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.

The plain citizen compares the operation of the bureau with the working of the profit system, which is more familiar to him. Then he discovers that bureaucratic management is wasteful, inefficient, slow, and rolled up in red tape. He simply cannot understand how reasonable people allow such a mischievous system to endure.

In the final sentence of the preceding excerpt Mises exposed another crucial misconception about the state. Libertarians have argued for a century or more, state bureaucrats are “reasonable people.” Public choice theory, a venerable branch of economics (evidenced by the awarding of the Nobel Prize in Economics to five proponents: James Buchanan, George Stigler, Gary Becker, Vernon Smith and Elinor Ostrom), has confirmed the libertarian hypothesis by demonstrating that the behavior of state bureaucrats is fundamentally selfish — labeled self-interested in the academic literature. In reality, state bureaucrats are functionaries for a professional criminal class (the ruling members of the state apparatus). What is the purpose of this “mischievous system” championed by this professional criminal class? George Orwell furnished the definitive answer in this extract from his classic dystopian novel 1984,

The Party seeks power entirely for its own sake. We are not interested in the good of others; we are interested solely in power. Not wealth or luxury or long life or happiness: only power, pure power. … We know that no one ever seizes power with the intention of relinquishing it. Power is not a means; it is an end. One does not establish a dictatorship in order to safeguard a revolution; one makes the revolution in order to establish the dictatorship. The object of persecution is persecution. The object of torture is torture. The object of power is power.

Orwell explains that the purpose of increased state healthcare power is not, as the current emperor contends, “to provide affordable, quality healthcare for all Americans and reduce the growth in health care spending.” Rather, the purpose of increased state healthcare power is to increased state healthcare power. The escalation of state power is not a phenomenon previously unknown to the American medical market, particularly on the macroeconomic scale. The Food and Drug Administration, Medicare, and Medicaid are three morally and fiscally bankrupt examples.

If increased state healthcare power is not the solution for a dysfunctional healthcare system, what policies should be espoused “to provide affordable, quality healthcare for all Americans and reduce the growth in health care spending?” Libertarians recognize that a series of steps must be taken to rectify the injustices perpetrated by the current corporate state system. Such proposals are not presented as dessert options on a “reform” menu. Instead, the comprehensive adoption of the following libertarian program by the American society is the just approach. This course would not only maximize the benefits of this radical change for the most vulnerable Americans, but also minimize the duration of the transition pain for those advantaged — unknowingly — by the existing structure:

1. Abolish licensing requirements for medical personnel and accreditation requirements for medical schools, hospitals, clinics, pharmaceutical manufacturers, medical device companies and all other healthcare-related businesses.
2. Foster grassroots mutual aid healthcare networks.
3. Eliminate State regulation of the health insurance industry.
4. Exhort the malpractice insurance industry to convert to restitution-based practices from retribution-based practices.
5. Spur the relevant workers of State-privileged healthcare organizations to homestead the unjustly acquired scarce resources from their employers.
6. Nullify intellectual property, especially pharmaceutical medical technology patents.
7. Foster nutritious ecological agriculture by negating State agribusiness subsidies.
8. Revoke taxes, especially sumptuary (sin), sales and income taxes.
9. Spark healthcare unions by annulling anti- and pro-union State regulations.

The emergence of a just, high-quality and inexpensive healthcare system merely requires us to shed the chains of the state.