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Health care & the follies of central planning

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Sunday, July 14, 2013, 9:00 p.m.

“Under socialism, production is entirely directed by the orders of the central board of production management,” explained Ludwig von Mises (1881-1973), sociologist, philosopher and Austrian School economist.

Under central planning, intrinsically, the few do the planning while the many are required to become cogs in what Mises called an “industrial army,” a herd of individuals without authentic individuality who are well-trained to be yielding and unimaginative.

The problem, aside from the lack of freedom and power for the majority, is the limited knowledge — an inescapable shortcoming among the planners and societal designers.

As F.A. Hayek explained in his book, “The Fatal Conceit: The Errors of Socialism”: “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”

We saw how Hillary Clinton in 1993, with a severe case of fatal conceit, imagined how she could successfully redesign the entire American health-care system by holding a series of closed-door meetings with a small cadre of Ivy League academics, who had basically no medical knowledge, no business experience and no appreciation of the central role of individual incentives and personal sovereignty in a free and decentralized society.

The result was a top-down, command-and-control system, simultaneously coercive, punitive, complex, politically naïve and economically destructive, the core of which was a mandate for employers to provide health insurance for all their employees, regardless of their ability of pay.

Asked by a Virginia congressman what could be done to ease the burden of her health-care mandates on small businesses, Mrs. Clinton retorted in her best let-'em-eat-cake style: “I can't go out and save every undercapitalized entrepreneur in America.”

And Hillary Clinton's verdict on business owners who couldn't afford to give 100 percent health-care coverage to 100 percent of their employees? “Where I come from, freeloaders and free riders get no respect,” she proclaimed.

The message from central planning was loud and clear: Go out of business if you can't pay for our vision.

Now, two decades after Hillary Clinton's central-planning debacle, the ill-designed ObamaCare system is similarly running off the rails on its way to implementation.

On July 2, the Obama administration announced a postponement of the employer mandate, to 2015, a key funding source for ObamaCare.

That surprise policy change (an illegal action by the administration, since it violates the law passed by Congress) was followed by an announcement from the Department of Health and Human Services that it won't attempt to verify individual eligibility for ObamaCare subsidies.

In short, ObamaCare is now a plan that dries up its funding while simultaneously setting in motion a half-baked “honor system” scheme that's sure to increase the level of fraudulent handouts.

And still, the central planners plod along, displaying more faith than knowledge, unwilling to recognize what Nobel Prize-winning economist Milton Friedman so succinctly explained: “The greatest advances of civilization, whether in architecture or painting, in science and literature, in industry or agriculture, have never come from centralized government.”

Ralph R. Reiland is an associate professor of economics at Robert Morris University and a local restaurateur (

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