AIP Column: Populist Plutophobes

My new AIP column expands on the point I made earlier this week about markets and rationing — a response to the retort du jour that government rationing of health care is no big deal because “we already have rationing” with insurance companies.  All markets are rationing devices, with price assigned as a representation of the tension between the relative value of the goods or services and the demand for them.  Only items of infinite supply, like air and sunshine, don’t get rationed, although cap-and-trade can be described as an attempt to ration the former.  Markets give a rational basis of distribution based on demand, supply, and means for limited goods and services.

The problem that activists have with the current system of rationing is that they don’t like the outcome and want to dictate artificial outcomes that eliminate the benefits of economic success.  Why?  As the last couple of years have shown, people love to hate the people they envy:

In a free market system, even with insurers, the goods or services available to consumers allow for diverse choices and get rationed on the individual’s ability to pay. That’s true for anything, even the essentials of living – food, drink, clothing, shelter, as a moment’s thought will corroborate. Few Americans, at least so far, have argued that any of these basic commodities should be governed by a single-payer entity that assigns those choices by any other means than the fruits of one’s labors. However, as economist King Banaian notes, that’s exactly what motivates advocates on the Left:

“What I think the Democrats do is look at the distribution ex post and decides it doesn’t like it, so it wants to change it. It’s the common schism in politics between equality of opportunity and equality of outcome, or ex ante vs ex post equity. But the decision to change rationing systems doesn’t just influence distribution. It can also change the production of health care.”

That captures the issue in its essential, populist, plutophobic essence. Socialists who envision national systems for rationing health care (or any other products or services) want to disconnect economic success from access to vital products and services. At its core, the push for single-payer health care is an attack on wealth creation, and especially the buying power people derive from it. Even without the “surtax” on the rich proposed by Rep. Charles Rangel for the House version of health care reform, it’s class warfare. Liberal health care reform advocates want a top-down, government-imposed regime of “fairness” (as decided by bureaucrats), because economic success offends their sense of ex post equity.

As Banaian warns, this kind of market intervention will generate real scarcities in health-care services. Other nations with nationalized health-care systems have long wait times and poor responsiveness, as competition disappears and compensation gets stunted. Fewer providers will enter the market, leading to either higher prices or an increase in arbitrary rationing by the government, as is the case in Canada and the United Kingdom. The impulse for ex post equity does not mean that everyone gets the same top-quality care, but that everyone trapped in the system winds up with equal access to mediocrity.

We saw some of the same ugliness in the AIG Rich Hunt last March.  That plutophobia (fear of wealth) is a constant in Populism, which thrives on class warfare and envy.  It’s the basis of soak-the-rich tax schemes that pay for someone else’s services and goods.  That streak is not only present in the health-care reform debate, but also in cap-and-trade, although in that case the animus is directed at the US as a whole because of its wealth and economic success, which global-warming activists see as a dire exploitation to be punished, not a goal to achieve or exceed.

Be sure to read it all, but don’t stop there.  Katie Favazza blogs today about the Blue-on-Blue in the House over ObamaCare.  Despina Karras notes that capping costs but not benefits makes cost-reduction impossible.  John Stossel points out the arrogance of having a few people try a government redesign of 15% of our economy.

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