I saw this on Cafe Hayek and thought I should share it in honor of Milton Friedman’s centennial. From Capitalism and Freedom:
What the market does is to reduce greatly the range of issues that must be decided through political means, and thereby to minimize the extent to which government need participate directly in the game. The characteristic feature of action through political channels is that it tends to require or enforce substantial conformity. The great advantage of the market, on the other hand, is that it permits wide diversity. It is, in political terms, a system of proportional representation. Each man can vote, as it were, for the color of tie he wants and get it; he does not have to see what color-the majority wants and then, if he is in the minority, submit.
It is this feature of the market that we refer to when we say that the market provides economic freedom. But this characteristic also has implications that go far beyond the narrowly economic. Political freedom means the absence of coercion of a man by his fellow men. The fundamental threat to freedom is power to coerce, be it in the hands of a monarch, a dictator, an oligarchy, or a momentary majority. The preservation of freedom requires the elimination of such concentration of power to the fullest possible extent and the dispersal and distribution of whatever power cannot be eliminated – a system of checks and balances. By removing the organization of economic activity from the control of political authority, the market eliminates this source of coercive power. It enables economic strength to be a check to political power rather than a reinforcement.
Just over a week ago, I wrote the following:
Could they put through a bill requiring everybody in the US to do a year of community service before entering the workforce? What about requiring higher education? Both of these things, on the surface, would seem to have positive effects, but would completely ignore the unintended consequences, the ripple effect into other areas of life that perhaps wasn’t immediately expected.
I’ve been thinking for a while that even a single payer system would be better than the ACA, because at least everybody is guaranteed SOME level of care. Here in MA where we have lived under “RomneyCare” for several years now, even though 98% of the population have health insurance, some people can’t afford to use it. I can confirm, anecdotally, that this is true for many people. One of my co-workers, who gets his insurance through his wife’s work, is in this position. Myself, I am in this position as well, although I’m still rather young and healthy, so it’s not a huge problem for me (other than having to pay the extra thousands of dollars a year for far more coverage than I need).
Well, while stumbling around the internet recently I came across a blog post at Kids Prefer Cheese on this very subject, from someone far more learned than I:
With the ruling on the Affordable Care Act, I’ve been wondering: What else can be mandated? It was truly unprecedented to require citizens to purchase a product that they otherwise hadn’t decided to purchase. So whats next?
If Congress can constitutionally create a mandate for individuals to purchase healthcare, then Congress can create a mandate for individuals to purchase financial securities. Which — given the fiscal cliff that we are about to run off, and the reality that more and more sovereigns are dumping dollars and treasuries — could well be a useful weapon in keeping the Treasury’s borrowing costs low and the bread and circuses flowing.
I’ve been thinking about the Tragedy of the Commons recently, and with the passage of the Affordable Care Act (oh, what a snarky name that is!), I think the concept is particularly relevant.
The tragedy of the commons is a dilemma arising from the situation in which multiple individuals, acting independently and rationally consulting their own self-interest, will ultimately deplete a shared limited resource, even when it is clear that it is not in anyone’s long-term interest for this to happen.