Harvard economist Greg Mankiw breaks down the healthcare debate to one of trust:
Perhaps a lot of the disagreement over healthcare reform, and maybe other policy issues as well, stems from the fundamental question of what kind of institutions a person trusts. Some people are naturally skeptical of profit-seeking firms; others are naturally skeptical of government.
I tend to distrust power unchecked by competition. This makes me particularly suspicious of federal policies that take a strong role in directing private decisions. I am much more willing to have state and local governments exercise power in a variety of ways than for the federal government to undertake similar actions. I can more easily move to another state or town than to another nation. (I am not good with languages.)
Most private organizations have some competitors, and this fact makes me more comfortable interacting with them. If Harvard is a bad employer, I can move to Princeton or Yale, and this knowledge keeps Harvard in line. To be sure, we need a government-run court system to enforce contracts, prevent fraud, and preserve honest competition. But it is fundamentally competition among private organizations that I trust.
This philosophical inclination most likely influences my views of the healthcare debate. The more power a centralized government authority asserts, the more worried I am that the power will be misused either purposefully or, more likely, because of some well-intentioned but mistaken social theory. I prefer reforms that set up rules of the game but end up with power over key decisions as decentralized as possible.
What puzzles me is that Paul seems so ready to trust solutions that give a large role to the federal government. (In the past, for instance, he has advocated a single payer for healthcare.) I understand that trust of centralized authority is common among liberals. But here is the part that puzzles me: Over the past eight years, Paul has tried to convince his readers that Republicans are stupid and venal. History suggests that Republicans will run the government about half the time. Does he really want to turn control of healthcare half the time over to a group that he considers stupid and venal?
These thoughts, I appreciate, are broad generalizations. They don’t immediately lead to a specific set of reform proposals. But I wanted to give Paul credit for a key insight: A central question in this and perhaps other debates is, Whom do you trust?
The full post can be found here.
This is a great post. Centralized and concentrated government power is problematic. But such power is also problematic for private organizations when they become monopolistic or too big. I like Henry Simons’ credo:
“I hope that [mycomments] are fragments of one intelligible general
position…. The underlying position may be characterized as
severely libertarian or, in the English-Continental sense, liberal.
The intellectual tradition is intended to be that of Adam Smith…
Marshall … and Knight, and of Locke, Hume, Bentham .. . and
Hayek. The distinctive feature of this tradition is emphasis upon
liberty as both a requisite and means of progress…A cardinal tenet of libertarians is that no one may be trusted with much power—no leader, no faction, no party, no “class,” no majority, no government, no church, no corporation, no trade association,
no labor union, no grange, no professional association, no university, no large organization of any kind.”
In general, I trust private organizations over government in most instances–there is no question. But the current crisis reminds me that trust should never be blind. Government intervention to get us back on track may be warranted, but I would not want to replace a privately-run disaster for a government-run disaster. I hope we will get to the heart of the regulatory break-down (perhaps enforcing existing regulations rather than adopting half-ass symbolic measures with no teeth–echoing a post on Professor Becker’s blog a while back).