Why the Right Believes in God and the Left Doesn’t

The ultimate leftward Soviet Union and communist China were atheist societies in which religion of any type was formally outlawed. The ideologically opposite United States is a society in which religion has relatively flourished. The Founders were religious men that made reference to the existence of a deity (“In God We Trust”). In their attempt to stamp out religion, the communist countries, did not advocate trust in God, but implicitly advocated worship of the state. Although the Founders were personally religious and acknowledged the presence of God, they wisely disallowed the establishment of a state religion and formalized this in the United States Constitution. Paradoxically, this did not lead to a withering of religion, but rather it blossomed.
Although not always true, as a broad statement, those on the modern liberal left, typically are not religious. They see active religious practice as quaint and unsophisticated. The sophisticates of the liberal elite “know” that God is a fabrication of the simple man. The left sees religion as dangerous. They have actively advocated the deletion of any government reference to God, no matter how inconsequential. They neglect to recognize that the presence of a tiny cross on a county seal or the word “God” in the Pledge of Allegiance does not equate with the establishment of a state religion which is what the U.S. Constitution intended to protect against. Such symbols have been present since the Founding and the Republic has not suffered. On the other hand, conservatives are much more likely to be active church-goers that take solace in their religion. Why does this dichotomy exist? Is it merely a strange coincidence or is there a causal connection? The answer to these questions requires a digression to basic principles.
Few people anywhere along the political spectrum. would argue with the innate right of everyone to “Life, Liberty and the Pursuit of Happiness”. Implied is the ownership of our lives by ourselves and not by anyone else. Restated, the Founders recognized that people had rights. Autonomous beings are not subjugated by the “Divine right of Kings” nor “the tyranny of the majority”. The American Revolution was a justified backlash against the divine right of kings and the Bill of Rights was a codification of freedoms that the majority cannot usurp. To quote Ayn Rand, “rights are a moral sanction of freedom of action in a social situation”. The solitary man on a desert island has no “right” to food. To survive, he must take action to seek and procure it. Rights have meaning only in the context of two or more people. In a society of two people on a desert island, the right of either one to seek food cannot be legitimately intruded upon by the other.
Since government is a necessity to maintain order, a just government is limited in scope. It exists to insure that the rights of its citizen’s are respected. It must capture and detain criminals. It must keep foreign invaders in abeyance. It must enforce contracts so that no citizen can defraud another. The purpose of such legitimate government endeavors is to ensure rights. Rights being, “freedom of action”. Period.
In our desert island analogy with two people, neither has the right to food, but only the right to seek it. Sadly, since the New Deal, the concept of rights has morphed into “goods and services”. The New Deal concept of rights sees food itself as the right (not the freedom to seek it) while neglecting that someone must produce it. The government that becomes the provider of goods and services becomes the violator of the rights of some to provide for others. The government now has a conflict of interest functioning to both ensure rights and violate them.
Rights are about freedom of action, but not necessarily a guarantee of outcomes. Governments that profess to be providers neglect the fact of reality that they do not produce something from nothing. They may redistribute through confiscatory taxation and inflationary monetary policy but they literally do not create any wealth. They may corral resources into public works but don’t forgot that meanwhile they destroy other possibilities for that wealth. Thomas Jefferson wisely pointed out that “The government that can provide you with everything you want, can take away everything that you have”. We should heed his warning.
Modern governments now attempt to be all things to all people and ensure that they have food to eat, medical care and “social security”. The paradox is that as governments push harder to ensure these things, they are less likely to be secured. The most socialist governments oversee the most impoverished states. The United States, originally based on rights, became fertile ground for capitalism. Property rights are a basic liberty right. With ownership of one’s life, it logically follows that people own the fruits of their own labor and those things that others have voluntarily given them. With secure property rights, people are empowered to trade which is the basis of capitalism. Capitalism creates. Socialism can only redistribute.
The view that the legitimate function of government is to ensure rights, implies an acceptance that the overarching rule of government is not necessary to ensure that civilization will “work”. With limited government, there is a justified faith that people will be fed, goods and services will be produced and living standards will rise. Without the central control of government, the hand of God will direct events so that they ultimately work out.
I was recently on a Caribbean cruise with my family. I was astonished with the high degree of order needed to create this event. The dining room alone employed staff from over 30 countries. To optimally serve his/her own self-interest and raise his personal level of wealth each of these people had sought employment with the ship. With the commonality of their own interests, each and every person in the ship from the custodian to the CEO of the cruise line, are motivated to voluntarily co-operate in a manner that no government could ever compel. The workers from 30 countries in the dining room had a higher level of co-operation than the United Nations ever will. The organization and co-operation extended far beyond the dining room. The materials for the ship had to be procured, the ship built, accommodations booked and arranged, shore excursions and entertainment arranged. A colossal web of voluntary human actions transpired to result in a successful cruise. Entirely motivated by the interests of a vast web of individuals, order arises from Chaos. This order is a tangible example of the hand of God.
Such order from Chaos is not merely the state of cruise ships but the entire world. China and India are now raising themselves from poverty, not by increasing the imposition of controls by government, but by relinquishing them and allowing greater individual human freedom. Order from Chaos occurs not only in the human realm but also the realm of nature (which is not to imply that a cruise ship is not a part of nature. It is because man is a part of nature.). From the primordial soup of chemicals 5 billion years ago, the random movement of molecules have organized themselves into organic molecules which have organized into cells, which have organized into multi-celled organisms. Multi-celled organisms have evolved into millions of species of plants and animals which have organized into highly complex ecosystems.
Everywhere one looks you can see the hand of God producing order from disorder. A beehive and a cruise ship are examples of spontaneous order directed by the hand of God. The left denies the evidence before their eyes and implicitly asserts that Man is the endpoint of all things and that Man is the master of his own destiny. Nothing could be further from the truth. The liberal left desires that we deny the presence of forces at work that are greater than ourselves. The left wants us to believe that Man alone creates reality and there is nothing beyond us that guides our fate. Religion denies Man as the endpoint and therefore the left sees religion as dangerous to its agenda. By denying the existence of God, they want us to believe that Man has all of the answers and that the power seekers of the liberal left are just the ones that will provide those answers. The more Man ascribes to this notion, the more he invites disaster as the Communists well exemplified. The truth is that we are not able to engineer society into an image of what those in power believe to be the correct way. All governments can legitimately do is allow people to make choices and society will run itself. The sophisticates of the liberal left do not grasp this but the “hicks” of the conservative right inherently do.

Testimony by Dr. Kurisko - Minnesota House of Representatives

The following testimony was delivered on March 10, 2006 to the Minnesota House of Representatives Committee on Health Care Policy and Finance in response to proposed bill H.F. No. 3106 imposing single-party payer universal health insurance in Minnesota commencing 2010.

I am Dr. Lee Kurisko, a radiologist with Consulting Radiologists Ltd. based in Minneapolis. I am a Canadian physician having lived and worked in Canada until four years ago. I have 14 years of experience working in Canada’s system of universal health care. I was Medical Director of Diagnostic Imaging for Thunder Bay Regional Hospital in Thunder Bay Canada before I left. As a medical student, I recall defending Canadian universal health care as morally superior to U.S. health care. As I came to assume higher and higher levels of responsibility in within the health care system, I saw the impossibility of delivering care under such a system and became fully cognizant of its limitations
When I was working in Canada, I had a waiting list 13 months long for MRI and 7 months long for CT. I had the nightmarish task of triaging hundreds of patients awaiting these tests. There were patients that I had triaged too far out in the waiting list that had unknown rampant infections or tumors that could have benefited from earlier treatment. But if I new what their tests would show, they would not have needed the test. Much of our x-ray equipment was old and decrepit. Our angiography equipment was so old that it had a habit of breaking down; sometimes in the middle of the delicate medical procedure of cerebral angiography during which I would thread a catheter from a person’s femoral artery in their groin up into the blood vessels to their brain. I knew orthopedic surgeons and a gastroenterologist with two-year waiting lists. The waiting list for an MRI in Newfoundland is presently two and a half years long.
What is being proposed today is a major intrusion into the health care economy and therefore is subject to the same basic economic and political factors that cause poor health care in Canada.
There are three practical reasons why Canadian universal health care is a failure. Firstly, neither physicians nor patients have any accountability for costs. If a commodity has no direct cost attached to it, the demand becomes infinite. Hence the bankruptcy of the Canadian system. With the third-party payer system here in the U.S., the situation is similar. Physicians and patients alike are not accountable for costs hence true costs are exorbitant.
Secondly, rather than being an economy-stimulating, employment-generating, resource-creating business, health care is a government run monopoly which parasitizes the Canadian economy and whose primary purpose is to save money while maintaining the façade of providing care.
In Canada, with health care being delivered from governmentally derived budgets rather than from profit, a Zero Sum Game is created in which doctors and patients alike must clamor for their fair share from a limited resource pool. As government in the U.S. foots the bill for more and more of health care, the same dynamic unfolds. In Canada, such a strategy does not actually control costs. As of about two years ago, 46 cents of every provincial tax dollar in Ontario was being spent on health care with massive federal assistance on top of that. That is money that is not available for other services like infrastructure and education.
Thirdly, health care is a major segment of the economy which government attempts to centrally plan just as the Soviet economy was centrally planned with disastrous consequences. As a payer for health care, government, whether American or Canadian, has an enormous incentive to direct and control how dollars are spent. Imagine if the government declared itself the sole provider of bread. The government alone would determine how much wheat would be grown, how many bakeries there would be, how many loaves of bread could be baked, where and when the bread could be sold. The number of loaves of bread baked would be far below public demand. People would be squabbling over those few loaves of bread. Chaos would reign. Such is the state of Canadian health care just as it was for food production was in the Soviet Union. If both the Soviet Union and Canada have failed with socialism, there is no reason to believe that the United States or Minnesota, for that matter, will be successful.
Americans, just like Canadians, incorrectly believe that the shortcomings of American health care are due to the market nature of U.S. health care. The truth is very different.
When was the last time that you went to the mall and purchased some clothing, books, jewelry, saw a movie, had lunch and then went home with only paying a minimal co-pay? The different vendors would simply submit a bill to your home insurance company. The goods would seem cheap but your home insurance costs would be astronomical! With no accountability for costs on the consumer’s part, each store would bill the insurance company as much as possible. Suppose the insurance company could arbitrarily decide to not pay for some of the purchases. The stores would try to bill as much as possible. The insurance company would try to pay as little as possible. The established prices would have nothing to do with what the consumer would have been prepared to pay. Such a situation would be a gross distortion of free market capitalism.
The described scenario is preposterous but it is the equivalent of modern U.S. health care. Who is to blame for this bizarre scenario? It was an act of Congress, not the free market that started medical services being billed to third parties rather than directly to the patient. It was also an act of government, not the free market, that established the norm of insurance being tied to the employer. With wage and price controls established during World War 11, employers had to compete for employees by providing insurance. With health insurance tied to employment, choices are limited and problems arise when a person loses their job. There is no equivalent peril with individually purchased life or disability insurance.
In free markets, prices are set at the meeting point between the most that the consumer is willing to pay and the least that the vendor is willing to receive in return for the product. The consumer is free to go elsewhere to seek a lower price and the vendor is pressured to reduce prices to attract business. This pressure tends to reduce the profit margin per item sold. To maintain a viable business, the vendor must sell as much product as possible to as many people as possible. The vendor must continuously strive to make a better product at a low price. If unsuccessful, they will go out of business and someone will step up to the plate and do it better. The business world is in a continuous state of reordering while getting better and better at delivering what people want at lower prices. According to Michael Rothschild, author of Bionomics; Economy as Ecosystem, virtually every consumer product ever studied has dropped in price when measured in non-inflationary dollars if free markets are allowed to work. Because the U.S. health care market is not a free market, double-digit inflation is the norm putting it further out of the range for the have-nots of society.
The key ingredient in an efficient market is the consumer-vendor interaction. The consumer must be able to decide if he is getting sufficient value for his dollar and the vendor must be pushed to provide that value. In American and Canadian health care, this interaction is negated. With a third party payer system, the patient does not function as a consumer. The inflated prices seen in U.S. health care are not an example of “market failure” but the result of failing to make health care a market. With a minimum of 43 percent of all health care costs borne by government, the potential market for health care is further undermined creating a greater disconnect between patients functioning as consumers. The proposed bill under discussion today would increase that figure further thereby worsening the problem.
I admire the moral imperative of what you are attempting to achieve with this proposed legislation. I, like you, desire to see as many people as possible have access to affordable quality health care but disagree with the method that you propose. I believe that government should work to extricate itself from the delivery of health care and allow market processes to flourish so that costs may drop and more people can access care. Although administered by the individual provinces, health care in Canada is a form of national socialism. With the control by multiple third parties, health care in the United States is a form of corporate socialism. Moving towards one or the other will not produce something new or different. We need to think outside of the box, and rather than empowering government or third parties, we need to empower individuals through free markets. With health savings accounts, appropriate tax credits and tax deductions people should be empowered to cover their own health care needs. Perhaps the state should experiment with using some of the funds now spent on the needy and directing these into HSA’s for the poor. Obstacles to delivering private charitable care should be lifted. Furthermore, there should be more flexibility to purchase insurance independent of the employer so that individuals and their families own health insurance as they presently can own universal life and whole life life insurance. Perhaps whole life health insurance could be purchased with the costs amortized over decades just as a mortgage is. If markets were allowed to work a plethora of new ideas may unfold that force prices down and availability up. When Frederick Hayek wrote of the power and importance of markets in the 1940’s, he stated that no one can know what the collective actions of millions of people interacting in a market can produce. True to his prophecy, he could not have foreseen the marvels of the computer age and the writing of this testimony on a computer. Likewise, if we empower markets rather than empower government, we have no idea what great things we could achieve in health care.
Thank you.

The Dark Side of A Smoking Ban

As a physician, I am poignantly aware of the ravages of smoking. I have seen more cases of vascular disease and cancer as a result of smoking than I could ever count. Smoking is a filthy and unhealthy habit.
Although smoking is reprehensible, there is one thing worthy of even greater contempt. That is government that rejects the notion of private property rights and the freedom for us to choose for ourselves how we live our lives.
The American Revolution was the high water mark in the world’s recognition of rights in the original sense of the word. Rights were originally a principle defining and sanctioning human action in a social context. The solitary man on a desert island has no rights. Rights are only relevant when living in society in the company of others. Rights define the freedom to act so long as one’s actions do not encroach upon the rights of others to do the same. For there to be an advantage to living in society as opposed to a solitary existence, humans must have rights.

John Locke helped inspire the American Revolution with his notion of individual sovereignty and the right to “Life, liberty and the pursuit of private property”. As sovereign beings, we owned our own lives. As owners of our own lives, we owned the fruits of our own labor and therefore were free to trade these fruits with others as we saw fit. Restated, we had properties rights to that which we created ourselves or that which others had voluntarily given us as a gift or through voluntary trade. The notion of property rights flows logically from the concept of self-ownership.

Rights originally merely meant liberty rights. They simply defined freedom of action. During the twentieth century the concept of rights has morphed into the concept of welfare rights. Rather than defining freedom of action, rights now define “goods and services”. Such a distorted vision of rights evades the fact that such goods and services can only appear as a result of the coerced provision of these by others. The providers have their liberty rights annihilated by those that they are forced to provide for.

Freedom, as originally conceived, was limited to the field of politics. The term meant freedom from the coercion of others. It certainly was not a claim to the property of others. The claim that “A hungry man is not free” is absurd. It confuses the political concept of freedom with the biological fact that we all have needs for food and shelter. With freedom comes responsibility for our own lives. Freedom is not a claim on others to be responsible for us. Freedom is certainly not a valid claim on others to provide us with smoke-free restaurants especially when we are free to not go there.

Freedom is the ability to make our own choices. There is no guarantee that we will make choices that ensure a successful path in life. Nor is there a guarantee that we will make choices of which others will approve. There also is no certainty that our choices may not have consequences just as the choice to smoke carries dire potential consequences.

America has strayed far from its original vision of rights defining freedom of action. We now demand universal health care, prescription drug benefits and smoke-free air in restaurants for which we have no responsibility for the mortgage.
As a newcomer to "the land of the free and the home of the brave," I am astonished that government feels that it is within their ken to use its coercive force to decide how restaurateurs utilize their own private property. As owners of private property, it is for them to decide whether or not they allow smoking, not Hennepin County. It is also for the public to endorse or refute a restauranteur's policy choice by voting with their patronage. Similarly, in a free market, workers can either negotiate their terms of employment or else offer their services elsewhere.
As thinking beings, humans have values. Values are entities that we seek to maintain or gain more of. Love, money, happiness or even the pleasure of smoking are values that an individual may hold. As sovereign individuals, we all have a hierarchy of values whether we explicitly realize it or not. As a physician, smoking is certainly not within my hierarchy of values. But not only am I a physician, I am a sovereign member of society that wants my sovereignty respected. Therefore I must respect the sovereignty of others and their right to formulate their own hierarchy of values. I may not like the choice of others to smoke or to not offer smoke-free restaurants, but it is not proper for sovereign individuals in a rights-based society to coerce one another. Such would be antithetical to the concept of political freedom. It is only proper to try and convince and persuade others of our viewpoint; not to ram it down their throat with the coercive force of government.
Those that feel it is moral to skip persuasion in favor of force may someday regret this choice when the values of others are forcefully imposed on them. The evasion of this logic is the reason why the United States of America is slowly but incrementally degenerating from a bastion of freedom to a statist hell. The fact that the U.S. has a democratically elected representative government does not necessarily prevent this decay. America was envisioned by the founders as a rights-based republic designed to protect individual rights from the tyranny of the majority or big government. Democracy is a requirement for such a republic but does not prevent its downfall if individual rights are not enshrined.
Invariably, there are those that claim it is legitimate to compel the behavior of others because society as a whole bears the cost of health care. Because taxpayers are compelled to pay for welfare state programs like Medicare and Medicaid, further compulsion is “justified” to strip people of their own choices. Compulsion begets further compulsion. Such is the downward spiral of socialism. People accept such compulsion because they have been sold a bill of goods that it is good for society. I have seen it all before. In my native land of Canada, private property rights are extremely limited in the sphere of health care and people docilely accept one and two year waits for basic health care because they have been indoctrinated that their universal health care system is good for society. But after all, even the Soviet purges were supposedly for the greater good of society.
Although it is not proper for government to legislate against smoking on private property such as restaurants, it is completely just to do so for truly public places. Such places would be municipal buildings and courthouses because these places are truly public in that they are owned by all and therefore the will of the majority should be manifest above the wishes of a minority.
As a patron of local restaurants, I would never return to one that does not provide me with a non-smoking section and would actually be more likely to go to a restaurant that is entirely smoke-free. The management of such a facility will be obligated to voluntarily comply with the wishes of a free market or suffer the consequences of going out of business. Adam Smith's "invisible hand of the market" is already fulfilling this in that restaurants without a non-smoking section are very rare. Market forces are also at work increasing the number of completely smoke-free facilities.
Whether businesses are affected positively or negatively by a non-smoking ordinance is actually irrelevant to the issue. The real issue is whether or not Hennepin county truly believes in the concept of liberty and the right for us to make our own choices and to live by the consequences of our own choices. If liberty is to remain a value of American society, liberty cannot be violated when it is seems convenient or expeditious to do so.
I came to the U.S. with my family to leave behind intrusive government and the resultant ramifications of such a social structure. If government decides upon the usage of private property, is it really private property? The concept of private property is a cornerstone of the American Revolution. The essence of why I moved to the U.S. is embodied by the values of the American Revolution. Imagine my disappointment in Hennepin County.

This article was originally published in Metro Doctors - The Journal of the Hennepin and Ramsey Medical Societies.
Unfortunately, the proposed ban on smoking in restaurants in Hennepin County, Minnesota was passed.

U.S. Health Care - Market Failure or Failure to be a Market?

When was the last time that you went to the mall and purchased some clothing, books, jewelry, saw a movie, had lunch and then went home with only paying a minimal co-pay? The different vendors would simply submit a bill to your home insurance company. The goods would seem cheap but your home insurance costs would be astronomical! With no accountability for costs on the consumer’s part, each store would bill the insurance company as much as possible. Suppose the insurance company could arbitrarily decide to not pay for some of the purchases. The stores would try to bill as much as possible. The insurance company would try to pay as little as possible. The established prices would have nothing to do with what the consumer would have been prepared to pay.
Worse yet, people with modest consumption habits would be charged the same for insurance as those that go on daily shopping sprees. Suppose laws were written that disallow discriminating against the shopaholics by either raising their premiums or refusing to sell them insurance. Costs generated by shopaholics would have to be borne by everyone. Premiums would be driven up for all. As premiums rose, those with lower incomes would have to opt out of purchasing insurance and yet when they did need something from the mall, they would be charged the inflated prices generated by this wacky insurance scheme. Such a situation would be a gross distortion of free market capitalism.
The described scenario is preposterous but it is the equivalent of modern U.S. health care. Who is to blame for this bizarre scenario? It was an act of Congress, not the free market that started medical services being billed to the third party rather than directly to the patient.
In free markets, prices are set at the meeting point between the most that the consumer is willing to pay and the least that the vendor is willing to receive in return for the product. The consumer is free to go elsewhere to seek a lower price and the vendor is pressured to reduce prices to attract business. This pressure tends to reduce the profit margin per item sold. To maintain a viable business, the vendor must sell as much product as possible to as many people as possible. The vendor must continuously strive to make a better product at a low price. If unsuccessful, they will go out of business and someone will step up to the plate and do it better. The business world is in a continuous state of reordering while getting better and better at delivering what people want at lower prices. As a result, since the industrial revolution, living standards have been rising. According to Michael Rothschild, author of Bionomics; Economy as Ecosystem, virtually every consumer product ever studied has dropped in price when measured in non-inflationary dollars if free markets are allowed to work. Because the U.S. health care market is not a free market, double-digit inflation in annual insurance costs is common.
The key ingredient in an efficient market is the consumer-vendor interaction. The consumer must be able to decide if he is getting sufficient value for his dollar and the vendor must be pushed to provide that value. In American health care, this interaction is negated. With a third party payer system, the patient does not function as a consumer. The inflated prices seen in U.S. health care are not an example of “market failure” but the result of failing to make health care a market. With a minimum of 43 percent of all health care costs borne by government, the potential market for health care is further undermined.
Arguably, Americans don’t get much for their tax-derived public dollars. Prior to the advent of Medicare, the elderly were paying 20 percent of their income on health care expenditures. They now pay 19 percent. This huge entitlement program hardly saves the elderly any money. This is especially true when you consider that they had to pay taxes into Medicare throughout their productive years. They would be better off to have not paid for Medicare, skipped the entitlement and pay for their own health care instead. This does not even weigh into account the benefit of a less-taxed society producing a more vibrant economy that would elevate everyone’s standard of living thereby increasing the affordability of health care.
Capitalism is not about haves and have-nots. It is really about “haves and have-laters”. Markets have produced automobiles, televisions, microwave ovens and stereo systems that used to only be for the wealthy. Now most of us enjoy these things at reasonable cost. If given the opportunity, the same dynamic could unfold in health care. Why did it only cost 550 dollars for my human sized dog to have a hysterectomy and a bilateral salpingo-oophorectomy whereas the same operation would cost tens of thousands of dollars for a human female? The reason is that veterinarians work in a free market and physicians don’t.
The elderly have grown accustomed to the entitlement of Medicare. Despite being the wealthiest cohort of retirees of all time, they have demanded a prescription drug benefit to “control the costs”. A rudimentary understanding of economics will prove that such an entitlement will not control costs, but actually escalate them. As pointed out previously, price is the meeting point between what the purchaser is willing to pay and what the provider is willing to receive. If Medicare kicks in a subsidy for a drug, the amount the consumer is willing to pay for the commodity remains the same. If he was originally willing to part with 50 dollars to obtain a prescription, the outside contribution by a third party will not change this threshold. The amount that the vendor wants is obviously as much as possible and therefore if a third party is footing part of the bill, the price will tend to rise. After all, the consumer is still willing to part with 50 dollars to get the product. The prescription drug benefit will elevate the true costs of drugs.
Drug costs are also escalated by federal involvement in the drug approval process. The Food and Drug Administration has a monopoly on certifying the safety of prescription medications. The current process is so inefficient and costly that it costs drug manufacturers about 800 million dollars to bring a single drug to market. Such a cumbersome and costly process is only feasible for the largest companies. Smaller players are effectively excluded from competing. Limited competition leads to higher prices and fewer choices for consumers.
Being a government monopoly, the FDA has no meaningful accountability for performing its function cheaply and in a timely manner. Competing independent consumer organizations would. The independent consumer organization that can certify the safety and efficacy of a new medication expeditiously while keeping costs down will attract business and push other organizations to do the same.
Independent consumer organizations are already at work in other fields. Underwriters laboratory certifies electrical equipment. If UL began giving its stamp of approval to items that electrocuted people, they would immediately lose credibility and some other organization would step up to the plate and do it better. Likewise any independent drug approval agency that gave its stamp of approval to an unsafe drug would quickly suffer from public censure. With the FDA being a government monopoly, it will suffer no consequences for having approved drugs such as Vioxx that are now generally recognized as unsafe.
Consumer’s Union does a great job reviewing and rating sundry consumer items. My certification as a radiologist is through a private non-governmental organization, the American Board of Radiology. Independent certification organizations work and they could work for the pharmaceutical industry also.

To keep costs low, in the insurance industry, individual risk needs to be stratified. Life insurance mandates an assessment of one’s risk of dying. Auto insurance mandates an assessment of the likelihood of a motor vehicle accident. With health insurance purchased in large blocks by employers the 20 year-old fitness fanatic is effectively paying the same as the 60 year-old obese smoker. If the young person loses his job, he may opt to skip insurance rather than pay inflated prices. By denying basic actuarial facts, the number of uninsured increases. With government-enforced laws that increase the number of uninsured, the knee jerk response of the masses is to further increase government involvement with nationalized health insurance.
The norm of insurance being obtained from the employer is not a free market manifestation. The precedent was sent during World War 2 with government imposed wage and price controls. In order to compete for employees, employers began to offer health insurance. Health insurance is purchased in large blocks rather than by individuals thereby limiting the competition to keep prices down and the flexibility to tailor the product to the individual.
Under the current system of American health care, the patient-consumer has no meaningful accountability for the costs incurred. A trip to the emergency department for a simple headache may prompt both a CAT scan and an MRI scan. The charges for both tests will be vastly inflated by the third party payer system. The tests may be performed when a simple history and physical exam may have sufficed. Compounding the problems further is an army of predatory attorneys ready to pounce at even the hint of a medical mistake. Physicians feel obligated to leave no stone unturned in the assessment of patients. Every possible test and intervention is undertaken even when reasonable medical judgment would dictate that they are not necessary. Hence, the sky is the limit and all physicians live on eggshells waiting for their next lawsuit. Even the perception of a medical mistake must be avoided and therefore all stops are pulled on the assessment of even the simplest of health problems. The parasitism of attorneys is sapping the life out of the medical profession. With every physician seeing each patient as a potential litigant, a natural consumer-provider relationship is further warped.
The landscape of American health care is gross distortion of a free market. Rather than having doctor-patient relationships we have doctor-patient-government-third-party-payer-attorney-doctor relationships that have mangled that which an effective market could and should be.


This article was first published in March/April 2006 issue of Metro Doctors - The Journal of the Hennepin and Ramsey Medical Societies.

Why Multicultarism is a Crock

A culture is the common history, thoughts, values and behavior patterns that are mutually shared by a group of people. It is often argued that cultures need to be preserved. Countries like Canada formally embrace a policy of multiculturalism whereby the government actively intervenes to preserve the behavior patterns of various subgroups within the wider Canadian population. Should government bother to do so? Is it just a romantic feel-good policy to maintain culture and is there potential harm from trying to do this?
A common knowledge base and a common way of doing things often makes sense and simplifies the need to reinvent and re-establish norms. A Laplander struggling to eke out a living in the far north of Scandinavia makes his life easier by learning from his fellows the best way that has thus far been establish to skin a reindeer. Figuring out for himself de novo would be wasteful effort that may impede his survival. A common language is a necessity. Local dialects and expressions convey meanings that do not have to be re-explained repeatedly. Such common behaviors simplify life. People will spontaneously engage in those activities that make life easier. No outside intervention is required to make people do so. If a Laplander can make a living by working on an oil rig or designing software, reindeer skinning skills become useless. It would be absurd to have a government program to preserve Laplander reindeer skinning skills.
The art of a people may have esthetic value that does not necessarily serve any survival function. Multiculturalists see benefit in active governmental effort to preserve this part of the culture. The fear is that the culture will die if the government does not act. If people do not partake in the art through their voluntary free will, then so be it. They did not want to. If they do, the art is question will be perpetuated. To suggest that the government should intervene is to imply that the choices of special interests, politicians and bureaucrats should supercede the choices of freely acting individuals. Furthermore, monies would have to be expropriated from others in the country to enforce the interests of those that are politically connected. Those in power are credited with “knowing better” than the populace at large.
In Canada, First Nations people claim the importance of their traditional ways. On a recent trip home back to Canada, when walking through the local mall, it was quite apparent that the traditional way of doing things must have limitations because all of the natives in the mall were wearing modern clothes with many of them being “designer” fashions. The truth is when given the choice, natives like the rest of Canadians, gravitate towards modern ways that give them pleasure or make their lives simpler. There is absolutely nothing wrong with that. If posed with the choice of hunting down a caribou, skinning it, preparing the hide and fashioning clothing out of it versus going to the Gap and dropping fifty bucks for a set of jeans, I will go the Gap route every time too. If taxpayer’s money has to be spent to preserve the traditional ways of any culture, then perhaps the traditional ways were not really wanted.

No culture is a static entity and it is a form of tilting at windmills to make it so. It is inevitable that cultures influence one another. Although Canadians pride themselves on being different from Americans, Canadian culture is highly influenced by their southern neighbor. Although there are genuine differences, the similarities outweigh the differences. Western culture in general is highly influenced by ancient Greece and Rome. The practice of tobacco usage was adopted from the North American natives. Australian culture is a spin-off of British culture. The New Zealand culture has been influenced by Britain and the native Maori. The continuous interfacing of cultures has resulted in a ongoing evolution in what we define as the present culture. In the modern era, with instantaneous global communications and rapid travel, the entire world has become a vast melting pot of all cultures. One can drink French wine or British tea, drive a Japanese car, enjoy Thai food, learn Eastern religion and watch Hollywood movies. The dynamic and advanced society that we live in allows us to enjoy the blending and mixing of behaviors. Defining ourselves with one set rigid cluster of behaviors is not liberating but stifling. Behaviors are adopted because they make life better in some way. The free exchange of behaviors and ideas is part of the natural order of things in a harmonious world. To rigidly define one’s culture in a set way and endeavor to “save” it is to squelch the exchange of ideas and products amongst free individuals.
Despite the most concerted effort of the multiculturalists, the world culture will continue to evolve relentlessly. One thousand years from now, human culture will be completely different from what it is now. Language, as a part of the culture, will evolve ceaselessly. Expressions exist now that didn’t even five years ago. Such speech patterns are adopted because they effectively convey ideas. The English language from five hundred years ago is almost unintelligible to the modern listener just as our language now will be unintelligible to those from 500 years in the future. Language habits will evolve like all cultural habits because the changes make communication easier. No special interest groups should interfere with these choices that people freely adopt.
There is no one pure “x” culture. Local customs, expressions, knowledge and interests vary. Having spent most of my life in Northern Ontario, I can attest to the fact that the local culture in Sault Ste. Marie on the northeastern shore of Lake Superior is not quite the same as the local culture in Thunder Bay, 400 miles away, on the northwestern shore of Lake Superior. Even within each of these small cities, there are variances between the east end and the west end of Sault Ste. Marie and the north side and south side of Thunder Bay. There is no one single Italian culture. The north and south of Italy are different. Despite the desperate efforts of the French in Quebec to preserve their culture, they are not the same as the French in France.
The point is that there is no one single static culture. There never has been and there never will be. If a culture is static, it is stagnant and therefore not evolving and incorporating behaviors that may improve lives. If maintenance of a static culture is a value, then what is special about the culture at this point in time as opposed to another point in time? If an uncorrupted culture is that which is not influenced by contemporary influences, then all cultures are corrupt because contemporary is simply that which is now and all influences in the past were once “now”. By the implied logic of the advocates of cultural preservation, perhaps the only culture worth preserving is caveman culture.

All cultures are made up of a group of individuals. As members of the culture, they share common behavior patterns. As a Canadian, I act in certain ways that define me as such but like all other Canadians, I am very much an individual. My individual characteristics are more defining than the idiosyncrasies that I have inherited as a Canadian. Restated, I am more different from my fellow Canadians, than I am the same. What is important about individuals is who they are as unique beings, not their superficial common traits. What government should be striving for is to not maintain the superficialities of our commonality but to build and maintain a framework of a society that allows every individual to live as they desire; to make their own choices and to not be compelled by the choices made by others. The framework of such a society requires the maintenance of liberty rights which is the freedom to make our own individual choices in life.
Identifying with one’s culture tends to give one a sense of belonging. With that sense of belonging comes a personal sense of value. That sense of value and belonging is an illusion. A few years ago, my family and I went to a Canada Day celebration in the Twin Cities for Canadians living in the area. Upon arriving, we realized that our common “Canadianness” really meant nothing as far as having a meaningful affinity for any of the people there. I am sure they were all fine people but the geographical accident of a common birthplace above the 49th parallel did not automatically mean these people would be appropriate friends. Aristotle said that a friend is someone with whom we share a mutuality of values. Although there may have been a very thin common thread of mutually shared values as Canadians, it was by no means strong enough to guarantee friendship with these people that were nothing more than strangers just like any other group of strangers that one may come across at a cocktail party or within a city bus.

A danger of actively promoting multiculturalism is that we promote ourselves as members of a group rather than as the distinct individuals that we all are. When laws, entitlements, special privileges and money are bestowed upon us because of our accidental membership within a given culture, we define ourselves as part of this collective and different from other citizens that are members of other cultures with their own special laws, entitlements, special privileges or monetary allotments. Group is pitted against group. Individual rights are subjugated to fulfilling obligations to special groups. If the role of government is to protect individual rights rather than to dispense special favors to groups, there is little potential for divisiveness. On the other hand, in the multicultural “Utopia” of Canada, the French and English will always live in begrudging tension and the natives will always believe that the handouts that they receive are never big enough to fulfill their special sense of entitlement. If everyone in Canada simply viewed themselves as Canadians, there would be no problem.
The original American notion of the “melting pot” is much more viable and more likely to lead to harmony than the Canadian ideal of multiculturalism. Each American is free to live, act, speak, think, and worship as they see fit. No one can rightly impede that freedom. On the other hand, no special privileges are granted to facilitate an individual’s chosen course of action. As a result, I have yet to hear of a single U.S. state agitating to leave the Union. On the other hand, every decade or so, Quebec separatism rears its ugly head in Canada.
In Canada, bilingualism is official government policy. All forms, signage and services must be available in French or English. In rural Saskatchewan (where almost no one speaks French) a citizen can demand government service in French. The citizenry must pay for such services to be available. Having two official languages is cumbersome and costly. Those in the minority (the French) see themselves as special. A double standard exists in Canada whereby all federal services are available in French and English and yet the province of Quebec is officially unilingual French in which it is illegal to post non-French signage at private establishments such as stores and even at restaurants in Montreal’s Chinatown. In Chinatown, all of the signs must be in French; not Chinese. The identification of any group as having special status is fractious, not unifying.
Similar policies are evolving in the historically more sensible United States. It is federal policy that hospitals must provide interpreter services to their clientele at all hours of the night and day at the hospitals expense. It is virtually impossible to comply with such dictates. How could a small rural hospital possibly have access to all languages from Afghan to Swahili? Worse yet, there are actually those calling to make Spanish another official language of the United States. United States would then be an officially divided population of Anglos and Latinos instead of being united as Americans.

If culture A deserves special governmental favoratism, then so does culture A’s subcultures of X,Y and Z. The dividing lines between subcultures X,Y and Z are naturally indistinct. Infinite gradations of culture could conceivable by made until we have divided cultures down to the characteristic behaviors of a single individuals. Culture is nothing more that a group of common behaviors. Perhaps rather than agonizing over the special rights that each culture and subculture receives, we should focus on protecting the rights of the smallest unit capable of behavior that there is and that is the individual.

Why Capitalism Works and Socialism Doesn't

It is plain to see that capitalism produces the highest standard of living that the world has ever seen. The wealth of the United States towers above the wealth produced by the former Soviet Union. But why? Could it be that the U.S. is endowed with greater natural resources? No, because the Soviet Union was vastly endowed with resources. The Steppes are a huge tract of arable land and yet the U.S.S.R. was unable to feed itself. Tiny little capitalist Hong Kong has almost no natural resources but is an economic powerhouse. The socialist Scandinavian countries have gross domestic products less than the productivity of a single American company, Walmart.
Why is it that the capitalist countries thrive and the socialist countries merely limp along economically? The fundamental difference is freedom, specifically the freedom to trade.
The smallest indivisible unit of an economy is the single sale of any good or service. With every transaction, each party seeks value. Values are those entities that we endeavor to retain or gain more of. Love, money health are all values. Value may also come in the form of a better house or MP3 player. It may be a meticulous lawn care or a good paint job. As individuals in a free country we know what we want and are individually free to seek them. In socialist countries, some bureaucrat, body of bureaucrats or the general electorate decides for you what you will be allowed to receive.
Typically, the good or service is exchanged for dollars. The purchaser attempts to gain the product at the lowest price possible. The seller tries to obtain the highest price possible. In a free country they function as mutually respectful traders. If the terms set by the other party are not agreeable, each is free to walk away and seek their business elsewhere.
If I agree to sell you my widget for five dollars, it implies that I want the five dollars more than I want the widget. Conversely, you want the widget more than you want the five dollars. We each receive value from the transaction. By each having received what we want, we have both have more wealth than we started out with.
Take a look a something complex like a computer. A computer is a fantastically complicated piece of equipment but it is comprised of simple components. Most elementally, it is just a bunch of plastics and metals but its total composite value is far greater than the value of its constituents. Someone had to mine metals from the earth which were sold to someone else that also bought plastic and fashioned microchips that were then configured with other components into a central processing unit that was assembled with other components into a computer tower. Add in a keyboard, internet service and a monitor and you have an entity that is of far greater value than a bunch of rocks that were mined from the earth and raw chemicals that could be synthesized into plastics. Every step in the process resulted in added value.
Each step can only occur when the sellor and purchaser reach a mutually agreeable price at which they both feel that they are further ahead by proceeding with the transaction. Every step along the way from digging materials out of the earth to the purchase of the computer by the consumer has created material wealth. If left unfettered the process could conceivably create an infinite and never ending increase in the world’s wealth. Capitalism is about mutually beneficial trade for the purpose of making one another’s lives easier or more pleasant. As long as mankind continues to think of new ways to utilize the raw materials of the earth or new ways to use the goods and services created by others, the process could continue ad infinitum with no endpoint to the amount of abundance that can be created.
With a vibrant economy, multiple entrepreneurs may choose to provide a certain good or service. Because widget x is available from multiple sellers, people are free to buy from the seller with either the lowest cost or the highest quality or some compromise between the two. With a competitive marketplace, each seller must provide as much value as possible for a given price or else the consumer goes elsewhere. This applies relentless pressure to the seller to drive his price down and give more and more for the money. Computers are a great example of this. They keep getting cheaper and better year in and year out. My outdated palm pilot has far greater computing power than the best computer that NASA had in the 60’s and it occupied a room as big as two football fields. In fact, in free markets, the price of all products ever studied, when measured in non-inflationary dollars, always drops. Skeptics like to site the example of health care and education which rise in price to the tune of double digit inflation. The basic reason why is because these are not free market commodities. They are both highly publically subsidized and highly regulated. The market forces that would normally force the price down and the quality up, are not operant. The involvement of government inhibits the drop in price and the rise in quality that naturally occurs with every other commodity.
Regulation of an industry inserts demands on the producer and costs on the consumer that neither necessarily wanted. As an example, child-proof medicine containers were not something that the market desired but that regulators dreamed up and imposed on producers. Such a measure raises the cost of production which is passed on to the consumer which ultimately results in less wealth available to be spent on other things. Living standards drop or do not reach their full potential. Parenthetically, child poisonings have increased as a result of this regulation because the caps are so difficult to remove that people simply leave them off the bottles inviting small children to put the contents into their mouths.
As another example, the federal agency JACHO has insisted that at our hospital, we document the time of every telephone call that we make to a physician (to the minute) to inform them of a test result. If they are not immediately available, we are to document the time we left a message and when they called back. Furthermore, this data is to be tabulated and tracked which requires the hiring of more staff to fulfill this function. We didn’t want this, the other doctors didn’t want this and nor did the patients. And yet the government demands that we do it. Tracking this information costs money and drives up the cost of health care.

What is the fuel that drives the capitalist process of wealth creation? The fuel is the potential for profit. The potential for profit only exists when there are needs and wants of others that may be fulfilled by providing goods and services that they desire enough to pay for. It is difficult to think of anything more honorable than fulfilling peoples needs and wants. The degree to which one profits reflects the degree to which they have made their customers happy through voluntary trade. Strangely, there are some people that actually consider profit evil.
As an aside, there is a pervasive belief that everyone is entitled to an equal level of goods and services in life and that this is “socially just”. It is not just nor is there anything sociable about it. Justice is the concept that we get what we deserve. Social justice, as used in modern parlance, is an oxymoron because it implies that people should get goods, services and wealth without voluntary trade or voluntary charity. They should obtain these things merely because they exist. But if people are to receive these things non-voluntarily the only alternative is that they be forcibly extracted from others. There is nothing very social about that.
The potential for profit is a signal to the entrepreneur that money, time and resources should be directed into a venture. Suppose a town has no dry cleaning service. An entrepreneur may see this niche and invest in opening such a business. Perhaps, there is a potential market that three or four such companies could be sustained. If three or four dry cleaning stores open, they each must work to keep their prices low so that they remain competitive. The companies that cannot do so, go out of business because people won’t want their high priced services. This is a message that perhaps this entrepreneur running such a business is not suited to this endeavor and should look elsewhere for income. As more and more dry cleaners open, the potential for profit is diminished and therefore entrepreneurs should direct their capital and effort elsewhere.
A few years ago, I tried to make money by investing in real estate. I lost plenty of money in attempting to do so. I currently devote my money making efforts to radiology; something that I am good at and I make a healthy living at it. The market has given me a powerful message that real estate investing is not my niche. The market system has a way of directing people into that which they are best suited.
The market system results in prices that are not fixed. They can be volatile and variable based on supply and demand. If there is only one dry cleaner for a large population, prices will be high. If there are many, prices will be low. Prices must vary as the market dictates and not as government dictates. Spontaneously price changes given information to the marketplace about where money and resources should be directed. Governmental wage and price controls have long been discredited as a means of “improving” the economy because the government cannot outsmart the marketplace.
As an example, the entirety of Canadian health care is based on wage and price controls. The government not only decrees what doctors get paid, they are determining funding for individual hospitals, cancer clinics, emergency departments, public health, imaging departments and a multitude of other programs. There is no way that government can be omniscient and be able to figure out exactly how much money should go into each of these things.
When I was working in northern Ontario, I was the only radiologist that was doing peripheral angioplasties for a radius of almost five hundred miles. During this procedure, I employed x-ray guidance and directed a balloon-tipped catheter into blood vessels that were narrowed. Upon expanding the balloon, I was able to open up the narrowing. The usual context for such a procedure was inadequate blood flow to the legs which would cause limitations on walking distance, pain or non-healing ulcers. For many patients, this procedure was hugely beneficial and could often be performed instead of major invasive surgery.
When I left Canada, there was nobody doing this procedure even though there were others there that had training in this technique. But why wouldn’t they do it? The reason boils down to the negative effect of wage and price controls. Per hour, I made less doing this procedure than a plumber does. The point is not to disparage plumbers because they provide a valuable service. The real point is that my compensation was not proportionate to the rarity of such skills and the demand for them.
If someone feels that they have not been compensated sufficiently for their time, effort or investment of capital they have a disincentive for the provision of the goods or service in question. By having artificially low compensation for angioplasty, a shortage of such service arises. In a free society, prices are set not by government decree but by the mutual agreement between the buyer and seller. If a shortage arises, prices rise but only temporarily. A rising price signals others to move into that field. As more competitors enter the field, prices drop. With wage and price controls, that signal is negated.
Once peripheral angioplasty services were no longer available locally, patients had to be transferred 450 miles to Winnipeg which was the next nearest center offering the service. Alternatively, they would have to have an operation by a surgeon locally to deal with the problem. Such an operation is far more costly than an angioplasty procedure. By not having peripheral angioplasty services available locally due to wage and price controls, true costs rose. As an aside, government compulsion to provide the service would not save costs in the long run either. Such compulsion would result in fewer people going into the profession and a shortage would again arise.
It is the spontaneously changing price system of a free market that is necessary for a functional economy. The price system disseminates millions of bits of information everyday every time money exchanges hands. It is the price system that gives information to investors on where they should direct their capital. The unimpeded movement of capital is the basis of capitalism. By directing capital towards providing the things that people want, both Americans and Canadians have an abundant economy except when it comes to Canadian health care. Inherent in the price system is the potential for profit. It is because of the potential for profit that investors are motivated to expend their capital, time and effort. Without the potential for profit, risk is not taken. Goods and services that people want are not provided and scarcity is the result. The mechanism is the same whether talking about dry cleaning or angioplasty.
I was recently driving in Toronto. It is astonishing how similar it is to the U.S. in many ways. There are a multitude of new buildings and many new flourishing businesses. This prosperity is only possible with the price system. When I was in the hospital to visit my ailing brother, it was like being in a third world country where immense pressure had to be applied for basic medical testing. Health care in Canada is centrally planned by government bureaucracy. The way they implement their planning is by setting wages and prices whether it be the reimbursement for an angioplasty or the annual budget of an emergency department. Markets are squelched in that citizens are not free to spend their own money as they see fit for the care they want and need. Furthermore, physicians and investors are not free to provide services outside of the provincial health insurance plans. Centrally planned economies such as Canadian health care are impervious to the exquisitely detailed information provided by the price system which is based on millions of spontaneous monetary transactions between free individuals acting on their own volition. In the 1920’s Ludwig von Mises correctly pointed out that socialism cannot work exactly for this reason; that it ignores all of the information that is obtained by the spontaneous price system of a free market. Shortages of resources are therefore inevitable.

For awhile, when I was working in Thunder Bay, Canada, I was one of three full-time radiologists providing services to a catchment area of 250,00 people. The Canadian Association of Radiologist felt that one radiologist per 13,000 people was optimal. You do the math, the situation wasn’t pretty. This situation was a direct result of central governmental planning of the number of people trained as radiologists; something that should be left to the sphere of free markets. Nonetheless, due to our desperate manpower shortage, we required a simple device called a rolloscope to facilitate reading large volumes of radiographs. Such a device is common in x-ray departments in the U.S. Since the purchase of a rolloscope exceeded funds available in the hospital global budget, a plea had to be made to bureaucrats in the Ministry of Health 700 miles away to grant funds for this essential piece of equipment. After applying pressure for three years, the radiologists at Thunder Bay Regional Hospital finally got their rolloscope (I was long gone). The rolloscope then sat idle for another year because there was no money in the budget for an employee to load the films.
While working here in the United States at St. Francis Regional Medical Center in Shakopee, Minnesota, we were seeing steadily increasing volumes of imaging cases. We made a request for a rolloscope justified on the basis that such a device would allow us to read more x-rays better and faster thereby making more money for my company and the hospital while enhancing service and helping to ensure ongoing renewal of our contract with the hospital. Our request was granted within a month. The cause of the difference in my Canadian and American experiences with the rolloscope issue lies in the price system and the potential for profit. The potential for profit in America provided information that the thirty thousand dollar expense of a rolloscope was justified and beneficial. The potential for profit told us here in the U.S. that a rolloscope was money well spent. In Canada, where the potential for profit is squelched in health care, the expense of a rolloscope is nothing more than a burden rather than a useful investment. Advocates of centralized planning of the economy, which advocates of universal health care are, are unwittingly saying that a few bureaucrats can decide where money should be spent better than millions of individuals interacting in the marketplace with a free and unfettered exchange of dollars.
The bureaucrats working 700 miles away from me in Canada would not have only been fielding my request for funds for a rolloscope, they would have been fielding a multitude of requests for funds from clinics doctors, hospitals and public health programs across a geographical region larger than France. How is it possible that bureaucrats can be sufficiently omniscient to come up with the exact correct distributions of funding for all of these expenditures? They can’t. They cannot possibly assimilate all of the necessary information that is spontaneously disseminated in a free market with spontaneously set prices based on supply and demand. Every time dollars exchange hands in a free market, information is propagated about where it is useful to direct capital to garner profit by meeting people’s needs and desires.
The potential for profit provides incentive to do things with as low a cost of production is possible. By creating a product at low cost, profits rise creating capital to provide more service and/or costs drop allowing consumers more money to spend on other things. Restated, a drop in production costs leads to more value. Similarly, increases in individual productivity increase profits and drop prices.
A rolloscope is a tool that allows a radiologist to do more work in a given time period. We have moved beyond this and now read our cases from computers rather than film because working from a computer is even more efficient than a rolloscope. Computers allow us to read more cases faster increasing value for the patients that receive our services and ourselves because we are paid for these services.
One hundred years ago or so, the majority of workers were employed as farmers. Modern agricultural advances such as farming equipment have massively increased the productivity of individual workers. Furthermore, production costs have dropped and the cost of food has dropped. Rather than almost everyone being a farmer, human resources are freed up such that some people can work in a vast array of fields from landscapers to computer programmers. Consumers now have to spend a smaller fraction of their income on food and therefore can enjoy products from larger houses to wide screen televisions. This rise in the standard of living occurs because of an economy based on capitalist value-for-value exchanges which is facilitated by labor saving methods from farming equipment to computers.
Labor and cost-saving methods such as automation and computers do not destroy jobs; they create them. Although the myopic view is that a machine doing a person’s job has robbed the person of the job, the broader and more accurate perspective is that the increased efficiency has released capital that can be spent on other things resulting in a richer society. A richer society has more capital to invest which results in the creation of jobs. The primary purpose of a healthy economy is to create value. The creation of jobs is a secondary consequence of this. If the purpose of the economy was to merely create jobs, full employment could be instantly created with a single simple measure. Simply outlaw farming equipment. Almost everyone will then have to work in farming and everyone will be employed. There will no longer be any capital, either human or monetary, to use on other things such as telecommunications, modern health care, transportation and entertainment. We would all be employed but would have an impoverished standard of living.

The Marxist fallacy is the belief that the economy can be planned by government. Marxists believe that a central governmental authority can plan the number of butchers, bakers and candlestick makers that there should be. Just as controlling prices by government fiat does not work, neither does planning human resources. Part of the problem with Canadian and American health care is that medical resources are planned by governmental decisions on how many doctors there “should” be rather than letting the market decide as in the case of the dry cleaning analogy. The world is far too complex for anyone to plan. There are now far more occupations to chose from than there were in Marx’s days of butchers and bakers. This is because of the power of markets not government planning.
Blacksmiths have lost jobs because we now drive cars. In doing so, millions of people are employed in the automotive industry. The mobility of automobiles facilitates a vibrant economy with a far higher standard of living than in the days of blacksmiths. To protect the jobs of blacksmiths, should cars have been banned? Obviously not.
Angiography is the procedure whereby a radiologist would thread a catheter into a patient’s blood vessels, inject x-ray dye and take x-ray pictures of the blood vessels. At one time, this was a fantastic medical advance but it did carry risks to the patients and was very labor intensive. During my training, I worked long and hard to become a skilled angiographer. With the advancements in CT scanners, traditional angiography is now rarely necessary. CT images of a person’s blood vessels are obtained more quickly and at much lower risk to the patient. My angiography skills have now gone the way of the blacksmith’s for the better of society. A healthy economy is a changing economy that provides a increasingly better living standard for its participants.

Capitalism produces markets that cater to people’s wants whereas socialism only allows people the goods and services that the government deems permissible. There is a chain of coffee shops in Canada called Tim Horton’s that has a shop on almost every street corner in Canada. Everybody loves Tim Horton’s including me and I am glad that they are out there selling their wares. When it comes to healthcare in Canada, such entrepreneurial spirit is perversely considered bad and Canadians are paying the price for their warped morays.
About a year ago, my brother was desperately ill and in need of an MRI to ascertain the cause of his illness. The nature of his symptoms suggested that he had a life-threatening condition which he did in fact have. Because it was Christmas time and because he was in a Canadian hospital, he was not able to access an MRI which he so desperately needed. Canadian hospitals function out of government provided budgets rather than from profit. Therefore, the hospital MRI scanner functions from nine to five on weekdays only. There is no incentive and no means by which the hospital can offer after-hours scans. They have a disincentive to do so because added service means further depletion of their budget. Contrast this with Tim Horton’s that had a kiosk in the hospital lobby which was doing a thriving business selling coffee and donuts for which people paid out of their own pockets. Furthermore, Tim Horton’s made its services available night and day whether it was a holiday or not. Although people can spend their own money for coffee and donuts in such a hospital, they cannot spend their own money for health care in the same hospital.
Tim Horton’s, like other free enterprise businesses, cover costs from profits derived from providing service. Because the hospital is operating from a budget, the incentive is to save money rather than provide service. Therefore, the hospital’s MRI is closed on weekdays after 5 pm, on weekends and holidays whereas Tim Horton’s stays open. My brother was in hospital over Christmas and desperately needed an MRI to definitively diagnose his condition. The sad truth is that at such a time, in a Canadian hospital, you are more likely to be successful getting a good cup of coffee and a donut, than you would be getting an emergency MRI. Capitalism is about service. Socialism is about doing as little as possible.

Capitalism produces accountability whereas socialism does not. Teleradiology is the practice in radiology of transmitting imaging cases over the internet for interpretation elsewhere. My company, Consulting Radiolgists Ltd., has been doing this for fifteen years. The sophistication of its teleradiology system has been getting better and better with each passing year. Where did the initiative and investment in teleradiology come from? It came from the initiative of CRL radiologists. The money came from CRL's own investment. No government handout was necessary.
When I left Canada at the end of 2001, there was a government initiated nascent effort afoot to try and provide teleradiology service to Northern Ontario. Six million dollars of taxpayer money was expropriated and set aside for this purpose. The effort to get it off the ground is still floundering. In a centrally planned bureaucratic decision, the intent was that images would be transmitted to Thunder Bay for interpretation. This federal decision was made when there was a real possibility that all of the radiologists would leave Thunder Bay. No one in government had even talked to us about this scheme. Imagine my surprise when I read in the newspaper about the fact that women in Kenora would be able to get their mammogram interpreted by a radiologist in Thunder Bay before they even left the office. This was news to me because as one of the handful of Thunder Bay radiologists that meant that I would be providing this service and I had not even heard of it yet. With the central governmental planning that occurs with socialism, the left hand does not know what the right hand is doing. There were many flaws in the government’s plans. Most importantly, they had not accounted for a complete lack of radiology manpower to provide the service. There was a very real possibility that my resignation may have precipitated a manpower meltdown such that no radiologist would be available in Thunder Bay to provide the service.
As six million dollars was being flushed down the toilet, who was paying for it? The taxpayer, that's who. If CRL's efforts at teleradiology failed, whose money would it be? It would be CRL's money and that is only fair. Private sector investment holds the potential for both gain and loss on the part of the investor. This provides inherent accountability to the investor that a public venture does not have. If a government program is inept and unable to produce, often more cash is infused into it to be further wasted rather than discarding the program. That is money the tax-paying consumer does not have to spend on those things that are of value. Tax funded government programs impede the production of wealth. Living standards do not reach their full potential.
Massive government inefficiency and ineptness has no consequence to those in government that waste money. Inefficiency and ineptness in private enterprise does. If the ineptitude is of sufficient magnitude, the business will cease to exist and be replaced by one that can function efficiently and effectively.

The critics of capitalism are quick to point out that capitalism causes a huge difference in economic success. It is sited as a problem that the same country may be home to the very rich and the very poor. This is viewed as a problem when it is in fact a necessary reality. (See “The Increasing Gap Between the Rich and the Poor is a Good Thing”) In a nutshell, our differences in economic success reflect the fact that we have differing abilities to generate value in the form of the goods and services that we have to offer others to achieve our success. It reflects the degree to which we live in a voluntarily society in which individual autonomy is respected
The truth is that those that have little value to offer others and end up poor are better off than they would have been in non-capitalist society. Without others having the freedom to generate wealth, there is no wealth to be redistributed to them whether it is coercively obtained by the government welfare state or voluntarily through private charity. Wealth is not created by governmental decree. It is created by an ongoing exchange of values; ie. voluntary trade. Non-capitalist nations did not create wealth and therefore rather than having a minority living in poverty, most people did.
Karl Marx and Frederich Engels expounded the false concept of “The Zero Sum Game”. This was the incorrect notion that the wealth in the world is fixed and finite. This was the justification for attempting to divide wealth up evenly between the workers and the factory owners. They mistakenly believed that the wealthy in a capitalist society became that way by taking the wealth from others against their will. The reality is that their wealth was made by creating value for those that purchased their goods and services. Because of capitalism, the total wealth in the world is far greater now that it was in the time of Marx and Engels.
Because capitalism drops costs and incents innovation, the standard of living for the poor in a capitalist country, far exceeds that of earlier times. Although generally wealthy in their time, the Founding Fathers did not enjoy the riches that almost everyone in our society enjoys. Central heating, air conditioning, radio, television, easy transportation, internet, e-mail, movies, DVD’s, stereros and MP3 players are all things that the Founders could not have even conceived of. Through the miracle of capitalism, these things are available to almost everyone. Even many of the so-called poor have indoor plumbing, televisions, microwave ovens and other marvels that were inconceivable for anyone of any economic status in past days.
Capitalism is not really about “haves and have-nots” but rather about “have nows and have laters”. Many of the items that are now commonplace across socioeconomic strata, were originally only in the realm of the wealthy. For example, originally few people could afford cars. Now cars are commonplace. The same can be said of sundry items such as stereos, televisions, cell phones and microwaves ovens.
In days past, only royalty would have access to an orchestra in their own living room. Eventually, the phonograph, stereos and now MP3 players have increased the accessibility to music to a tremendous degree. An MP3 player the size of a deck of cards can hold a selection of 15,000 songs of hi fidelity music from a wide variety of artists. Even a king did not have access to such luxury. No king had central heating, air conditioning, refrigerated food, or electric lighting. In the summer, a king would not have even had access to ice cubes. Things that even the poor take for granted in modern times were unfathomable to even the wealthiest in the days past.
Capitalism works because individuals are empowered to serve their own interests by serving the wants and needs of others. By functioning as mutually respectful traders, more and more of us are empowered to live lives that even kings could not have dreamed off.

Socialism's Slight of Hand

It is easy to point to the products of the government welfare state and claim them to be a testament to the effectiveness of socialism. The baseball stadium that is built with public subsidization is proclaimed to be stimulating the local economy. Canadian hospitals are delusionally believed to be providing health care that otherwise would not occur. The welfare check to the single mother is perceived as a safety net that could not possibly exist without government benevolence. Paranoia is rampant that workers will be exploited without regulatory measures of the socialist state. The term socialism is being used in the broadest sense of the word in that decisions that could be in the realm of the individual are replaced with decisions by majority rule, elected officials or government regulatory bodies.
The overlooked and much harder to see reality is that the subsidized baseball stadium is unfairly redistributing wealth to the rich by building a workplace for billionaire team owners and their millionaire players. If the services of these people are of value to the fans they serve, in a truly free market, they will remain employed. As for stimulating the local economy; although the presence of the stadium may be a boon to the local pub nearby, without the publically subsidized stadium, people will find things to spend their money on. You just will not be able to point exactly to where it is being all used but it will be used for something whether it be new stereos, surfboards, home improvements, mutual funds or beer at a different pub. The tax dollars used to subsidize the stadium were not created out of thin air but were expropriated from the general public with the implied justification that the government can decide better than individuals where the money should be spent. Those tax dollars could also have found usage for sundry consumers goods or investment products. It just would not be possible to point to the one thing that they are used for if they had not been lumped into a baseball stadium.
The economy is a fantastically complex web of dollar and commodity exchanges. Government subsidization of projects like baseball stadiums simply results in a portion of the economy being pushed in one direction. The web gets distorted but does not get bigger. The web may actually get smaller because government expenditure of money is not accountable in the same way that private expenditure of money is. When you spend money on something that you want, you will only do so if you feel that you are getting value for your money. When the government spends your money, they can blatantly squander it without being directly accountable to you. The Department of Vehicle Services will continue to exist whether or not it stays within its budget and whether or not it provides a service that people want. Your local car dealer can only exist by providing vehicles and services that people want and therefore voluntarily purchase.
People spend their money on the things that are of value to them. The companies that are effective at providing value can potentially grow into huge entities as a result of providing people with what they desire. The existence of Microsoft and Walmart prove this point. No government subsidy was required. It is preposterous to believe that baseball stadiums can only exist with public subsidies. If the public wants to spend their money on baseball, the stadiums will be built without government welfare to millionaires and billionaires. It is true that without expropriated public handouts, the stadiums may not be as elaborate as they are, but smaller stadiums may be a more truthful reflection of what the individual baseball fans want if they are confronted with paying for the building themselves albeit indirectly through the price they pay for tickets. The baseball fan’s private interests should not be at the expense of an elderly woman paying for her prescription drugs, or pet food for her cat. The baseball fan’s interests are theirs alone as is the elderly lady’s interests are her own. It would be bizarre for one to righteously proclaim legitimacy to coercively take from the other to meet their own individual interests. Bizarre as it may seem, this is how we use government. Rather than using government to protect our rights in the true sense of the word, we use government to coerce others into fulfilling our own interests.
It is easy to think of plenty of things that would be nice to have. It would be even nicer if someone else other than ourselves would pay for it. Education, health care, recreation, arts, entertainment are all wonderful things. If I want to access these things, how can it be justified that someone else should pay? Markets work by providing people with want they want. Without public subsidization of these things, they will still exist and likely much more cheaply than if they are subsidized. Virtually every free market commodity ever studied drops in price when measured in non-inflationary dollars and yet health care and education continue to go up in price. Why? Because they are heavily, if not entirely, publically funded. The provision of value is not ruthlessly enforced as it is in the free market.
When I buy something for myself, I can pretty well get exactly what I want. If I am thirsty and I want a 20-ounce bottle of diet caffeine free Coke, I can get it because it serves the Coca-Cola company to provide me with exactly what I want. If my children are to be publically educated, they will largely receive a generic curriculum whether my wife and I like it our not. Presence or absence of sex education, religious education, physical education, recital of the Pledge of Allegiance will be determined collectively and not by the free choices of individual parents. Different parents have different views on the merits of these things as part of a school curriculum. Why not let them have choice on how their own money is spent? A free market educational system would not result in rampant illiteracy. Academic achievement in United States has been falling in rank relative to other countries and yet the public expense on education continues to increase. Before the institution of mandated public education, the United States was amongst the most literate nations in the world. Education does not have to be expensive. Before public education, children may have been educated in the church basement. Compare that to the public high school where we live. The high school actually has an indoor football stadium. Although my children likely will never benefit from it, I am forced to pay for it through my property taxes. I am not getting value for my money and I have lost the choice of how my own money is spent. Rather than purchasing education collectively through taxes for government schools, we should be able to purchase education privately and tailor the product to the individual needs of our children and parental choices.
The United States has a formalized separation of church and state and this policy has proven to be a boon to religion. Churches do not receive public subsidization and are not regulated by collective choices like public schools are. The result is a wide array of churches to choose from that meet people’s religious needs in the manner that they want them met. The people want religion and they get religion in precisely the way they want it. No government handout or regulation is required. Compare that with health care or education. There is never enough money in these fields and people do not get what they individually want. It astonishes me that people don’t make the connection between the failures of education and health care and the success of religion. If you want to make education and health care strong, separate them from the state just as religion is. The sky will not fall if you do so. Conversely, education and health care would thrive. Religion is a sphere of life that is best left to individual choice. There is no reason why health care and education should be any different, especially in a nation that claims to be a free country.
By usurping the role of the free market in health care and education, the government does not create these things; it impedes them. Unfortunately, the solution often cited for the ails of health care and education is not to empower individuals to make their own choices in a free market, but to increase the involvement of the state. Rising health care costs mindlessly lead to pleas for universal health care. Falling educational achievements lead to increased centralized governmental control with irrational but “feel good” policies like “No Child Left Behind”. Power is moved further from the individual and into the hands of central federal government.

It is very easy to think of things that would be nice to have. Better yet to have someone else pay for it through the coercive power of government. Pandering politicians are more than happy to appeal to the masses by promising everything from baseball stadiums to prescription drug benefits in return for their votes. It is simply too easy to forget that the state provision of these things can only occur by picking the pockets of some to give to others. Socialism does not create value, it merely redistributes it and inefficiently at best. According to Dr. Mary Ruwart, 70 percent of the money intended for the poor in government welfare programs is merely redistributed to the middle class social workers and administrators of these programs. These government employees do not add value like an entrepreneur or an employee in a private company must. Government workers deplete value from the value-creating taxpayers that fund the welfare programs. Parenthetically, private welfare programs such as the Salvation Army are much more efficient getting money directly to the poor. The Sally Ann’s overhead is only 10 cents on every privately donated dollar. Why are private welfare programs more efficient? They are for the same reason that private business is more efficient than government. The Sally Ann and other private charities are accountable to its donors just as entrepreneurs are accountable to their customers. If the Sally Ann cannot manage its money well, people will tend to donate to charities that will.
It is easy to point to the products of socialism and incorrectly use them as evidence of socialism’s effectiveness. In Thunder Bay, Canada, where I used to work as a radiologist, there is a grand new public hospital. One could look at this building as a testament to the effectiveness of public dollars spent on health care. This hospital has the only imaging department for hundreds of miles with only one CAT scanner and one MRI scanner. In fact, as the regional hospital it had the only imaging center that is even allowed to exist for the region. It is easy to forget about the five or ten (or possibly more) that would have existed in the region if Canadian health care was not a publically held monopoly but instead a competitive free market.
Likewise, it is easy to not see the vast variety of schools that would exist if public education were not the near monopoly that it presently is. Unfortunately, there is only a small private market for education that exists for those families that can afford to pay twice for education through their taxes and again through private tuition.
It is easy to forget about the sundry items that individuals would purchase or invest in if they did not have to pay for public works such as baseball stadiums.
It is easy to forget the slight of hand that has been used to aggrandize government in its provision of programs. Prior to President Johnson’s advent of Medicare, elders paid 20 percent of their income on health care expenses. Decades later, they still spent 20 percent. They have not saved any money. Furthermore, they have been compelled to pay taxes for a lifetime into an inefficient government program. It is easy to forget about this money that could have been spent on sundry consumer or investment items that could have further grown the economy while raising living standards for everyone.
It is also easy to forget about the weakening and softening of the national character that occur with socialism. I recall my father respectfully talking of his immigrant relatives that would never have accepted a welfare check as a matter of pride. He believed that they would have rather starved to death than take a handout. These people were dirt poor. My Great Grandmother come to North America as a stowaway on a cattle boat. They were so poor that they could not afford a horse and the women actually pulled the plows. Now welfare of all types from baseball stadiums to drug benefits are seen as an entitlement, not the disgrace that they are.

Health insurance is certainly a desirable commodity. The retail giant, Walmart has been publically criticized for not providing its employees with sufficient health care coverage. Legislatures in Maryland and 30 other states are proposing a law that compels Walmart to provide such a benefit. In Maryland, the legislature has voted to impose a tax on Walmart by the amount that the company’s expenditures on health care fall below 8% of payroll costs. This may sound blissfully wonderful but upon close scrutiny this will actually be very destructive. In fact Walmart’s stock value dropped 1.5 billion dollars within 90 minutes of this announcement. That is stock value owned by Americans of a wide range of social strata. This legislation instantaneously destroyed wealth across America.
In a free country, the only proper manner in which to deal with one another economically is as mutually respectful traders. Both parties in any transaction must feel that they are further ahead by consummating the transaction than they would be if they did not. The deal must be “win-win “ for both. If not, they are free to look elsewhere for what they seek. This holds true whether buying a burger or a corporation. No third party can morally impose terms and conditions that the transacting participants have not non-coercively and mutually agreed to. Those people that have chosen to work at Walmart must be satisfied that they are receiving the best total package of wage and benefits for the work that they perform or else they would seek employment from someone else that can offer better. When the government imposes the condition that the company must provide health care to an arbitrarily set level whether directly through payroll benefits or taxes, there are two choices. Firstly, wages could be cut thereby negating the autonomy of the employee to decide for themselves how the money that he or she earned is spent. Secondly, Walmart could be compelled to pay for such insurance on top of present wages. This would decrease profits for the corporation in an industry that already has only a razor thin profit margin per item sold. Eliminate the profit margin and then people cannot be employed. At the very least, the growth of Walmart is limited and the company may even need to contract. Worst case scenario, the company closes because it is unable to compete. There is little good that can ever be achieved through compulsion of our fellow citizens.
In the state of California, Rob Reiner, famous for his role as “Meathead” in the sitcom, “All in the Family”, is agitating that public pre-school education be instituted in his state. Such a demand is a feel-good claim of entitlement but the destruction it would render is easily overlooked.
This does not even account for the fact that there is no evidence of scholastic benefit for such early-formalized education. U.S. public education is an abysmal failure and California is ranked 47th in the nation of reading and math achievement in its public school system. Why extend this mediocrity to pre-schoolers when a private system already exists? To pay for such a system, Reiner would impose a new tax on California’ wealthy thereby giving them an incentive to move elsewhere likely taking their employment creating businesses with them. Furthermore, Reiner’s initiative would mandate all preschool teachers to have a bachelor’s degree and a one-year certificate in early childhood development by 2014. The impact would be devastating. Cynthia Leahy runs Montessori Schools of Fremont. Her instructors already have bachelor’s degrees and some have master’s degrees in education with intense training in the Montessori method of education. Demanding that they return to school to obtain a state-mandated certificate will add no value to their teaching and prompt those close to retirement to simply quit. This would leave a disproportionate number of younger and less experienced teachers.
Furthermore, such legislation would force Ms. Leahy to pay her teachers on the state K-12 pay scale. She would be compelled to pay higher wages to less experienced teachers. Some preschool centers in California cater to a mixed ethnicity population of children. They have teacher’s aides of various ethnicities that help the children but may not have any formalized credentials as teachers. Their assistance will not be allowed to occur thereby severely undermining the service to these children that can be delivered and destroying employment for these aides. By such illogic, my wife and other parents like her, should not be allowed to volunteer at our children’s elementary school, as she often does. She has no formalized credentials as an educator (although she does have a PhD in psychology). Like all socialist programs, they may feel good but leave a wake of destruction.

Government legitimately exists to allow us to be secure in our persons and property. They should protect us from criminals and foreign invaders. Government must enforce contracts. To this end governments legitimately protect us with armed services, a police force, a court system and prisons. These tasks, although limited in scope, are lofty assignments indeed. Good government has its plate full fulfilling these functions. And yet, government oversteps its bounds by trying to be all things to all people. Much like Newton’s oft quoted statement, ”Every action causes an equal and opposite reaction”, virtually every intrusion into the economy by government induces a negative effect that causes at least as much damage as it causes benefit. For example, minimum wage laws do not prevent exploitation. The illusion is that they elevate living standards. The reality is that they cause every employee that is not worth their mandated wage, to lose their job. Remember the days when theaters had ushers. Minimum wage laws incent theater owners to not offer these entry-level employment opportunities. Entry-level work is a crucial stepping-stone to bigger and better opportunities. One of my first jobs was painting fences on a farm for two dollars per hour. I was thrilled to have this job. To me every two dollars I earned was worth the hour of work. It was a win-win for both me and my boss. What right does the government have to say that I cannot accept employment under these terms? What right does the government have to say that my boss cannot offer employment under these terms? They have no right.
Taxation kills incentive to work and the likelihood of risking capital to earn profit. Just as importantly, the money is diverted to bureaucrats that do not add value with the expenditure of the money as an entrepreneur must, and they deplete the economy of the value that could have been created.
Rent control kills incentive to own rental properties and kills incentive to upgrade those that exist. Such controls contribute to slum neighbourhoods and housing shortages.
Price controls discourage the investment of personnel, time and capital into the creation and sale of goods and services. Such controls are universally recognized by credible economists as a sure road to shortages (eg. Canadian health care).
Industrial subsidization leads to the expensive production of products that people do not necessarily want. If a failing company successfully campaigns for a government subsidy, they are given an unfair advantage in the marketplace thereby undercutting the efficient producers that can offer a better and cheaper product. Living standards are insidiously undermined through the expropriation of our money through taxes and our deprivation of cheaper and better products that could have existed without the subsidy. Capital does not go where it should go which is into the production of better value whatever the commodity may be.
In his compelling 1940’s book, “Economics in One Lesson”, Henry Hazlitt ruthlessly debunks the misconceptions about how the government supposedly “helps” the economy. Virtually every type of intrusion into the free market that government makes wrecks havoc somewhere albeit invisibly. On may point to a great public works project and crow about the elevation of local living standards that it has caused, but forget about the reduction of living standards elsewhere from where the money has been expropriated.

Socialism is an illusion in which you can see its material products but you may not see that which has been impeded from existing. The biggest socialist illusion of all is the belief that it is well intentioned because goods and services are showered upon the people by a loving benevolent government. The illusion of benevolence was a bubble that was burst for me while working as Medical Director of Diagnostic Imaging at Thunder Bay Regional Hospital. With limited physical and manpower resources created by the socialist state, I desperately worked to maintain a functional imaging department. As a good Canadian believing in the moral virtue of publically delivered health care, I worked day and night to keep the place running. I had workdays extending from 3 a.m. to 9 p.m. My vision was to have a full-service high-quality imaging department. In my naivete, I believed that the government would support me in this vision. But alas, I eventually faced the naked truth that government serves the government and not the people. Desperately understaffed, through the power of the internet, I was able to make contact with well-trained South African radiologists that were interested in moving to Thunder Bay to work. To my chagrin, the regulatory hurdles to obtaining licensure to work were insurmountable. Despite writing letters to everyone in the government in a position of power, right up to the premier, the answer was no. These people would not be granted licenses to work. Ontario’s stringent licensing regulations would not accept the credentials of these well-trained radiologists. These regulations are supposedly in place to protect the public, but how is the public protected if they cannot access people to provide them with health care? You could be the best-trained radiologist from the Mayo clinic and Ontario will not recognize your credentials. The only training recognized as valid is that which is obtained in Canada. This policy does not protect the people. It protects the government from having to pay more doctors to provide the health care services that the government has claimed a monopoly on. There is no benevolence in this. With a one-party payer government run system, the government does not actually have a vested interest in providing the health care upon which it has claimed a monopoly!
Furthermore, obtaining basic equipment or instituting basic organizational changes to provide better services where invariably met up answers of “no”. Operating out of a government provided budget, the goal of the hospital was to save money rather than to provide high quality service. In other industries where services are provided from profits, there is an intrinsic incentive to spend money to provide better service and generate more money. The loving benevolent government that claims a monopoly on the provision of care is inherently motivated to not provide the care. So much for the illusion of a loving benevolent government. Socialism is nothing more than a grand illusion. Like a magician’s slight of hand, socialism does not produce something from nothing but socialism does invisibly destroy the possibilities of a better world.

The Illusion of Control

It is foolish to believe that if enough laws are written and enough government programs are created that a perfect world could be created. When stated as such, the notion seems absurd and yet it is the manner in which government seems to behave.
Events of any type are intricately inter-related with complexity far beyond what any mortal could ever grasp. Single isolated events can change the course of your life and the lives of those around you. The change in their lives changes the lives around them in ever widening circles of influence. Innocuous isolated events could conceivably alter the course of history.
Fifteen years ago, a single chance meeting of myself and a beautiful young woman lead to our marriage and eventually two children. Who those children are as individuals is reflected in the way our genes have intermixed and the manner in which we jointly are raising them. If my wife and I had never met by chance that day, perhaps we each may have had children some day, but they would not be the same and would be interacting with the world differently themselves. That single event of my wife and I serendipitiously meeting has literally changed the course of events indefinitely. But of course, there are an infinity of events that have, do and will impact on future events. It was impossible to predict that my being at a certain place at a certain time would have changed the course of my life let alone predict the manner in which the events of that day could impact the rest of history.
It is impossible to foresee all possible ramifications of any one action that we take because we interact with such a complex dynamic world. It is even more difficult to anticipate the consequences of many actions taken simultaneously. And yet government does believe that it can impose its will on entire populations of people and supposedly be assured of a beneficial outcome. Although it is legitimate for government to enforce contracts and to restrain criminals and foreign invaders, it has no moral authority to compel the actions of peaceable citizens. Even if motivated by “benevolence” such tyranny will likely result in a negative outcome when the choices made by autonomous individuals are restrained.


There is a discipline within modern science known as "Chaos Theory". This model of reality dictates that the composite effect of events that appear to be random and without order can result in highly orderly and complex end results. As an example, a solitary ant seems to be working without any order or plan. The sum result of its actions along with numerous other ants results in a complex society housed within the catacombs of an anthill with an organized societal hierarchy.
Chaos theory has been used to explain the development of life on Earth and the complex ecosystems of the world today. From the primordial soup of chemicals 5 billion years ago, the random movement of molecules have organized themselves into organic molecules which have organized into cells, which have organized into multi-celled organisms. Multi-celled organisms have evolved into millions of species of plants and animals which have organized into hugely complex ecosystems. The Chaos generated complexity of an ecosystem can be highly fragile. The introduction of a single variable such as an environmental toxin can cause a domino effect resulting in alterations within populations far removed from the species primarily effected by the toxin.
An analogous situation occurs in human social systems such as national economies. Witness the economic havoc invoked by the isolated events on the single day of September 11, 2001. That single disturbance to a complex system such as the North American economy had far reaching ramifications across the continent. Health care is a complex subsystem of the economy which has many governmentally superimposed contingencies that retard its smooth functioning.
Weather is also a manifestation of Chaos. The weather at any place and time is the result a myriad of complex interactions of different temperatures, air pressures, currents, humidity, solar flare activity, the tilt of the earth's axis, latitude and so on. Because the atmosphere is a contiguous mass of air, the temperature in Sydney, Australia on Tuesday will effect the temperature in Toronto on Saturday.
In theory, if given enough information, a meteorologist could predict the temperature in Minneapolis on New Year's day using data derived on the fourth of July. This would require an array of non-linear mathematical equations. If the relationships between temperature, ambient light, humidity, barometric pressure etc. were well enough understood, this could be done. This would not just require data from Minneapolis, but the world over because the Earth's atmosphere is a huge fluxing mass of varying parameters.
There are a few major challenges involved in predicting weather in this manner; the complex nature of the relationships must be elucidated in the form of mathematical formulae and the data must be collected with a near infinite degree of precision. An inaccuracy in only a single variable in the order of only 1 x 10 (-10) could alter the predicted temperature for Minneapolis at noon on New Year's Day by as much as 50 degree Celsius.
In practical terms, all one can say about the temperature in Thunder Bay at noon on New Year's Day from the vantage point of the fourth of July is that the temperature has a 95% probability of being between - 35 and + 20 degrees Celsius.
A key concept of Chaos Theory is that events widely separated in time and space can have a profound effect upon remote happenings that one normally would assume to be entirely unrelated. This is whimsically referred to as the "Butterfly Effect". A butterfly beating its wings in the jungle of South America has effects on events on other continents. The chance meeting of my wife fifteen years ago will affect the type of people that my children are and the manner in which they will interact for decades to come.
The most fundamental unit of an economy is the exchange of commodities between individuals. An economy is a highly complex system which is the sum total of all such interactions. The economy is much like the weather. It is difficult to predict and even more difficult to control.
Compare the economies of the U.S. versus the former Soviet Union. The Soviet Union ascribed to the Marxist tenet of a "planned economy".
In 1848, in, "The Communist Manifesto" Karl Marx argued that an idyllic world could be created by planning the needs of society by predetermining the number of butchers, bakers and candlestick makers that a society would need. The U.S.S.R. attempted to put this into action by having a society run by 30 million bureaucrats. The net effect was that very little could get done, progress ground to a halt and people were starving. Eventually, their economy imploded and the country collapsed.
The U.S. economy is a juggernaut of massive proportions which has rarely been rivaled. There is relatively little (although still too much) central governmental control of the economy and yet massive productivity is the end result. Much like the ants of our anthill analogy, the citizens of the U.S. are free to live their lives as they see fit and engage in unregulated commerce with one another. Their activity is not controlled and yet the end result is the most productive and powerful nation the world has ever known because the Chaos is allowed to manifest itself freely resulting in the formation of a large and powerful economy.
Witness the massive explosion over the last decade in computer technology and its enormous positive impetus on the economy. Does the United States have a Ministry of Computers planning all of this? No, it does not. Any such government involvement would be an impediment to progress. There are only computer scientists, programmers and entrepreneurs that are free to ply their respective trades as they see fit

Approximately twenty years ago, in Canada, central governmental planning determined that there would be approximately 65 entry training positions for new radiologists in Canada. There has been little change in this figure despite the fact that there have been a number of events that central governmental planning has failed to compensate for. There has been an explosion in imaging technology that has been a keystone of modern medical diagnosis. The population has aged and become sicker. Governments now rightfully avoid deficit spending. Stodgy central government planning cannot adapt with sufficient agility to a rapidly evolving world.
In the mere one hundred and fifty years since Marx's day of planning butchers and bakers, the world as changed to an incredible degree. There are now tens of thousands of occupations in existence that did not exist then. The world is a constantly changing place that is changing at an ever-faster pace. Within my lifetime, I have seen the first satellites put into space, the first men to walk on the moon and computer technology progress to the point were it is now in the realm of possibility to produce artificial intelligence. Marx could not possibly centrally plan a society that can compensate for such change.
Despite the fact that the Soviet Union has collapsed with its centrally planned economy, governments around the world still labor under the delusion that they can plan the events in their economy.
The Canadian Association of Radiologists recommends one radiologist per 13,000 population. I was one of only three radiologists in Thunder Bay serving a catchment area of 250,000 people. Obviously, we were severely constrained on the adequacy of service that we could deliver. This does not merely reflect a distribution problem, there is a massive shortage of radiologists country-wide.
Enormously overburdened with work and armed with insight into the statist nature of our health care system December 2000, my wife and I decided to move to the United States. Being one of only three full-time radiologists, one of my colleagues considered leaving when I did. This would leave only one full-time radiologist for 250,000 people. The lack of a cohesive radiology service at Thunder Bay Regional Hospital was viewed as a huge impediment to the delivery of quality care and could have spawned the resignation of several other specialists dependent upon our services. This could have crippled the hospital.
The centrally planned decision in Ottawa, to train 65 radiologists, could have caused Thunder Bay Regional Hospital to collapse and patients to die in Thunder Bay fifteen years later. This is the Butterfly Effect in action. Events widely separated in time and space do effect one another. The grandiose fallacy of government is that they credit themselves with such omniscience that they can interfere with the Chaos and produce a favorable end result. Even though the intention of government may have been benevolent, the decision to only train 65 radiologists was wrecking havoc.
The reality is that publicly administered health care in Canada does far more than just control the number of radiologists. The number of doctors in all specialties, the number of family doctors, the number of nurses, the number of hospital beds, the number of CT scanners, the number of MRI scanners, funds for running operating rooms and emergency departments are all governmentally constrained along with a myriad of other factors. Like the meteorologist's prediction of weather, improper alteration of a single factor could conceivably severely alter the end result. And yet, we are not only trying to control one of several interrelated factors; we are trying to control them all. Health care is a fantastically complex component of our economy. Centrally planning and control of health care is not only akin to saying we can predict weather with infinite accuracy but that we can also control it! By attempting to control the Chaos rather than simply letting it happen, the end result is catastrophe. The Chaos of delivering health care needs to be allowed to happen, rather than made to happen. The same statement can be made about the economy is general.
Even if one factor is corrected, it could cause a negative effect on other factors if they are not also corrected. For example, a sudden influx of family doctors needed for forty percent of the Thunder Bay population would cause a crushing increase in workload for the existent radiologists and would overwhelm the physical resources such as ultrasound machines, CT and MRI scanners unless their numbers are corrected commensurately. In fact, once more tests are ordered than can be performed, waiting lists would literally grow without stopping rendering existence of the technology futile. The primary limiting step on the length of waiting lists would be remaining life expectancy of the patients. Such occurs in Britain under the National Health Service where waiting lists for hip replacements are up to six years long. The rate-limiting step to this is the fact that people need hip replacements in the latter years of their life. Patients simply die off before they get their surgery.

A nuclear reaction occurs because one subatomic particle splits an atom releasing more subatomic particles which split more atoms thereby releasing more subatomic particles. The reaction occurs at an ever- increasing rate that can rapidly build to a nuclear explosion. In a nuclear reactor, the rate is controlled by the insertion of cadmium rods that mop up careening subatomic particles limiting the number of atoms split thereby dampening the reaction. If enough control rods are inserted, the reaction completely stops.
A healthy economy is like a nuclear reaction. Free individuals exhange money and commodities thereby spawning further exchange of money and commodities. Like the insertion of multiple control rods into a nuclear reactor, with all of the governmentally controlled constraints on the delivery of health care, the nuclear reaction is grinding to a halt.
Dentistry in Canada is not subject to the same degree of central governmental management. As a result, the provision of dental services has grown without the shortages that typify the rest of Canadian health care. Dentists, ancillary dental workers, dental offices and dental equipment are all well aligned with market need. Although there are severe shortages of physicians, there are no comparable shortages of dentists, chiropractors or lawyers. This is even in light of the fact that these other professionals have comparable educational requirements.


Up until less than twenty years ago, there was essentially no computer industry. Computers existed merely as research tools. Years ago, I remember reading a futurist article predicting that there would be a day when everyone would have a computer in their home. I thought the idea was preposterous. "What possible use could a home computer have?" I thought. As I sit writing this document on my home computer, I realize how wrong I was.
At the time of the Apollo space missions, NASA had a computer which filled a room the size of two football fields. It had less computational power than a modern Palm Pilot. Computers are now ubiquitous and highly sophisticated. Computers are a multi-billion dollar industry which stimulated the economy spawning the most prosperous era in human history. Did the costs of the computer age come from a governmental budget? Was the explosion of computer technology centrally planned by government? The answer is a resounding "no" in both cases. The unregulated spontaneous "chaos" of the computer market did not parasitize the economy by depleting a tax-derived budget. To the contrary, the computer industry symbiotically enhanced the economy. Computers have caused the world to have more wealth, not less, unlike governmentally delivered commodities such as Canadian health care.
Computers are a commodity for which only the most visionary of individuals could have foreseen a market niche. People did not even know that this was something that a major portion of the economy would be devoted to.

We have seen that interfering with the economy is only likely to produce deleterious effects. Why limit that concept to the events that lead to an exchange of dollars for commodities and services? Would it not also apply to non-economic events also. The Founding Fathers seemed to inherently know this. They realized that government needed to be constrained so that each of us could pursue “Life, Liberty and Happiness” in whatever manner we chose. They correctly saw the role of government as the protector of freedom not the grantor of freedom. Citizens had natural rights that pre-existed any government.
Rights are a moral sanction for freedom of action in a social context. The solitary man on a desert island has no rights. He does not have a “right” to be fed. If the man on the island has a companion, neither can morally impede the rights of the other to seek out food or pursue any other course of action. Whether a society has two people or millions, the same principle holds true. It is inherent in nature that we have a right to act as we see fit so long as we do not interfere with the rights of others. Rights merely define the morality of acting freely. Rights are not a guarantee of material goods. Although cagey politicians may persuade you otherwise, none of us has a right to that which must be provided by others. To deem so, annihilates the rights of the providers.
The Founders insured that we were free to act as we pleased. In a free society, we come and go as we please. We make choices as we please. We associate with whomever we please for whatever purpose we mutually choose, so long as it is peaceable. In Canada, as a relatively free society (outside of health care), I was free to pursue my current wife. Government would have no moral justification for interfering with this. The only person morally justified in interfering with my advances would be her. Through our own free choices, we married. The result has been wonderful and could only have occurred with each of us being free.
Although freedom allows us to seek out happiness, it is by no means a guarantee of happiness. Government harbors the delusion that it can guarantee our happiness through a vast array of programs and regulation. As demonstrated in the example of Canadian health care, programs and regulations only succeed in limiting freedom and limiting possibilities. As a further example, there are insurmountable hurdles to my radiology company in Minneapolis that disallow the interpretation of imaging cases from Canada. The potentiality for an enormous amount of service, job creation and income has been vaporized by a few well placed regulatory obstacles.
Likewise, if there had been a governmentally placed impediment to my wife and I associating, many wonderful events such as the birth of our two children and the innumerable events in our happy lives together would also have been mere potentialities that never came to fruition. The chance meeting of my wife and I was a seemingly random event in the Chaos of human existence that resulted in a beneficial outcome. No one, especially within the government, could have could have planned this through micromanagement of our individual lives. Beyond the maintenance of law and order and the securing of our borders against foreign invaders, government is about limiting possibilities, not creating them.
With the world being as complex as it is, it is not possible to foresee the negative consequences of seemingly good laws imposed on the people. Of course, there should be laws to protect us from theft, fraud and physical harm from others. That is why we have government. It is easy for government to be overzealous and undermine its own reason for existence. For example, in jurisdictions where legal limits for blood alcohol levels are too low, drunk driving has been shown to increase. The unforeseen consequence of overly restrictive laws, results in the law being seen as too easily broken and meaningless like letting the parking meter expire. The infraction is no longer seen as criminality but as a nuisance law. The stigma of breaking the law is negated and the infraction is then seen as trivial. Push the legal limit too low, and then alcohol-related driving deaths actually increase!
Similarly, the legally mandated institution of child-proof caps on medicines has been shown to increase childhood poisonings. Why? The bottles are so difficult to open that people now leave the caps off increasing the accessibility to young children. In these examples, the negative consequences are easily apparent. With the world being as complex as it is, often we may never be able to extricate the chain of events that any given regulation may cause. The deleterious consequence may be so far removed from the law that we are blind to it. Only someone with omniscience can foresee all of the consequences of restricting people’s freedom. Herein lies the fallacy of the benevolent dictator.
I have heard it argued that what the world needs is a benevolent dictator. The term is an oxymoron. It is simply not possible for a dictator to be benevolent. To restrict the choices of peaceable free people is an act of evil, not benevolence. Humankind, survives and thrives by the power of our individual minds. Why are not like animals that survive by brute force, large claws or fleet feet. Even in the past as cave dwellers by exercising our rational faculties, we have been able to keep ourselves alive. Through human ingenuity, we were able to procure food, clothing, shelter and fire. Through the continuous exercise of our minds, we have built a society with spaceships and microchips. None of this came through compulsion but rationally made choices. It is with the near infinity of peaceable free choices of individual minds that we have built civilization. The societies based upon compulsion and uniformity have stagnated in the middle ages (Afghanistan under the Taliban). The societies that tried to move forward through individual compulsion led to their own destruction (Nazism, Communism).
No dictator or group of such leaders can possibly see the ramifications of all of the choices that they make for everyone else. The cascade of consequences percolate out into the Chaos in ways that simply cannot be foretold. Although the centralized planning of Communism was intended to be better than the free market, it wasn’t. There was no prosperity; only starvation and impoverishment. It is delusional to believe that somehow some other government or dictator will “get it right”. Only freedom works. Compulsion doesn’t.
We each have the power to make individual choices and we each do so all day, every day. Beyond the power to make individual choices, our control over our lives and the course of all society is limited. All any of us can do in our lives is make individual choices as we go through life. Neither us, nor government can know the ultimate consequences of our choices. There is a near infinity of choices for each of us to make, whether it be the clothes we pick in the morning, our career choice or our spouse. None of us can know or predict what the ultimate consequences of such a dizzying array of choices ultimately will be. Nor can we even grasp the potentialities of the choices that we didn’t make. We may think that we are in control of our own lives, but we are not. Such a belief is merely an illusion. It is even more impossible to predict the outcomes for society in general for the choices made by millions of people making individuals choices and interacting with one another. Unfortunately, government does act and believe that it can interfere with the Chaos of human existence by making choices for us supposedly to make things better. They have the hubris of believing that they “know” how to make things better but the world is far too complicated for anyone but God to have such certainty.

Why an Increasing Gap Between the Rich and Poor is a GOOD Thing!

I can just imagine the vitriolic reaction that the title will invoke in most normal compassionate people. Like the old false belief that the Sun orbited the Earth rather than the truth that the Earth orbits the Sun, a change in perspective is necessary to see the truth. That which seems self-evident is not necessarily true.
The misconception that wealth needs to be redistributed is predicated upon a false concept. Back in the days of the industrial revolution, communist theorists, Karl Marx and Frederich Engels incorrectly believed that the amount of wealth in the world was finite and fixed. This was called the “Zero Sum Game”. They incorrectly believed that if one person was wealthy, it was at the expense of others. They perceived an injustice that the factory owners were wealthy and the workers were poor in comparison. Naively they believed that common ownership of the means of production (factories etc.) would result in a higher standard of living overall which would be more socially desirable. The truth is that the world is far wealthier now that it ever was and is much wealthier than it was during the Industrial Revolution. This has occurred to the degree that the world has embraced capitalism rather than communism.
Communist countries that attempted to redistribute wealth to form the Marxist “workers’ paradise” have degenerated into squalor and poverty to the point where most communist governments have been overthrown. Those that remain in existence only do so with an iron grip limiting the freedom of its individual citizens.
Despite the failure of communism and its attempt to redistribute its way to prosperity, modern workers enjoy a standard of living that far exceeds that of most of the factory owners in earlier times. The vast majority of common working folk enjoy ownership of cars, color televisions, computers, comfortable living accomodations, microwave ovens and sundry other consumer goods that even the early factory owners could not have purchased. These goods are produced by capitalism which is based on voluntary trade and division of labor. The general standard of living in the world in the countries that base their economic systems even remotely on capitalism is far higher than in the past.
There have been many excellent examples demonstrating the economic power of capitalism over communism. Just look at the wealth disparities between North and South Korea, East and West Germany, the Soviet Union versus the United States, Cuba versus Miami. Another good example is government controlled health care in countries like Canada and Britain versus the semi-capitialist health care system in the U.S. Britain’s national health service and Canada’s universal health care system are characterized by astonishingly long waits for what would be basic service in the United States. When I was a radiologist in Canada, our waiting list for CT was seven months. For MRI it was 13 months. I worked with a surgeon that had been trained in Britain. The wait for a hip replacement or a hernia repair in Britain was seven years.
What is the fundamental root cause of these differences? In a word, it is freedom. Freedom is the ability to make our own choices as individuals rather than being dictated to by governments. Free people will trade amongst themselves to satisfy their own individual wants by satisfying the wants of others. I work for a paycheck because someone wants my services and is willing to pay me to access my skills. The reason they pay me is because they make an individual decision that my services are worth more to them than retaining the money they have chosen to spend. Such transactions form the basis of the entire capitalist system. This mechanism is in place whether purchasing a mop at Walmart, buying a new home or choosing to employ someone. It is millions of voluntary economic transactions than create the mighty U.S. economy. Those economies that have attempted to centrally plan their economy through the decisions of a few elite bureaucrats that make decisions for everyone have universally faltered compared to the U.S. where decisions occur at an individual level.
It is an inescapable truth that we are all individual unique beings. Therefore we have differing abilities and different things to offer others in society in trade for those things that we want. If individual choice making is to be respected rather than delegating choice to the government, there are those that will become very wealthy and those that won’t do as well economically. It is too easy to castigate the rich as evil and deem that wealth should be forcefully redistributed in some “ideal” manner. What this “ideal” is would be subject to as many different opinions as people that you may ask. Should the most wealth that anyone be able to accumulate be two times that of anyone else? Should it be 10 times or 100 times?
Let us perform a thought experiment. Let us assume that the “ideal” distribution of wealth is as the Marxists proposed and that is that we should all have the same. For now, we will simply gloss over the fact that the only way to achieve such an end is to inflict force upon the populace. People generally don’t voluntarily give up that which is rightfully theirs. Force would be an inherent requirement of any attempt to create such a Utopia. The 100 million dead bodies created by the communists in the twentieth century is proof of that. Let’s neglect these ethical considerations for now and concentrate upon the economics.
Let’s all take the starting point that we have an equal amount of wealth and that we are free to use it as we each see fit. For arguments sake, everyone has one thousand dollars. Some will save all of it and some will spend all of it. Some may offer a service to others that others are willing to pay for. Suppose one person is an excellent singer and they offer to give a concert. She charges ten dollars to each person to give the concert. One thousand people feel that she is such a good singer that they are willing to part with ten dollars to hear her sing. After her concert, she is now richer by ten thousand dollars. Is that fair? Is it just? It is fair because each person voluntarily gave her the money. They were not coerced and felt that they received sufficient value in return to offset their losses. Justice is the concept that we get what we deserve. She deserves the money because one thousand people each decided to give her ten dollars. It is therefore just that she have her ten thousand dollars.
The point is that in a society in which we can all exercise our own choices, some people will get wealthier than others. Assuming that they do so through non-coerced voluntary transactions, they can only do so by providing value to others.
What about the case of Bill Gates who literally has billions of dollars? Is there some arbitrary point at which people should be restrained from making more money? Of course not. Bill Gates is fantastically wealthy because his computer operating systems add so much value to people’s lives that they keep on handing him more and more money over and over. It is hard to conceive of anyone not being touched by Bill Gates’ genius. Whether you use a computer or not, computers have allowed businesses to operate more efficiently such that products can be delivered to people cheaply thereby raising the overall standard of living. In my line of work, it is because of computers and other technological advents that we have reached Star Trek capabilities of diagnosing people’s ailments. Even if you are a street person receiving health care in a county hospital, you have benefited from Bill Gates because the hospital is invariably using a computer (or many) to give care. I would wager that even the your local homeless shelter administers itself and operates more efficiently with a computer.
The wealthy are so because they produce something of value that allows them to create wealth. They should be honored as the valuable members of society that they are. They should not be castigated for their abilities. By many people’s standards, I am wealthy although I am certainly not Bill Gates. How did I get this way? Firstly, I worked incredibly long and hard to get into a position in which I could even start to build some wealth. I did 16 years of post secondary education living with the stress of meeting ever rising academic standards to move to a higher level of education. I spent most of my youth studying during evenings when my peers were partying or engaging in other types of recreation. I vastly lowered my standard of living for 16 years because my income was so low during this time. In fact, I lived well below the poverty line. I have worked as much as 120 hours in one week during my medical training. I now have a skill set that people want to access. I make decisions and take actions that affect the course of people’s lives. Should they be disallowed from paying me to access my skills? Alternatively, should I have to accept less pay than I feel my time, skills and judgement are worth? Clearly, the answer is no if we are to base our society on the basis of freedom of individual choice.
If you need your pancreas biopsied, do you want me to do it or the hospital janitor? If you want me to do it, you must be willing to pay me fairly for the service. That means you must be willing to pay me an amount that compensates me for lost time that I could be doing something else. Likewise, I can only charge that which you are comfortable paying otherwise you will get the service elsewhere. Repercussions would be serious if physician income is limited. If there is not sufficient return, people will not invest the time and effort into becoming doctors. Who in their right mind would invest 16 years of their life working up to 120 hours per week while enduring the stress and strain of medical training if there is no economic return?
But of course, there are people out their with much less education and responsibility than me that make much more money than I do. Do I have a problem with that? No, I don’t if they did it providing people with something that they wanted and voluntarily paid for in a free market.
If we are to make the same amount of money regardless of what we do, incentive would be removed for investing capital. An entrepreneur that starts a new small business may have to borrow and risk hundreds of thousands of dollars. In a free market where people can decide whether or not they want to be patrons of his business, there is a big chance of being unsuccessful and losing it all. There is no reason to take such a risk if the return will only be the same as an employee that simply punches the clock. One of the great things about capitalism is that it does reward those that can best recognize the opportunities where money should be invested to provide the services that people want. The communist and liberal mindset is that this should be punished.
Those in society that create wealth are a godsend to us all. Suppose someone has a net worth of one million dollars. The standard Marxist mindset is that this is one million dollars that everyone else does not have. This is not true. Much of that money is likely invested where it serves as capital for new ventures that provide services that people want and create jobs so others can create their own wealth.
Even if much of the million dollars is spent, society benefits. Suppose she purchases a house. The large house of the millionaire had to be built by someone. The raw materials had to manufactured. Many people benefit through the opportunity for employment and personal wealth generation that this presents.
As the rich get richer, the poor get richer also. The poor during the industrial revolution did not have microwave ovens, central air conditioning and heating, color televisions and access to the internet as many of the poor in America now do.
Now we are ready to tackle the central premise of this article. The growing gap between the rich and poor is a good thing. In a society that recognizes that there should be freedom to engage in trade to provide those things that people want, it is mandatory that people be paid that which others are willing to pay them. There must be a return for people with desired special skills or the ability to channel capital where it should go. If they cannot improve their economic condition by doing so, they won’t.
No sensible person would risk a sum of money if the potential returns don’t offset the risk. In other words, there must be a potential to get richer from our actions. Capital comes in different forms whether it be money, time or years of education. Naturally as the amount of capital that we consider investing increases there must be an ever-increasing potential for return. The fellow that invests 100 hundred dollars and gains ten dollars in interest one year later should be pleased. The fellow that risks a million dollars cannot be arbitrarily limited to a profit of ten dollars. If he is, he simply won’t risk the million dollars.
This is the limitation that society would have to impose if we decide that we do not want the rich to get richer. But this would be everyone’s loss because the investor can only increase his investment if people decide that they like the service that his investment provides. Actually for my argument to be consistent, we would have to stipulate that the return on an investment of one million dollars should be zero because we don’t want anyone to get richer. It is in the nature of investing that there is a potential for loss; possibly even the entire sum of invested money. Of course in such an instance, the people with money will not invest and we all lose. Without the investment of capital by those that can generate capital, the economy would collapse and we all would live in poverty.
The fact is we have to encourage investment so that our standard of living for everyone can rise. Who best to encourage investment from? Those with the most capital; the rich. How do we encourage them? By letting them get richer. For all of us to benefit, the gap between the rich and poor should grow not shrink. By gosh, the Earth does orbit the Sun!

How Enron Made the Case for Capitalism

The knee jerk response to the events of Enron is to disparage capitalism. When looked at clearly, the events at Enron strengthen the case for capitalism.
With the collapse of Enron, employees that had invested in company stock lost an average of 20,000 dollars each from their retirement plans. This is money that they will never see. This is terrible indeed but with the just collapse of this company, Enron will never be able to dupe people in this manner again. Enron employees had several different investment options of which company stock was only one. It is a basic principle of sound investing to diversify rather than to put too many eggs into one basket. Those that invested too heavily in Enron were exercising a choice, albeit a poor one. On the other hand, in the few years that I have lived in the United States, I have been compelled to pay into Social Security much more than the amount that the average Enron stockholder lost. Under the current structure of Social Security, it will be insolvent by the time I retire and I will receive nothing.
Social Security is a giant Ponzi scheme. The original intent of the government was that payments would be saved and in effect, people would be paying for their own retirement. Hence, the euphemism “contributions” rather than tax. Like Ponzi, rather than investing and saving contributions as promised, the government squandered the money. Rather than being a savings plan for the future for ourselves, current workers must support current retirees. At least Ponzi and the miscreants at Enron went to jail. The federal government remains unaccountable for its crimes.
When Social Security was started under President Roosevelt, there were many workers for each retiree. As the population ages, there will soon only be two or three workers supporting each retiree. As this unfolds, imagine the bitterness on the part of those working that are being forced to pay for those that are living off the fruits of their labor. Worse yet, with social security headed towards insolvency, those of us that are younger will likely never see our money.
It is inevitable that there always will be people that will behave in an unethical manner. When private enterprise does it, there is ultimate accountability in that the market will punish the wrong doers. Their business will fail and people will divert their capital elsewhere to those concerns that will use it well. It is an imperfect system in a continuous state of reorganization. Imperfect, but it works. The tremendous level of wealth that one sees all around in this country was created through the chaotically coordinated efforts of free markets, not the parasitism of government.
The Enron scandal evokes cries from the left about the horrors of capitalism. It is implied that we would be better if government ran more of our lives. Business, especially big business is viewed as evil and needs to be suppressed and regulated. Since there always have been and always will be dishonest people, is it not better to let them function in a market where their misadventures are stamped out by the just hand of the market as opposed to expanding the powers of government where the dishonest and the irresponsible have the massive coercive power of the state to impose their will on all of us? Markets are ultimately accountable whereas government is not.
Capitalism decentralizes power rather than concentrating it in the hands of government. Government with its ability to impose its will on all of us potentially has far more power to negatively influence our lives than any private company. Certainly, some companies become very large but they can do so only by serving their customers. If you are not happy with the prices and services at Walmart, then you are free to go to Costco or the Mom and Pop store down the road. Walmart knows this and must continuously work to please you. Not happy with the service at the Department of Motor Vehicles? Well, you are just out of luck.
Unfortunately, government has reached its coercive tentacles into many spheres of our daily life. They intrude into our health care, paychecks, education and with social security, even our retirement planning. Unlike Walmart, we do not have the freedom to withhold our dollars and go elsewhere. If you are not happy with the way T. Rowe price manages your investments, you have near infinite choices of where you can put your money. If you are not happy with Social Security’s use of your money, that is just tough luck.
Capitalism is the unfettered exchange of goods and services amongst free people. Socialism is state control of the resources. Unfortunately, we presently live in a mixed economy with elements of both. Many of the foibles attributed to capitalism are actually manifestations of socialism. For example, corporate subsidies are granted by the state and not through the free choice of individuals exercising choice in the market place. Tariffs, restrictive regulations and licensing laws, price controls and other interventions are granted by government and result in distortions whereby some individuals, special interest groups and companies hold a specially privileged place in society. The state is guilty of this, not the market.
The lesson from Enron is not that markets don’t work but that they do.