Thursday, August 20, 2009

Congressman--Watch your Language

Listening in on a local Telephone Townhall Meeting last night, I was struck by the repeated and blatant misuse of words----employing the language of the free market when referring to actions and programs that have little to do with, or are the exact opposite of, the implied meaning. Here's just a few of them: competition, insurance, capitalism.

It's like Iran calling itself a republic in the hopes that we fail to notice the brutal tyranny perpetrated by the government upon its people.

Here's a brief, closer look at these terms.


In a free market, companies compete for customer's voluntary purchases by offering the best product for the best price. Prices are set according to the laws of supply and demand. Efficiency in resource use and in meeting customers needs is rewarded by profits. Inefficiency and misjudging customer priorities is disciplined through financial loss.

But the "public health insurance option" that we are told we need to provide "competition" for private insurance companies, will be funded not voluntarily, but primarily through income redistribution via taxes. Prices are to be set through regulation and legislation (the laws of men---not the laws of supply and demand.) Incredibly, we are told this public option will be more efficient because it does not have to earn a profit. But profit is the mechanism by which we discover what is efficient. When your "competitor" is also the rule-maker and the referee, and the rules are designed so that "competitor" will not be allowed to fail, the game is rigged. Calling it "competition" doesn't change that.


Insurance is a means of financially protecting oneself from costly, unexpected and unpredictable events--not from the predictable, expected and affordable. An insurance company is able to provide this service by balancing risk against the premiums it collects. There are good reasons there is no market for food insurance, and why our homeowners insurance protects against earthquakes and fires but not the routine maintenance of painting or gutter replacement. There are also good reasons you can not buy life insurance after a person dies, or car insurance to cover you for a wreck that already occurred.

But the "public option" will not allow premiums to be adjusted for risk, and "insurance policies" will be required to be sold regardless of pre-existing conditions. In a free society, people may indeed choose to assist those who can not afford important goods or services, or who are suffering from unfortunate events and circumstance, but those activities are properly referred to as welfare or charity. If the government mandates such support, it is wealth distribution--not insurance.


I repeatedly hear that the current health care system is broken, that we "cannot afford the status quo," and then hear the current system referred to as "free market" or "capitalistic." It is not. Our economy is a mixture of free market and government-controlled central planning. I realize many people are finding it harder to afford health insurance and medical care, but in a system where freedom and government control are so intimately and complexly combined, it should be open for debate which aspect of the mixed economy is the cause of rising prices and shrinking affordability.

Health care expenditures in this country are already half public and half (heavily regulated) private. Sound economic arguments exist which explain how it is the public (centrally planned) half which created the "status quo" and why increased privatization (i.e. capitalism) is the the solution.

Don't be fooled by the incorrect use of these terms. Proponents of increased government control over your private health matters are using the language of freedom and and capitalism to sneak in a system that has more in common with the central planning of socialism and fascism than it does with the individual rights protected in our Constitution.

War is Peace
Freedom is Slavery
Ignorance is Strength

Monopoly is Competition
Welfare is Insurance
Central Planning is Capitalism

It's 1984 by stealth.

(I know I promised a post on administrative costs. It's coming.)


The Rat Cap said...

Great post. I especially liked your statement:

"we are told this public option will be more efficient because it does not have to earn a profit. But profit is the mechanism by which we discover what is efficient."

It is amazing how often these terms are used improperly, often to describe their exact opposite!

You have provided clear and succinct explanationss of these concepts. One can use your explanations not only to debunk absurd leftist arguments but more importantly, to help make a positive case for capitalism by making clear exactly what capitalism is! That's most of the battle.

Anonymous said...

You make some good points. Be careful what you wish for, though. Given the almost 50% of health care expenditures coming from government sources, i.e. Medicare and Medicaid, one can only imagine what the total expenditure might be in a free market. Currently government programs call the tune and everyone else, including private insurance, dances to it. The tune they call is anywhere from 30% to 60% of billed fees, according to anecdotal evidence collected in my travels. If we suddenly let the free market determine the price, we may see a 20% to 35% increase in total health care expenditures, tempered by a sudden reduction in health care consumption.


Sue said...

Thanks Beth - very clear and helpful. I used the bit on capitalism in my blog.