7 Mar
2010
Mar 7, 2010 7:48pm
In the debate about health care and free markets vs socialism and all that, I have some thoughts to add.
I always think of complete free-market libertarianism with no regulations the same way I think of Newton's 1st law.
Sure, an object will continue in motion at the same speed and in a straight line so long as there are no external forces applied to it. That is true in theory, just like a perfect free market might be true in theory.
But in physics, in day-to-day life there is friction acting on the object so it does slow down and stop.
I think that's the same thing about the economy. As a society, we've decided to add all sorts of "friction," in the form of rules and regulations, to the economy. Some for bureaucratic reasons I don't understand. Others because as a society we deem the rule for the public good.
But all these rules inhibit free enterprise and have a negative effect on economic opportunity.
Some examples:
* Requiring a business license.
* Zoning laws.
* Safety regulations at the workplace.
* Requiring extra licenses and standards to run day care centers or nursing homes.
* Requiring licenses to practice medicine.
* Forbidding the running of a friendly neighborhood numbers racket.
* Outlawing the sale of some drugs and requiring doctors prescriptions for others.
The list goes on and on ad infinitum.
Some of those things we might even all agree are good rules, and a civil society depends on them.
But they all have a "friction" effect on the ideal "free economy." That's my theory anyway.
So in compensation for following these rules, we expect certain things in return, as part of our social contract. These include roads, police, a military and maybe yes, a post office and national health care running at a financial loss.
It seems it's all on the table. And can all be decided on a case-by-case basis, just like the rules are. I don't think we need to apply one overarching philosophical rule to deciding everything. I think the society we have created is all case-by-base. And everything else is just "in theory."
doug
