Third only to Adam Smith and Ayn Rand in the writers that comprise the “cannon” of the “free market fixes all” believers is Fred Hayek. I was given “The Road to Serfdom” by a former employee who left to enter the free market and make bags of money. He had the zeal of the converted but unfortunately not the drive to succeed. I had to laugh when reading the local paper and there was Hayek quoted by a University of Alabama history professor to explain how things were better in Tuscaloosa (because of all of the capitalist tendencies in T-town) then they were after the hurricane in New Orleans (didn’t realize there was 8 feet of water in Tuscaloosa after the tornado but shows how biased the liberal media is).
Turns out that Hayek might have liked the Affordable Care Act better than the Ryan plan. According to Matthew Yglesias, Hayek’s view was that in regards to health care, the unencumbered market might not deliver care best:
Where, as in the case of sickness and accident, neither the desire to avoid such calamities nor the efforts to overcome their consequences are as a rule weakened by the provision of assistance, where, in short, we deal with genuinely insurable risks, the case for the state helping to organise a comprehensive system of social insurance is very strong.
Paul Ryan’s “market-based” Medicare reform has not received the scrutiny it deserves. Many who are followers of the “canon” have touted the need for such reforms. While there is general agreement on the need for change, until now there has been little effective writing available to informed consumers demonstrating that a regulated market in health care is a necessity. A very effective essay was posted recently on the Economist site by M.S. that makes such a case. Worth reading in its entirety, the market analogy comparing the market for shoes to the market for healthcare is especially useful:
we all agree that the private sector produces far better shoes at far lower cost than could be produced by a state-owned manufacturer. I think the analogy is also helpful when we add in the dimension of marketing. Beyond a certain point, you can’t explain the value of a great pair of shoes in any rational fashion. The reason a pair of Air Jordans was vastly superior to a pair of nondescript Soviet sneakers in 1989 was only partly that they were more durable, or had better support and traction. Most of the added value wasn’t there. It was in the interplay of marketing and fashion. The satisfaction customers derive from marketing and fashion is absolutely real; in the case of shoes, it’s practically the whole point. But in the case of medicine, it usually shouldn’t have any place in decisionmaking. We shouldn’t be aiming to make Americans happy by marketing medically useless knee surgery to them and then letting them walk down the street feeling all fine and dandy with snazzy new knees that aren’t actually any better than the old ones. Not in the publically insured sector, anyway. Medically unnecessary cosmetic surgery is fine, but not on the taxpayer’s dime.