawed a proposal he presents, one can count on entities like the New York Times, Washington Post, Time, and the various television news outlets, along with "Public" Television to carry some of the water for socialist medicine.  In other words, no matter how bad the argument for government healthcare might be, there are still people out there willing to make it.

Before going further, I need to point out that in politics, marketing an idea is everything.  In 1990, Harris Wofford won an upset victory in his bid for U.S. Senator from Pennsylvania, as he campaigned on the theme that since prisoners in Pennsylvania's prisoners received "free" medical care, then all of Pennsylvania's citizens also were deserving of such "free" care.  That medical care in prisons is second-rate and is administered to people whose freedom has been taken away did not seem to connect with the enthusiastic voters who somehow believed that they were receiving substandard care while prisoners were having favors lavished upon them.

(Apparently Pennsylvanians conveniently forgot that they, too, could have all the luxuries of prison life, including free housing, three squares a day, and "free" healthcare.  All they had to do was to violate the increasing number of criminal statutes churned out by the state legislature or Congress and such luxurious comfort could have been theirs.)

Henry Hazlitt remarked in Economics in One Lesson that the lessons of the "broken window fallacy" must be learned by every generation.  Since I doubt that any generation has learned the proper lessons regarding socialist medicine, those of us who understand the real damage that government does in this area must be willing to explain and explain again just why intervention by the state into medical care will result in making things dangerously worse for all of us.

Despite the many disasters of socialized medicine, there are a number of reasons why even the idea of socialized medicine remains popular.  I will list some of them, and also give reasons why they are still bad ideas, despite the almost endless procession of advocates.

Socialist Medicine is Egalitarian

It is no secret that most Canadians and Europeans consider themselves to be morally superior to Americans, especially when it comes to their medical care policies.  While the actual technical delivery of those policies might differ from country to country, the results pretty much are the same.

All citizens (and many noncitizens) in those countries are "entitled" to free medical care from visits to their general practitioners to major surgery.  No one, regardless of income, can be turned away, at least on paper.  While some government plans, like those of Great Britain, permit private payment plans to exist, most do not.  In Canada, anyone who either offers payment or receives payment for providing medical services is guilty of a criminal act and can be prosecuted and jailed.

The way the system is supposed to work is that those who provide the services receive their compensation from the state and thus do not have to be concerned with the ability of patients to be able to pay their bills—which are paid by the taxpayers.  Furthermore, supporters of such a system contend that the needs of individuals come first, not their income status.  The system (again, on paper) is egalitarian, as no two individuals are regarded above one another, no matter their wealth or social status.

While such systems have their obvious supporters, it seems that all of this begs some serious questions.  The first is this: Why limit such egalitarianism to medical care?  Why not expand this "right" to everything?  For that matter, why was not the society depicted in Kurt Vonnegut's "Harrison Bergeron" (where everyone was equal in everything) not something to which we should aspire instead of being a spoof on egalitarianism?

For example, why should some people be "permitted" to live in nice houses or drive expensive cars while others live in hovels and drive lemons?  For that matter, why should there be restaurants that serve costly food that not everyone can afford?  If those who believe in egalitarian health care were being consistent, they also would support policies in which all goods are doled out by the state.  Moreover, consistent egalitarians would support a system in which individuals received no compensation for their services, as the state would suffice to provide all the goods that they need.

Wait a minute!  I believe that V.I. Lenin tried to implement such a system in Russia from 1918 to 1921.  After economic chaos reigned, and after millions of people had starved to death, he called off the dogs and reverted to a system that he called the New Economic Plan, and which in reality was a partial return to private enterprise—though the state still controlled much of the economy.

Faced with such a realistic history of socialism, "single payer" advocates like Gore prefer simply to place medical care into a separate category, as though the delivery of medical services was more important than the delivery of food, shelter, or many other goods.  What I find most interesting is that the documented long lines for basic service in Canadian medical care, as well as the deterioration of health care facilities actually are points of pride with many Canadians, as they look upon this sad situation as proof of their high moral standing.

The egalitarian mindset holds that absolute equality is the most important social good, so if one Canadian (or European) must suffer from substandard medical care, then all Canadians should likewise suffer.  Of course, the Canadian government still permits citizens to travel to the United States to take advantage of the "immoral" U.S. system.  Should the USA adopt the Canadian system, as Gore now advocates, those poor Canadians will have nowhere to go and will have to bear the full brunt of their system.  Indeed, should that happen, one can be assured that if misery loves company, North America will be full of miserable—but morally superior—people.

All Other "Industrialized" Nations Have Government Health Care

This is one of those slogans that should be further deconstructed.  A decade ago, advocates of socialist medicine were proclaiming that all other "industrialized" nations—except for South Africa—had government-run health care.  Since at that time South Africa was considered an international political pariah for its racial policies, the implication was that only a "racist" nation would fail to have government medicine.

Of course, now that South Africa no longer has the apartheid system in place—replaced by the African National Congress—those comparisons are no longer made.  (Another reason is that South Africa is quickly reverting to a much more primitive economy of Third World status, so it would not matter what system the government were to put into place there, as no one outside of South Africa even will notice.)

The "industrialized nations" reasoning is a non sequitur.  Just because a country has an "advanced" economy does not automatically mean that government medicine must follow.

The reason many people use this argument is because the attitude of intellectuals is that Europeans are morally and intellectually superior to people in this country.  Europeans long have decried the "dog eat dog" capitalism of the USA and its institutions of private property, forgetting, of course, that capitalism, markets, and private property created the prosperity that enables those governments to fund socialist medicine.  Not long ago, Europeans, and especially Great Britain and Germany, also had strong private property rights, but those rights now seem archaic to people in those countries, who instead have succumbed to the religion of statism.

Also, keep in mind that "industrialization" itself is not a sign of civilization.  The former Soviet Union was considered to be an "industrialized" nation, which may or may not have been true, but the presence of numerous industrial operations did not bring prosperity and freedom to the people of that hapless country.  Furthermore, the "free" medical care for the average person—supposedly an admirable part of the communist regime—made the most substandard care given in the USA seem of highest quality by contrast. (Robert Hessen once remarked that the Soviet Union was the only nation that managed to give the world simultaneous industrialization and famine.)

Furthermore, many people on the left who make the remark about government medicine and industrialization are the first to condemn large-scale manufacturing of goods.  Yet, the only reason that the European states can offer even decent tax-funded health care is because those industrialized societies still are very productive.  One cannot simultaneously have the green utopia of which the left dreams and high quality medical care.

Socialist Medicine Costs Less than Private Health Care and Provides Superior Service

I have seen this argument used a number of times, most recently in the campaign in Oregon where proponents of the socialist medicine initiative claimed that elimination of "overhead" by private insurance companies and by private practitioners would result in wondrous cost savings that would make the program pay for itself. The problem is that such advocates are ignorant of the word "cost," thinking it to be only a monetary term.

Take individuals in Canada who suffer from large kidney stones, for example.  In the USA, a procedure called lithotripy is readily available.  (This method uses sound waves to break up large stones so individuals can more easily pass them.)  Canadian medical authorities, on the other hand, rarely make such treatment available and make those victims of kidney stones deal with them in the most painful way.  (Not all U.S. kidney stone sufferers are given lithotripy, but they almost always receive more intensive care than do Canadians.)

Since all medical prices are controlled by the Canadian authorities, treatment of kidney stones is less expensive north of the border, at least on paper.  However the real costs are borne by the consumers of such medical malpractice.  It may be cheaper according to some accounting ledgers to make people stand in line and wait (and wait and wait) for basic health care, not to mention needed surgery, but when one factors in all the opportunity costs, suddenly Canadian medicine is no longer so cheap.

One area in the United States where the government regulates medicine in a quasi-Canadian fashion is organ transplants.  Because government controls the source of transplants—the transplantable organ—there are waiting lines thousands of people deep, and in this country, far more people die each year waiting for organs than were killed in the September 11, 2001, massacres.

In fact, none other than Al Gore himself authored the law that restricts the supply of available organs for transplant.  The reasoning behind making organ donation an "altruistic" endeavor in which the live donor or family of a deceased donor does not receive payment for the organ is two-fold.  First, as advocates say, it encourages "altruism," which they say is always good for society.  Second, they contend that by making the basic "input" of a transplant operation a "free good," it "holds down the costs of transplants."  This is nonsense.

In reality, such a policy actually drives up the costs of transplants to individuals and their families.  While it is true that the organ is "donated" for free, the government-created procurement organization that actually takes possession of the organ before a transplant is well-compensated for that organ.

Furthermore, by restricting the supply of organs, the supply of potential transplant operations also is restricted, which ultimately drives up the price of the finished product, a successful organ transplant.  Like the government oil regulators who forced artificially low prices on U.S. crude oil during the 1970s, ostensibly to hold down the price of gasoline at the pump (this policy, not surprisingly, actually forced up gasoline prices), the government acts in the name of "cost savings" to force up costs everywhere else.

The ultimate cost, of course, is death.  In government parlance, a dead person needs no medical attention, so the cost to the system to let a person die prematurely is zero.  

The political classes have insisted that the only deaths on September 11 that actually mattered were the police and firefighters who lost their lives when the World Trade Towers collapsed, when in reality the losses of key personnel in world finance operations was immense. While the deaths of government employees in the Trade Towers attack were tragic and costly to New York City, the world economy lost even more when thousands of traders and executives and all their knowledge and expertise vanished when the towers fell to the ground.

The death of anyone usually is a tragedy to someone. Furthermore, death often means the loss of an income earner or someone who contributed in an important way to the well being of a family or even a society.  A system like that in Canada and what is in place in Europe that actually speeds up the process of death does not perform a "cost saving" benefit to a society, but rather is costly in so many ways, some easily measured and some not, but a cost all the same.

Medical Care should not be Subject to Laws of Economics

A favorite pejorative term of the left is "commodification," which means that an item of necessity should not be treated in economic terms, and, especially should not have a money price placed upon it.  Thus, a recent issue of Mother Jones that was dedicated to the future of water demanded that the state take over the process and delivery of fresh water, since to do otherwise would be to "commodify" water.

 Again, we are dealing with nonsense.  Private firms are not able to take something that is so plentiful (like air) and turn it into a "commodity," at least in most situations.  (Try breathing underwater.  At that point, someone might appreciate a canister full of fresh, breathable air that otherwise would be nonexistent, and for which one must purchase.)

To put it another way, potable water in most situations is not a free good, a situation that is borne of nature, not the greed of individuals.  That fact makes the processing and selling of fresh water by individuals and firms an attractive process, but all they are doing is taking a scarce resource and making it available to individuals who are willing to give up something scarce in their own possession to have it.

Likewise, health care is a scarce good, whether or not we wish it to be.  From the individuals who perform acts of medical care to the medicines and various medical devices used to deal with health and wellness-related issues, all of these things are scarce and no amount of rhetoric from intellectuals and the political classes can change that fact.

The issue, then, is how to create and distribute these scarce goods.  Gore and his followers insist that it can only be done by the state.  While his arguments literally hold no logical water, many influential people will champion them.  It is our job at least to point out the awful consequences that will visit us should the government take us down this road.  Our arguments may not be popular, and even the Republicans are likely to shy away from them, insisting instead on a "Gore lite" medical passage.  However, our arguments in the end are logical and correct, and we need to spread them wherever possible.


William Anderson, an adjunct scholar of the Mises Institute, teaches economics at Frostburg State University. Send him MAIL. See his Mises.org Articles Archive.