Tuesday, August 1, 2017

Health Care Legislation Cannot Work

Any health care legislation passed by either party is doomed to fail. The only thing Congress can do to actually fix the system is repeal all regulations. This is because it is impossible to plan the actions of hundreds of millions of producers and consumers in the absence of the free market price system, no matter how well intentioned or brilliant the planner.

Note that relatively free sectors of the economy, like the computer industry, continually produce amazing new products at decreasing cost, while heavily regulated and subsidized sectors like health care and education are the opposite.

This is not a coincidence.  Free market prices directly reflect the actual desires of buyers and sellers.  Any distortion of these signals creates chaos.  Asking businesses and consumers to make decisions on distorted prices is like asking a doctor to make a diagnosis based on a distorted x-ray image.

In general, the reason why socialism always fails is because it destroys the private ownership of the means of production and with it the profit motive and the price system.  In destroying the price system, socialism destroys the central method of rational economic calculation by individual businessmen and consumers and substitutes for it the arbitrary judgments of government bureaucrats.

There is no special formula or magic recipe to make central planning work. It cannot work and has never worked and this time is no different.

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