G. Keith Smith, M.D.

Much can be learned by the reaction to the refusal of several governors to implement exchanges or expand Medicaid in their respective states.  I have written at length about the usefullness of Rothbard’s “cui bono” (“who benefits”) concept, to pull back the curtain in an attempt to find the real reasons for this or that government policy/action.  In other words, no matter what some government apparatchik proposes, look hard for the beneficiaries of that action and you’ll more than likely discover who was behind it.  

On the flip side and as a corollary concept, those who whine the longest and loudest when a government policy is not pursued, are those most likely to have benefitted, had the policy been realized.  The reaction of the corporate hospitals to Governor Mary Fallin’s decision to reject creation of an exchange and her refusal to expand Medicaid illustrates the validity of this and signifies a division in the “business” community that merits consideration.  I think Governor Fallin had to know this rift would result, making her decision all the more remarkable.  

Hospitals and insurance companies have as much or more support on the Republican side of the aisle as they do on the Democrat side, historically.  Many times, hospital CEO’s are treated as fellow “businessmen” by those in the business community.  The wild profits of hospitals are tolerated as regrettable but necessary.  Hospitals smooth this situation over by constantly treating anyone within earshot about how much care they “donate” or give away and their “contributions” to the community.  While the hospital-men (modern day highway-men) quietly prayed for Obamacare’s healthy future, other businessmen saw this legislation for what it was:  the most gigantic over-reach of federal power in recent memory and one that threatened the very existence of their businesses and enterprises.

Certain Republican legislators having long been in the pocket of the big hospital lobbyists and big insurance, have been in a jam.  They had to look like they were against Obamacare to the folks who voted for them, all the while knowing their corporate benefactors were counting on them to do their part.  As the governors contemplated nullifying this law, we heard…”..it’s the law of the land, now that the election is over,” and other such statements in an attempt to disarm the rebellion.  

In chapter 43 of Thomas DiLorenzo’s blockbuster new book, “Organized Crime:  The Unvarnished Truth about Government,” he writes the following:

“As common as it is to speak of ‘robber barons,’ most who use that term are confused about the role of capitalism in the American economy and fail to make an important distinction-the distinction between what might be called a market entrepreneur and a political entrepreneur.  A pure market entrepreneur, or capitalist, succeeds financially by selling a newer, better, and/or less expensive product on the free market without any government subsidies, direct or indirect.  The key to his success as a capitalist is his ability to please the consumer, for in a capitalist society the consumer ultimately calls the economic shots.  By contrast, a political entrepreneur succeeds primarily by influencing government to subsidize his business or industry, or to enact legislation or regulation that harms his competitors.”

If you apply DiLorenzo’s distinction to the business community, two types of entrepreneurs certainly appear, the vast majority of those in the healthcare business falling into the “robber baron” group.  Imagine a chamber of commerce meeting where those political entrepreneurs in the various health businesses had to wear an “O” signifying their support of Obamacare, legislation that may represent the ruin of many others in the room.  Unable to satisfy the political and market entrepreneurs with her decision, Governor Mary Fallin sided with the free market bunch by rejecting the exchanges and refusing to expand Medicaid (which basically amounts to loading more passengers on the Titanic in the words of one legislator).  

Good for her.  She should wear as a badge of honor the various attacks she is receiving from the political entrepreneurs in the healthcare business sector.  Contrast the principle of her decision with that of New York’s mayor, who pulled his sword in defense of union workers, rather than accept the much needed non-union help in Sandy’s aftermath.  

G. Keith Smith, M.D.

Professor Robert Higgs toward the end of his brilliant book, “Crisis and Leviathan,” discusses the errors of the renowned social scientist Joseph Schumpeter with regards to his prediction of a socialist U.S.,  post WWII.   Higgs describes a post-war march toward a more mixed economic result, one characterized by a government that gives lip service to private property but whose intense regulation of this private property resembles the fascistic regimes of wartime Italy and Germany.  Higgs faults Schumpeter for clinging to a Marxist model with the bourgeoisie or “business class” on one side and the labor unionists, intellectuals and government bureaucrats on the other.  Consistent with this “two-class theme” Schumpeter portrays those in the business class as the last defenders of capitalism (much like Ayn Rand).  Quoting the brilliant Higgs,”He (Schumpeter) failed to appreciate how much the abandonment of traditional economic liberties over the long run had resulted not from the acquiescence or defeat of businessmen but from their enthusiastic sponsorship.”  Later, “Businessmen have done more than their full share to foster the active regulatory state from its very inception.”  

Examples of medically related businesses that have embraced this fascism are too numerous to list.  Operationally, it is critical to understand that while the political contributions and bribes these medical mercantilists pay are substantial, the loot they later receive dwarfs their “investment.”  The poor-mouthing and complaining about the regulations or new government hoops and hurdles that these medical “businesses” must overcome create the needed distraction, one that deflects attention from the promised future payoff.  Giant hospitals are a prime example of this “business” model.  Being the only medical facilities big enough to deal with the most onerous government curve balls, behind closed doors the administrators of these facilities cry in their champagne as they watch their smaller rivals whither due to these same government curve balls.  

One can only imagine what kind of dough the HIT (health information technology) companies threw down to obtain a government mandate to buy their product.  This is a more blatant and obvious bribery.  The distraction effort took the form of an intense propaganda campaign to convince the public that this HIT emergency was all in the interest of patient safety.  This campaign continues today.

“Businessmen” that have made their millions through government contracts are nothing more than fascists as they essentially lobby for the stolen property to capitalize their “pubic-private” partnership.  As intensely ingrained as these men are in the medical business, their footing is precarious, as the source of their funding is unstable, essentially the product of a robbery.  True and free markets raising their heads out of the medical mud are devastating to even the biggest of the crony’s flagship “businesses” and facilities.  

As more and more physicians and medical facilities display their prices the tactics and true colors of the fascist conglomerates will become more clear.  I believe that this medical industrial complex will fall just like the Berlin Wall, as the unsustainable and unstable business model, embraced in this country for the last few decades, has run its course.  The free market, with its creative destruction,  will once again bring to ruin those who deserve it dearly.  

G. Keith Smith, M.D.

When I was first seriously thinking about the concepts of liberty, I was focused on and fascinated by how well freedom “works.”  You know the drill:  tax cuts actually increase federal revenue, competition actually benefits the poor as this results invariably in a lowering of prices.  While I continue to find this interesting to some extent, this approach to liberty, one which I now consider sophomoric, continues to be promoted as the justification for its own existence.  In other words, examples of how free markets result in far superior utilization of resources, lets the promoter of liberty off the hook at a dinner party for having uttered such unmentionable concepts as the free market and capitalism.  

But here’s the rub.  It doesn’t matter what wonderful deed is accomplished with money taken by force from one individual and given to another.  The confiscation of the property in the first place is wrong.  Someone’s rights have been violated.  For me the argument stops there.  Folks argue about the advantages of this or that government program.  People talk non-stop about the efficacy of one program or another.  If you believe in property rights, you see this as nonsense, all based on the false premise of the legitimacy of theft.  

The endorsement of any level of government involvement in health care is an endorsement of property confiscation.  Even when government health care is at a minimal level, the principle of inviolable property rights has been surrendered, and only the matter of degree is left to quibble about.  

Thinking about the proper role of government in terms of property rights helps to identify and avoid the distraction of whether some “greater good” can be achieved with stolen property.  The ends never justify the means.  So when you hear someone drone on and on with their trumped up statistics about how “we are the unhealthiest people on earth,” or “the health care here is the worst on the planet while simultaneously the most expensive,” or “countries with single payor systems have the best health care in the world,” or “we have the highest infant mortality in the world,” or some such, just before they use these “failures of capitalism” to justify some government intervention, remember that whatever they are about to propose is essentially a robbery.  This just flat makes it wrong, in my book, no matter what they have to say after all of the other noise.  If the individual you speak or spar with does not respect your or anyone else’s private property, I don’t think you owe them a hearing of what they plan to do with your stuff.

G. Keith Smith, M.D.