Crisis Communism


No law has drawn more ire from libertarians and conservatives than Obamacare. The idea of the government using its power to punish people for making a free and informed decision not to purchase health insurance, justified by the noblest-sounding idealism of "lowering costs" and "increasing access," is obvious pavement for the road to socialism. If the government has the right to impose economic decisions on us, then capitalism is finished.

My own view is that, contrary to conventional libertarian wisdom, Obamacare gets some things right. I have a history of health problems and the end of exclusions for preexisting conditions benefits me greatly; without it I probably would not have health insurance. I also like the Obamacare health insurance exchanges, because they enable plans to compete for buyers, and competition is the engine that lowers cost and improves quality. In terms of preexisting conditions, and the lack of competition among plans, I think the old system was broken and the new system is better.

But my point is that these good things would have happened from deregulation. The flaws in the old system were caused by government control, not by the free market or the greed of insurance companies. In fact, greed is a main motive of Obamacare's insurance-company backers, who love a law that forces people to buy their products and pay them more money.

Here I posit a theory that I call Crisis Communism: when the government interferes in the free market it causes a crisis, which the socialists then use as an excuse for greater government interference, justified by the need to end the crisis. Thus regulation achieves a downward spiral towards Marxism. One good example is the Great Depression. The Federal Reserve caused it; then the New Deal was offered as a solution — which made it worse.

In the field of health insurance, two regulations precipitated the crisis "solved" by Obamacare. First, the complex of laws and codes known as ERISA (associated with the Employee Retirement Income Security Act of 1974) tended to force health insurance to come from a worker's employer, so that the employer chose the plan, which killed competition for plans among individual consumers. Second, the state insurance commissioners issued detailed regulations about what a health insurance plan was allowed to cover and what benefits it could have. The advocates of Obamacare might blame the free market for a bad system, when really it was state socialism that was to blame.

I want Obamacare repealed. But if we are to repeal Obamacare, then we must also repeal ERISA and all state health insurance regulations, so that free market competition can force health insurers to make plans available at prices that people want to pay for the benefits they want and freely choose to purchase.

Share This


Jerome Bigge

Our high cost of health care, the world's highest, is caused by the actions of government providing a legal monopoly to medical providers over access to medical drugs. Prior to 1938, prescription laws as we know them today did not exist. A sick person could purchase what they needed at a local drug store. The druggist would assist them if needed.

The medical profession hated this state of affairs for good reason as it considerably reduced their incomes, especially there in the Great Depression. At this time, druggists often also compounded medications for their customers, cutting further into a field where doctors felt they were the only qualified people to do such things. When a druggist mistakenly used a type of antifreeze to "sweeten" his concoction (antifreeze is poisonous), the AMA used this incident to have the FDA declare that only doctors would have legal right to prescribe medicine. After this, everyone had to go get doctor's prescription (for which they had to pay the doctor for) in order to go to the drug store and buy any medicine now under FDA control. The individual was forbidden to purchase medicine without first obtaining "permission". A great way of course to increase medical incomes!

The fact of the matter is that very few medical drugs need to be under this sort of restriction. But it is a great deal for doctors, who got the government to give them the "gift" of legal monopoly over access to medicine.

Without prescription laws, many people would be able to take of their own health without seeing a doctor. This would of course save them a great deal of money, at least a hundred billion dollars a year if not more. I am a libertarian because I oppose "monopoly" in whatever form it exists. And the professional monopolies are some of the worst there are!

Paul Geddes

Higher premiums for pre-existing conditions occurred because of government regulation? Do smokers pay higher life insurance premiums because of government regulation? If you want a second helping at a restaurant, is a second charge the result of government regulation?

Also, there is a difference between competitors who end up in the same location because of voluntary choice and those forced there by coercive edict. Ever visit a government created artificial market?

© Copyright 2020 Liberty Foundation. All rights reserved.

Opinions expressed in Liberty are those of the authors and not necessarily those of the Liberty Foundation.

All letters to the editor are assumed to be for publication unless otherwise indicated.