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Freeman Essay #116: “So You Want Government-Supplied Health Care?”

In the November 2007 Freeman I expressed my deep skepticism of the case for government-supplied health care.  My column is below the fold.

Every summer my wife Karol and I enjoy the honor of lecturing at student seminars sponsored by the Institute for Economic Studies in Europe (IES-Europe). I offer whatever wisdom I can about economics and political science, while Karol shares her insights about law. (Other lecturers—including Freeman columnist Steve Davies and former FEE trustee Tom Palmer—cover history and philosophy.) Organized on a shoestring budget each year by the intrepid and talented Pierre Garello, who teaches economics at the University of Paul Cezanne in France, these annual seminars introduce (mostly eastern) European students to the foundations of classical-liberal thought. Karol and I always come away from those seminars impressed not only with the brainpower of the students, but with their hunger to learn more about free markets and other aspects of a society of free and responsible individuals.

The summer of 2007 was no exception. The seminar we participated in took place in July near Deva, Romania. This was our second trip to Romania; a 2005 IES-Europe seminar was held just outside the beautiful Transylvanian town of Cluj-Napoca. As in 2005, this year we began our Romanian adventure in Bucharest. We immediately noticed how much it has changed since 2005. Not only has Delta Airlines launched a direct flight there from New York (which we took), but near the Bucharest airport now stands a brand-new IKEA furniture store. Roads and driveways boast more new cars, and the downtown is blossoming with shiny new hotels, restaurants, and trendy retail stores.

Bucharest still has a long way to go. No one there is ever far from signs of Romania’s communist past. Especially prominent are the hideously ugly, dilapidated concrete-block buildings. And most of the public parks are strewn with litter and obviously have enjoyed no landscaping in decades. But also unmistakable is the progress that Bucharest has made in the recent past—and is still making.

Some of our Romanian friends note that this progress has a downside: horrible traffic. And, indeed, the traffic in Bucharest is nightmarish. Streets with more than two lanes are rare (and rarer still in parts of Romania outside of this capital city). And the roads are largely unkempt. They are typically narrow, poorly marked, and badly in need of resurfacing. So while private enterprise is hard at work supplying new cars, new eateries, and new retail outlets to Romanians, the government seems to be working at a snail’s pace at supplying those amenities for which it takes responsibility.

Back in the U.S.A.

When we landed at New York’s JFK Airport on our return from Romania, Karol and I found ourselves with an unexpected windfall of extra time to reflect on our most recent experience in eastern Europe. Our connecting flight (back to our home near Washington, was scheduled to leave JFK two hours after our flight from Bucharest landed. Fortunately, that flight landed about five minutes early. But then we proceeded to wait on the tarmac for more than 30 minutes before pulling up to the terminal to unload. The reason for this delay, the pilot explained, was that our gate was occupied.

Part of the blame for this delay, I suspect, belongs to Delta Airlines. For whatever reason, it couldn’t load and prepare the plane departing JFK with sufficient dispatch. But another part of the blame, I’m sure, lies with the system Americans use to supply commercial passenger air transportation. All commercial airports in the United States are built and owned by government. This means that commercial airports are neither built nor operated in full accord with the profit motive. Political and bureaucratic incentives are the dominant forces in play to guide the construction and operation of these airports.

One result is too few gates for loading and unloading passengers at busy airports. With no profit motive guiding the building of such gates—or, more generally, with the price system not used to convey information about how many gates it would be best to supply—politicians and bureaucrats have too little incentive and information to ensure that the number of gates at airports is economically appropriate. So at busy airports such as JFK access to gates is too often allocated by waiting—such as the inordinate amount of time that our flight from Bucharest waited before it gained access to a gate.

Still, by the time we stepped off the plane into the terminal, we had just over an hour to catch our connecting flight. “We’ll make it,” I assured Karol. Because the flight from Bucharest was ten hours long, both of us recoiled at the thought of missing our flight from New York to Washington. Exhausted, we longed to sleep in our own bed.

Minutes later, though, we realized that we’d miss our flight to D.C. After walking down a long and dreary hallway to U.S. Passport Control, we and our fellow passengers were herded into the room where agents stood at their desks waiting to check our passports.

Despite the fact that JFK is one of the world’s busiest airports—despite the fact that summertime is the peak of the international travel season—despite the fact that other international flights were landing about the same time at that terminal—the U.S. Department of Homeland Security had a total of three agents employed that evening to examine the passports of U.S. citizens returning home. Three agents. That’s all. I didn’t count the number of agents assigned to inspect the passports of non-U.S. citizens, but I couldn’t help but notice that most of the passport-control desks stood empty, mocking the many tired and frustrated passengers lined up and waiting in a slow-moving queue to have their passports stamped, clear customs, and then catch their connecting flights.

It took us 50 minutes to have our passports checked. By the time we claimed our luggage and cleared customs, we’d missed our flight.

Government Health Care?

As I waited with increasing irritation in that line, I wondered why so many people want government to supply health care. Do these advocates of government-supplied health care never fly internationally during the summer? When these people wait in long lines just to clear passport control and, in the process, notice the many empty desks that could be (but aren’t) occupied by additional agents, do these people not think that similar poor service might, perhaps, also characterize government-run health care? Do these champions of state-run health care never visit the post office?

The queues at passport control and the post office, along with the indifferent “service” typically rendered there, are too common not to be symptomatic of government supply. When “customers” neither pay directly for what they receive nor have the option of either not paying for the product at all or of seeking an alternative supplier, suppliers have little motive to respond to the wishes of the people they are allegedly employed to serve.

So, for a good sense of what government-supplied health care would look like here, all you must do is to visit a foreign country (preferably during the summer), fly home on a late afternoon or early evening, and then watch government service in action. You’ll have plenty of time to observe.


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