If you try to have a government agency produce shoes for everyone, the results will be disastrous. The point of the shoe-making industry, after all, is to make shoes that people like at a price they want. And individual consumers are much better equipped to assess what shoes they like and what they want to pay for them than are government bureaucrats. This is why capitalism is a good economic system, and it’s why the Soviet Union had terrible consumer goods. My maternal grandfather is an economist and he did some of his World War II service setting a national price control regime for shoes. It was a silly thing to be doing. Yay free markets!
Hence, David Brooks’ skepticism of statist approaches to health care policy: “if 15 Washington-based experts really can save a system as vast as Medicare through a process of top-down control, then this will be the only realm of human endeavor where that sort of engineering actually works.”
But of course while running a nationwide price control regime for shoes was a terrible way to run the footwear sector of the economy, the point was to fight and win a war and as it happens, the top-down control experts in DC did a pretty good job of it. The goal wasn’t to maximize consumer welfare, the goal was to direct national resources to a social purpose: Beat Adolf Hitler. In a similar vein, we have some good empirical data on what happens when you take a freedom-loving Anglophone political culture and introduce lots of bureaucrats into its health care system:
Canada’s in the middle ground here, with the UK much more statist and the US much less statist. A Canadian looking at the chart can see clearly that moving toward a less-statist, more US-style regime will push up expenditures. The creative energy of a million health care entrepreneurs will be unleashed on the unsuspecting Canadian people, offering them a dazzling array of choices reminiscent of the consumer bounty associated with shoe stores now that my grandpa’s got his price setting paws off of them. Conversely, moving in a British direction will turn things in the spartan direction of a crappy government office building. There should be no question that if you give 15 bureaucrats in Washington a budget with which to run Medicare, that they’ll deliver health care services inside the budget cap. If the concern is that health care consumption in the United States is currently insufficiently lavish and we need to move even further away from global norms of health spending, then maybe what’s needed is deregulation. But does anyone really think that? America’s health care spending is too low, and growing too slowly? Really?