Would Hayek Support Obama’s Healthcare Plan?


I voted for the President, and I’ll likely do it again.  But while I’ll certainly take the new approach to healthcare over what we had, that doesn’t mean I like it. 

There’s been some talk on the left that maybe even Hayek (the classic Libertarian) would have supported the current plan.  Will Wilkinson, not surprisingly, has something to say about that:

At a cosmetic level, there’s something to this. Hayek was open to the idea of mandating the purchase of health insurance on the grounds that “many who could thus provide for themselves might otherwise become a public charge.” But I think it’s safe to say that Hayek would not have supported the recent health care legislation. Why not?

Well, Obamacare builds upon and consolidates some of the worst features of the American health care system from a Hayekian perspective, such as (a) It is more or less illegal to sell actual insurance, and (b) There is at best a grievously hobbled price mechanism in the health care market, if you can call it market.

If Hayek stood for anything, he stood for the importance of the informational function of freely moving prices for both individual planning and effective social coordination. (a) and (b) screw it up bad.

He continues with a story comparing the current system of human healthcare vs the healthcare available to his dog:

As many of you know, our dog recently broke his leg and had surgery that involved installing a plate and some pins. (He’s doing really well, thanks!) Do you know what I got when we came to pick him up? AN ITEMIZED RECEIPT?! I could see what the pins cost! The tube for the IV bag! Can you believe it? Later that week I had a doctor’s appointment at the university hospital and mentioned the itemized receipt to the resident and his supervising physician. Man, did they laugh. “How much does this appointment cost?” Hoo! Good times, good times.

Call a hospital and ask “How much for a hip replacement?” and they’ll almost certainly ask, “What insurance do you have?” This is not what Hayek had in mind in “The Use of Knowledge in Society.”

Prices, prices, prices, prices.

Without even knowing the prices of what you’re buying, how on God’s green earth can we make smart choices.  No market can thrive without an honest knowledge of the price of its goods and services. 

I can’t say this with certainty, as Hayek is dead, and he can’t defend himself.  But, I think Hayek would be for a minimum of healthcare for those who can’t afford it that covers all major necessary care (and especially preventative care).  But, only in a system of open prices, free markets (It’s still illegal to sell insurance across most state borders), and freedom of choice for the consumer.  That would lower prices for all, and increase quality of care. 

Sadly, the current plan is not that.


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