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Economic Freedom, Universal Health Care, and Labor Unions

By Matthew Yglesias  

"Economic Freedom, Universal Health Care, and Labor Unions"

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The Heritage Foundation has a new report out touting the fifteenth annual edition of its joint project with The Wall Street Journal called the “Index of Economic Freedom”. This is the right-wing’s gold standard of international comparisons that they say “provides strong evidence that the countries that maintain the freest economies do the best job of promoting prosperity for all citizens.” See here:

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Long story short, they think we should become a dictatorial East Asian city state.

But it’s interesting to look at how the non-U.S. countries fare on some controversial policy ideas. Singapore, for example, has an interesting health care system that combines some elements of the consumer-driven model beloved by the right-wing with a universal guarantee of access and affordability and a healthy dose of direct state provision of services. Hong Kong has a British-derived system of public provision. And of course the rest of the top ten are Western countries among which, as is well-known, the US is alone in not providing for universal health coverage.

Or think about the Employee Free Choice Act. Conservative claim that making it easier for workers to form unions will cripple the economy. But consider these union density stats:

  1. Hong Kong — 22.1 percent
  2. Singapore — 18.5
  3. Australia — 20.0
  4. Ireland — 35.0
  5. New Zealand — 21.1
  6. United States — 12.0
  7. Canada — 29.7
  8. Denmark — 80.0
  9. Switzerland — 25.0
  10. United Kingdom — 28.4

Long story short, by conservatives’ own lights these major elements of progressive social policy are completely compatible with sound overall economic policy. But health care reform and a stronger voice for labor would help ensure that the gains of economic growth are shared broadly rather than leaving us stuck in the Bushonomics trap of debt-financed middle class consumption growth. And I would argue that egalitarian measures like a stronger health care system and the better wages that come from higher union density help forestall political demand for the kind of labor market regulations that you see in the southern European countries that this Heritage/WSJ study frowns upon.

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