Unless you are interested in economics, you probably never heard of Milton Friedman, who died a few days ago at the age of 94.
He was a guy who combined genius with common sense. If not the most influential American economist of the last half of the 20th century, certainly in the top two or three. I read a couple of his books 25 years ago – they were excellent.
The Wall Street Journal posted some excerpts from past op ed columns of Friedman, and they can be accessed on their free opinionjournal website. Friedman’s Sampler OpinionJournal – Extra
Here are a couple of excerpts, one "on the free market" and "on health care":
On the Free Market
What most people really object to when they object to a free market is that it is so hard for them to shape it to their own will. The market gives people what the people want instead of what other people think they ought to want. At the bottom of many criticisms of the market economy is really lack of belief in freedom itself.
The essence of political freedom is the absence of coercion of one man by his fellow men. The fundamental danger to political freedom is the concentration of power. The existence of a large measure of power in the hands of a relatively few individuals enables them to use it to coerce their fellow men. Preservation of freedom requires either the elimination of power where that is possible, or its dispersal where it cannot be eliminated.
It essentially requires a system of checks and balances, like that explicitly incorporated in our Constitution. . . .
The person who buys bread doesn’t know whether the wheat from which it was made was grown by a pleader of the Fifth Amendment or a McCarthyite, by person whose skin is black or whose skin is white. The market is an impersonal mechanism that separates economic activities of individual from their personal characteristics. It enables people to cooperate in the economic realm regardless of any differences of opinion or views or attitudes they may have in other areas.
–from "The New Liberal’s Creed: Individual Freedom, Preserving Dissent Are Ultimate Goals," May 18, 1961
On Health Care
The best way to restore freedom of choice to both patient and physician and to control costs would be to eliminate the tax exemption of employer-provided medical care. However, that is clearly not feasible politically. The best alternative available is to extend the tax exemption to all expenditures on medical care, whether made by the patient directly or by employers, to establish a level playing field, in terms of the currently popular cliche.
Many individuals would then find it attractive to negotiate with their employer for a higher cash wage in place of employer-financed medical care. With part or all of the higher cash wage, they could purchase an insurance policy with a very high deductible, i.e., a policy for medical catastrophes, which would be decidedly cheaper than the low-deductible policy their employer had been providing to them, and deposit all or part of the difference in a special "medical savings account" that could be drawn on only for medical purposes. Any amounts unused in a particular year could be allowed to accumulate without being subject to tax, or could be withdrawn with a tax penalty or for special purposes, as with current Individual Retirement Accounts–in effect, a medical IRA. Many employers would find it attractive to offer such an arrangement to their employees as an option.
—from "A Way Out of Soviet-Style Health Care," April 17, 1996
As far as health care goes, the current medical savings account programs (msa’s) are based on the idea of a high deductible health insurance policy, combined with a tax favored savings account, exactly as described by Friedman above.
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