by William L. Anderson March 3, 2004

 I have a friend serving time in the federal prison camp near Cumberland, Maryland, and I visit him whenever possible. (Like many other federal prisoners, he should not be incarcerated at all, but that is material for another story at another time.) During my last visit, we were discussing prison medical care, or the lack thereof.

"Bill," he said, "If you are in prison, you had better stay healthy." Prison medical care, he said, is deplorable at best, and he cited an example of one inmate who had broken his leg, but prison officials there refused to take him to a local emergency room for two weeks. By that time, the bones had set, so doctors had to break the bones again in order to permit a proper resetting.

I bring this up because the modern medical care debate of whether or not the United States should enact a Canadian-style system of government medicine began in earnest in 1991, with a special election for an open U.S. Senate seat in Pennsylvania. (Sen. John Heinz was killed that year in a plane crash.) The contestants were U.S. Attorney General Richard Thornburg and Harris Wofford, who won in a close vote.

Wofford's "winning" slogan went something like this: "Prisoners receive free medical care. Shouldn't Pennsylvanians and all Americans expect the same thing?" Indeed, since then politicians have declared near open warfare on the private medical establishment, and especially private health insurance firms and pharmaceutical companies.

Thornburg's obvious reply should have been: "Do we really want to force Americans to have the same deplorable healthcare as prisoners?" However, being that Thornburg's position as U.S. Attorney General put him in charge of federal prisons, he would have been condemning himself, since the government advertises that prison medical care follows "community standards," which in itself is a falsehood. So this issue stuck with voters, who somehow convinced themselves that prisoners
were able to receive a quality product for free, and that everyone else on the outside of the prison walls should also be privy to such wonderful care.

It is not just the politicians who are calling for even more expansion of the state in this area. In a recent New York Times column, <>Paul <>Krugman resurrects the medical care debate, and strongly urges the implementation of a socialist system of healthcare. First, Krugman points to the fact that pollsters tell us that an
overwhelming number of voters are concerned about medical care because they are prone to losing their health insurance should they lose their jobs.

He writes, "Unlike other wealthy countries, America doesn't have universal health insurance, and it's all too easy to fall through the cracks in our system." Krugman's solution would be almost painless, according to the Princeton University economist:
What would an answer to the growing health care crisis look like? It would surely involve extending coverage to those now uninsured. To keep costs down, it would crack down both on drug prices and administrative costs. And it might well cut private insurance companies out of the loop for some, if not all, coverage.

To justify his claims that government medicine would be a social panacea, Krugman cites "a recent study" which claims "that private insurance companies spend 11.7 cents of every health care dollar on administrative costs, mainly advertising and underwriting, compared with 3.6 cents for Medicare and 1.3 cents for Canada's government-run system." (Of course, Krugman does not tell us who authored the study, or the criteria used to arrive at such conclusions, but we can be assured that whoever wrote it is not an advocate of private medical care.)

From there, Krugman's reasoning is quite simple. If we were to go to socialist medicine, it would be cheaper than what exists right now and nothing else would change. All of us would receive the same care we do now-or perhaps even superior care.

In economics, we call this the ceteris paribus assumption, that is, "everything else being equal." Unfortunately, Krugman's assertion that the only thing that would change if government took over the entire medical apparatus here would be lower costs is more reminiscent of the many economists' jokes that appear on Internet sites. (An economist and two others were stranded on a deserted island when a case of canned goods washed up on shore. While the others fretted about how to
open the cans, the economist declared, "That's easy. Just assume that we have a can opener.")

Indeed, the Krugman "solution"-socialization and price controls (no doubt, he also would later advocate that the government seize drug companies as well) would almost certainly propel us to receive the same "high quality" medical care given to the nation's prisoners. For example, after an article on medical care on the Mises page, I received some emails from Canadians who had their own horror stories to tell.

One person told me about a friend whose diagnosis required removal of her gall bladder. According to the writer, she had to wait for 18 months before she could have surgery because of the long lines ahead of her. (Her "as soon as possible" case was not considered "urgent" enough for immediate care.)

The writer added:
There is one glitch in this, "as soon as possible" in Saskatchewan's Medicare system means 18 months. So this 35-year-old mother of one had to put her life on hold, endure several trips to the emergency room whenever she had an attack. She could not afford the ambulance (not covered by Medicare) so she had to take a cab every time she had one, then she sat in emergency for several hours until they gave her a bunch of powerful painkillers and sent her home. All of this severely
curtailed her enjoyment of life, as you can well imagine. After 18 months of this she was operated on.

The writer also added another anecdote that is very telling about the combination of modern culture and government:
My sister and her husband own and operate a cattle ranch in southwest Saskatchewan. On this ranch they have several saddle horses. About three years ago one of her horses became ill and was in obvious distress. She took it into the nearest vet clinic where it was diagnosed with gallstones, apparently a very painful condition for horses as well as people. The vet recommended that the horse be operated on as soon as possible. My sister left the animal with the vet, who operated on him that night. My sister picked up the horse four days later, and took it home. After a couple of weeks of rest the horse was as good as new.

My sister pointed out if she had made her horse wait 18 months she would have found herself in front of a judge, answering charges of cruelty to animals, and rightfully so. No one would do that to an animal but apparently it is acceptable to do it to humans in Canada.

On paper, the government of Canada "saved money" by forcing this woman to wait for "free" surgery. In reality, the government abused her, and should the Krugman medical state be implemented here in full (as this most-likely future Nobel Prize winner advocates), one can be sure that Americans would face the same kind of treatment that people in other countries with similar setups have received.

The reason is that for all his rhetoric, Krugman's ceteris paribus standard cannot hold in this case. If Krugman were correct, then it would make sense for government to supply all scarce goods, since it would be able to deliver them at lower costs (using Krugman's calculus) and, thus, save consumers money. Product quality would not change and everyone would be better off.

However, no one but the most diehard socialist would make the argument I have made. Not even Krugman will advocate something akin to what we see in North Korea of the former Soviet Union or China before it began to cast off its Maoist "heritage." Yet, we are now left with a perplexing question: If socialism does not deliver the goods like bread and automobiles in large numbers and in high quality, why does anyone believe that the practice of medicine is an exception?

One thing to remember is that when government becomes the monopoly provider of services, then people who receive those services are going to be subservient to the state. (After all, Krugman, for all his protestations that he is against monopolies-calling them "market failures"-is advocating a government monopoly over medicine.) People who have no choice must be satisfied with what they receive-or else receive nothing at all. This is a prescription for abuse, and those who have
been on the receiving end of government abuse know clearly of what I write.

Indeed, the government medicine monopoly that Krugman urges not only would make us even more subservient to the state, but would also reduce what few choices we already have regarding medical care. Does any reader believe that once it had a monopoly on the practice of mainstream medicine, that government would not come down hard upon the practitioners of alternative medicine like chiropractic and homeopathy just as it has done with anyone who competes with the U.S. Postal Service? Those running the government monopoly of medicine over time almost certainly would develop the attitude toward individuals that prison officials have now: You had better be thankful for what you have, and if you step out of line, you will receive nothing at all.

Economists like Ludwig von Mises, Murray N. Rothbard, and F.A. Hayek have clearly demonstrated through economic logic that socialism is and always will be a failure. We have the record of the U.S.S.R. and its acolytes as the empirical laboratory.

Yet, the dream of socialism lives on. Krugman may not claim to be a full-blown socialist, but it is clear that he believes that an exception can be made for the practice of medicine. We already know it cannot. The task before us is not to tweak the existing system-which already is burdened heavily by government spending and regulations-but rather to turn back to free markets that have provided so much for so many for so long.

Indeed, if the government ultimately goes in the direction Krugman has demanded, the watchword among us will not be "quality healthcare for all." Instead, it will be, "Stay healthy!"


William Anderson, an adjunct scholar of the Mises Institute, teaches economics at Frostburg State University. Send him See his Archive.