As the White House struggles to rouse itself from its self-induced ObamaCare public relations nightmare, the primary excuse — at least regarding the canceled health insurance portion of the fiasco — has been to claim that the relevant policies were “substandard” and, therefore, harmful to individual consumers. Ergo, the “substandard” plans needed to be abolished from the market so citizens would be liberated from the possibility of purchasing a “substandard” plan, leaving the procurement of a “quality, affordable” health insurance plan (approved by the compassionate American state of course) as the sole option. There are two major problems with this statist argument.
The first problem with the White House’s argument is that it is logically impossible for a third party (the American state in this scenario) to “objectively” declare a scarce resource (the health insurance policy in this scenario), transferred from a seller to a buyer via a legal contract, “substandard.” Why? It is impossible because, as libertarian economists like Carl Menger, Ludwig von Mises and Robert Higgs have indisputably shown, value is subjective or, in lay terms, beauty is in the eye of the beholder. The buyer of a “substandard” health insurance plan demonstrates, by the very act of purchasing the product, that the plan meets or exceeds her subjective minimum quality standard. If the policy had not met or exceeded that standard, she would not have purchased the “substandard” product; instead, she would have purchased an alternative policy that did meet or exceed it. In contrast, when the American state decrees that a particular plan is “substandard,” the state is evaluating the plan based on its own subjective minimum quality standard rather than the consumer’s. These two subjective minimum quality standards are at variance because all subjective standards are different. Aesop’s fable, “The Town Mouse and the Country Mouse,” succinctly illustrates this ancient human truth.
The second problem with the White House’s argument is that it does not accurately specify who deems the canceled health insurance policies “substandard.”. A fundamental mistake of the typical non-libertarian consumer, based on the comments from President Obama himself or his surrogates, is to assume that the American state is the only organization that appraises the canceled insurance polices as “substandard.” The truth, however, is that the insurance companies themselves also perceive the relevant policies as “substandard.” The reasons the American state and the insurance companies divine the policies to be “substandard” are different, however. The American state judges the plans to be “substandard” because the American state wields less healthcare power than it otherwise would when it has not yet comprehensively micromanaged the health insurance market. The insurance companies, by contrast, judge the plans to be “substandard” because they earn less profit than they otherwise would when market competition necessitates that they offer inexpensive plans that have not been banned from the market. To solve this manufactured “crisis,” the insurance companies and the American state colluded — evidenced, among many things, by a December 2008 “reform” proposal by America’s Health Insurance Plans (AHIP), the national trade organization for insurance companies, which is nearly identical to ObamaCare — to create a corporatist system (an alliance of corporations and the state, also known as fascism) from which the state gains increased power by thoroughly micromanaging the health insurance market (by banning some products and mandating others) and the insurance companies gain greater profits because less-expensive, lesser-quality healthcare plans are banned from the marketplace.
In summary, White House protestations that the recently canceled healthcare insurance policies were “substandard” and, therefore, should have been abolished are unintelligible. The assertions are unintelligible not only because it is not logically possible for the American state to “objectively” declare that a product is “substandard” based on a subjective minimum quality standard, but also because the American state has conspired with insurance companies to increase state power (via micromanagement of the health insurance market) and corporate power (health insurance corporate profits soar due to state mandates to purchase ridiculously expensive health insurance plans). The just solution to these genuine problems — unaffordable health insurance and excessive state and corporate power — is abolition of the state, not ObamaCare.
Citations to this article:
- Don Stacy, Banning “Substandard” Products, Before It’s News, 12/03/13
"The first problem with the White House’s argument is that it is logically impossible for a third party (the American state in this scenario) to “objectively” declare a scarce resource (the health insurance policy in this scenario), transferred from a seller to a buyer via a legal contract, “substandard. Why?"
Well, because the US health insurance industry is a cartelized "market" preventing more competitive companies from offering a wider range of cheaper and superior policies, the consequence of a protection racket that began decades before Obamacare and the 2008 reform act you reference?
"…[I]f the policy had not met or exceeded that standard, she would not have purchased the “substandard” product; instead, she would have purchased an alternative policy that did meet or exceed it."
Despite your appeal to authority in your second paragraph ("because Mises et al said so"), your argument is a non-sequitur, particularly in light of your analysis in the last sentence of your third paragraph.
Finally, I find more practical arguments, criticisms, and solutions on how to incrementally free the health care "market" from economist and "gasp," interventionist, Dean Baker. For a recent sample of his approach, see the following article published in The Guardian, "Want 'free trade'? Open the medical and drug industry to competition," which can be found here: http://www.theguardian.com/commentisfree/2013/nov… I see Dean Baker's solutions as more left-libertarian than the rightward drift this site has evidenced of late, with all respect due.
More from Dean Baker as it relates to US healthcare costs (link to entire article is below):
"If we got an additional 200,000 doctors from Mexico over the last 20 years then it would likely go far toward bringing the pay of doctors in the United States more in line with the pay of doctors in other wealthy countries. This would lead to tens of billions of years in savings in health care costs to patients and the government.
Even doctors would share in these savings, since they too would have to pay less for their health care. However no one would try to tell doctors that they were better off from this trade deal because of their reduced health care costs. The hit to their wages would have swamped the savings on their health care bill. This is the same story with ordinary workers and the impact of Nafta.
Nafta could have been structured to bring the pay of doctors and other highly paid professionals more in line with their pay in other wealthy countries by removing barriers. This would have produced substantial economic gains to the economy as a whole (it’s the exact same model as economists use to show gains from the Nafta we have), EXCEPT THESE GAINS WOULD BE ASSOCIATED WITH A DOWNWARD RATHER THAN AN UPWARD REDISTRIBUTION OF INCOME." [emphasis added].
The doctors and their allies among the elite have been able to prevent such a deal from being considered by the politicians in Washington, American workers don't have that power."
Link: http://www.nytimes.com/roomfordebate/2013/11/24/w…
Bring in doctors from another State and everything is peachy-keen? NAFTA? Doctor pay cuts? These types of "solutions" are left-libertarian? They are solidly statist in my view.
Licensing, cartelization, and monopolization due to state interference in healthcare is the main reason that healthcare practitioners are in short supply. We don't need more over-educated, state-approved doctors. We need a place where people can evenly trade their skill value for appropriate medical care. No state-approved doctors need be incentivized to migrate in order to stitch up a laceration. The barriers erected to make that role available only after much cost, both monetary and time-based, need to be removed.
That's not to say that some minimum standards of care can't be enforced by guilds and other industry associations.
Spoken as a true rejectionist.. If you can't have your ideal world in it its entirety, then you reject interim approximations in favor of your purist ideal. Or is that not the implication?
Further, let the readers of Dean's articles decide for themselves whether his two articles referenced above, particularly the second article, would initiate further cartelization of medical doctor's services or legislatively ameliorate it in favor of freer market solutions. Hint: It does, along with Dean's realistic appraisal of the difficulty of implementing such a proposal given the political power of the medical profession as a whole. Nevertheless, it's a better approach than what today's "conservatives" advocate, who, in typical Randroid over-generalization, equate a ALL intervention to immorality, which has become THE efficient means of controlling people without resorting to force. "Only the most profoundly disturbed, timorous, evil, and abject takers/moochers/parasites support [all] intervention as the default solution to their own moral failure." You don't want to be a part of that group to do you?
Finally, you wrote: "Licensing, cartelization, and monopolization due to state interference in healthcare is the main reason that healthcare practitioners are in short supply." What's to disagree?
That is not the implication.
I admit I did not read the Baker article in its entirety and instead relied on your summation, so perhaps the entire article is required to understand how NAFTA could be a "left-libertarian" solution to medical monopolies rather than a statist giveaway to international corporatism.
I think you're setting up a false dichotomy. "Rejectionism" is an individual, not collective action. It's not about outlawing state regulations for everyone. If a person wants to hand over his personal life-decisions to the authority of his choice — political, economic, religious, whatever — fine with me. It's a question of forcing me do the same by disallowing non-state alternatives. Whether this is done by dictatorial fiat or by democratic mob-rule is irrelevant — the coercion is the issue. Currently, there is no stateless alternative to the healthcare cartel (or many others). Why not? It's because the mendacious want to protect their revenue stream and the well-meaning don't trust their peers to make their own choices. If and when progressives/statist-socialists lose their "white-man's burden" attitude about the working class, there will be more common ground to fulfill our shared values — abundance, social justice, equal opportunity.