Bastiat vs. Krugman

by Don Boudreaux on September 25, 2006

in Health, Risk and Safety

Last December, Paul Krugman was admirably forthright about his disdain for the competence of ordinary men and women.  Writing in the New York Times about health-care decisions, Krugman rhetorically asked:

is giving individuals responsibility for their own health spending
really the answer to rising costs? No.

….it’s neither fair nor realistic to expect ordinary citizens to have
enough medical expertise to make life-or-death decisions about their
own treatment. A well-known experiment with alternative health
insurance schemes, carried out by the RAND Corporation, found that when
individuals pay a higher share of medical costs out of pocket, they cut
back on necessary as well as unnecessary health spending.

Krugman dismisses without comment the likelihood that the vast majority of people will seek the advice of experts — MDs — when making deisions about health care, just as ordinarly people seek the advice of experts — say, electricians — when seeking advice about how to repair electrical wiring in their houses.

I recalled Krugman’s distrust for ordinary people’s decision-making capacities when I read this passage in Chapter 10 of Frederic Bastiat‘s book Economic Harmonies.  It’s interesting — and, I  believe, proper — that Bastiat saw freedom of choice as intimately connected with competition:

After all, what is competition? Is it something that exists and has a life of its own, like cholera? No. Competition is merely the absence of oppression.
In things that concern me, I want to make my own choice, and I do not
want another to make it for me without regard for my wishes; that is
all. And if someone proposes to substitute his judgment for mine in
matters that concern me, I shall demand to substitute my judgment for
his in matters that concern him. What guarantee is there that this will
make things go any better?
It is evident that competition is freedom.
To destroy freedom of action is to destroy the possibility, and
consequently the power, of choosing, of judging, of comparing; it
amounts to destroying reason, to destroying thought, to destroying man
himself. Whatever their starting point, this is the ultimate conclusion
our modern reformers always reach; for the sake of improving society
they begin by destroying the individual, on the pretext that all evils
come from him, as if all good things did not likewise come from him [emphasis added].


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