Would Adam Smith Support Government-Run Healthcare?
Matthew Spalding /
So claimed Senator Jay Rockefeller (D-WV) in the Senate Finance Committee debate on Tuesday morning. The “public option” would create the “choice” of a new government-run health insurance plan to “compete” with private insurance in the free market. If Adam Smith means choice, competition and free markets then he would favor the public option. Rockefeller went so far as to claim that “Adam Smith would have cooked up this amendment” establishing the public option. Members of the committee did not see it that way, and the amendment was defeated. But does Rockefeller seriously think Adam Smith’s principles are consistent with the government-run healthcare?
This view depends on the patently false idea that competition would be enhanced by the addition of a new player – the government – in the insurance market. The problem is that government, by definition, isn’t just another economic player, and will always tend to want to control markets for its political purposes. That threatens economic as well as political liberty. (Hmmm . . . isn’t this why we favor free markets in the first place?) (more…)