There is a tendency for campaigners and political parties to focus on the right problems, bit to always come up with ‘solutions’ that make things worse, or to fail to see why the problem exists in the first place.
A good example is the cost of health insurance in the US. Especially in a time of recession, it is very difficult for families to choose between the mortgage and health insurance. Obama may believe his plan helps to solve this problem, but it fails to deal with current government intervention that is making insurance more expensive.
Health insurance is the only product that cannot be sold across state lines, in a clear violation of the constitution. North Carolina has only one monopoly provider – clearly some competition would come in handy! Many states also impose minimum coverage mandates, requiring you to pay for frivolous things you’ll never need coverage for. In both cases I wouldn’t be surprised to see the hand of lobbyists involved.
None of this deals with the fundamental problem of insurance itself, which is designed for rare and expensive events. Doctors who work with the uninsured for simple treatments can charge 10 times less than what is billed to the insurance company. Since health insurance is tax deductible, it enjoys a false advantage in the market. No one suggests using car insurance for an oil change, and yet it is used when you need flu medication. The current US system is nowhere near a free market (the US govt is the biggest purchaser of healthcare in Medicare and Medicaid) so how about undoing some of that intervention before piling on more? The example of friendly societies in Britain prior to the NHS provides a great model for the alternative to state provision.
Closer to home, the farcical drought we’ve had in south east England is another government created problem. Richard North has a great set of posts on this topic. Simply put, supply has not kept up with population growth, as successive governments has stopped the building of new reservoirs, often claiming we need to reduce consumption instead. It’s hardly rocket science to understand the need to increase supply when the population is growing. We can blame the greedy private water companies if we like, but they’ve been willing to invest in new infrastructure only to be stopped by our caring overlords.
I’ve always taken the view that any privatisation that’s taken place isn’t complete until we abolish the quangos that control them. They tend to begin with ‘of’… ofwat, ofgem etc. For an industry to be truly private, it needs not only to be funded privately, but also to exist under the same rules as all other industries. Once you establish special rules, the government is now trying to steer the action of private companies towards central goals. Or as its better known, fascism. If an industry is not allowed to decide how to invest its capital, its just another agency of the state, one that happens to be profit making. The railways, the energy companies, the telecom industry, ‘private’ schools, water companies, and banks (yes even those capitalist pigs, who benefit hugely from the money printing at the BoE) are not free to decide how best to serve their customers. In this manner they are fundamentally different from truly free market firms, who are only subject to general laws on fraud, safety etc.
We must make a distinction between companies that are privately owned profit making enterprises, and yet largely controlled by the state, and a real free market.
Defend the current system if you will, but please don’t call it capitalism or the free market. We have a phony debate, as on so many topics. The choice is not between nationalised utilities, ie socialism, or between private entities controlled by the state, ie fascism. We could opt for a true free market for once. It might even work.