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Public Good and the Law of Unintended Consequences

Posted on 10 April 2011 by Editor

Originally posted 2010-01-03 23:55:02. Republished by Blog Post Promoter


by Editor

January 3, 2010

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I consider myself an interested and vested observer of the American debate on health care reform. After all, the outcome of whatever form the proposed changes in the way health care are delivered (if in fact any changes will indeed be made) will deeply affect our relationship with our doctors, and certainly will have an impact on the quality of the care we receive from health service professionals.

However, listening to the arguments both proponents and opponents use in arguing their respective positions, one has to wonder whether each side is in fact debating the same issue. How can a people of the same nation have such diametrically opposing opinions on the same issue? After all, isn’t there a generally accepted societal consensus on what is good and bad? Surely, no person of significant influence in the government “of the people and for the people,” and certainly no true citizen of this country, would wish upon us something that could potentially be detrimental to our interests and welfare.

So something else must be lurking in the shadows of this debate and this something has to both lie at its root and also be so subtle and elusive so as to not have previously surfaced and itself have been debated. This murky notion must in fact be the core contributor to the disparity in arguments on both sides of the health care debate.

And here I find myself bewildered by the conspicuousness of this seemingly illusive notion. It’s really not that hard to uncover once you do a bit of national introspecting. In fact, the only thing that keeps it from being massively exposed is our fear of taking the issue head on and engaging in a serious dialog about it. It can be stated very simply – Americans don’t have a nationally uniform understanding of, and agreement on, what is an entitlement versus what is individual responsibility.

The American society does not have a generally accepted frame of reference for where welfare ends and where individual  responsibility begins. (By the way, if anyone is offended with equating government entitlements with welfare, then I challenge them to provide a clear definition of how the two differ, as I have yet to come across a compelling argument that differentiates between the two). Without first establishing a universally accepted framework, any national debate about governance, whether related to health care, the environment, control of financial systems, employment, etc. is inevitably futile. Even if its result is a solution that many or even most people support, those that don’t will comprise a significant disenfranchised populace, in all likelihood in active opposition to the accepted solution. A continual national tug-of-war results, with deep divisions, and with much productive human energy lost to societal friction.

At this time American’s don’t know who they are, they are in flux, they have lost their grounding in any foundation which could guide them in determining their course and destiny. A fundamental part of this grounding has to be an agreement on the extent to which Americans will allow the government to assert control over their lives, inevitably by usurping individual freedoms and liberty. By defining these boundaries Americans will choose to either return to their roots and founding principles of limited government and individual freedoms and liberty, or embark on the global experiment in socialist revival that is presently unfolding within the EU and throughout a number of countries around the world.

Many in the US look to Europe and see the EU as a social entitlement model worthy of emulating. Many of these progressive thinkers hold prominent positions in the US government or positions which can greatly influence government action. But while extolling the “quality of life” virtues they perceive are important (the touted 8 week summer vacations in France, universal health care in the UK and most other EU countries, etc.), they conveniently overlook the EU’s miserable economic growth rate of less than half that of the US (see table), consistently high unemployment rates, low rate of new business creation, and other factors which are the direct result of anti-capital sentiment across the European continent.

European Union Unemployment Rates

Year Unemployment rate (%)
2004 9.1
2005 9.5
2006 9.4
2007 8.5
2008 8.5

Many here see the EU as an experiment in high-speed globalization, one which some feel America must actively participate in so as not to be left behind. But few American government policy writers delve into and openly discuss the mechanics of the social methods being deployed and promulgated throughout European societies. For example, the socialization of many services and economic forces in EU countries (e.g. medical services, education, transportation, certain manufacturing sectors, etc.) is generally accepted as failing or, at a minimum producing sub-optimal results, to which the low rates of economic growth in the EU-15 countries is a glaring testament.

EU-15 GDP Growth Rates

Member State % GDP Growth
2005 2006 2007 2008
Austria 2.0 3.3 3.4 1.9
Belgium 2.0 2.9 2.7 1.4
Denmark 2.5 3.9 1.8 1.2
Finland 2.8 4.9 4.4 2.4
France 1.7 2.0 1.9 1.4
Germany 0.8 2.9 2.5 1.4
Greece 3.8 4.2 4.0 3.5
Ireland 5.9 5.7 5.3 1.8
Italy 0.6 1.8 1.5 0.3
Luxembourg 5.0 6.1 5.4 3.1
Netherlands 1.5 3.0 3.5 2.1
Portugal 0.9 1.3 1.9 1.3
Spain 3.6 3.9 3.8 1.8
Sweden 3.3 4.1 2.6 2.0
UK 1.8 2.9 3.1 0.7

Evidence pointing to the miserable economic results of the early 20th century march of socialism across Eastern Europe, the USSR, Cuba, Mao China, South Korea and other aligned countries are today countered with arguments such as “this time we will do it better, we will do it differently.” Yet no one making these arguments is able to spell out how this will be done. How, for example, will the new global socialist order deal with the hard cold reality that only the free market system is able to produce goods and services in the abundance needed to supply the unproductive part of the world with food, medicine and essential products necessary for their survival? The European feeble sub-2% economic growth is barely able to keep up with its own population growth and needs of its citizens. The US free (reasonably speaking) market is still the most efficient in the manufacturing of goods and services, and by so doing is supplying the world with creative new products and services, not to mention food and medicines. By so doing it is still the only proven and sustainable vehicle which creates high personal wealth for investors and those who create the new ideas and products.

Before one can distribute wealth, one must first be created. No ideology can usurp this basic fact — that without a good economic engine, the train of society cannot move forward, and certainly cannot cross steep hills of adversity. “To each according to his need,” the rallying cry of the Marxist socialist movements, can only have meaning once someone has produced that which satisfies this “need.” Otherwise, it is an empty slogan, devoid of substance, logic and any founding in reality. In order to help those with needs, first a society has to produce wealth, which comes from the application of capitalist principles in the manufacture of goods and services. Historically, America has been the driving locomotive of the world. And ironically, it is the American fee market system which has allowed high-thinking global ideologues and proponents of a new socialist world order to ponder their progressive agendas, while having soup served to them from free market capitalist kitchens.

A strong belief in a system of deep social entitlements is probably the one theme that most universally defines progressive socialism. As Americans debate their universal health care issues, this theme is used as the underlying argument by those who support radical involvement of a higher government order in the way in which health care is dispensed and financed. Opponents are derided as having no appreciation for, nor sensitivity to the overriding public good which comes from a system which, they claim, only a government mandated system can provide. After all, how can any individual or company care for the public good with equal fervor as does the government of the people? No matter that no evidence can be pointed to, neither historically  nor in present society, where such public good has ever actually been delivered, efficiently or otherwise.

The great philosopher and writer Ayn Rand (“Atlas Shrugged”) eloquently laid out a world where every decision imposed by a disenfranchised entity (read: government, ruling body, etc.), while in each case for the well intended public good (or the entity’s individual definition of what the “public good” should be), inevitably causes a detrimental disturbance in the flow of goods and services, naturally following the basic principles of the Law of Unintended Consequences. Each subsequent decision attempting to rectify the previous, only causes a deeper rift in the balance of the natural energy that drives man to create and produce. Ultimately, without invention, production and human drive to improve oneself, the society as a whole must collapse so as to at some later time rebuild from its ruins.

As impractical or improbable as it would be, I would suggest that no American should contribute their vote nor voice their opinion on the health care debate without first reading “Atlas Shrugged” and becoming familiar with the core philosophy of Objectivism.

As one of my friends and excellent writers Nancy Morgan of put it:

“The people that don’t read it will likely end up living it.”

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Norbert Sluzewski is the Editor of

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2 Comments For This Post

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