Socialized Healthcare is Incompatible Wtih Personal Liberty

[This post originally appeared on the mises.ca blog on July 6, 2012]

In the build-up and aftermath of the US Supreme Court’s decision to uphold the so-called individual mandate of the Affordable Care Act numerous articles were published and republished on the inefficiency of nationalized healthcare. (The most insightful of these I find to be Kel Kelley’s “The Myth of Free-Market Healthcare.”) These articles made their point very well: that socialized medical care is inferior to that provided by the free market, and that under such a regime Americans ought to expect a reduced lifespan, lower quality of service and care provided and outright shortages. And, while the moral argument was also ably made by those opposing the idea of the government forcing a person to purchase something he does not wish to, it seems to me that one point has not been articulated well enough, which I shall attempt to undertake below. It is the point of nationalized healthcare as the death knell to any idea of personal liberty and choice.
To be sure it is irrelevant to this argument whether or not there is an industry backed conspiracy behind the abandonment of a market system that according to many functioned perfectly well. Likewise it is of no significance whether or not those who supported and ultimately forced the new regime of a government enforced cartel upon the rest of society had good, but misguided intentions. Relevant only are the facts of what this regime represents and how deeply it penetrates into the lives of those living under it. Canada has been under a socialized healthcare regime long enough that her citizens simply take it as given that there can be no other way. Many liberties have suffered or outright been lost in this country as a result of its healthcare system, and the adoption of a similar regime in the US is doubtless going to prove fertile soil for more aggression upon personal liberties in the name of the communistic healthcare system.
Even the supporters of nationalized healthcare admit—more so, they base their entire argument on—the fact that its basic purpose is to spread the costs by including every member of society in the pool. There are two problems with this. The first one has been discussed in the abovementioned articles which made the economic argument against socialized healthcare: the fact that the more persons are included in the program, the higher the probability that the percentage of non-contributors will rise at the expense of contributors. That is to say that the problem of the “free rider” grows, rather than shrinks. When socialized healthcare propagators admit to this point, they bring morality into their argument by making the case that those non-contributors need to be helped by those who are labelled as “better off.” The point is lost on them that a major motivating concern is wiped off for those “downtrodden” to improve their lot, thusly trapping them in the bowels of the social order.
The second problem is less obvious to spot, yet, it is considerably farther reaching, and ultimately more deleterious to the notion of personal liberty. Any insurance scheme profits by having to pay out as little as possible. To achieve this, prevention of payment causing damage is imperative. By putting the whole society into a single pool of insured, the stage is set for ever more government intervention in the personal lives of citizens. Thus, products can be banned from consumption or be made mandatory to use in order to “control the costs of healthcare.” Now government has an open and quasi-legitimate avenue to pick winners and losers on the market. Much of this has been in practice for many years now, such as with the war on tobacco, the War on Drugs and more recently the war on obesity. Under conditions of free market healthcare a person’s choice to pursue what some claim to be an unhealthy lifestyle is his, as well as the costs that are to be borne with it. Yet, under a nationalized regime, person A’s health wrecking habits are to be borne, in part or wholly—depending on whether A is a contributor toward the insurance fund or not—by persons B, C, D and so on. As his co-payers or sponsors B,C,D, etc. have a moral right to impose on A a lifestyle that they find suitable for him relative to his health. They have this right because they become part owners of A. Under this regime A loses any right to be an individual and to act to his accord.
Now, individuality may not be a tenet of great importance to many or even most people. In fact, it may be the least important issue to all persons in a society but one. Is it just for that society to deny that single person that which may be the single most important issue to him? Surely we cannot answer this question in the affirmative and claim to have any regard for human life. To compound the argument, the individualist is only concerned with his own being and has no desire to force the rest of society to do as he does.
Bans on certain foods and drinks—witness New York City’s ban on certain sized soft drinks—are certain to become a norm. While it may seem outlandish to suggest it now, mandates to perform certain amounts of physical activity may be forthcoming, too. This may be executed in the form of decrees obligating employers to pay for employees gym memberships; obesity taxes; or compulsory neighbourhood workouts. Predictably, such mandates will be greeted by Keynesian influenced economists as pro-growth. Such calls are already being made by the philosopher-kings of the Court intelligentsia:

… I think we should focus paternalistic laws on children. Youngsters can’t make rational, informed decisions about their bodies, and our society agrees that parents don’t have the right to make disastrous decisions on their behalf. Accordingly, we require parents to enroll their children in school, have them immunized and make them wear seat belts. We require physical education in school, and we don’t let children buy alcohol or cigarettes. If these are acceptable forms of coercion, how is restricting unhealthy doses of sugary drinks that slowly contribute to disease any different?

The cited author completely ignores the point of personal choice and speaks of “societal acceptance” of ideas. Socialized healthcare gives him a new avenue to pursue his goal of shaping society to his vision, since “we are all in it together.”
Doubtless, a government ban on a product practically never drives that product out of circulation; it simply pushes it into the so-called underground market. The only thing ever to drive a product out is its obsolescence—remember that the horse buggy was never outlawed. Witness instances with the prohibition of alcohol in the US during the 1920’s, the ongoing War on Drugs, “illegal” immigration, prostitution, etc. However, despite the failure of these policies of prohibition, major market and societal disruptions take place when they are put into force. The Prohibition brought with itself the dreaded Mafia, which after Prohibition’s repeal turned its activities onto weapon, drug and human trafficking. Along the way the Mafia infiltrated and corrupted many law enforcement and judicial agencies, making them not onlky completely impotent with respect to these policies, but wholly changing the nature of them—thus turning law enforcement into worse offenders against the private citizen than the Mafia ever was. Politicians grew richer and more corrupt as a result of bribery. It grew government to immeasurable size, ballooned its budgets beyond sustainability—thereby increasing the need for an increase in the money supply in order to make up the budgetary deficits—and gave government bureaucracies powers to submit the taxpayer into a subject. It is irrelevant to this argument that the Prohibition was brought about on a different pretext. It is relevant, however, that not only these prohibitions on alcohol and drugs failed to force the public to quit enjoying the products in question, the prohibition made the products more potent and more harmful to the users. Likewise it is relevant to note that the prohibitions gave governments the opportunity to directly pick and choose companies to present with monopolies, thereby making the political system a “pay to play” regime where the highest bidder can lobby the government to outlaw its competitors. The interested reader is referred to Dr. Mark Thornton’s piercing analysis of the consequences of these policies summed up in his study titled The Economics of Prohibition.
Alcohol and tobacco have been under a prohibition-by-taxation regime in Ontario for many decades now, producing quite a “dog-chasing-its-own-tail” situation. Since the government of Ontario has been using the revenues produced by these excise taxes to pay for the healthcare system, it has found itself on both sides of the issue. On the one hand, since it taxes $7.00 per bottle of wine that retails for $8.00, it wants to maximise sales of alcohol and tobacco in order to increase revenues. On the other, higher consumption means higher demand on the healthcare system. In the meanwhile, alcohol sales have been limited to a handful of franchisers who have managed to gain the favor of the Liquor Control Board of Ontario—thereby cartelizing the alcohol distribution industry and severely limiting entry into it, thus also limiting consumers’ choice. Further, the LCBO dictates the sizes and types of containers to be used: preferring larger containers to smaller, and tetra-pack to glass; again forcing both the consumer to purchase alcohol in larger quantities than he wishes to—so that the Ontario government can tax him more—or to not buy at all (that is no real choice); and giving an upper hand to certain producers of containers over others.  The Ontario Government’s pretext to such market interventions is the communistic healthcare regime.
The situation with tobacco is even worse. Sales of tobacco products are not as centralized as are those of liquor, which leaves more room for smugglers. Since a pack of cigarettes costs approximately $0.50 to produce and distribute, and excise taxes price it at $9.00-12.00, the margin to add the cost of smuggling is too great to fail to tempt those inclined to such business. It ought to be mentioned here that among the worst offenders in this respect are the large legitimate tobacco product manufacturers, who simply let a certain percentage of their production slip off the books. Corrupt Third World governments are also a great participant in the underground cigarette market. Indeed, the Yugoslav civil wars of the 1990’s were mostly funded by cigarette smuggling into the highly taxed European markets. While excise taxes do raise the price of cigarettes, no study has conclusively proven that this policy has managed to deter people from smoking, as some forgo other purchases when cigarette prices go up, and others seek out underground market supplies. Thus, the demands on the healthcare system remain constant; yet, the expected revenues fail to materialize.
The quasi-ban on tobacco products gives tobacco farmers who are uncompetitive against foreign competition an excuse to go hat in hand seeking subsidies from the government. This further distorts agricultural markets, as these uncompetitive farmers are discouraged from changing to more profitable crops; or to change the use of their land completely. Thus they keep the prices of desirable crops or land higher than they ought to be under free market conditions.
A nationalized healthcare system encourages the expansion of the welfare state. While without such a regime the case for providing the “necessities of life” for those “who cannot afford” them is made on a compassionate basis, under the nationalized regime it is “economically wise” to provide all insured with meals that meet certain nutritional standards, as well as housing of a minimum standard. It is not unconceivable to see a power hungry politician making the case for such programs. Once this threshold is passed, emotional considerations are certain to follow, as unhappiness can always be said to be a cause for mental afflictions. It is hardly worth talking about the manipulations that are to take place with regard to modes of transport, construction materials, sources of energy, types of entertainment enjoyed, etc., that can (and are likely to) be directed in the name of improving the healthcare system.  Under socialized healthcare even the so-called democratic means—rule by majority—of decision-making becomes unnecessary. Public approval becomes obsolete, because all that matters is “keeping the costs of healthcare down.” Now, all social engineers require in order to force what they want on society are “studies,” which who’s to say will not be financed by interested parties.
The proponent of the State will surely interject here by arguing that these sort of nefarious activities of private enterprises are precisely why “we” need government to intervene as the impartial judge over what is “good” and what is “bad” for society. Yet, they miss the point that in a free market no enterprise can force the consumer to buy its product, nor can it forcibly strike down its competition. Only the entity which holds the monopoly of force—the government—can, and a socialized healthcare scheme gives politicians and bureaucrats all that much more power to force the citizen what and how much of it to consume, how much to pay for it and who to buy it from. In trying to capture the essence of the fascist economic system, John T. Flynn wrote in As We Go Marching:

[W]hat emerges in the end is a multitude of colossal bureaus which take over the direction and supervision of all industry and trade and which gradually absorb all the decisions of industry and trade.
It is in this that the true significance of the word “bureaucracy” takes its origin. When government confined itself to managing its own affairs, policing society, managing its armed forces, furnishing a judiciary to society, protecting the health and persons of its people, it operated through agencies which were called bureaus and those who manned them were called bureaucrats. But the modern government bureaus and their bureaucratic managers in the national socialist state are something quite different. The vastness of the modern state, the multitude of human situations it undertakes to regulate and care for, the extension of its directing hand to the affairs of every business unit are such that the bureaucrats participate in the formulation of the policies and making of the decisions of private life. The bureaus are no longer behaving as the servants of the state rendering services to the people as citizens. They are now engaged in managing and operating the private affairs of the people. And while the whole tendency of European states has been in this direction, it has remained for the fascists to adopt the practice as an institution of government upon a general—or to use its favored word—a totalitarian scale. (p. 141)