Obamacare And The Third World Mindset

Do you ever wonder why rich countries get rich, and at least sometimes continue getting richer, while poor countries seem to remain mired in poverty?  Actually it's not all that complicated.  Essentially all wealth and economic betterment comes about by the exchange of privately-owned property via markets.  Think about how to make any life-enhancing product and you quickly realize that no one is smart enough to come up with this thing on his own within the short span of a human lifetime.  Even Apple contributes relatively little to the smartphone -- it buys from others everything from the chips to much of the programming to the metal case to the special glass to the apps.  Starting from scratch, you couldn't make something as simple as a pencil, and neither could a pencil manufacturer.  The generation of wealth is completely dependent on the ability to buy lots of things from others, and on the freedom of individuals to seek to act in their own economic self-interest by buying and selling things in markets.

Since markets tend to arise spontaneously in human affairs, it actually takes some work to maintain your status as an impoverished third world country.  But, to take just one example, Venezuela literally every day teaches new lessons on how a country can impoverish its people by making freedom of market exchange illegal.  Today's Wall Street Journal has a roundup of the latest actions of new strongman Nicolas Maduro.  Maduro has just been granted by his legislature the right to rule by decree for 12 months.  Maduro has said that he needs these new powers to counter what he calls an "economic war" against Venezuela.  The so-called "economic war" consists of people seeking to enhance their well-being by buying and selling things in markets.  Maduro is completely oblivious to the fact that this is where all wealth comes from.

Thus at the top of Maduro's list is the plan to go after everyone who publishes the black market price of the tightly-controlled Venezuelan currency:

Venezuela's telecommunications regulatory agency, Conatel, said on Tuesday that it sent a letter to the San Francisco headquarters of Twitter requesting that the social-media company take down accounts that publish the currency's black-market rate. Twitter didn't respond to a request to comment.  On orders from the president, Conatel previously blocked some 50 websites that distribute the underground exchange rate and opened administrative proceeding against several Internet service providers.

Then there are the periodic army-enforced orders that stores must cut prices by half:

This month, Mr. Maduro ordered home appliance stores to slash prices by half and sent soldiers to take over the operations of one retailer. He has vowed to next tackle businesses that sell textiles, toys, shoes, cars, food and hardware stores. Crowds of bargain hunters and long lines of shoppers formed last week in anticipation of further government-imposed discounts.

Multiple other examples are discussed in the article.  These measures are supposedly designed to address the "shortages of basic goods" that have been appearing throughout the Venezuelan economy.  Well, the betting here is that the shortages are about to get a lot worse.  In the process, I'm also betting that the Venezuelan people will become much poorer, while Maduro will become extremely wealthy.  Probably, he will become the richest man in Venezuela.

The United States, of course, would never be so stupid as to try to undo basic human behavior, restrict the free buying and selling of stuff and make it illegal for people to behave in their own economic self-interest and for companies to sell them what they want to buy.  Well, actually that is the very essence of Obamacare.  Left to their own devices, people act in their own economic self-interest by buying the cheapest health insurance that can meet their expected needs, or, in some cases, no medical insurance.  Those beyond child-bearing age skip maternity coverage; men skip birth-control coverage; teetotalers skip substance-abuse coverage; the childless skip pediatric dental coverage; almost everybody skips "preventive and wellness" coverage.  And insurance companies know that they must price policies for healthy young people cheaply or otherwise they won't sell any policies.

The architects of Obamacare can't see it in themselves, but they have exactly the third world mindset.  Don't let people behave in their own economic self-interest by buying and selling freely, but instead order them to behave in a way to achieve a result that the masters deem "fair"!  This of course has never worked and won't work, but it did take the Soviet Union 70 years to fall apart.

Looking for someone who articulates the third world mindset without realizing it, I find today in the Washington Post PostPartisan feature an article by Jonathan Capehart titled "The GOP is out to destroy the country."  Turns out that by "destroying the country" Capehart means any and all opposition to massive government programs that restrict economic freedom.   Among the issues facing the country that Capehart lists as needing prompt solution are (of course) healthcare, as well as climate change, income inequality, and "stimulating job growth."  And where are those evil Republicans on these issues?

[T]he GOP is grinding just about every sector of the federal government to a halt. And it is doing it through a cynical combination of obstruction, saying no and failing to have viable alternative proposals worthy of national debate.

In other words, in Capehart world the only acceptable "solution" to any of the above problems, or others, must come via a big program from the federal government.  How about as a solution to all the so-called problems: get the government out of it and let the people improve their economic positions by market exchange?  According to Capehart, that's not "worthy of national debate."  He has no idea that enabling market exchange is what creates wealth, or that cutting off market exchange prevents further wealth creation and puts the economy (or here, its healthcare sector) into stasis.

As particularly relevant to Obamacare, the good news is that the scheme's own self-destruction may be teaching people a lesson that could never have been learned in any amount of classroom time: that ordering people to behave against their own economic self-interest will not work.  That means that there are limits to what the government can or should do.  If there is any subject "worthy of national debate" in my view, that's the big one.