The Healthcare.gov launch is an unmitigated political disaster. If the site isn’t soon fixed, its fallout could seep from politics to policy, doing real harm to the Affordable Care Act’s goal of providing, er, affordable care. Folks on the left have, for the most part, rightly been excoriating the Administration’s catastrophic failure.
For some conservatives, though, the implications are far wider: we’re witnessing, in their eyes, the rapid “discrediting” of liberalism as a governing doctrine. “Obamacare is a multiyear, multifaceted fiasco,” former Bush speechwriter Michael Gerson writes in the Washington Post. “And it could become an intellectual crisis for modern liberalism.”
This is dross, but it’s interesting dross. That’s because, ironically enough, the “Obamacare discredits liberalism” line reveals far more about the decrepit state of conservative ideological thinking than it does about anything else.
Gerson and the others are spirit mediums channeling the ghost of Friedrich Hayek. The famous libertarian economist’s tract “The Use of Knowledge in Society” argues that, because government officials necessarily have limited information about the world, they aren’t very good at predicting the effects of public policy. Market economies worked better than planned ones, Hayek suggests, because market prices serve to compile much of the available information about how people value of goods into one handy signal. People make better decisions for themselves than the government does, in short.
It’s easy to see how Hayek’s insight becomes a tool for tarring the entire liberal project with the healthcare.gov brush. The healthcare.gov catastrophe isn’t just an example of the government’s knowledge gap, the line goes: it’s proof that governments, by their very nature, can’t manage complex things. “Maybe the problem is not Obama or Sebelius,” Gerson writes, “but rather a government program that requires superhuman technocratic mastery.”
This is annoying. Not because it’s a criticism of Obamacare or liberalism, but because it’s a vacuous way to think about public policy.
Hayek’s “knowledge problem” is at best an explanation of why free-market solutions work better than the alternative in the cases that they actually do. Compare Maoist China to the United States, and Hayek looks like a genius. But the question here isn’t nationalization of the entire U.S. economy; it’s whether a specific mixed market-and-public health care system is better to the current mixed-market-and-public health care system we already have.
Unless you dogmatically assume that policies get worse in direct proportion to the amount of government involved in them, then the question of whether Hayek’s analysis applies to any individual market or policy is open.
And it doesn’t seem very helpful either in the case of healthcare websites or healthcare systems. Ezra Klein reminds latter-day Hayekians that “the Massachusetts government [built a working site] years ago, and California, Washington, Kentucky and other states have already done it under Obamacare.” Every other developed country, of course, has some form of socialized health care and generally better health outcomes than the United States. Singapore, the preferred conservative example of a free-market system health care system that works, has moved over time towards more government intervention in the health market.
The basic idea here wouldn’t surprise Hayek himself, who supported the state stepping in to “preserve health and the capacity to work” against problems no one could possibly identify. Cancer, for example.
So no, Hayek’s “knowledge problem” isn’t a particularly helpful frame for thinking about healthcare.gov’s failure, which can perfectly well be explained by plain old ordinary incompetence. Nor is it intended to be: the knowledge problem argument is a criticism of overconfident “scientific” economists and (implicitly) Marxists. Hayek isn’t introducing a universal theory of how to understand every sector of the economy.
But to hear conservatives tell it, that’s exactly what Hayek did. The knowledge problem argument has been used to damn the auto bailout and the cap-and-trade bill. It’s been deployed against marriage equality and federal mortgage policy. Paul Ryan loves to cite Hayek, though he doesn’t appear to have the most solid grasp of the economist’s work.
This assumption of the broad applicability of the knowledge problem argument is bizarre. It isn’t philosophical; Hayek’s isn’t a moral argument that government regulation is wrong because it, for example, unacceptably restricts individual rights. Nor is it an empirical argument, as it’s not rooted in data on the government’s regulatory track record.
Rather, using Hayek in this fashion is a pure exercise in ideology. It’s either a demonstrably false assertion that any government intervention in the market unfailingly makes things worse or an empty exercise in question-begging argument that assumes Hayek’s analysis applies to an individual proposed policy any actual evidence to that effect.
When Lionel Trilling said in 1950 that conservatism was a series of “irritable mental gestures which seek to resemble ideas,” he was being unfair. But if he were talking about this particular Hayek tic, he wouldn’t be wrong.