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Saturday, May 8, 2010

Just because companies are profiting from it doesn’t make it a ‘free-market’ policy

[Originally posted at Beltway Confidential]

The Economist has a condescending, ungrounded piece today that has this interesting claim:

For example: the new health-care-reform law passed in March is an entirely private-insurer, free-market-based reform.

Michael Cannon at Cato has a very good takedown of this whole blogpost on how close-minded conservatives are, but I wanted to expand on the use of the phrase “free-market” in a description of a bill that, as Cannon writes, expands Medicaid, creates new insurance subsidies, the price controls, and places new mandates on individuals and employers.

We see Lefties roll this canard elsewhere when they want to paint as extreme the opposition to a big-government program.

Lee Fang, a liberal blogger at the Center for American Progress wrote recently:

The right has attacked Crist for voicing support for cap and trade, a free market idea to address global warming.


Q. What’s in common between (1) government mandates and subsidies for private insurance, and (2) government requirements that businesses use tradable carbon credits before burning their own fuel?

A. Some private business is making money.

So, for some lefties, that appears to be the definition of “free-market.” Of course, they are ignoring the “free” half of the phrase. Yes, cap-and-trade would create a market, and yes, newly mandatory, heavily subsidized, heavily regulated insurers will compete under ObamaCare — that’s a market, just not a free one.

Similarly, Lefties sometimes use “free-market” as a label on anything that both (a) involves profit, and (b) is bad. See Thomas Frank’s work for a gazillion examples.

To be fair, this confusion — that private profit is the same as free markets — is shared by many on the Right, who defend corporate welfare, thinking (or claiming) that it’s part of the free market.

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