"No government of the left has done as much for the poor as capitalism has. Even when it comes to the redistribution of income, the left talks the talk but the free market walks the walk. What do the poor most need? They need to stop being poor. And how can that be done, on a mass scale, except by an economy that creates vastly more wealth? Yet the political left has long had a remarkable lack of interest in how wealth is created. As far as they are concerned, wealth exists somehow and the only interesting question is how to redistribute it." ~ Thomas Sowell
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My father worked all his life for one company, a prestigious insurance firm in the UK. He began from school as an entry-level clerk, and ended up its Branch Manager in the city of Worcester, where the well-known sauce is made. In all that time, he made only one key mistake of which I'm aware.
Soon after he took over the Worcester branch, he came up with a plan for a new product. He had cultivated cordial relations with other employers in the city, and knew (this was the 1960s) that labor was short and in heavy demand, and spotted the opportunity to open up for his firm a rich new source of premium revenue. The brass got involved from Head Office (which is probably why, later, he suffered no adverse consequence) and a proposal was put to one of the biggest firms; I think it was the sauce maker, Lea & Perrins, but memory fades and I could be wrong. The idea was to insure their workers against sickness--so that wages were not lost if they had to take time off work. Although more complex than simply raising their wages, it was a more efficient way to reward them because the government taxed wages but not benefits; it distorted the labor market.
Such an employee benefit was commonly available then to salaried employees in middle and upper management, but it was a new idea for hourly-paid workers. It made sense; the insurer got new business, the employee avoided financial distress, and the employer didn't have to spend buckets of money replacing staff who were less than satisfied with the benefits package. So Dad gathered all the statistics about sick-days at his prospect's factory, did the sums, made a proposal, and got the business. Champagne was served.
It was a disaster, because as soon as it cost the employee nothing to take some time off work, the rate of sickness rose like a rocket. The employer lost labor on the job, the insurer lost money, and Dad was put on the carpet.
Understandably, he never talked much about it, but his explanation was that wage-paid people (he didn't call them "lower classes" because that phrase was already falling out of fashion) could not be trusted to do the honorable thing.
Had I known then what I know now, I'd have offered a correction: that their reaction to the stimulus his company had provided was perfectly rational and there was little dishonorable in what they had done. The terms of their contract had just changed, so they took advantage of the new ones. When they felt ill from a minor ailment, formerly they had borne it and gone to work so as not to suffer the extra whammy of lost wages, but now that said whammy was removed, they stayed home. This was simple economics at work, nothing less and nothing more. You offer something for free, people will take it. What else do you expect?
I had an Economics degree at the time, albeit a minor, but such radically simple concepts had not been included in the course, which drew most of its inspiration from John Maynard, Lord Keynes. Ten years later I encountered Friedman, and ten after that I read Rothbard, and so I began to understand. Even so, looking back, it's amazing that at the time we did not anticipate that problem--because almost exactly the same thing had happened 20 years earlier, in Britain, and on a massive scale. Following WWII and the sweeping victory of a Labour government, health services had been made available to everyone, free of charge at the point of delivery; that is, the UK implemented a National Health Service paid for by taxation. The immediate result, which I remember observing as a boy, was that demand for physician services hopelessly outpaced supply; waiting rooms were packed full, "sick days" increased and physicians, paid a small, fixed sum by the government for each patient on his "list," were grossly overworked--so much so that shiploads of them emigrated here in the two decades following, so contributing to a vicious spiral.
Almost exactly the same thing happened here in the US when Johnson introduced Medicaid and Medicare. Formerly, low-income people had been served with health care on the basis of charity, but from then on they were handed a "right" to have it paid for by someone else. Any and all stigma was removed. You offer something for free, people will take it; and they did. The overall cost of US health care started rising sharply in that very decade, and has not looked back since. Like the bumper sticker says, "If you think health care is expensive now, wait until it's free." But notice; it is not dishonorable or unsporting to accept what's offered, it is merely to react to a new stimulus, to take advantage of a new contract. Just like the workers at that Worcester sauce factory. Change the rules of the game, the game will play out differently.
These several examples--along with all other government-operated health-care industries worldwide--make it abundantly clear to any with eyes to see that when the apparent price of a good or service is lowered, demand for it will increase. This is an inexorable, natural law of economics. It should occasion no surprise whatever; yet still, important people like politicians of all parties (Republicans have held power, recall, several times since 1965 yet did nothing to repeal Johnson's "Great Society") appear not to get it. Two possibilities: (a) they get it perfectly well, yet do nothing because their interests are served best by continuing the scam, or (b) they really, truly don't get it; and while that might have been excusable 40 years ago, there is no way to excuse it now. Take your pick: malevolence or stupidity, one or the other.
That malevolence or stupidity is currently poised to rise to a new level with Obamacare, which will force 40 million people to pay for health insurance whether they want it (as some of them no doubt do) or not (as many of them certainly "don't") and move the industry towards a single-payer system such as was thrust upon Brits very rapidly in 1948. It is very, very sad that millions of people evidently approve of his plan, for he and his admirers vigorously denounce the high cost of staying healthy at the very same time as they propose the one thing certain to make it rise much higher. That they can so far get away with it is powerful evidence that whether they are malevolent or stupid, voters suffer from appalling economic ignorance.
Is that their only malady? For I suggested above that to accept a freebie, a change in the terms of a contract, is ethically neutral. So it is, I think, considered in isolation. Someone "up there" changes the rules, we adapt to them; it stops raining, we fold the umbrella. But it's not really quite like that, is it? Perhaps it was so for the saucemakers, for as far as I know, there was no input from the factory floor about the new employee benefit my father facilitated, but in the case of national health care, the beneficiaries are not bystanders. They are players. They cause the change to happen, or not to happen. They are responsible. Before even Johnson brought in taxpayer-funded medical benefits, somebody elected Johnson, in part so he could bring them in. Those somebodies were the very people who would benefit. When they voted for "free" health care, they were pro-actively declaring, by pulling those voting levers, that it was fine and dandy by them to take the needed funds from their neighbors and ultimately to shoot them dead if they refused.
So it's not really ignorance alone; there is, at root, an ethical question at work, and it centers on the gross immorality of casting a vote. Yes, politicians are malevolent or stupid, most likely the former in my view, but everyone who votes for them is complicit, up to his neck, actively taking part in the most humongous act of armed robbery in the history of man. That is not "insurance"--a perfectly sound idea involving the voluntary sharing of the risk of heavy but unpredictable loss--this is theft, neither more nor less. That is the real, moral disease that has infected the core of this society and no amount of medical care is going to cure it.