“There is little doubt that the growth of health insurance is a desirable development. And perhaps there is also a case for making it compulsory since many who could thus provide for themselves might otherwise become a public charge. But there are strong arguments against a single scheme for state insurance; there seems to be an overwhelming case against a free health service for all.” — F. A. Hayek.
Hayek wrote this on page 298 of his magnum opus, The Constitution of Liberty (1960). We could put this another way.
This isn’t about putting government in charge of your health insurance; it’s about putting you in charge of your health insurance. Under the reforms we seek, if you like your doctor, you can keep your doctor. If you like your health care plan, you can keep your health care plan.
These words may sound familiar. They are from President Obama’s 2009 speech calling on Congress to pass ObamaCare.
But if Hayek was willing to surrender the moral case against ObamaCare, what about the welfare state in general? Hayek favored this surrender.
In the Western world some provision for those threatened by the extremes of indigence or starvation due to circumstances beyond their control has long been accepted as a duty of the community. . . . The necessity of some such arrangement in an industrial society is unquestioned — be it only in the interest of those who require protection against acts of desperation on the part of the needy.
These are the opening words of chapter 19, “Social Security.” He spelled out the implications of this position on the next page.
Once it becomes the recognized duty of the public to provide for the extreme means of old age, unemployment, sickness, etc., irrespective of whether the individuals could and ought to have made provision for themselves, and particularly once help is assured to such an extent that it is apt to reduce individual’s efforts, it seems an obvious corollary to compel them to ensure (or otherwise provide) against those common hazards of life. . . .Finally, once the state requires everybody to make provisions of a kind which only some had made before, it seems reasonable enough that the state should also assist in the development of appropriate institutions. Since it is the action of the state which makes necessary the speeding up of developments that would otherwise have proceeded more slowly, the cost of experimenting with and developing new types of institutions may be regarded as no less the responsibility of the public than the cost of research for the dissemination of knowledge in other fields that concern the public interest. . . .
Up to this point the justification for the whole apparatus of “social security” can probably be accepted by the most consistent defenders of liberty. Though many may think it unwise to go so far, it cannot be said that this would be in conflict with the principles we have stated. Such a program as has been described would involve state coercion, but only coercion intended to forestall greater coercion of the individual in the interest of others; and the argument for it rests as much on the desire of individuals to protect themselves against the consequences of the extreme misery of their fellows as on any wish to force individuals to provide more effectively for their own needs.
He wrote: “The necessity of some such arrangement in an industrial society is unquestioned — be it only in the interest of those who require protection against acts of desperation on the part of the needy.” Let me summarize his position: “Voters should surrender to violence-prone blackmailers. This surrender is both moral and institutional. This policy of surrender is consistent with liberty.” Let me identify where this road is headed: to something worse than serfdom.
Sixteen years after the publication of The Road to Serfdom, Hayek pulled the moral rug out from under the fledgling libertarian movement that his earlier book had helped to launch. The Road to Serfdom became a best-seller for the University of Chicago Press. It was summarized in 1945 in Reader’s Digest. This book, along with Hazlitt’s Economics in One Lesson (1946), probably contributed more to an understanding of the dangers of central planning than any other book that was widely read, and has remained widely read, ever since the mid-1940s.
Nevertheless, Hayek’s work has always been a liability in the areas of morality and epistemology. He was never as committed to the free market as his mentor was: Ludwig von Mises. Mises was hard-core in his defense of free market principles. Hayek never was.
(For the rest of my article, click the link.)