Save the World? Learn Economics

The recent death of actress Natasha Richardson has given the socialized medicine of Canada another black eye. After the original 911 call, it took four hours to get Richardson to a hospital in Montreal because Quebec has no medical helicopter system. "Our system isn't set up for traumas and doesn't match what's available in other Canadian cities, let alone in the States," said Tarek Razek, director of trauma services for the McGill University Health Centre, which represents six of Montreal's hospitals." In a brilliant analysis of what's wrong with socialized medicine, Bill Anderson points out that countries with socialized medicine systems are always relatively under-supplied with capital goods, like medical helicopters. Anderson's county of residence has 80,000 people and more MRI machines than Montreal which has several million residents. It is numbers like these that lead to the quip that it is easier in Canada to get an MRI for one's dog than for one's aunt.

Today, wealthy Canadians can simply bypass Canada's inferior health care system (provided they are not in the same situation Natasha Richardson was in) and get medical care in the relatively capitalist U. S. system. Were the United States to adopt a system like Canada's, health care would eventually be much worse than it is today. Wealthy Americans would bypass this new American system by going out of the country to a hospital that will allow doctors, likely refugees from the U.S., to cater to them. Thus the limousine liberals who advocate socialized medicine for the masses know that they themselves will not have to wait in line for health care.

The bigger question, however, is how does someone like Bill Anderson analyze a question of political economy like the provision of health care? Answer: He simply applies knowledge of economic truths to real situations. The fact that we have a system of economic knowledge to draw upon to guide us is largely the consequence of the stubborn adherence to professing the truth of the greatest economist of the 20th Century, Ludwig von Mises. With courage and at great personal and professional cost, he battled the destructive intellectual trends of the last century: historicism, socialism, fascism, interventionism, and any other doctrine which promised prosperity yet was bound to bring misery.

Although Ludwig von Mises believed, like Max Weber, that economic science is value free and should not be influenced by the personal opinions of the scientist, he strongly advocated laissez-faire capitalism. There was no inconsistency. Just as a biologist needs objectivity in studying harmful bacteria, he may be motivated to study the bacteria in order to save humans from the misery the bacteria cause. Thus von Mises had developed economics as "scientific theory without any thought of its political significance". Yet he passionately advocated laissez-faire economics because his critique of interventionism led to the conclusion that interventionist government policies subvert the free choices of individuals and always accomplish the opposite of what the policy makers profess to be the goals of the policy. Laissez-faire is the proper policy is so far as mankind prefers "life to death, health to sickness, nourishment to starvation, [and] abundance to poverty." For Ludwig von Mises, advocacy of laissez-faire was advocacy of civilization itself.

Ludwig von Mises wrote in his magnum opus Human Action "Economics deals with society's fundamental problems; it concerns everyone and belongs to all. It is the main and proper study of every citizen." Can a simple person learn enough economics to actually make sense of the world and evaluate government policy? Certainly. Economics is not, as one might think from browsing through the requirements for a degree in economics from a typical college, the realm of specialists with knowledge that is beyond the comprehension of mere mortals. Physicist Ernest Rutherford is reported to have said, "If a principle of physics could not be explained to a barmaid, ...the problem was with the principle, not the barmaid." So too with an economic principle.

Where to begin learning economics and becoming a citizen qualified to make sound pronouncements on the seemingly endless string of policy blunders by government? I recommend four books for beginners, although there are others. These can be read for free:

The Concise Guide to Economics by Jim Cox

Economics in One Lesson by Henry Hazlitt

What Has Government Done to Our Money? by Murray Rothbard

Economic Policy: Thoughts for Today and Tomorrow by Ludwig von Mises

Happy reading!