Capital Investment in Health-Care

Also available at mises.ca

Universal health-care may not be a “right,” but it is part of the civic culture. Ergo, if one wishes to live in “Canada,” the territorial monopoly in charge has the right to extract wealth from you in exchange for services rendered incapable on a free market. Whether or not this argument is valid is irrelevant to the fact that capital investment is necessary for a sustainable health-care system. However, government by definition cannot engage in capital accumulation. Therefore the long-term functionality of a state-controlled health-care system can be described as destructive, whereas the idea of “universal access” can be separated from the state apparatus and deemed sustainable.



 
First – why capital accumulation is necessary for an organization like health-care. Health-care is knowledge-based and dependent on accesses to technologies. This access is in the form of capital. Society accumulates capital when individuals save and/or invest a portion of their income. The reasons why are unique to the individual, however individuals often act as groups to achieve common goals. Businesses that successfully serve the public will find it easy to obtain capital for expansion – the unsuccessful go out of business. The government only distorts this process by taxing capital gains or by interfering with interest rates, leading to the current situation where capital consumption is a serious problem.
 
Second – the government cannot accumulate capital because it taxes. Capital implies saving, something the government cannot do. Capital investment is the result of entrepreneurs using price signals to allocate resources for consumer demand. “Government investment” is an allocation of resources based on a politician or bureaucrat’s own preferences. Capital requires consumers voluntarily giving up funds for entrepreneurs to invest. “Government investment” requires forcing consumers to give up their funds, thus acting as a parasite on the productive elements in society. Forcible seizure of wealth is detrimental to an individual’s own valuation because he must resort to the arbitrary wishes of a third party before he can act for his own self interest.
 
Therefore – capital goods are impossible in a command-and-control system which all governments are based on. A universal health-care system must be a by-product of voluntary association or else the entire system will slowly destroy itself. The private sector allocates resources based on a production structure in tune with consumer demand. The government is fundamentally destructive, allocating resources based on the preferences of bureaucrats out of touch with the knowledge revealed in price signals. A efficient, sustainable health-care system should be regulated by the superior “checks and balances” of a free market; not an arbitrary authority from history. The idea of “universal access” is part of a civic culture that need not be defined by a territorial monopoly. Canadians don’t need to resort to using violent means to achieve this peaceful end. Not only is the free market capable of supplying “universal access,” it would be superior to the government’s unproductive methods.