A Thought Experiment in Rationed Food

upbraids me when I point out that a health care system run by self-interested politicians invites corruption. Only those who make contributions to the Party will get their liver transplant when Big Brother rather than Marcus Welby decides who gets treatment.

He thunders (or perhaps giggles playfully. On the Internet one never knows):

"Mr Wright, you need to look past the ideologies for a second a realize this: People just want affordable health care."

My dear sir, you need to look into ideologies for a moment to discover which of two competing theories of political economics delivers more and better health care to more people. Stripped of non-essentials, there are only two alternatives: liberty and tyranny.

Tyranny is always, always more popular. Caesar is always a Populist, not an Optimate: Big Brother is always for the Little Guy, the Forgotten Man. Hitler is always for the Volk; Stalin is for the Proletarians; Napoleon is for the Citizen.

"People would not be crying out for a socialist system if the privatized system actually worked."

It is to laugh. I would answer that Canadians would not be streaming over the borders into America if their socialist system actually worked, nor would patients be dying of bedsores and bedlice, nor would SARS swell to an international scare.

Likewise, I would answer that people would not be crying out for Napoleon, Hitler, and Stalin to lead them in revolution, glorious revolution, if the previous system, the Monarchy, the Wiemar Republic, or the Czarist system actually worked. However, the fact that what followed was far worse than what came before it could perhaps be excused by the ignorance of the people doing the crying. We Americans have no such excuse: the facts about the European, Canadian, and Soviet models of public health care are unambiguous.

But perhaps that answer would be flip. That answer would assume we are distinguishing between two alternatives. We are not. We are distinguishing between reality and a rosy-colored daydream.

Discontent is caused by a difference between current circumstances and imagined alternatives. If the imaginary alternative is rosier, and yet false, they will be discontent. You perhaps assume people are not being mislead by false and extravagant promises.

Instead of assuming that artificially-inflamed popular discontent necessarily means that rationing a scarce good will make it more abundant, I suggest we analyze the causes of the perceived problem, and look at the costs and benefits of the alternatives.

Have you analyzed why the current system is underperforming? I suggest a thought experiment to you.

Imagine what would happen in the restaurant business, for example, if a New Deal type program, call it Munchicare and Munchaid, picked up your meal tab. To you, the cost of a McDonalds burger and a sirloin steak is minimal: the difference in scarcity between those two goods is not reflected in the price you pay. Uncle Sam picks upthe tab: all you pay is the tip. Who would not prefer steak? Steak is scarce. The restaurant customers not taking Munchicare or Munchaid must bid against the both you and Uncle Sam. When there are more bidders, the price goes up. As the price goes up, Muchicare benefits are adjusted to match. Soon, the non-Muchicare customer is priced out of the market.

If you employer agreed to buy you ‘Lunch Insurance’ so that the Insurance Company picked up the now-extravagant tab, they would naturally attempt those maneuvers needed to maximize their profits and minimize their outlay.

If trial lawyers found that gullible juries would award multibillion dollar damages every time someone choked on a fishbone or found a fly in his soup, the restaurant owners would defray the extra cost of doing business by raising prices yet again: and since Uncle Sam and the Food Insurance companies are picked up the tab, there is no drop off of bidding to decrease demand. In other words, demand is artificially inflated.

Now, you cannot tell me people do not need food to eat. It is a good that is always in demand. A starving man will pay anything, anything he needs to get a meal.

Now, in our thought experiment, can you tell me any reason why the price of, let us say, oil, or shelter, or medicine, or any other good or service in the economy would not react the same way under the same circumstances?

And yet for some reason, a stay in a hospital room used to cost about the same as a stay in a hotel room. Something drove the price through the roof. What was it?

Now, do I need to list a complex reason to show why, if the price structure of any good or service is suspended, the only other alternative is rationing?

Do I need to make the argument that rationing by a politicized process is made according to politicized goals?

Or will my honorable opposition stipulate that the health care in socilized America will be distributed by race preferences, because that is the way Americans distribute College Admissions and government subcontracting jobs? Have you noticed a marked decrease in the scholastic accomplishments of our Colleges ever since they became instruments of public policy rather than teaching institutions? I have. Why should hospitals be any different?