Liberty, Property and ObamaCare

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Morgan Silmon

“As far as individuals have the opportunity to choose, they are free; if they are forced by violence or threat of violence to surrender to the terms of an exchange, no matter how they feel about it, they lack freedom.” (Ludwig von Mises)  In Ludwig Von Mises’s, Liberty and Property, von Mises explained that he believes that Government truly does not allocate freedom.  He states that the “Government is the negation of liberty”, because he feels the government uses violence or threats to control humanity. Given today’s economic landscape, I question whether or not Ludwig von Mises would adhere to the view that the only viable economic policy for the human race is the policy of unrestricted laissez-fire, of free markets, and the ability to exercise the right of private property.  Would von Mises support health care reform?

In 2010, Congress passed and President Obama signed into law the Patient Protection and Affordable Care Act.  This Act was the most important achievement of the first term of the Obama presidency, and it became known as “Obamacare.”  Obamacare expanded government regulation in the lives of Americans and therefore it displaced individual choice and private enterprise.  In the mid-twentieth century, Ludwig von Mises gave a speech before the Mont Pelerin Society that he titled Liberty and Property.  Although von Mises gave his speech many years before the passage of Obamacare, his arguments are still relevant today to an analysis of Obamacare that focuses on the primacy of individual rights to liberty and property.  In von Mises’s view, these rights often come into conflict the power of government to regulate and control, and when they do, the individual’s rights should win that conflict.  The government is “a necessary institution,” but onlyto the extent that it provides a “means to make the social system of cooperation work smoothly without being disturbed by violent acts on the part of gangsters, whether of domestic or of foreign origin.”  Von Mises believes that everything government does rests on the “negation” of individual liberty.

Obamacare is a large and complex law and includes many rules and regulations that apply to people and businesses relating to health care.  The most important feature of Obamacare is the individual mandate.  The individual mandate is a requirement that all American citizens purchase insurance to cover and pay for health care costs.  In addition to the individual mandate, Obamacare also includes provisions requiring that employers (over a certain size) offer health insurance to their employees (the “employer mandate”), that health insurers must cover people without exclusions for preexisting conditions (“guaranteed issue”), and that health insurers provide at least a minimum policy covering basic health needs including contraception.

Based on von Mises’s analysis, we can be sure that he would find that the individual mandate and the other provisions of Obamacare go far beyond the proper scope of government.  Von Mises agreed with the view of Ferdinand Lassalle, who believed that the proper role of government was to do no more than act as a “night watchman.”  This means that the government, like a real night watchman, should step in to prevent theft, violence, and other kinds of abuses of the rights of individuals.  But government should not do anything else.  In particular, it should not tell people how to live their lives or make choices for them about how to spend their own money.  Government should allow people to make their own decisions.  This is the way in which government can provide the greatest liberty to the people.  As von Mises said, when government is limited, there is “freedom because there is a field in which individuals are free to plan for themselves.”

One important criticism von Mises has of government regulation is his argument that the market best protects the rights of minorities and others who do not want to conform to the majority’s views.  According to von Mises, with private property, “if a man is willing to pay the price, he is free to deviate from the ruling orthodoxy or neo-orthodoxy.”  Von Mises would certainly criticize a number of provisions of Obamacare on this ground.  For example, by specifying a minimum policy of health insurance that all companies must offer, Obamacare would not allow religious minorities, who might differ in what insurance they would like to offer or purchase, to exercise their own freedom of choice.  The restrictions on free choice would be particularly oppressive when it comes to moral choices such as abortion or contraception.  Obamacare requires employers to cover contraception regardless of the religious views of the employer.  This requirement has led a number of Catholic schools and medical facilities to bring suit on the grounds that this requirement of Obamacare infringes their religious freedom.  Under von Mises’s analysis, by contrast, the free market would permit employers to offer whatever insurance plans they wish, and to make sure that the plans they offer are compatible with their religious beliefs.

The ability of individuals to make free choices in a market economy is critically important to von Mises.  Von Mises believes that the market economy actually grants what he calls “sovereignty” to the people as consumers.  What he means is that businesses in a market, no matter how large and important right now, will lose all their power and wealth if their customers decide to shop elsewhere.  This, von Mises says, is the key difference “between a sovereign king or duke who could be dispossessed only by a more powerful conqueror and a ‘chocolate king’ who forfeits his ‘kingdom’ as soon as the customers prefer to patronize another supplier.”  Obamacare would set up government rules that everyone must follow, including the rule that all persons have to buy health insurance.  The “customers” of Obamacare, however, could not change the rules or take away the power from the government as they can from (using von Mises’s example) Hershey’s merely by deciding to spend their money elsewhere.  Instead, to change Obamacare, people would have to undertake the difficult task of passing a new federal law.  In von Mises’s view, therefore, Obamacare actually takes away sovereignty from the people.

Von Mises also made practical arguments in favor of the superiority of the market economy and private property over government regulation.  The system of private property, von Mises argued, has created prosperity because private “is the means to stimulate a nation’s most enterprising men to exert themselves to the best of their abilities in the service of all of the people.”  Von Mises noted, for example, that the capitalist system has created a very efficient system that has led to tremendous economic growth and an increase in well being of all Americans.  “There is no record of an industrial innovation contrived and put into practice by bureaucrats,” von Mises states.  “If one does not want to plunge into stagnation, a free hand must be left to those today unknown men who have the ingenuity to lead mankind forward on the way to more and more satisfactory conditions.”  In von Mises’s view, Obamacare’s many laws and regulations would threaten the free enterprise system, the economic engine that has provided tremendous wealth and growth for Americans and has led to the greatest prosperity of any people ever in the history of the world.

People who supported Obamacare argued that the law was needed to accomplish a good purpose.  Millions of people in this country, including many children, do not have health insurance coverage.  As a result, the health care they can receive is limited in many ways.  They are often forced to visit the emergency room of a hospital every time they get sick.  And they may not get the routine preventive care they need since that kind of care is not generally available at the emergency room of a hospital.  For von Mises, however, a good purpose does not justify more government regulation.  Even if government is doing something otherwise good and unobjectionable, such as running a hospital, von Mises believes the government it is “ultimately supported by the actions of armed constables” who are exacting taxes from the citizens without their consent.  In von Mises’s view, taking taxes away from people to pay for “good things” for others is repression and limits freedom.  In his view, the free market is the best way for society to operate a health insurance system, and the free market is certainly the only system in his view that is compatible with the greatest liberty and property rights he would recognize.

Some people might argue that Obamacare is justified because individuals who cannot get health care are not truly “free” in any sense of the word that matters.  For these people, the rights to property and liberty do not mean much if an individual does not have health care and cannot get necessary treatment, for example, for life-threatening diseases.  Von Mises would reject these kinds of arguments.  Health care cannot be given to needy people by the government without taking taxes from others.  A supposed right to something like health care is not true freedom, he argues, because it depends on taking someone else’s property away without their consent.  It is the same, he argues, as if men without toothbrushes argued that their “freedom” was being restricted “because I object to their using my toothbrush.”  This is nothing more than an attack on the whole institution of private property, von Mises believes, and the supposed “freedom” to take property away from others is not true freedom.

In the end, von Mises’s arguments depend on the view that the “distinctive principle of Western social philosophy is individualism. It aims at the creation of a sphere in which the individual is free to think, to choose, and to act without being restrained by the interference of the social apparatus of coercion and oppression, the State.”  In von Mises’s view, Obamacare would be contrary to the spirit of individualism, and it therefore would be an unjustified extension of government power and an infringement of personal liberty.  For von Mises, all the “spiritual and material achievements of Western civilization were the result of the operation of this idea of liberty,” and he would insist on preserving that view of liberty.

“ObamaCare Summary: A Summary of Obama’s Health Care Reform.” ObamaCare Summary : Obama Health Care Summary. N.p., n.d. Web. 11 Dec. 2012.

“Overview of Health Reform.” The White House. N.p., n.d. Web. 11 Dec. 2012.

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