Obama, health care, and the new road to serfdom

At the core of the Obama administration’s push for implementing a comprehensive national healthcare system and related programs is a radical ideological belief in political paternalism and the welfare state. Let’s examine the premises behind – and realities of – welfare statism.

Power and paternalism

First, the guiding idea behind political paternalism is that the individual cannot be trusted to be a free and responsible human being. Those who wish to socially engineer our lives consider us too ignorant, too irresponsible, and too narrow in our own planning to intelligently and reasonably take care of our own healthcare, retirement, family’s education, or spending and consumption choices.

These paternalists presume to know what is good for us, better than we know ourselves. They are determined to make the world over in their own ideological image – and, of course, all for our own good, whether we want it or not.

They are also willing to use force against their fellow human beings to attain their ends. They believe that it is morally right for the state to use its coercive powers to take the income and wealth of some to give to others.

Sound exaggerated? Well, imagine how the government would react if you inform the government that you are sending in a tax payment for your contribution to police, courts, and national defense, but you’re withholding any amount that would fund a national healthcare plan because you consider it unnecessary and immoral. You’d soon face jail time if you resist the confiscatory seizure of your property for unpaid taxes.

Political plunder 

Second, a number of economists, such as Nobel laureate James Buchanan, have taught us that the actual politics of government intervention and redistribution has little to do with high-minded notions concerning some hypothetical “public good” or “general interest.” The reality is that politicians want campaign contributions and votes to be elected and reelected. In exchange, they offer other people’s money, in the guise of “targeted tax breaks” or “social programs.” 

This tendency toward political plunder is due to what is called a “concentration of benefits and a diffusion of burdens.” Suppose that in a country of 30 million people, the government taxes each citizen $1, and then redistributes that $30 million among a special interest group of 30 individuals. The 30 recipients have a strong incentive to lobby, influence, and even corruptly “buy” the votes of the politicians able to pass this redistributive legislation. Each individual taxpayer, on the other hand, has little incentive to counterlobby legislators merely to save $1 in taxes.

Thus, modern democracy has degenerated into a system of political plunder and special privilege at the expense of consumers, taxpayers, and competing producers in society.

The mirage of social justice

Third, as another Nobel Prize-winning economist Friedrich A. Hayek argued, even if we assumed that paternalists have the most benevolent motives, there is no real meaning to ideas such as “social justice” or politically enforced “fairness.” They are all “mirages,” Hayek warned. The market does not reward some hypothetical notion of “merit” or “goodness.” It rewards “service” – creation of value to those willing to pay for it.

There is no impartial way the state can bestow on each member of society some fraction of national income that reflects their “socially just” amount.

Hence, it is far better to leave such issues to private charities, who spend money based on their personal standards of benevolence. Because they rely on voluntary contributions, charities are far more efficient than the coercive monopoly welfare state. After all, if charities can’t demonstrate effective results, funds will go to competitors. 

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