Ludwig von Mises Institute

The Mises Institute monthly, free with membership

As the bureaucrats pursue their Draconian war on drugs, the Clinton administration is conspiring with the pharmaceutical industry to provide drugs at taxpayer expense. Under the guise of expanding Medicare--already a massive wealth transfer from young to old--prescription drugs will be included among the benefits the feds use to further rope senior citizens into the government orbit.

Already, the whole prescription business itself is a creation of government and therefore a racket. In times when information about medical drugs is inescapably available, we still have to pay a distracted doctor to scrawl out his permission for us to use what we know we need anyway.

We then have to go to the pharmacy, where we pay prices outrageously inflated by the lack of competition made possible by the government grant of privilege called the patent. In this Rube Goldberg system, a guy in a white coat with lots of training pours pills from one bottle to the next. The government pretends that this is a complicated medical technique average people couldn't possibly master.

There is no reason for this system to exist--no reason except to keep patients subservient, the incomes of medical professionals high, and the profits of the pharmaceutical companies higher still. But don't they all keep us from killing ourselves with the wrong medicine? Of course not: we could kill ourselves with over-the-counter drugs just as easily as prescription drugs (a distinction as arbitrary as any in our increasingly socialistic medical economy).

To keep people from paying the artificially high prices of medicines, the government is creating yet another entitlement and at the same time promising it won't cost the taxpayers much and won't artificially increase the demand for drugs. After thirty years of soaring costs in Medicare and Medicaid, there's not a soul alive who takes such promises seriously. No, what we have here is the usual combination of graft and political payoffs called public policy.

Of course prices will rise, which is what happens when something is artificially subsidized. And subsidies always come with controls. The pharmaceutical industry, like the medical industry, will find itself facing massive new controls on every aspect of its marketing as a consequence of getting further on the Medicare/Medicaid gravy train. Those price controls will dampen innovation because existing drugs will face a marketplace with more guaranteed customers.

The real cost of the proposal consists of factors that will never be seen. What drugs were not introduced into the market? What price reductions were never experienced by consumers? What pharmaceutical companies never opened their doors because of the privileged cartel members who currently hold the top positions? These are costs that never enter into their calculus because they are not objectifiable.

How did the Republicans respond to Clinton's proposal? With the usual hemhawing around and fretting about the costs to the federal budget. But since they long ago conceded the federal government's responsibility to provide for the health and medical benefits of young and old, they have no principled reason to oppose expansion, and indeed they only questioned the scope of the program, not its enactment.

It may be that the most that can be hoped for right now is that Clinton's proposal dies the death of partisan politics, with both sides refusing to cooperate on the details. Once again, gridlock may prove to be the only hope that liberty has in our times. If it is not stopped, we can look forward to a population ever more addicted to sickness, drugs, and statism.

"By weakening or completely destroying the will to be well and able to work," wrote Mises, "social insurance creates illness and inability to work; it produces the habit of complaining.... It is an institution which tends to encourage diseases, not to say accidents, and to intensify considerably the physical and psychic results of accidents and illnesses.

"As a social institution it makes a people sick bodily and mentally or at least helps to multiply, lengthen, and intensify diseases.... We cannot weaken or destroy the will to health without producing illness."

----------------------------

Llewellyn H. Rockwell, Jr., is president of the Ludwig von Mises Institute. Further Reading: Ludwig von Mises, Socialism (Indianapolis: LibertyClassics, [1922] 1981).

Back