Why Are We Moving Toward Socialized Medicine?

By Yaron Brook

Government intervention in medicine is wrecking American health care. Nearly half of all spending on health care in America is already government spending. Yet President Obama’s “reforms” will only expand that intervention.

Prior to the government’s entrance into medicine, health care was regarded as a product to be traded voluntarily on a free market–no different from food, clothing, or any other important good or service. Medical providers competed to provide the best quality services at the lowest possible prices. Virtually all Americans could afford basic health care, while those few who could not were able to rely on abundant private charity.

Had this freedom been allowed to endure, Americans’ rising productivity would have afforded them better and better health care, just as, today, we buy better and more varied food and clothing than people did a century ago. There would be no crisis of affordability, as there isn’t for food or clothing.

But by the time Medicare and Medicaid were enacted in 1965, this view of health care as an economic product–for which each individual must assume responsibility–had given way to a view of health care as a “right,” an unearned “entitlement,” to be provided at others’ expense.

This entitlement mentality fueled the rise of our current third-party-payer system, a blend of government programs, such as Medicare and Medicaid, together with government-controlled employer-based health insurance (itself spawned by perverse tax incentives during the wage and price controls of World War II).

The resulting system aimed to relieve the individual of the “burden” of paying for his own health care by coercively imposing its costs on his neighbors. Today, for every dollar’s worth of hospital care a patient consumes, that patient pays only about 3 cents out of pocket; the rest is paid by third-party coverage. And for the health care system as a whole, patients pay only about 14 percent.

Shifting the responsibility for health care costs away from the individuals who accrue them led to an explosion in spending. In a system in which someone else is footing the bill, consumers, encouraged to regard health care as a “right,” demand medical services without having to consider their real price. When, through the 1970s and 1980s, this artificially inflated consumer demand sent expenditures soaring out of control, the government cracked down by enacting further coercive measures: price controls on medical services, cuts to medical benefits, and a crushing burden of regulations on every aspect of the health care system.

As each new intervention further distorted the health care market, driving up costs and lowering quality, belligerent voices demanded still further interventions to preserve the “right” to health care: from regulations mandating various forms of insurance coverage to Bush’s massive prescription drug bill.

The solution to this ongoing crisis is to recognize that the very idea of a “right” to health care is a perversion. There can be no such thing as a “right” to products or services created by the effort of others, and this most definitely includes medical products and services. Rights, as the Founders conceived them, are not claims to economic goods, but to freedoms of action.

You are free to see a doctor and pay him for his services–no one may forcibly prevent you from doing so. But you do not have a “right” to force the doctor to treat you without charge or to force others to pay for your treatment. The rights of some cannot require the coercion and sacrifice of others.

Real and lasting solutions to our health care problems require a rejection of the entitlement mentality in favor of a proper conception of rights. This would provide the moral basis for breaking the regulatory chains stifling the medical industry; for lifting the tax and regulatory incentives fueling our dysfunctional, employer-based insurance system; for inaugurating a gradual phase-out of all government health care programs, especially Medicare and Medicaid; and for restoring a true free market in medical care.

Such sweeping reforms would unleash the power of capitalism in the medical industry. They would provide the freedom for entrepreneurs motivated by profit to compete with each other to offer the best quality medical services at the lowest prices, driving innovation and bringing affordable medical care, once again, into the reach of all Americans.

Atlas Shrugged on Floor Displays at Largest Bookstores

Atlas Shrugged on Floor Displays at Largest Bookstores

Washington, D.C., June 29, 2009– Shortly after Independence Day, new free-standing floor displays of Ayn Rand’s novel Atlas Shrugged, first published 52 years ago, will be placed in more than 850 bookstores across the United States. Borders will display the novel’s trade edition at 520 of its stores and Waldenbooks will feature the mass market paperback edition at 336 of its stores. Thousands of copies of Atlas Shrugged will be on display.

Barnes & Noble also had copies of Atlas Shrugged for sale in special floor displays in most of its bookstores from late May into early June.

According to Dr. Yaron Brook, executive director of the Ayn Rand Center for Individual Rights, “This is the most prominent and widespread display for this novel in all of its publishing history. It is particularly remarkable because it comes more than a half century after its initial publication.

“The fact that the largest bookstore chains in America have chosen to make such a prominent display of Atlas Shrugged is a testimony to the current and growing interest in Ayn Rand’s novels and ideas, and an encouraging sign for America’s future.

“As Americans confront the scary growth of government control over their lives and the economy, they need, more than ever, to learn about Ayn Rand’s conception of a new morality of rational self-interest and her unprecedented defense of freedom and individual rights.”

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Record Number of People Are Listening to Atlas Shrugged

Record Number of People Are Listening to Atlas Shrugged

Washington, D.C., June 22, 2009–The Ayn Rand Center for Individual Rights and the media have been reporting on the surge in sales of Ayn Rand’s classic novel Atlas Shrugged over the last six months. Not surprisingly, sales of the Atlas Shrugged audio book are also making impressive gains.

According to Blackstone Audio, one of the publishers of the full text audio edition of Atlas Shrugged, 16,000 audio copies of the novel were sold in the first five months of 2009, compared to around 20,000 in all of 2008. “This is a huge increase,” noted Dr. Yaron Brook, executive director of the Ayn Rand Center for Individual Rights. “This year audio copies of Atlas Shrugged are selling at about twice the rate as last year.”

Reports from trade sources have indicated that book purchases of Atlas Shrugged have also spiked recently, having tripled in the first four months of 2009 compared to the first four months of 2008. “The tripling in sales of Atlas Shrugged is remarkable,” said Dr. Brook, “especially considering that in 2008 a new all-time record in annual sales of the novel was established with more than 200,000 copies sold in the United States.”

More than 6,500,000 copies of Atlas Shrugged have been sold to date.

“Given the striking similarities between the plot-line of the book and the events of our day, more Americans are reading and listening to Atlas Shrugged than ever before,” said Yaron Brook. “Hopefully, they will find in Atlas Shrugged the principled solutions to the problems we face today.”

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Punishing Google for Its Success

By Alex Epstein (Investor’s Business Daily, June 4, 2009)

The Obama administration’s Department of Justice recently announced that it will dramatically increase enforcement of antitrust laws against successful, dominant companies who allegedly harm competition by wielding too much “market power.” What sorts of companies? Experts agree that the first targets might include one of America’s most beloved. “This will be bad news for heavyweights in the tech industries,” a leading scholar told the New York Times, “companies like Google.”

But wait: Isn’t Google a company whose products and services, centered around its fabulously popular search engine, benefit millions of Americans and businesses? Shouldn’t Americans be celebrating Google, and shouldn’t the government be leaving it alone?

No, antitrust enforcers say. Google has become too “dominant” in the search engine market–that is, too many of us choose to type in http://www.google.com/ instead of http://www.yahoo.com/ or http://www.live.com/. This allegedly gives Google too much power over those who wish to buy its coveted, keyword-based advertising. In an influential article on leading technology blog TechCrunch, Wharton professor Eric Clemons argued that “Google enjoys monopoly power over corporations that participate in its keyword auctions” and “Google is abusing its monopoly position by overcharging corporations for access to consumers.”

But what does it even mean to have “abusive monopoly power?”  Well, consider what the “power” of Google–a company no one is forced to deal with and anyone is free to compete with–really amounts to.

Through incredible technical innovation and brilliant management and marketing, Google has created by far the most popular search engine on the planet, attracting hundreds of millions of users. Through additional innovation, it has created the AdSense program, which offers advertisers the ability to reach users whose searches contain keywords associated with the advertisers’ products. Millions of advertisers eager to reach that Google user-base are willing to pay substantially higher rates than less-popular search engines can charge. Google even holds expensive auctions for top keywords.

Google’s prices and terms, often denigrated as “overcharging” and “unfair,” are in fact earned. And Google’s power to attain them exists only as long as it continues to offer superior value to its advertising customers. The minute AdSense’s rates stop making financial sense to advertisers, Google will see its dominance disappear. Critics bemoan the difficulty faced by competitors trying to overtake Google in search and advertising revenue–but that just proves how much value Google brings to the table, relative to anyone else. This is grounds for admiration of a superior competitornot prosecution for being “anticompetitive.”

Google has no power to force consumers to use its products and no power to prevent competitors from offering products of their own. Consequently, it can pose no threat to anyone’s rights or to the competitive process. (If Google ever does use coercion, as is alleged in a copyright case against the company, it should be prosecuted–but this has nothing to do with antitrust.)

There is, however, one player in today’s market that can thwart competition: the government. By using the vast and arbitrary political power given to it by antitrust law, the government can forcibly control successful companies such as Google and Microsoft, telling them what products they cannot sell, what markets they cannot enter, what prices they cannot charge. Obama’s new push to “protect competition” is the real threat to competition. Under the reign of antitrust, any superior company can be stopped in its tracks because some bureaucrat, company, or academic decides that the prices in its voluntary contracts are too high, or its voluntary terms are too onerous, or evento take another common accusation against Google–that its stable of free products is too large! In other words, Google is to be shackled so that future competitors can catch up to Gmail, Google Maps, and Google Books.

Success earned in a free, competitive process is an achievement. Our Department of Justice regards it as a crime. Thus, we may well see Google undergo the fate of Microsoft, which has been tortured, drained, and shackled by more than a decade of antitrust persecution–for adding a web browser to its fabulously successful operating system. Google famously encourages employees to devote 20% of their time to creative projects of their own choosing. An antitrust case could effectively force much of that precious time and energy to be devoted to mollifying and obeying Washington’s economic little Caesars. Let’s challenge this travesty-in-the-making, along with its underlying theory that successful companies possess “monopoly power,” before America commits yet another sin against capitalism.

He’s No Rand Disciple

By Alex Epstein (Published in American Banker, May 20, 2009)

In a recent story about former BB&T CEO John Allison’s support of Ayn Rand’s laissez-faire ideas, including a gold standard, (“Allison Shrugs”) American Banker repeats an unfortunate misconception about Rand, one that is often used to undermine anyone who agrees with her: “Even former Federal Reserve Board Chairman Alan Greenspan, Rand’s most famous student, has backed away from her ideas as the financial crisis has deepened.”

But Greenspan can’t “back away” from something he hasn’t believed or supported for decades. Remember, this is a man who for two decades reveled in wielding the manipulative power granted to him as Fed Chairman–a job he once (rightly) argued should not exist. The New York Times called him “the infallible maestro of the financial system.” Free markets don’t have “infallible maestros”; they liberate us from such “maestros”–the central planners who have time and again falsely claimed the ability and the right to orchestrate (dictate) millions of economic lives.

Greenspan long ago degenerated into another central planner–and a particularly bad one, both because of his highly inflationary policies (a fundamental cause of the crisis) and because he implemented them under the banner of laissez-faire. If one wishes to understand or argue with the laissez-faire ideas of Ayn Rand, Alan Greenspan is the last person to look to. He stands for free markets about as much as a Chinese censor stands for free speech.

Diplomacy Encourages North Korea’s Belligerence

Washington, D.C., May 28, 2009–In reaction to North Korea’s explosion of what appears to have been a nuclear device and its launching of long-range missiles, Elan Journo, fellow at the Ayn Rand Center for Individual Rights, said America should stop appeasing North Korea’s dictatorial regime and face up to the enormous threat it poses.

“The US should stop rewarding North Korea for its aggression.

“North Korea has become a significant threat precisely because we have appeased it for years with boatloads of oil, food and money.

“The pattern of America’s suicidal diplomacy is clear: the North threatens us, we respond with negotiations, gifts and concessions, and it emerges with even greater belligerence.”

According to Mr. Journo, this cycle of appeasement was made possible by the fact that our political and intellectual leaders cling to the amoral fiction that North Korea shares the basic goal of prosperity and peace. “This fantasy,” said Mr. Journo, “underlies the notion that the right mix of economic aid and military concessions can dissuade North Korea from its nuclear ambition. It evades the fact that the North is a militant dictatorship that acquires and maintains its power by force, looting the wealth of its enslaved citizens and threatening to do the same to its neighbors.

“Years of rewarding a petty dictatorship for its belligerent actions did not disarm it, but helped it become a significant threat to America.

“There is only one solution to the ‘North Korea problem’,” concluded Mr. Journo: “the United States and its allies must abandon the suicidal policy of appeasement.”

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Atlas Shrugged Triples in Sales

Irvine, CA, May 12, 2009 – Reports from trade sources indicate that consumer purchases of Ayn Rand’s Atlas Shrugged have tripled in the first four months of 2009 compared to the first four months of 2008.

According to Dr. Yaron Brook, executive director of the Ayn Rand Institute, “The tripling in sales of Atlas Shrugged is remarkable, especially considering that in 2008 a new all-time record in annual sales of the novel was established with more than 200,000 copies sold in the United States.”

As Dr. Brook pointed out, “Annual sales of Atlas Shrugged have been increasing for decades to a level not seen in Ayn Rand’s lifetime. Sales of the U.S. paperback editions averaged 74,000 copies a year in the 1980s, 95,000 copies a year in the 1990s and 139,000 copies a year in the current decade. After reaching an all-time high during the novel’s 50th anniversary in 2007, another new high was reached in 2008 and an even higher mark is expected for 2009.”

More than 6,500,000 copies of Atlas Shrugged have been sold to date.

“As America faces a devastating economic crisis fundamentally caused by government policies, it is a hopeful sign for the future that increasing numbers of concerned Americans are turning to Atlas Shrugged and discovering Ayn Rand’s original morality of rational egoism and her uncompromising defense of laissez faire capitalism.”

Pakistan’s Surrender to the Taliban

Pakistan’s Surrender to the Taliban

Washington, D.C., April 23, 2009–In reaction to the Pakistani government’s decision to give Islamists the power to enforce sharia (Islamic law) in the north of the country, Elan Journo, fellow at the Ayn Rand Center for Individual Rights, warned that all of Pakistan is at risk of falling under Islamic rule.

According to Mr. Journo, “Instead of living up to its stated goal of opposing the Islamists, by defeating them militarily, Islamabad has opted for the losing policy of appeasement–a policy that can only strengthen the jihadists.” If the current trend of appeasement continues to unfold, argued Mr. Journo, nuclear-armed Pakistan may soon “look a lot like Taliban-controlled Afghanistan.”

Just like other cases of appeasement, noted Mr. Journo, Pakistan’s surrender “was predicated on willfully ignoring crucial facts about the goals of the Islamists–goals that are well known. For the last three-odd decades, jihadists all over the world have been vocal in asserting their ultimate aim of expanding Allah’s dominion across the face of the earth. Not alongside other forms of government, but in place of them.

“By evading the Islamist movement’s nature,” concluded Mr. Journo, “Pakistan has handed it a signal victory–the Swat Valley today, plausibly the rest of Pakistan tomorrow.”

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How to End Piracy in the High Seas

How to End Piracy in the High Seas

Washington, D.C., April 20, 2009–In a dramatic rescue operation a week ago, U.S. Navy Seals succeeded in freeing Capt. Richard Phillips from captivity by Somali pirates.
 
According to Elan Journo, analyst at the Ayn Rand Center for Individual Rights, even though the operation was successful, it did not teach the pirates the appropriate lesson, as evidenced by news of a pirate attack on another American-flagged ship, the Liberty Sun.
 
“The pirates have not been deterred,” said Mr. Journo, “because we have emboldened them for years through an entrenched policy of passivity and accommodation–and the freeing of Capt. Phillips was unfortunately just one halting step in a better direction.
 
“What we need–in response to piracy as well as other foreign threats–is an across-the-board reversal in U.S. policy. When, for example, it became clear more than a year ago that the waters off the coast of Somalia are a playground for pirates, the minimum that Washington should have done was to lay down an ultimatum to the pirates to leave Americans alone or else–and lived up to it.
 
“The substance of that warning: if any American vessel is captured by pirates, we will use military force to destroy every last pirate base in Somalia. When such a threat of retaliation is made fully credible, it can be sufficient to deter would-be aggressors. If any dare test us, then we must unapologetically respond with force.
 
“When America has once again earned a reputation as a power that none dare cross,” Mr. Journo concluded, “we won’t have to worry about pirates.”

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Obama Evades Government’s Role in the Crisis

Obama Evades Government’s Role in the Crisis

Washington, D.C., April 10, 2009–In an op-ed published this week by Canada’s Financial Post, Alex Epstein, analyst at the Ayn Rand Center for Individual Rights, argued that “In calling for a massive increase in government control over the economy,” Obama “has evaded the mountain of evidence implicating the government.”
 
The primary cause of the current crisis, explained Mr. Epstein, was “drastic attempts by the government to control the housing and financial markets–via a Federal Reserve that cut interest rates to all-time lows, and via a gigantic increase in Fannie Mae and Freddie Mac’s size and influence.” Through these entities, Epstein pointed out, “the government sought to ‘stimulate the economy’ and promote homeownership by artificially extending cheap credit to home-buyers.”
 
But, Mr. Epstein noted, Obama did not mention the Fed, Fannie, or Freddie even once, during his recent 52-minute speech to Congress. “Not once did he suggest that government manipulation of markets could have any possible role in the present crisis. He just went full steam ahead and called for more spending, more intervention, and more government housing programs as the solution.”
 
But the “fundamental solution to our problems,” said Epstein, is “to disentangle the government from the markets to prevent future manipulation.” To achieve that, Epstein concluded, we need to consider “pro-free-market remedies such as letting banks foreclose, letting prices reach market levels, letting bad banks fail, dismantling Fannie and Freddie, ending bailout promises, and getting rid of the Fed’s power to manipulate interest rates.”

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