How Does Healthcare Reform Impact Liberty in Chile?

For more than three decades Chile has had a dual healthcare system consisting of both state-run and private health services, which has provided more Chileans with greater choice and better access to such services. Initially funded by way of a 4 percent tax on income, by the late nineties the public Fondo Nacional de Salud (FONASA) started running deficits as one in four Chileans opted for private insurance instead. Consequently the obligatory contribution was raised to 7 percent, helping force a significant chunk of people back into the old system. Unfortunately government meddling did not stop there.

1314902_99313658In 2005 a fresh round of regulations listed 56 priority health problems that all insurers must cover. Unsurprisingly, premiums spiked across the board that year as well as the following years. Unfazed, the first Bachelet administration expanded the list to cover a total of 80 medical conditions. The result is as predictable as it is inevitable, and the unfortunate thing is it usually leads to more demonization of the market and increased calls for more heavy-handed government intervention. Considering the aforementioned developments it seems as though that process is already playing out.

Needless to say, the selfless crusaders for more equity – be it in healthcare or whatever other area of life – make no mention of inflation, currently estimated at 4.5 percent, that is stealthily yet ceaselessly robbing all Chileans of their purchasing power. Nor is there any mention of the fact that patent laws are artificially propping up drug prices, or that compulsory medical licensing is keeping competition out of the market. Experiences with “free” state-run healthcare and the resulting long waiting lines and other unintended consequences such as in Canada and the UK are equally overlooked if not purposely left out of the debate.

To point the finger to the market as the source of inequality merely reveals one’s intellectual laziness, if not dishonesty. Moreover, it is to deny the fact that free market type policies have made Chile the most prosperous Latin American nation in known history, slashing poverty from 50 to 11 percent while raising per capita income fivefold. In other words, being poor in today’s Chile generally means owning a used sedan rather than a new SUV, whereas just a few decades ago it was the difference between having three meals a day or going hungry.

Extracting wealth from the SUV driver in the name of equality is not only immoral; it has historically never lead to anything but equal misery for everyone, wherever it has been tried. Besides, the case of the United States shows that simply increasing spending on health by no means guarantees a healthy population. After all, when government policies make healthcare more expensive that inevitably leads to more spending, yet as a measure of effectiveness or efficiency that metric is of no use at all. It does, however, achieve the exact opposite of the stated goal of making healthcare more affordable. Where have we heard that before?

Bachelet’s healthcare reform falls squarely into the category of just another excuse for more government intervention to solve the problems created by previous intervention.

The Futility of Institutional Reform

For over a century Ludwig von Mises and other Austrian School economist have convincingly argued their case and exposed the obvious inconsistencies in Keynesianism and other schools of economic thought. In more recent decades many liberty-minded Americans have collectivized themselves in such organizations as the CATO institute, the Libertarian Party, and Campaign for Liberty, yet the police state and government debt are now larger than ever in the history of the “land of the free”.

On the other side of the pond the increasing tyranny displayed by the European Union has jolted many into the same type of collectivist action. Different euroskeptic organizations are sprouting up everywhere pushing for “democratization”, more accountability and more transparency. Nonetheless, the EU bureaucracy is growing in leaps and bounds even if the 2014 budget is set to fall by nearly 6 percent amidst unprecedented austerity measures in member states. From olive oil bowls and jars in restaurants to the shape of fruits and vegetables, bureaucrats in Brussels aim to control every part of Europeans’ lives.

HPIM0501.JPGIt is about time liberty-minded folk around the world recognize that voting, advocating for reform and even civil disobedience all fall under what Sun Tzu would call “letting the enemy pick the battleground”. While all of these may (seem to) have a temporary positive impact those that engage in them are – often unknowingly – legitimizing the very existence of the State; the idea that there should be masters, and therefore slaves.

It is time to understand that the State sustains itself not with guns or bombs or tanks or soldiers, not by a “justice” system that puts peaceful people behind bars or with the evil man or woman up top; the only thing that is holding up the house of cards called government is legitimacy. And to engage in any of the above actions, no matter how well-intended, is to aid and abet this longstanding enemy of freedom. It only serves to lend more legitimacy to the statist paradigm and prolongs the inevitable collapse of the system as we know it. The sooner a significant number of people realize that there can be no legitimate rulers, the sooner humanity will be free.

Fortunately more and more people are rejecting coercion and oppression, as evidenced by their tuning into alternative news media looking for truth in reporting, getting into alternative stores of wealth like gold and silver as well as Bitcoins, seeking educational alternatives for their children, researching medical alternatives rather than conventional sick-care and buying (or growing!) real food instead of the junk commonly found on grocery store shelves. This is the revolution between the ears that is happening right under our noses, and it’s already having an effect.

Needless to say, the vast majority of people already practice the non-aggression principle in their daily lives; after all, it comes natural to people. As such it is not given much thought and so taking the moral stance in political matters is an approach that has not yet been widely adopted, but that day is coming.

The realization is sinking in that bypassing the Leviathan is much more effective and rewarding than trying to change it. Asking your ruler to be a little nicer while legitimizing his very existence and the hierarchical nature of the system is like asking an assailant to drop the baseball bat and beat you with his fists instead.

Fighting for reform in the name of freedom is a battle that cannot be won, for reform of any institution or policy is just renewed justification for its existence.