Prescription for Competition

As part of his March 29 GPS (Global Public Square) feature for CNN, Fareed Zakaria demonstrates that he’s not really paying attention, arguing that “[t]he central debate between Democrats and Republicans is over whether the free market works well in health care.” Zakaria is not alone in his misunderstanding about what it is that politicians of either major party actually advocate. As much as I hate to spoil the ending, neither Democrats nor Republicans are interested in anything like a real free market.

Among the most interesting features of the debate on health care in the United States is the relationship it assumes between the major corporate players and the federal government. The mainstreams of both right and left perpetuate the accepted orthodoxy — that the two are locked in a permanent clash, with the state as a bulwark preventing the free market from leaving the poor and elderly without medical care.

The foregoing account breaks down, however, when we observe that, as a practical matter, the relationship between powerhouse business interests and the central state is far from adversarial. Health insurance, pharmaceutical and medical supply companies spend millions lobbying policymakers for just the kinds of legal privileges that have cut competitive pressure off at its knees.

Following the money, it isn’t hard to understand why consumers and especially vulnerable groups are an afterthought in the corporate quest for higher profits; the most entrenched commercial groups have the state bought and paid for, outlawing meaningful competition that could actually rescue us from the crisis we’re witnessing in health care. In fact, among all of the billions that American corporations spend on lobbying each year,  Big Pharma leads the pack, spending about $2.6 billion from 1998 to 2012.

If you wonder what that kind of money buys from the country’s “public servants,” the United States has some of the strictest, most stifling intellectual property laws in the world, granting rich companies exclusive rights that translate to monopoly mark-ups for consumers. And if you think that the coming implementation of the Affordable Care Act — better known as Obamacare — will allay the pain of those in need, guess again.

The centerpieces of the new law are a powerful inducement for pressing the states to expand a decaying Medicaid system and a rule forcing everyone to buy health insurance. Rather than hanging the poor out to dry by funneling them into Medicaid, where they’ll receive notoriously low quality treatment, market anarchists suggest simply eliminating the special, anti-competitive rules that now fill our supposed “free market” system.

End the subsidies, regulatory and licensing barriers to market entry, and extreme intellectual property rules (just to name a few broad categories of privilege), and we’ll start to see a very different health care system and level of quality coverage. With legitimately free and open competition, consumers will no longer be fed directly to a handful of oligopoly firms in each state, and the poor won’t be relegated to a rickety Medicaid system with such low reimbursement rates that many providers won’t even accept it. Instead, the real welfare queens (to redeem an ugly phrase), the privileged corporate elite, would see their profit margins dwindle in the face of experimentation by free individuals and communities.

Market anarchists understand that a real change, one that would actually benefit ordinary, working people, requires an end to the state’s protectorship of big money interest — which indeed is the state’s ultimate purpose. Anything short of that, and we’re leaving the problem and all attending future crises in place.

Anarchy and Democracy
Fighting Fascism
Markets Not Capitalism
The Anatomy of Escape
Organization Theory