Below is a letter to a reader of Marginal Revolution who e-mailed me this morning after reading this Marginal Revolution post.
Mr. Andrew Corrigan
Thanks for your e-mail. I did indeed see that Jeffrey Sachs supports a movement that has, among its goals, government creation of a “livable” wage for all jobs, as well as universal health coverage. You are correct that I object to any such political movement.
Forget here that government-mandated wage minimums price many low-skilled workers out of jobs. Another problem with such mandates is their ambiguity. Who determines what is the lowest wage that is “livable”? There are no objective criteria that any employer, politician, judge, jury, or voter can consult in order to determine such a wage. Any government-set “livable” wage is unavoidably the product of some mix of political divination and horse-trading.
Even more ambiguous is “universal health coverage.” A government that literally ensures universal health coverage would supply, at zero prices, not just the likes of hernia surgeries and post-natal medical care, but also items such as bandages, aspirin, cough drops, and foot powders. Indeed, true universal health coverage would also guarantee to every citizen, free of charge, a team of 24/7/365 personal physicians. After all, someone with such a team of physicians has more health coverage than does someone who must make an appointment to see a physician who has several other patients.
Given, therefore, that no system of so-called “universal health coverage” can possibly supply anything remotely close to actual universal health coverage, someone (or some group of someones) must decide just how non-universal “universal health coverage” will be. What reason have you to suppose that there is one such ‘correct’ level of (necessarily non-universal) health-care coverage for an entire country or even for an entire state or city? And even if, contrary to fact, there is one such ‘correct’ level, what gives you confidence that politicians will discover and supply that level rather than a level of health-care coverage that funnels favors to politically powerful interests – favors that, though they are unwarranted, are nevertheless disguised by the glorious phrase “universal health coverage”?
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030