Healthcare and the Economics of Liberty

By Robert Wallace
America’s Right

I only have a few days left before I start my first semester as a graduate student in economics. I’ve only taken two economics courses before in my life: intro to microeconomics and intro to macroeconomics. The microeconomics course introduced me to some of the most fundamental aspects of economics, like the law of supply and demand.

Perhaps the most fundamental concept in economics is the concept of scarcity. If something isn’t scarce there’s no economy to study. Economics only applies when there isn’t enough of a thing for everyone to have all that they want. In those cases there has to be some mechanism of deciding who gets how much.

So here’s the fundamental, unavoidable truth about healthcare: it is subject to scarcity.

This means that any system – public, private, or combination – is going to have to address the question of how we allocate the available resources to the people who want them. And every system – public, private, or combination – is going to involve some or all people not getting the medical care they would if it were completely free.

If scarcity is the fundamental truth of the healthcare debate, then the fundamental aspect of the progressive movement is utopianism. Utopianism is an idea dating back to the 16th century that with the right combination of science, religion and/or politics it is possible to create an ideal world here on earth: a utopia. Nothing could be more warm and fuzzy in intention than utopianism, and yet nothing in human history has resulted in more corruption, barbarism, brutality, and human misery than the unflinching pursuit of the perfect society. From Stalin’s 5-year plans and artificial famines to Mao’s Great Leap Forward and cultural purges to the bloodthirsty campaigns of socialist terrorists all around the world nothing has cost more human lives than fantasy of an atheist Eden.

In the healthcare decision the fundamental question is how to distribute the scarce resources that we have. How much of our economy do we commit to healthcare, and how to we slice up the healthcare pie. There are really only two alternatives: either we allow the free market to operate unhindered, or we have complete government control. Every plan will fall somewhere between these two points on the spectrum.

And, on the face of it, the progressives have a strong case. What could be less fair and less efficient than merely allowing random chance to decide who gets healthcare and who doesn’t?

It’s important that we not demonize our political enemies because to defeat an enemy you must first understand him. So let’s take a look – as Obama has invited us to do and Glenn Beck has already started to take him up on – at the advisers whispering in President Obama’s ear.

Cass Sunstein

Dr. Sunstein is an eminent and widely respected legal scholar who currently teaches at Harvard. He has supported several of Bush’s Supreme Court nominations (especially Roberts) because his legal philosophy is one of judicial minimalism. But the reason he is a progressive is because of his work in integrating behavior economics into law. Sunstein believes that humans often make bad choices, and that it is in the best interest of everyone if governments and other large organizations “nudge” them in the direction that is best for them. His particularly philosophy has been branded “libertarian paternalism” – a contradiction in terms if ever there was one! It can be summed up quite simply: give people as much freedom as is good for them.

On an odd note, Dr. Sunstein has argued that animals should be allowed to be plaintiffs in their own animal cruelty lawsuits.

Ezekiel J. Emanuel

Dr. Emanuel is Rahm Emanuel’s brother. He currently holds the position of Director of the Clinical Bioethics Department at the U.S. National Institutes of Health. He is also a Special Advisor for Health Policy to Peter Orszag in the Obama Administration.

Dr. Emanuel is well known for opposing laws that would liberalize euthanasia and allow for physician-assisted suicide because in his experience many of the patients who requested suicide weren’t in excruciating pain. And so – presumably – suicide wasn’t what was best for them.

Dr. Emanuel has addressed the issue of how to divvy up limited healthcare resources head on going back to an article he wrote for The Hastings Center Report in 1996 in which he stated:

Americans have been willing to tolerate a system in which the well insured receive a wide range of medical services with some apparently basic services uncovered; Medicare beneficiaries receive fewer services with some discretionary services covered and some services that intuitively seem basic uncovered; Medicaid beneficiaries and uninsured persons receive far fewer services … Without overstating it (and without fully defending it) not only is there a consensus about the need for a conception of the good, there may even be a consensus about the particular conception of the good that should inform policies on these nonconstitutional political issues … Substantively, it suggests services that promote the continuation of the polity-those that ensure healthy future generations, ensure development of practical reasoning skills, and ensure full and active participation by citizens in public deliberations-are to be socially guaranteed as basic. Conversely, services provided to individuals who are irreversibly prevented from being or becoming participating citizens are not basic and should not be guaranteed. An obvious example is not guaranteeing health services to patients with dementia. A less obvious example is guaranteeing neuropsychological services to ensure children with learning disabilities can read and learn to reason.

That passage may be hard to follow, but what he’s basically saying is that allowing healthcare resources to be allocated by random chance is inefficient. Clearly it would be better if there was system that determined who got what so that we could concentrate our resources where they would have the most effect. Treat the children with learning disabilities first because they are young and with sufficient training they can provide a great amount of value to society of their lives. Treat the old farts with dementia last because they are lost cases and they aren’t going to be around for long anyway.

This is the kind of thinking that Sarah Palin had in mind when she talked about “death panels”. And that is the kind of claim that Dr. Emanuel has angriliy defended himself against: pointing out that he has spent his life trying to improve end-of-life care and opposing the kind of euthanasia laws that one would typically associate with amoral attempts to cut costs by simply killing expensive patients (or allowing them to kill themselves). And while I certainly agree that Dr. Emanuel has no intention of forming “death panels” that would deny babies with Down Syndrome treatment, I think that a Milton Friedman quote applies here: “One of the great mistakes is to judge policies and programs by their intentions rather than their results.” No matter how well-intentioned Dr. Emanuel may be, it’s beyond naive to believe that we could institute this kind of a policy without ending up with death panels sooner or later.

John Holdren

Dr. Holdren wears a lot of hats at the White House. He is a science and technology advisor to the President, Director of the White House Office of Science and Technology Policy, and Co-Chair of the President’s Council of Advisors on Science and Technology. Before that he was another Harvard professor, where he was the Teresa and John Heinz Professor of Environmental Policy at the Kennedy School of Government at Harvard University, director of the Science, Technology, and Public Policy Program at the School’s Belfer Center for Science and International Affairs, and Director of the Woods Hole Research Center. (On a side note: I wonder how many jobs for America we could create if we just told rich academics to stick to one fancy-sounding title at a time and spread the rest around?)

Dr. Holdren is the greenest of the green. He’s unquestionably brilliant (I wouldn’t want to match wits with someone who studied plasma physics at MIT) and has been into climate change since before it was cool. Like any committed environmentalist he views humans as the real problem, and therefore overpopulation is one of his chief concerns. Frankly, the planet is better off without us. (Of course we can’t all die, because then there would be no one left to feel self-righteous about it.) Since back in the 1960s he’s been considering a wide range of ways to make sure there are fewer Americans ranging from the politically palatable (abortion and voluntary birth control) to the somewhat nutty (low doses of birth control drugs in public drinking water) to the nefarious (mandatory birth control).

Dr. Holdren goes even farther than Dr. Sunstein, and believes that natural objects (like trees!) should be given legal standing to act as plaintiffs in lawsuits because doing so would be good for the environment. If you think ambulance-chasers are bad now, can you imagine what would happen when TV-advertising asbestos lawyers began roaming the suburbs looking for signs of recent tree-pruning on which to base lawsuits against homeowners?

The reason that I’m writing these bios on people that surround Obama in the White House is that he has told us himself that the way to judge him is to look at the people he associates with. Of course when he said it, he didn’t list these guys. Here’s what he said:

Let me tell you who I associate with. On economic policy, I associate with Warren Buffett and former Fed Chairman Paul Volcker. If I’m interested in figuring out my foreign policy, I associate myself with my running mate, Joe Biden, or with Dick Lugar, the Republican ranking member on the Senate Foreign Relations Committee, or General Jim Jones, the former supreme allied commander of NATO. Those are the people, Democrats and Republicans, who have shaped my ideas and who will be surrounding me in the White House.

I haven’t seen so much of Warren Buffett or Paul Volcker there at the White House recently, but all of these guys have permanent positions or close ties to the Obama administration. And what are the ties that bind them? Other than a rather peculiar fascination with letting shrubbery launch lawsuits, here’s the pattern that emerges:

If only the smart guys had more power to tell the rest of us what to do life would be better.

And here’s the thing that I think we have to admit as conservatives: the progressives make a strong case. Wouldn’t it be better if we spent our scarce resources where they would have the most impact? If we’re honest, I think we have to say “yeah, that might be better.”

But the problem isn’t the end, the problem is the means. If we all did what the smart guys think we should do because we were all smart life probably would be better. But if we all do what the smart guys think we should do because they have a gun – literal or political – to our heads than I’m not so sure we’ve arrived back at Eden. And isn’t it ironic, that the progressive atheists are so keen on becoming the kind of bullying deity they decry the Judeao-Christian god to be? Heaven forbid our actual Heavenly Father and Eternal Creator have the gall to tell us how to live our lives, but obviously we should all make way for the Harvard alums to tell us where to set our thermostat, right?

I would also like to take a moment to point out that in academia–as elsewhere–it’s generally not the guys with the most impressive titles who necessarily are the best and brightest. As often as not those are the guys who spent the time dabbling in the politics necessary to acquire regal titles while the rest of their colleagues were busy doing more research or being lazy. (With tenured professors, you never can tell which you’re going to get.)

If progressivism didn’t sound promising it wouldn’t have stuck around for the last century or so. And that’s just modern progressivism, mind you. In many ways what we’re seeing is really an eternal temptation of the best and the brightest: if only we had more control, we could do it better.

And hey – maybe they could. But the cost of finding out is just that: control. I don’t believe that American progressives – not even the radicals I’ve described here – want control because they are evil people. I believe they really have the best of intentions. But there’s an old saying about good intentions and it applies nowhere if it does not apply here.

The fundamental choice we have in healthcare is between a system in which people are left to their own devices and one in which a benevolent tyranny makes our choices for us.

A system in which people are left to their own devices is a flawed, imperfect system because people are flawed and imperfect. There will be tragedies and injustices because life is often tragic and unfair. We live in a world where little children who’ve done no harm to anyone get cancer anyway, and no amount of government spending is going to somehow turn that fallen world back into Eden. But – as the law of supply and demand shows – even out of such apparent random chaos order can emerge. And within that order there are opportunities for acts of charity and compassion. There is also opportunity for the kind of innovation and entrepreneurial spirit that has made America the economic peak of the world. We don’t invent organ transplants and cancer-fighting drugs by obsessing over how to best distribute the resources we already have.

On the other hand we can have a benevolent tyranny. On paper that means we’d have fair, efficient healthcare at the expense of our liberty. But in reality we’d still give up our liberty but wouldn’t get fair and efficient healthcare in exchange. Unquestionably a system where government bureaucrats are spending other people’s money on other people’s healthcare is a system ripe for waste and fraud. Just look at Medicare and Medicaid.

But even more disturbing is the fact that the best and brightest have so often managed to drive straight off a cliff. Whether we’re talking about Kennedy and Vietnam or Enron or Rumsfeld planning for the post invasion occupation of Iraq the academics could stand to learn something every enlisted man and woman in our armed forces knows: no plan survives contact with the enemy. Or, in the case of government: no policy works in real life the way it’s supposed to on paper. Which is why it is so vitally important to cling to the principles of limited government rather than the dreamy calculations and good intentions of erstwhile child prodigies. All Marx wanted to do was give the workers a fair shake at the fruits of their labors, and look how that turned out.

Have no doubts about this. Regardless of how well-intentioned the Obama’s brilliant academics are: no product of mental gymnastics is worth the high cost of our liberty in exchange. A healthcare system based on the free-market – including common-sense rules and regulations to keep it from falling into anarchy – is not going to be perfect. In fact it’s the worst form of healthcare I can imagine except for the alternative.

Robert Wallace has an academic background in mathematics and systems engineering. He has been writing for America’s Right since December 2008.



  1. Samuel Fain says:

    Excellent article, Robert!

  2. PLEASE READ IT says:

    The best book on the subject of economics I have ever read is "God wants you to be rich" by Paul Zane Pilzer. The title seems theological but it is the best book on economics for a layperson I have ever read. Check it out!!! Definitely addresses the problem of people like Gore who alway preach scarcity not taking into account the ingenuity of man to invent, persevere and prosper.

  3. Roses, WA says:

    Wow, nice writing, I'm impressed, and I only read the first part. :-) Just wanted to add a comment about scarcity in healthcare… organ transplants. If they ever make everyone join the organ donor list and provide tissue for matching… heaven help us if an elite liberal needs a kidney.

    I pointed this problem out to a knee-jerk liberal and they went straight to denial. Oh no, that will never happen, that's just sick..etc. But with totalitarianism, there are always people who are more equal than others.

    Thanks again for the great article, and I promise to read the rest of it… later :-]

  4. Rix says:

    I find myself in the same camp with John Holdren on one count: the Earth is dangerously overpopulated and the problem must be eventually addressed. For all his MIT-polished brilliance, however, he failed to see through a huge logical flaw in his own ideas.

    For an atheist like myself, the humans are, in a sense, mere animals to whom all natural laws fully apply. Over the course of years and centuries, those best suited for survival are supposed to thrive, accumulate wealth and give birth to stronger generation. Same goes for nations: those who develop a better social mechanism and advance their science will rise, conquer their neighbors and exploit their resources, just to fall in turn, either to stronger and even more advanced society or to its own internal struggles.

    It is the well-wishing liberals who disrupt the natural course of events. Lazy good-for-nothings who would die of either hunger or rope mere two centuries ago are now enjoying welfare checks, Medicaid and voting rights. Horrendous regimes are left alone in the name of "human rights" and "cultural diversity" to squander their natural resources and oppress their own people. Social security and humanitarian aid are what ushered the overpopulation problem in. Perhaps we should start with outlawing them? Maybe even along with the political parties who support them, eh, Dr. Holdren?


    LOS ANGELES (Reuters) – Wildfire investigators in California are looking for marijuana growers tied to a Mexican drug cartel whom they suspect ignited a blaze that has charred more than 87,000 acres of a national forest.

    The La Brea Fire, which erupted August 8 in the Los Padres National Forest in the remote Santa Barbara County mountains northwest of Los Angeles, is believed to be the first major wildfire in the state caused by drug traffickers, U.S. Forest Service spokesman Jim Turner said on Monday.

  6. SWALLOW LEAD says:

    Overpopulated?, you go first, Holdren, here's a Glock.

  7. 14 ACRES OF LEAVES says:

    I can't wait to sue my trees for having forced me to clean up after themselves every October….. geesh that is backbreaking work, totally uncalled for.

  8. Anonymous says:

    I don't believe the planet is overpopulated. Every human being alive today could fit comfortably in the state of Texas. Sure, the entire state would look like a typical residential neighborhood, but the point being we have more than enough land to hold them all. The problem is servicing those people: food distribution, waste removal, etc.

    It is ironic what Rix said. The libs implemented programs which allowed more people to live healthier, better, and longer; and then they have to come up with plans on how to end those lives sooner.

  9. Anonymous says:

    somebody is PhD sensitive

  10. Gail B says:

    Robert Wallace! Nice to see your work again–and to know that you weren't scared off by everyone at America's Right while Jeff was on vacation across the pond.

  11. La Muse Poetique says:

    To add to your utopian idea,

    Utopia means "no where"

    That's why it was named utopia, because utopia can not exist.

  12. Anonymous says:

    Organ donations! That may be why genocidal govts. in countries where large numbers of people, mostly minorities. "involuntarily disappear" enjoy such support and financial aid from free nations around the world. These involuntarily disappeared people turn up months later headless and too decomposed to identify. Were they made to "involuntarily " donate their organs before being decapitated?


    You GOTTA LOVE PhD's with NO COMMON SENSE. Their parents should take back that college tuition. Thanks for making this Fairfax County High School graduate feel oh so smart.

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