Socialism: Costly to Avoid

[I intend to expand on these ideas in a future video, but for now this can serve as a first draft of the script]

There is a substantial contingent in this country that regularly sings the praises of the free market as the most powerful self-regulating mechanism through which open competition fueled by informed consumers will produce the healthiest and most efficient environment for innovation and quality.

Allowing people and businesses to evaluate what works best for them in their various situations, they say, is far more effective than any government-imposed regulatory framework could ever be. The government's role should be to stay out of the way, they say, because the government only ever introduces artificial costs and increases inefficiency. If the government interferes, they say, businesses will have to devote precious resources to regulatory compliance rather than innovation, in order to continue participating in the market, and these costs are passed along to the consumer in the form of higher prices across the board.

If the government stays out of the way, however, prices will be freed to settle at the most reasonable levels, they say, as an equilibrium is achieved by letting individual actors in the market determine what quality of product or service they need and what value it holds for them.

Bad actors will be crowded out by competition, they say, because consumers will eventually come to know which providers to trust and which to avoid.

In short, consumers will only have to look at a supplier's track record and the price for their goods, in comparison with other suppliers and prices, in order to determine from whom they wish to make their purchases. If supplier A has an excellent track record, and their price for product X is similar to, or less than, product X from supplier B, consumers will buy from A, forcing B either to lower their price or increase their quality.

Sounds super duper simple, right? Very Adam Smith... Very Ayn Rand... Very intuitive. This economic philosophy certainly works on paper (most of the classical economic philosophies DO, actually). In the real world, however, people are involved. As such, no economy has ever survived for long without some balance of differing philosophies. Even in so-called "capitalist" countries, there are always elements of socialism, the market is never allowed completely unfettered freedom, and we can watch the seemingly daily tug-of-war between the right and left caucuses as they each fight to protect and promulgate their interests.

If you asked a random sample of Americans whether it is wise for the federal government to spend more money than it takes in, I believe you would find that an overwhelmingly high percentage of responses in the negative: the citizen in the street viscerally feels that budgets should basically be balanced and that debt must be manageable. That having been said, we don't see nearly the same percentage of the population agitating for a balanced budget, not in the short term, and especially not if that would require crippling tax increases and spending cuts.

Thus, we are as a population faced with goals which run contrary to our intuition, self-interest, beliefs, and philosophies. Pretty much everyone would like to see more fiscal responsibility; most everyone would like to make it easier for suppliers to compete for their business; somewhat fewer are willing to be charged more in exchange for having at least some basic regulatory protections; fewer still believe fiscal restraint is best achieved by keeping the government away from markets; and even fewer still believe that lowering tax rates, eliminating regulations, and encouraging a more "raw" spirit of competition will eventually cause the economy to grow much more quickly, achieving their goal of fiscal restraint through Austrian-style supply-side stimulus policies.

The theme running through all these positions is that one shouldn't have to pay more for a product or service than necessary, that said product or service will tend to be of high quality due either to competition, regulation, or both, that consumers should be free to pursue suppliers with a better widget for less dollars at every possible turn, and that the government should live within reasonably responsible fiscal barriers.

Suppose I told you that there was one particular product or service that, eventually, every single consumer in the country would have to use? Suppose I further told you that a huge majority of consumers (primarily out of rational self-interest, but also due to government mandates) would at some point need this product or service whether they wanted it or not? Suppose I further informed you that this product or service was so important to society that even babies were required to use it even though they weren't old enough to know what was happening to them? Every single person has used or needed it, is using or needs it, or will use or need it in the future.

Lastly, suppose I told you that the delivery system in America for this product or service wasn't just flawed, it was sometimes embarrassingly so: not everyone who needs it can get it; not everyone who can get it receives the same quality; sometimes the quality is so bad it hurts us or even kills us, but (and here's a particularly touchy point) you MUST go back for more; finally, we are requiring ourselves to pay almost twice as much as people in other countries for exactly the same product or service? AND those people in the other countries are typically more satisfied with what they get, tend to live longer, and regularly claim to have better quality of life than we do?

With the preceding product or service and its attributes as described, what would you say should be the most logical response? Frustration? Anger? Indignancy?

If you haven't figured out what I'm addressing here, it is of course health care. By almost every metric you can name, the United States is not as good as most other industrialized nations. Our healthcare results are occasionally better, but usually worse, we're spending almost twice as much per capita, we're spending 6% more of GDP, we aren't fully covering our citizenry...

What part of this equation isn't adding up? We are spending over $800 billion per year more for a system that is grossly inadequate, making us the laughingstock of the civilized world. Even if we were only able to cut our expenses by 20%, we would still save over $400 billion per year.

Is avoiding "socialism" really worth that kind if money? Especially when the current fight on Capitol Hill is revolving around roughly $100 billion per year in additional revenues from the top 2% of income earners?

Think about it.