Capitalism is the ism that isn’t, it reflects not an ideology but a prioritization of capital. It is the economic equivalent of eating your vegetables before your desert. In capitalism you seek the maximum value for each action, you expend at the peak moment, you labor for the most gainful fruits. To sell high and buy low is capitalism, to invest your time in study rather than idling in front of the television is capitalism – to do the opposite of these examples as motivated by the rewards or perspectives of your ideology is capitalism. A Christian taking on habits and practices to avoid the occasion of sin is investing the capital of habits and time for the gain of grace in salvation. A Marxist defending Communism, distributing the manifesto and voting for greater state power and social programs is investing the capital of that effort which could go many other places, is practicing capitalism.

This post is the practice of capitalism; your reading it, or quitting mid-way through or stopping in the first sentence is capitalism. Capitalism is acting upon the best path known to us, it is practiced through the advocacy of free human action that does not infringe on other human actions, through seeking out trade and expertise to maximize impact of labor – which leaves us with finding the best paths, through analyzing data and examining incentives and consequences.

So are your actions the best employment of capitalism? Is what your advocating been tried before? How did it perform? Where did you get the information on its performance from? If it performed poorly primarily due to faults of its own character, a good capital decision would be to move away from it, or at least those aspects of its character. If it performed well, a good use of capital is the examination of all contributing factors to enhance its implementation.

We are all capitalists, we all practice capitalism, the real question is whether or not our culture is getting better or worse at it, and what can we examine to help steer us toward the better?

Wealth Creation:

Cooperation:

Conservation:

For instance, I may choose not to drive a car, or purchase gasoline – but I may not choose not to pay my taxes, which are used to build and maintain our roads. (This is not an argument for privatizing roads, just an example of choice vs. force.). The principal is simple: If I am unable to simply say one word, “No” – then I am being forced to act, forced to work, forced to serve someone else with my mind.

A common criticism of this discussion is that it is too abstract or, for instance “doesn’t feature a single word about policy.” I would simply argue that a philosophical understanding of why government exists, how it functions, and what its role should be is far more essential than any policy discussion. In fact – it must pre-empt policy discussions. Policy is decided long after people have already made assumptions about what government can and should do.

Many people have written about the proper role of government in the past, but sadly, their ideas are substituted in favor of chatter about this or that policy. For the person who perhaps hasn’t taken a moment to think about the core issue, “What is the role of Government,” allow me to present two arguments about the proper, and improper use of force (Government being an institution of force).

The following is an excerpt from John Galt’s speech toward the end of Atlas Shrugged. It highlights some important points about the use of force that must be considered when talking about government functions, since (in America at least), Government is the only institution granted the monopoly use of force. This is a bit of a mild spoiler if you have not read the book – so if that is the case, you may wish to come back to this after reading the book. The video clip is just an excerpt, so be certain to skip to the text below. I have added emphasis.

“Whatever may be open to disagreement, there is one act of evil that may not, the act that no man may commit against others and no man may sanction or forgive. So long as men desire to live together, no man may initiate-do you hear me? no man may start-the use of physical force against others.

“To interpose the threat of physical destruction between a man and his perception of reality, is to negate and paralyze his means of survival; to force-him to act against his own judgment, is like forcing him to act against his own sight. Whoever, to whatever purpose or extent, initiates the use of force, is a killer acting on the premise of death in a manner wider than murder: the premise of destroying man’s capacity to live.

“Do not open your mouth to tell me that your mind has convinced you of your right to force my mind. Force and mind are opposites; morality ends where a gun begins. When you declare that men are irrational animals and propose to treat them as such, you define thereby your own character and can no longer claim the sanction of reason-as no advocate of contradictions can claim it. There can be no ‘right’ to destroy the source of rights, the only means of judging right and wrong: the mind.

“To force a man to drop his own mind and to accept your will as a substitute, with a gun in place of a syllogism, with terror in place of proof, and death as the final argument-is to attempt to exist in defiance of reality. Reality demands of man that he act for his own rational interest; your gun demands of him that he act against it. Reality threatens man with death if he does not act on his rational judgment: you threaten him with death if he does. You place him into a world where the price of his life is the surrender of all the virtues required by life-and death by a process of gradual destruction is all that you and your system will achieve, when death is made to be the ruling power, the winning argument in a society of men.

“Be it a highwayman who confronts a traveler with the ultimatum: ‘Your money or your life,’ or a politician who confronts a country with the ultimatum: ‘Your children’s education or your life,’ the meaning of that ultimatum is: ‘Your mind or your life’-and neither is possible to man without the other.

“If there are degrees of evil, it is hard to say who is the more contemptible: the brute who assumes the right to force the mind of others or the moral degenerate who grants to others the right to force his mind. That is the moral absolute one does not leave open to debate. I do not grant the terms of reason to men who propose to deprive me of reason. I do not enter discussions with neighbors who think they can forbid me to think. I do not place my moral sanction upon a murderer’s wish to kill me. When a man attempts to deal with me by force, I answer him-by force.

“It is only as retaliation that force may be used and only against the man who starts its use. No, I do not share his evil or sink to his concept of morality: I merely grant him his choice, destruction, the only destruction he had the right to choose: his own. He uses force to seize a value; I use it only to destroy destruction. A holdup man seeks to gain wealth by killing me; I do not grow richer by killing a holdup man. I seek no values by means of evil, nor do I surrender my values to evil.

“In the name of all the producers who had kept you alive and received your death ultimatums in payment, I now answer you with a single ultimatum of our own: Our work or your guns. You can choose either; you can’t have both. We do not initiate the use of force against others or submit to force at their hands. If you desire ever again to live in an industrial society, it Will be on our moral terms. Our terms and our motive power are the antithesis of yours. You have been using fear as your weapon and have been bringing death to man as his punishment for rejecting your morality. We offer him life as his reward for accepting ours.”

“This is John Galt speaking.” – Atlus Shrugged

Frederick Bastiat also illuminated this idea much earlier in The Law:

What, then, is law? It is the collective organization of the individual right to lawful defense.

Each of us has a natural right — from God — to defend his person, his liberty, and his property. These are the three basic requirements of life, and the preservation of any one of them is completely dependent upon the preservation of the other two. For what are our faculties but the extension of our individuality? And what is property but an extension of our faculties? If every person has the right to defend even by force — his person, his liberty, and his property, then it follows that a group of men have the right to organize and support a common force to protect these rights constantly. Thus the principle of collective right — its reason for existing, its lawfulness — is based on individual right. And the common force that protects this collective right cannot logically have any other purpose or any other mission than that for which it acts as a substitute. Thus, since an individual cannot lawfully use force against the person, liberty, or property of another individual, then the common force — for the same reason — cannot lawfully be used to destroy the person, liberty, or property of individuals or groups.

Such a perversion of force would be, in both cases, contrary to our premise. Force has been given to us to defend our own individual rights. Who will dare to say that force has been given to us to destroy the equal rights of our brothers? Since no individual acting separately can lawfully use force to destroy the rights of others, does it not logically follow that the same principle also applies to the common force that is nothing more than the organized combination of the individual forces?

If this is true, then nothing can be more evident than this: The law is the organization of the natural right of lawful defense. It is the substitution of a common force for individual forces. And this common force is to do only what the individual forces have a natural and lawful right to do: to protect persons, liberties, and properties; to maintain the right of each, and to cause justice to reign over us all.

Clearly, Force in itself, is not an evil thing, just as guns in themselves, are not evil. However – applying force against an individual’s will is a violation of that individual’s basic human right to liberty. As Rand’s fictional character John Galt put it, to force someone to substitute their own will for yours or another’s, is to deprive that person of choice, or the proper use of their mind.

This brings us back to the core question: What is the proper role of Government? Or in other words – how can the collective force be used, in a manner than does not violate the rights of individuals? This question can be applied to all manner of topics: From National Defense, to Education, to Universal Health-care – the first question, the question that is more fundamental to every situation is – does this policy fall within the bounds of the proper application of force. How are we to determine this? Bastiat again helps with this quandary:

See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.

As soon as government breaks out of its proper boundaries (its limits, which I believe were the very purpose of our Constitution), each individual’s mind is in grave danger. No – this isn’t some “black helicopters and tin-foil hats” nonsense, but you simply have to apply what you know about human nature, and add in the power of coercive force without proper function or limit. The bigger and more centralized a government program becomes, the greater number of individual wills are overrun by the relatively tiny will of the elected body. This is exactly the reason that conservatives favor smaller, more local initiatives (if they favor them at all). Programs and policies that claim to represent everyone, more accurately represent no-one. The closer a representative is to the people whom they represent (and the fewer people they represent), the more likely that their choices will align with the wills of the represented.

This is also the reason conservatives reject socialism and other collectivist philosophies. Not only do these philosophies have a history of mass atrocity, at their very core, they fundamentally act against the individual. Given human nature’s fatal tendency to dominate (by force) other human beings – it is easy to see the dangers of setting up systems which encourage and enable this ability.

Self-preservation and self-development are common aspirations among all people. And if everyone enjoyed the unrestricted use of his faculties and the free disposition of the fruits of his labor, social progress would be ceaseless, uninterrupted, and unfailing.

But there is also another tendency that is common among people. When they can, they wish to live and prosper at the expense of others. This is no rash accusation. Nor does it come from a gloomy and uncharitable spirit. The annals of history bear witness to the truth of it: the incessant wars, mass migrations, religious persecutions, universal slavery, dishonesty in commerce, and monopolies. This fatal desire has its origin in the very nature of man — in that primitive, universal, and insuppressible instinct that impels him to satisfy his desires with the least possible pain.

-Frederick Bastiat, The Fatal Tendency of Mankind -The Law

Back to the concept that conservatives being “short on policy.” There are people who believe that if only the “right policy” (the right application of force) were implemented, then everyone would benefit. This sounds like a nobel idea (and is classic among collectivists), but the ends do not justify the means. You cannot confiscate work, to encourage work. You cannot enslave, to set free. This is contradictory. Historian and Communist Howard Zinn penned the popular “A people’s History of the United States” (though I take huge issue with his use of Presentism) which catalogs the suffering and horrors of underdogs and people trampled by force throughout history. And yet – all the while, he supported the idea that “the right government” could wield force, or if “the right people” controlled the levers of power, it would benefit “the people.” Zinn spent his life demonstrating the destruction that the use of force wreaked on people, and yet never arrived at the idea that force cannot be initiated against the unwilling, even if done with noble intentions.

And this truth is the core of my argument. Firstly, I reject the group classification of “the people.” There is no such thing. There exist only totally unique individual human persons. Therefore, there is no way for any policy to be “right” for each individual person. Economist Thomas Sowell put it this way: “The most basic question is not what is best, but who shall decide what is best.” To take this question away from a person, and hand it a third party, is to remove the choice from the person with the best knowledge to make it. I think each person needs to decide what is best for themselves, their family, their children, etc. Not some elected group of “experts” claiming to act in the individual’s best interest.

This is why true conservatives advocate ideas that increase liberty. We don’t believe that if we only had “the right government,” or the “right policy” every societal ill could be corrected. We believe that each human being is an individual person, and thus do not address nameless, faceless groups, and classes of people. We do not create political mascots out of groups, such as “the rich,” “the middle class,” or “the poor” so that we can pit them against one another. Nor do we have the audacity to proclaim ourselves so above society that we can fix their problems with our magical policies, if they would only surrender us the power.

By advocating more liberty, given the dismal history of the human condition, conservatives are the true progressives. Liberty is the only situation where each individual is truly a person, capable of making the maximum amount of choice about their own life. With Liberty, the individual has rights and is not demanded by threat of imprisonment or death to surrender his mind, his choices, or his work to the will of another. A free man offers the product of his choices (or his mind) in exchange for something else of value. He determines what he judges to be a fair trade – not a third party. He offers true charity out of his own desire to help another person, not by edict imposed from the desires of a politician. He is not forced to work for someone else, neither does he force another to work for his benefit. In doing so – his rights do not necessitate the destruction or sacrifice of anyone else’s. The choices in his mind, do not command the minds of others.

Thus, the proper and only role of government is to protect human rights, or men’s minds from being violated by force.

“…That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed…”

Let us stop proposing policies which are destructive to this end. Let us not regress into soft-despotism and servitude. Let us progress, as a nation, with ideas that free individual’s minds.

It has an often repeated axiom that a person can learn a whole lot about a society by how it treats its poor. But just as much can be learned by looking at how that society treats its rich. Indeed, the economic future of the poor – and our nation – will be determined in the coming decades by how we treat the people in this country who create great wealth. It will be determined by our understanding of the so-called rich. And our ability to protect this minority.

It is an unpopular thing to say, I know. Rich people need help? Rich people need to be protected? Rich people a minority? Give me a break. They just seem to keep getting richer!  Regrettably, too many Americans, and far too many intellectuals and politicians, don’t understand these people we call “the rich.” And how it is they got rich in the first place.

Because most of us don’t actually know any of these rich people, we instead experience them in the abstract, through policy debates and statistics, and always through the prism of our own ideological lens. We look at the raw data to state our case either against or for the richest among us. In the end, our view of the rich has much to do about how all of us view “capitalism” itself. Indeed, in that respect, our opinions about the rich are a sort of Rorsach test, revealing more about ourselves than anything else.

To those on The Left who think capitalism creates unfair outcomes, they have statistics to confirm their outlook. It seems absurd on its face that the top 1% of American families own 90% of the nation’s wealth.

Wouldn’t it be possible to contrive an economy that is just as prosperous but with a fairer distribution of wealth? Couldn’t we cap the earnings of the rich at $50 million? Or even $100 million? 

Most defenders of capitalism and free markets say no. They contend that the bizarre inequalities we see are an indispensable part of the processes that create wealth. They imply capitalism doesn’t make sense, morally or rationally, but it makes wealth. So don’t knock it.

What nonsense it all is!  And how little to do with the reality of the rich. And how sad that defenders of the rich – or the rich themselves – can’t come up with a better economic or moral case! Quoting Adam Smith and supply side economists just doesn’t cut it.

So who are the so called rich? As someone who is rich (and would love to be even richer), and has spent a lifetime working with people who create wealth, I thought I’d explain who they are, where they come from, and why we should care about their wealth – and their desire to hold on to it.

To begin, it is not exactly a list of the Who’s Who and Most Likely to Succeed in high school or college, this group of Americans called the rich. They are certainly not the best looking. They didn’t get the highest SAT or ACT scores in high school, they probably weren’t voted most likely to succeed in any yearbook, and they certainly didn’t get where they got through the force of their personalities, charisma or celebrity.

A great number of the richest among us never finished high school, and many who went to college never managed to graduate. That’s because the rich in this country are chosen not by blood, credentials, education, or services to the establishment. The rich are chosen for performance, and for their relentless desire to serve consumers.

The entrepreneurial knowledge that is the crux of wealth creation has little to do with glamorous work, or with the certified expertise of advanced degrees. Great wealth usually comes from doing what other people consider insufferably boring.

The treacherous intricacies of building codes or garbage routes or software languages or groceries, the mechanics of butchering sheep and pigs or frying and freezing potatoes, the murky lore of petroleum leases or housing deeds, the ways and means of pushing pizzas or insurance policies or hawking hosiery or pet supplies or scrounging for pennies in fast-food unit sales, all of those tasks are deemed tedious and trivial.

In short, our rich – America’s best entrepreneurs – perform work that most others spurn.

You need to read the rest of this article -> blackhawkpartners.com

Very important article.

Whenever you read Paul Krugman, it is always helpful to remember that this man won a Nobel Peace Prize in Economics. It might as well have been for Pushing Water Uphill. Here are a couple remarkable statements from his latest New York times column. That’s right…THE New York Times – where The Vision of the Anointed is valued above any rational thought:

Beyond that, this is a story that could happen only in America. In every other advanced nation, insurance coverage is available to everyone regardless of medical history. Our system is unique in its cruelty.

[...]

So you end up with a tripartite policy: elimination of medical discrimination, mandated coverage, and premium subsidies.

Above, Krugman is referencing the much lauded “pre-existing conditions” angle. Now, in a tiny way, I actually agree that often insurance companies can be extremely harsh in their restrictions regarding people who have pre-existing conditions. However, the problem here is the screwy way some companies define “pre-existing.” That should draw Krugman’s ire – not the fact that any pre-existing condition must be ignored. The latter concept is lunacy. What would be the incentive to purchase insurance, if you were guaranteed coverage regardless of any pre-existing conditions? The whole point of insurance being that you are paying someone else to pool the risk that you may or may not require healthcare. It is not “discrimination” to willfully take on exorbitant risk.

So what of Krugman’s solution: 1) Force insurance providers not to “discriminate.” Coercing and removing the risk for mortgage lenders to make less “discriminatory” loans sure worked out really well for the mortgage industry. 2) Mandate everyone purchase insurance to increase the risk pool. Good idea…except that the poor are immediately and totally screwed. His solution for that – subsidize the poor. His solution to pay for that subsidy – you guessed it – taxing other groups of people. This is a fine strategy, if you endorse using the law to plunder various arbitrary groups of individuals. Since the law’s sole purpose is to provide justice by defending a man’s life, liberty, and property, you should be able to see the obvious contradiction. In short – Krugman solution is practicing injustice to promote justice.

Also, with regard to his, “every other advanced nation…,” statement; massive entitlement programs are exactly why most of these nations are going broke. Apparently, in Krugman’s mind, it is considered “advanced” to not only be fiscally irresponsible, but also to proclaim that A is not A.

Next quote:

Can you imagine a better reform? Sure. If Harry Truman had managed to add health care to Social Security back in 1947, we’d have a better, cheaper system than the one whose fate now hangs in the balance.

The law is the organization of the natural right of lawful defense. It is the substitution of a common force for individual forces. And this common force is to do only what the individual forces have a natural and lawful right to do: to protect persons, liberties, and properties; to maintain the right of each, and to cause justice to reign over us all.

Posted via web from Andrew Colclough

This is a rare, but great piece by Ayn Rand, originally published in Reader’s Digest, January, 1944.

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The greatest threat to mankind and civilization is the spread of the totalitarian philosophy. Its best ally is not the devotion of its followers but the confusion of its enemies. To fight it, we must understand it.

Totalitarianism is collectivism. Collectivism means the subjugation of the individual to a group — whether to a race, class or state does not matter. Collectivism holds that man must be chained to collective action and collective thought for the sake of what is called “the common good.´´

Throughout history, no tyrant ever rose to power except on the claim of representing “the common good.´´ Napoleon “served the common good´´ of France. Hitler is “serving the common good´´ of Germany. Horrors which no man would dare consider for his own selfish sake are perpetrated with a clear conscience by “altruists´´ who justify themselves by-the common good.

No tyrant has ever lasted long by force of arms alone. Men have been enslaved primarily by spiritual weapons. And the greatest of these is the collectivist doctrine that the supremacy of the state over the individual constitutes the common good. No dictator could rise if men held as a sacred faith the conviction that they have inalienable rights of which they cannot be deprived for any cause whatsoever, by any man whatsoever, neither by evildoer nor supposed benefactor.

This is the basic tenet of individualism, as opposed to collectivism. Individualism holds that man is an independent entity with an inalienable right to the pursuit of his own happiness in a society where men deal with one another as equals.

The American system is founded on individualism. If it is to survive, we must understand the principles of individualism and hold them as our standard in any public question, in every issue we face. We must have a positive credo, a clear consistent faith.

We must learn to reject as total evil the conception that the common good is served by the abolition of individual rights. General happiness cannot be created out of general suffering and self-immolation. The only happy society is one of happy individuals. One cannot have a healthy forest made up of rotten trees.

The power of society must always be limited by the basic, inalienable rights of the individual.

The right of liberty means man’s right to individual action, individual choice, individual initiative and individual property. Without the right to private property no independent action is possible.

The right to the pursuit of happiness means man’s right to live for himself, to choose what constitutes his own, private, personal happiness and to work for its achievement. Each individual is the sole and final judge in this choice. A man’s happiness cannot be prescribed to him by another man or by any number of other men.

These rights are the unconditional, personal, private, individual possession of every man, granted to him by the fact of his birth and requiring no other sanction. Such was the conception of the founders of our country, who placed individual rights above any and all collective claims. Society can only be a traffic policeman in the intercourse of men with one another.

From the beginning of history, two antagonists have stood face to face, two opposite types of men: the Active and the Passive. The Active Man is the producer, the creator, the originator, the individualist. His basic need is independence — in order to think and work. He neither needs nor seeks power over other men — nor can he be made to work under any form of compulsion. Every type of good work — from laying bricks to writing a symphony — is done by the Active Man. Degrees of human ability vary, but the basic principle remains the same: the degree of a man’s independence and initiative determines his talent as a worker and his worth as a man.

The Passive Man is found on every level of society, in mansions and in slums, and his identification mark is his dread of independence. He is a parasite who expects to be taken care of by others, who wishes to be given directives, to obey, to submit, to be regulated, to be told. He welcomes collectivism, which eliminates any chance that he might have to think or act on his own initiative.

When a society is based on the needs of the Passive Man it destroys the Active; but when the Active is destroyed, the Passive can no longer be cared for. When a society is based on the needs of the Active Man, he carries the Passive ones along on his energy and raises them as he rises, as the whole society rises. This has been the pattern of all human progress.

Some humanitarians demand a collective state because of their pity for the incompetent or Passive Man. For his sake they wish to harness the Active. But the Active Man cannot function in harness. And once he is destroyed, the destruction of the Passive Man follows automatically. So if pity is the humanitarians’ first consideration, then in the name of pity, if nothing else, they should leave the Active Man free to function, in order to help the Passive. There is no other way to help him in the long run.

The history of mankind is the history of the struggle between the Active Man and the Passive, between the individual and the collective. The countries which have produced the happiest men, the highest standards of living and the greatest cultural advances have been the countries where the power of the collective — of the government, of the state — was limited and the individual was given freedom of independent action. As examples: The rise of Rome, with its conception of law based on a citizen’s rights, over the collectivist barbarism of its time. The rise of England, with a system of government based on the Magna Carta, over collectivist, totalitarian Spain. The rise of the United States to a degree of achievement unequaled in history — by grace of the individual freedom and independence which our Constitution gave each citizen against the collective.

While men are still pondering upon the causes of the rise and fall of civilizations, every page of history cries to us that there is but one source of progress: Individual Man in independent action. Collectivism is the ancient principle of savagery. A savage’s whole existence is ruled by the leaders of his tribe. Civilization is the process of setting man free from men.

We are now facing a choice: to go forward or to go back.

Collectivism is not the “New Order of Tomorrow.´´ It is the order of a very dark yesterday. But there is a New Order of Tomorrow. It belongs to Individual Man — the only creator of any tomorrows humanity has ever been granted.

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Posted via web from Andrew Colclough

This is an outstanding economics talk from the Mises Institute, by Art Carden. Carden uses everything from LOST, to WALLE, to Walmart to illustrate core economic concepts like scarcity, opportunity cost, comparative advantage, firms, capital, and voluntary trading (just to name a few).

Sounds dry, right? There are probably more coherent and logical thoughts covered in this relatively short lecture than in every political speech given in the last 10 years combined.

I certainly agree with the idea that we deserve the government that we get. If we, as a society, feel that the decisions and responsibility concerning our own health are things that our government should be shouldering, rather than us – then we deserve socialized medicine.

If this is our choice, then we must also acknowledge we will be necessarily handing our own choice over to a third party – and be willing to live with this decision. We also must be willing to accept that in the future, removing this government program will be impossible – given that it provides citizens with something they perceive as ‘free,’ in exchange for their votes and loyalty to keep that program going. Mark Steyn points writes about this change in rolls:

“The problem isn’t the cost. These programs would still be wrong even if Bill Gates wrote a check to cover them each month. They’re wrong because they deform the relationship between the citizen and the state. Even if there were no financial consequences, the moral and even spiritual consequences would still be fatal.”

[...]

“Once you have government health care, it can be used to justify almost any restraint on freedom: After all, if the state has to cure you, it surely has an interest in preventing you needing treatment in the first place.”

This idea of cultural infantilism is much more fully discussed in Steyn’s article: Live Free, or Die.

You are probably wondering, if I am against a socialized or nationalized plan – what alternative would I suggest? Well, I am certainly no expert on health care – however, I do have several guiding principals and questions that we should ask or consider when we talk about health care:

First, Thomas Sowell’s famous three questions:

1. How much does it cost?
2. Who pays for it?
3. Does it work?

Now, several of my own:

1. Does the new plan increase – or decrease personal liberty?
2. If the new plan isn’t initially in conflict with personal liberty (question 1), can it easily be made to be so (for instance, by a future corrupt government)?
3. Why does any plan need to be created at the National or Federal level? Why not let the states figure out their own plans, especially since they are much closer and more knowledgeable about their own peoples and situations?
4. What evidence can you point to that our government can afford such a program, given the state of Medicare, Medicaid, and Social Security?
5. Does the new plan increase personal choice? In other words, under any proposed plan, would an individual have more choices overall, or less?
6. Does the plan encourage competition? Historically, industries that have free and tough competition, have to find ways to entice the customer to their service – or they will cease to be. Usually they do this through innovation, providing cheaper services, or providing better services for similar prices. Would whatever new plan we are considering create  competition, favor one business over another (such as one provider teaming up with the government, similar to lobbying), or eliminate competition?

Those are just a start, so I will probably return to this post and add additional questions. Feel free to add your own in the comments. In the mean time, here’s John Stossel’s take also:

And here are ten facts about the U.S. health care system you might not know (via The Hoover Institute – follow the link for in-depth explanations):

1. Americans have better survival rates than Europeans for common cancers.
2. Americans have lower cancer mortality rates than Canadians.
3. Americans have better access to treatment for chronic diseases than patients in other developed countries.
4. Americans have better access to preventive cancer screening than Canadians.
5. Lower-income Americans are in better health than comparable Canadians.
6. Americans spend less time waiting for care than patients in Canada and the United Kingdom.
7. People in countries with more government control of health care are highly dissatisfied and believe reform is needed.
8. Americans are more satisfied with the care they receive than Canadians.
9. Americans have better access to important new technologies such as medical imaging than do patients in Canada or Britain.
10. Americans are responsible for the vast majority of all health care innovations.

The president is making sense
Ezra Klein and Matthew Yglesias both catch President Obama making sense on the public option:

QUESTION: Wouldn’t that drive private insurance out of business?

OBAMA: Why would it drive private insurance out of business? If private insurers say that the marketplace provides the best quality health care; if they tell us that they’re offering a good deal, then why is it that the government, which they say can’t run anything, suddenly is going to drive them out of business? That’s not logical.

Making Sense? I respectfully disagree. Obama’s answer conveniently leaves out some important economic factors.

President Obama asks, “Why would it drive private insurance out of business?”

The answer is simple:

1. Because the government operates outside the market and price system and therefore has the unique ability to artificially set their price below the competitive market (something private insurers do not have the power to do, because their price is determined by supply and demand). Contrary to popular belief, Prices in the free market are not set arbitrarily. This is easily demonstrated by Craigslist. I recently tried to sell a rather ugly southwestern style kitchen table for $200. I actually figured that it probably wasn’t worth that, but I thought I would try it and see if I got any bites. No Response.
   Soon – I lowered the price to $150. Nothing.
   Finally, I lowered it to $100 and I sold it fairly quickly. You can see that I could not sell the table for more than it’s actual real-world perceived value. I didn’t really set the price at $100, rather, low demand for the ugly table did.
2. Also – the government is funded through non-voluntary trading – by taxation, thus has no competition, no bottom line, no incentive, nor any reason whatsoever to function efficiently. Nor do they have any real incentive to provide ‘better health care’ (In a public system – someone in an office, who knows nothing about you, will determine the policy of what is considered ‘adequate’ healthcare based on what – Statistical data?) since you don’t get to choose to pay (essentially, vote with your dollars) for their service. Only the government has the power to force you to pay for their service, whether you want it or not. Private industry has to offer you something you value more than your own money, to earn your business.
3. Finally, the fact that most people falsely perceive government options as “free,” basically guarantees overwhelming popular and political capital for an idea that you cannot choose not to pay for. Even if the actual outcome of such a program is poor, the majority of voters will subscribe to the nice sounding idea that everyone should receive health care. It is, after all, a noble sounding ideal – but unfortunately, when measured against history, or any kind of actual economic cost/benefit results – it fails.

I would expect Paul Krugman, Ezra Klien, Matthew Yglesis, and President Obama to know better, but political capital is so much easier to get excited about, than the, rather, wet blanket that is economic reality. It’s time (yet again) for one of my favorite quotes:

“The first lesson of economics is scarcity: there is never enough of anything to fully satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.”
-Thomas Sowell

You cannot buck economic forces. In my view – they are as consistent and absolute as the laws of Mathematics. Yet they seem to be the first to be disregarded in the face of an idea that sounds really satisfying.

I have written much more extensively on this here: Healthcare: Economic Reality vs. Political Capital