Our Elder Statesman rightly asked last week what government is good for (absolutely nothing! uhn-huh!), if not to provide the basics to those who can't provide for themselves. I think it's worth questioning not just the government's role in our society, but the free market's, too. Just as the government can't solve all our problems, neither can capitalism.
The mainstream position in America is that the free market is always the most efficient way to allocate resources, if not the most egalitarian — the latter point being where most people bring the government into the picture. This is true in most sectors, but not all.
Environmental policy is a good illustration of the free market's shortcomings. Pollution affects everybody, but the burden of reducing it falls solely on each polluter; nor are all of its affects financial, which makes it hard to factor them into ROI. The end result is that early adopters essentially subsidize everyone else's gains, and they get few benefits for their troubles. Everyone has a disincentive to be first in line, and little gets done; this is the exact opposite of standard free market conditions, where the race to be first is what spurs innovation. In areas where games of chicken threaten to leave everyone bleeding by the side of the road, the government is in a unique position to unilaterally devise a solution.
With health care, the problem isn't that people try to avoid being the first to get treatment; instead, it's that one of the fundamental assumptions of capitalist theory, that of the rational actor, doesn't apply. When people buy a car, they're more or less rational: advertising blitzes aside, they know what they want and what they're willing to pay for it. That BMW might roar somethin' pretty, but if it's not worth the money, I might get a Civic instead. And if my car is making weird sounds, I can put off fixing it if I don't have the money now; it might cost me more later if the car breaks down completely, but that's a risk I might be willing to take. When people learn that they might die in two years, on the other hand, they'll demand any and every treatment that might help. That 1% chance is everything when the alternative is death.
But it's a cold, hard fact is that people get sick, they get injured, and they die. The other cold fact is that we can't expend infinite resources on health care. Somebody needs to allocate — okay, I'll say it: ration — our resources. Right now, our system of rationing is the free market, a system built on assumptions that just don't apply. That's not the only reason the US spends so much money on health care and has so little to show for it, but it's part of the reason.
I can't say with certainty if government involvement is the best way to solve this rationing problem. But it's a way that other countries have shown works better than our attempt to force health care into the free market.
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