Catch-22
5 December 2007
Editor, The Wall Street Journal
200 Liberty Street
New York, NY 10281
To the Editor:
Thomas Letchfield says that "The case for requiring everyone to buy health insurance is the same as that for requiring motorcyclists to wear helmets - society, i.e., taxpayers, pays for whatever health care may be needed, and for however long" (Letters, December 5).
Indeed. But Mr. Letchfield seems unaware of the perversity of this fact. Government's core role (as economists inelegantly say) is to internalize externalities. It is to stop Jones from imposing costs on Smith without Smith's consent. But in practice government creates externalities. Only by forcing taxpayer Smith to cover Jones's medical and retirement expenses is Jones able to impose costs on Smith without Smith's consent. In short, government externalizes internalities - and then demands yet more power to "fix" these problems that government itself creates.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Editor, The Wall Street Journal
200 Liberty Street
New York, NY 10281
To the Editor:
Thomas Letchfield says that "The case for requiring everyone to buy health insurance is the same as that for requiring motorcyclists to wear helmets - society, i.e., taxpayers, pays for whatever health care may be needed, and for however long" (Letters, December 5).
Indeed. But Mr. Letchfield seems unaware of the perversity of this fact. Government's core role (as economists inelegantly say) is to internalize externalities. It is to stop Jones from imposing costs on Smith without Smith's consent. But in practice government creates externalities. Only by forcing taxpayer Smith to cover Jones's medical and retirement expenses is Jones able to impose costs on Smith without Smith's consent. In short, government externalizes internalities - and then demands yet more power to "fix" these problems that government itself creates.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Posted by Don Boudreaux on
Thursday May 15, 2008 at 12:14pm