So claimed Senator Jay Rockefeller (D-WV) in the Senate Finance Committee debate on Tuesday morning. The “public option” would create the “choice” of a new government-run health insurance plan to “compete” with private insurance in the free market. If Adam Smith means choice, competition and free markets then he would favor the public option. Rockefeller went so far as to claim that “Adam Smith would have cooked up this amendment” establishing the public option. Members of the committee did not see it that way, and the amendment was defeated. But does Rockefeller seriously think Adam Smith’s principles are consistent with the government-run healthcare?
This view depends on the patently false idea that competition would be enhanced by the addition of a new player – the government – in the insurance market. The problem is that government, by definition, isn’t just another economic player, and will always tend to want to control markets for its political purposes. That threatens economic as well as political liberty. (Hmmm . . . isn’t this why we favor free markets in the first place?)
Adam Smith himself long ago debunked the idea that government charters, giving a corporation exclusive privileges to engage in a particular type of business, enhanced competition. Far from it, government intervention would prevent competition by restraining the private market from having true competition in prices, products and free exchange. Smith lamented the old mercantilist policies of Europe which, like the “public option” plan, did not allow competition and choice:
The policy of Europe occasions a very important inequality in the whole of the advantages and disadvantages of the different employments of labour and stock, by restraining the competition in some employments to a smaller number than might otherwise be disposed to enter into them.
The exclusive privileges of corporations are the principal means it makes use of for this purpose. The exclusive privilege of an incorporated trade necessarily restrains the competition, in the town where it is established, to those who are free of the trade.
Anyone who is remotely familiar with Smith’s ideas, let alone the basic ideas of introductory market capitalism, knows how implausible Rockefeller’s claim is. Adam Smith wasn’t there to defend himself in the committee hearing, but we should—not just for his sake, but for the sake of the liberty he defended and we have long enjoyed.
After listening to this debate over the amendments of a few hours, I'm convinced that the liberal democrats really truly believe what they are saying. That makes them either stupid, dangerous or both.
Another example that the Democratic Politicians will say ANYTHING to pass a Health Care Plan that the majority of Americans strongly oppose.
In this case, all Rockefellah accomplished was appearing as a fool. Then, again, he already has his slice of the American Dream.
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NOTE Analysis OF Health Care Bill HR3200 Done By CADC Board Member,Mat Staver OF The Liberty Council, And Dean Of Liberty University School Of Law.Just Two Very Need TO Know PG. PG58 GOV Will Have Real-Time Access To INDIVIDUALS FINANCES And A NATIONAL ID HC CARD will be Issued. PG 59 Line 21-24 GOV will have DIRECT ACCCESS TO YOUR BANKS ACCCOUNTS for ELECTRONIC FUNDS TRANSFER.Al SO ACORN Is IN Working For The GOV And Being Paid By OURE TAX DOLLERS.
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it is not clear that adam smith would support a public option but i do believe that he would support much of what is in the health care bill that recently passed. In the wealth of nations smith argued against the mercantile policies that came before him and thought that there was a problem with the government essentially granting monopolies and preventing competition, which it is hard not to argue has occurred in the health care industry for decades. adam smith argued that "a monopoly granted either to an individual or to a trading company has the same effect as a secret in trade or manufacturers. the monopolist, by keeping the market constantly understocked, by never fully supplying the effectual demand, sell their commodities much above the natural price, and raise the emoluments, whether they consist in wages or profits, greatly above the natural rate" (smith 61). prices of health care and insurance are much different than their natural rates under perfect competition because there essentially is no competition in many states, in many cases this is because of government interference. i think a case can also be made that smith may have supported the public option because he did think the state should provide 1. national defense 2. administer justice and 3. maintain certain enterprises in the public interest that could never be profitable if undertaken privately. i believe one of the reasons that health care is highly profitable is because of the monopolies that currently exist and have persisted because of the prevention of competition in the industry and other barriers to entry like the high cost to start an insurance company. it is also misleading to ignore his theory of moral sentiments which is essential for the type of system he advocates in the wealth of nations. in order to argue that adam smith would support the system as it currently is, without the bill that recently passed, one would have to argue that he did not advocate competition and free markets. it may be possible to make a case for this but i think it would not be a strong one.