Howard Dean Endorses War Communism

by Gene Callahan

I heard Howard Dean on the radio yesterday morning (CBS AM, for those who care to look for a transcript — I tried but could not locate one) talking about why health co-ops won’t work. “You see,” he said (and I quote from memory — see no transcript note above), “our private health care system is inefficient — not because private enterprise is inherently inefficient, but because the insurance companies are owned by investors, so they need to take some of the premiums and pay out a return on investment. Private insurance only pays about 80 cents on the dollar to actual medical care, while Medicare pays about 97.”

Dean is apparently not aware that most “private enterprises” are owned by investors. The argument he gave is, in fact, a straight up Marxist argument for the inefficiency of capitalism. (Yes, “socialism” and “communism” get tossed around too freely in this debate, but in this case I’m merely being factual.)

So why isn’t Dean in favor of nationalizing the entire economy? Couldn’t we get bread, and computers, and automobiles more efficiently if we just cut out those useless profits? (Oh, forget that last item — I forgot that we are nationalizing the auto industry.)

7 thoughts on “Howard Dean Endorses War Communism

  1. I’m not sure that Dr. Demented Dean is including the cost of the government of which these programs are part of.

  2. Good point Gene. I’ve been wanting to write a Mises Daily article about this very point; someone said it beautifully in a comment at Krugman’s blog. Something like: “Single payer necessarily reduces the costs of providing health care, because you don’t have to give a cut to investors.”

  3. I’m with you on this one, Gene. I watched him say exactly these words on… CNN, I think? My jaw just dropped to the ground. Never have I seen a more ridiculous definition of efficiency. We need to more directly engage these people in public debate.

  4. “So why isn’t Dean in favor of nationalizing the entire economy?”

    Indeed. Though a more general point could be made; given standard micro theory, why aren’t all conventional economists in favor of nationalizing the whole economy, given what is or is not in conventional micro texts?

    That is, what bit of micro theory explains to a student (or professor) why profit instead of not-for-profit firms will be more productive, and cheaper for the consumer?

    I’ve got Mankiw, and i can’t find the answer to that question anywhere in it.

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