Single-Payer Groceries, Anyone?
The American Socialist Party (ASP), whose members entertainingly call themselves "Democrats," is determined to use its control of the executive and legislative branches of government to destroy the private health insurance and healthcare industries in favor of "single-payer" healthcare. Of course, when government is the single payer that means government-run monopoly. Average people instinctively understand that monopoly is never in their best interest, but to politicians who will administer and benefit from the monopoly the thinking is apparently "it's good to be the monopolist," as Mel Brooks might say.
Moreover, there is no reason to believe that they will stop there. If a government-run monopoly is good for healthcare, they will eventually argue, why not food, cars, and other essentials of modern life? They are socialists, after all.
Since I always try to keep a step ahead of the bad guys, it will be useful to think through how say, a single-payer grocery industry would work. Such an exercise will also teach us some lessons about what can be expected of a "single-payer," government-run healthcare monopoly.
Here's my take on how central planning for the new American single-payer grocery industry monopoly would work: First, all groceries will be paid for by the taxpayers, who are sometimes confused with "government" by the media. Anyone at any time — even illegal aliens — can walk into a grocery store and walk out with whatever groceries and other items they "need." A national government I.D. will be needed so that the state can "track" our grocery purchases with it. It will be as easy to obtain for illegal aliens as it is for citizens, since illegal aliens are such an important voting block in support of the American Socialist Party. The government grocery stores will keep track of all food purchases so that they can better administer the state's new anti-obesity/mandatory exercise campaign. The stated purpose of this "campaign" will be to cut healthcare costs by forcing us all into healthier lifestyles (as defined by the state). With government in charge of health and lifestyle planning, that old saying will be altered to say "a ton of prevention for an ounce of cure."
Since the laws of economics have not been repealed, one problem is that since groceries are free, many people will tend to consume far more than is necessary. Cats and dogs will dine on filet mignon, salmon, and sushi, for example, which might drive the pet food industry out of existence. Good riddance, some would say. In economics lingo, there will be an explosion of consumer demand, which will cause a subsequent explosion in costs in most of the food industries (these are called "increasing cost industries" by economists, since average costs of production tend to increase as they expand). Thus, "free" food will become expensive beyond belief. This phenomenon is what economists call "the moral hazard problem" of government subsidies.
In response to the government-created explosion of food costs, the government will wage nationwide propaganda campaigns to raise taxes, complete with televised pictures of starving babies, similar to the "feed the children" television commercials that raise charitable donations for starving children in the Third World. All opposition to the tax increases will be denounced by Nancy Pelosi and her comrades as "Hitler-like," and worse.
The booboisie will eventually recognize that the food cost explosion (and the healthcare cost explosion that will inevitably come with single-payer healthcare) cannot be paid for indefinitely by the Fed chairman's announcements of the printing and/or borrowing of another trillion dollars this week, a trillion more next week, etc. They will demand that "something be done" about the out-of-control costs of food as their tax burden escalates, and the politicians will comply.
Politicians typically have only one response to the cost explosions that their own policies cause: price controls, usually euphemistically called "global budgeting," "price caps," or some other deceitful phrase. The new price controls on food will stimulate consumer demand even further, while stifling food production and supply, since they will take much of the profit out of farming, which for the time being will still be in private hands. Food shortages are the inevitable result, which of course will call for even more government intervention in the form of a new government food-rationing board, similar to what occurred during World War II when there were price controls on food and many other items. The more affluent will be able to bribe their way into adequate food purchases, while the poor will simply be out of luck, as they always are whenever government rations anything. The affluent always have more political influence than the poor.
I would expect the new government grocery stores to be unionized, as the American Socialist Party will change the labor laws to make it mandatory, just as the government did with airport employees after 9/11. This will give tremendous clout to the public grocery union since a strike can literally shut down food distribution. It will essentially transfer much of the power to tax to the public employee grocery union. Consequently, grocery industry workers will be among the highest paid people in America. This will be an additional cause of a further cost explosion, which will ignite more tax-increasing campaigns and the demonization of the taxpaying public whenever it resists the additional plunder.
With no genuine profit-and-loss statements in our new single-payer grocery industry there will be no way in the world to know whether or not agricultural resources are being used efficiently, that is, whether say, a million dollars in grain is turned into food products that are worth more than a million dollars. When that occurs, there is a profit in the private sector, but the private sector will be only a memory. Consequently, there will be perpetual economic chaos in the food industry. We are talking about socialism here, after all.
Since civil service regulations make it all but impossible to fire public employees, we can expect the highly paid food industry bureaucrats to be as inefficient, lazy, and unproductive as any government bureaucrats anywhere. They will have no incentive to acquire skills that enable them to be more efficient at serving their customers. Instead, the "skills" they will acquire will be political networking, scheming, and conniving skills. Politics will be the route to higher pay and perks, not customer service.
Not to mention management, who will all be political appointees whose jobs will be protected by their politician/benefactors. Bad management, spoiled food, high costs, filthy grocery stores, shortages, and all other costly problems will all be addressed with one strategy: more tax increases and more government demonization of tax resisters.
Since government-run monopolies are, well, monopolies, any competition between the government grocery stores will be strictly controlled or prohibited. The most likely means of doing this will be to assign each person to a certain neighborhood grocery store, just as the government schools assign everyone to a certain government monopoly school, and as the British nationalized healthcare bureaucracy assigns everyone to a specific hospital. That way, our new government-run grocery monopoly will have a truly captured audience of "customers."
Black markets for food will eventually crop up (no pun intended), but they would have to be harshly penalized by fines and even imprisonment for the more egregious offenses, war-on-drugs style. Single payer means single payer, the government will ominously preach. Black market gardening will draw resources away from the government-run grocery monopoly, which will be especially harmful to "the children," the state will inform us. This is the argument that is always made by the state in response to the creation of private schools, increased homeschooling, or even school voucher proposals, and it will be repeated if there is any competition for the new government grocery monopoly.
Some years ago I discussed this scenario in a class of undergraduate students and asked them if all of these characteristics reminded them of any particular industry in America. (It's how public schools are organized). One student who had grown up in the Republic of China (Taiwan) immediately shouted, "Communism!" Having grown up in the shadow of Chinese communism he was very familiar with the subject, and he was right, of course. I'm sure he would have the same opinion of "single-payer healthcare."
August 7, 2009
Thomas J. DiLorenzo [send him mail] is professor of economics at Loyola College in Maryland and the author of The Real Lincoln; Lincoln Unmasked: What You're Not Supposed To Know about Dishonest Abe and How Capitalism Saved America. His latest book is Hamilton's Curse: How Jefferson's Archenemy Betrayed the American Revolution — And What It Means for America Today.
Copyright © 2009 by LewRockwell.com. Permission to reprint in whole or in part is gladly granted, provided full credit is given.