The economic results of government intervention are quite well observed and documented. When the government steps into a market through regulation, it's public "intentions" may be to help increase access to a service, or to drive down costs to make certain goods and services available at costs more affordable to a wider section of the consumers, but those goals often have unintended consequences for which those who study economics can see all too well. The deadweight loss created by intervening in the functions of natural market forces is blatant, difficult to refute or ignore, but when the problems are created by intervention by the state, how can further or expanded intervention reverse that course?
The Cato Institute asked and answered that very question a few years ago, back when the public was thinking that it would be better to plunder our fellow citizens to fund our own health care. Somehow, the idea that theft is bad was shelved for a while, and we were fed that line from the government. Plunder is still immoral, even when we allow someone with guns to do so with our consent. We are still accepting spoils of violence.
It is increasingly obvious that government solutions to health care are not effective. People often find market outcomes appealing. Proponents of free markets in health care should work to make the most persuasive case for real reform and to achieve incremental reforms where possible.
What we need is a true free market in health care and mutual fund insurance, which has historically shown a tendency to drive costs down and accessibility up, something that socialized services fail miserably to do on all counts.
Or we could just stick our heads in the sand and believe that the state will come to our rescue and save us from the big bad capitalists.
Today, we are constantly being told, the United States faces a health care crisis. Medical costs are too high, and health insurance is out of reach of the poor. The cause of this crisis is never made very clear, but the cure is obvious to nearly everybody: government must step in to solve the problem.
In the late 19th and early 20th centuries, one of the primary sources of health care and health insurance for the working poor in Britain, Australia, and the United States was the fraternal society. Fraternal societies (called "friendly societies" in Britain and Australia) were voluntary mutual-aid associations. Their descendants survive among us today in the form of the Shriners, Elks, Masons, and similar organizations, but these no longer play the central role in American life they formerly did. As recently as 1920, over one-quarter of all adult Americans were members of fraternal societies. (The figure was still higher in Britain and Australia.) Fraternal societies were particularly popular among blacks and immigrants. (Indeed, Teddy Roosevelt's famous attack on "hyphenated Americans" was motivated in part by hostility to the immigrants' fraternal societies; he and other Progressives sought to "Americanize" immigrants by making them dependent for support on the democratic state, rather than on their own independent ethnic communities.)
Or maybe government didn't help after all...
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