As most everyone who reads my work knows by now, I hold that a free-market healthcare system is the only — repeat only — solution to the deadly coronavirus crisis and, in a broader sense, the overall decades-long, ongoing, never-ending healthcare crisis.
One alternative is to continue with the system we have today, one in which the federal and state governments are in charge of addressing the coronavirus pandemic. This is a system called “central planning.” It relies on public officials to plan, in a top-down, command-and-control manner, the response to the coronavirus crisis. That’s what the FDA, the Centers for Disease Control and Prevention, and other federal and state healthcare agencies are all about.
One big problem with central planning is that it relies on the knowledge and expertise of the planners. Why is that a problem? Because there is no way that a group of central planners can possibly have the requisite knowledge and expertise to deal with a crisis as complex and rapidly moving as a pandemic.
Don’t tell that to government planners. They have what the Nobel Prize-winning libertarian economist Friedrich Hayek called a “fatal conceit.” He was referring to the mindset of the planners, a mindset that convinces them that they can successfully address things like a complex, rapidly moving pandemic.
The results are predictable and can be summed up in the words of another Austrian economist, Ludwig von Mises, who called the results of central planning “planned chaos.” When we consider the shortages of essential items, such as testing kits, masks, and ventilators, the massive indifference by federal and state planners to the crisis in its critical early stages, and the haphazard tyrannical responses to the crisis, it is easy to see that Mises’ term “planned chaos” fits the government’s system of central planning perfectly.
The other alternative is a free-market healthcare system. It’s a system in which government plays no role whatsoever.That’s what “free” in “free-market” means — a market that is free from government planning, direction, interference, and control. A total separation of healthcare and state, in the same way our ancestors separated church and state.
A free-market system obviously doesn’t depend on the knowledge and expertise of government central planners. Instead, it draws on the knowledge and expertise of millions of people all over the world, each of which is coordinating his efforts with others. This system inevitably produces fantastic results that no central planners could ever have conceived. Hayek called this phenomenon “the results of human action, not of human design.”
An example of this phenomenon is Dogfish Head Hand Sanitizer. No, I didn’t say Dogfish Head beer. I said hand sanitizer.
Take a look at this video op-ed entitled “Craft-Brewed Hand Sanitizer” from today’s New York Times. It’s only 4 minutes long. Sam Calagione, the founder and brewer of Dogfish Head Craft Brewer, explains how he came to the realization that he could convert the alcohol he uses in brewing beer into hand sanitizer. So, he did it, and now Dogfish Head Hand Sanitizer is making its way into hospitals, much to the gratitude of healthcare providers.
Why did Calagione do that?
That’s one of the fascinating aspects of this story, one that explains various aspects of a free-market system.
Calagione realized that hospitals and healthcare treatment centers were desperately in need of hand sanitizer. As an entrepreneur, he saw an opportunity, and it dawned on him that he could satisfy a need in the marketplace by converting part of his operations to the production of hand sanitizer.
But he didn’t do it for free. He did it to make money. Making money is a central part of a free-market system. After all, as Calagione points out in his video op-ed, he has a payroll to meet and other expenses of running his operation.
So, here you’ve got a fascinating confluence of profit-seeking and the desire to help others.
What is Calagione going to do with the profits he earns on the sale of his hand sanitizer? Two options would have been to plow them back into the firm or distribute them to stockholders in the form of dividens. That’s also part of a free-market system. Dogfish Head is choosing a third option. It is donating the profits from the sale of Dogfish Head Hand Sanitizer to a fund that helps hospitality workers who have been put out of work by the crisis.
It’s not the only example of how a free-market system works. Below Calagione’s video op-ed is the following: “NASCAR engineers are using 3D printers to roll out face shields instead of car parts. Masks and gowns for hospital workers are being made from Major League Baseball uniforms.”
What are the chances that such things would have occurred to the government’s central planners? Nil, which is why they never came up with these ideas. After all, don’t forget: Calagione is in the beer-brewing business, not the healthcare business! As Hayek pointed out, such ideas spring up within the minds of countless individuals in the marketplace and bring about a fantastic outcome that no planner could have possibly have come up with.
What is the approach of central planners? Their approach is to dig up a decades-old law from the Korean War and use it to order private companies to produce what the planners want. Compare the planners’ approach to what happens in a free market.
Unfortunately, many of these entrepreneurs still have to deal with the government’s dinosauric central-planning system. But at least they help to point the way to the only system that can extricate ourselves from this deadly coronavirus phenomenon and from America’s decades-old, perpetual healthcare crisis — a total free-market healthcare system.
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