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The Real Free-Market Approach to Health Care, Part 3


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The only solution to America’s health-care crisis is to end, not reform, governmental intervention into economic activity. What would this entail? A way of life in which people would be free:

  • to do whatever they want, so long as their conduct is peaceful and does not intrude, in some direct way, on the rights of others to do the same;
  • to engage in any economic activity without political permission or restriction;
  • to enter into mutually beneficial exchanges with others;
  • to accumulate unlimited amounts of wealth;
  • to choose for themselves what to do with their own money-save, spend, donate, invest, or whatever.

Generally, the solution to America’s social woes lies in ending, not reforming, its welfare-state, regulated-economy way of life. Specifically, the solution to America’s health-care crisis entails the elimination of income taxation, licensing laws, Medicare, and Medicaid.

Income taxation

What is the relationship of income taxation to the health-care crisis? A major part of the problem is that people cannot afford the costs of health care. But suppose income taxation had been abolished ten years ago. Assume that a person has paid an average of $15,000 a year in income taxes. If he had saved the money, this would mean, of course, that he would have $150,000 plus interest in his bank account — an amount that would be very helpful in paying medical bills and medical-insurance premiums today.

Now, granted, that’s water under the bridge. But the point is this: the more money that government sucks out of the pockets of the people, the more difficult it is for people to afford health care and other things they wish to buy. Conversely, if people were free to keep everything they earn, they would be able to afford health-care costs, as well as a multitude of other things.

Helping the poor

What about the poor — those who still would be unable to afford health care? Doesn’t government have a duty to help them?

No! First and foremost, it is important to remember the fundamental immorality of governmental assistance. Under Medicare, Medicaid, or any other political subsidization, the money is taken by force from one person (primarily through income taxation) and given to another. When public officials engage in this conduct, they celebrate the “goodness” of their act. They say, “We are good because we are helping others.” But the truth is that their conduct is highly evil, for they are “being good” with the fruits of earnings that have been taken by force from others. In other words, while their conduct is legal, it ranks with that of private thieves in terms of morality.

What would happen to the poor if Medicare and Medicaid (and all coercive transfer programs) were eliminated (rather than reformed)? Would they starve in the streets or die for lack of medical care?

Governmental officials say, “Yes! The American people cannot be trusted to care for others on a voluntary basis. They must be forced to provide assistance to others through the Internal Revenue Service, Medicare, Medicaid, and other welfare programs.”

It is a lie. And it is the most important lie underlying the entire welfare-state way of life. For if the American people ever conclude that they can be trusted to care for others on a purely voluntary basis, that will be the day that the welfare state will come to an end.

How do we know that the American people would help others if they were not forced to do so? Because the evidence is all around us. The caring nature of others can be found everywhere.

I grew up on a farm on the U.S.-Mexican border, near one of the poorest cities in the United States. One day, one of our farm hands — a Mexican illegal alien — discovered a lump on his neck. We took him to our physician, who diagnosed the lump as cancerous.

What happened to him? Well, it’s a story that will warm your heart. We had a friend who had been poor for most of his life. His poverty had dramatically ended with the discovery of huge quantities of oil under lands on which he had a sizable interest. Our friend learned about the plight of our employee. The next day, our friend picked up the employee, escorted him to the airport, put him on his Learjet, and had him flown to Houston for treatment at one of the world’s leading cancer clinics. The man was admitted into the clinic, even though he had no money (although we suspected that our friend may have covered the bill). The cancer was successfully treated — it never recurred.

And the same beneficent attitude characterized our family physician. Every time I visited him, his waiting room was filled with people who could not afford to pay for his services. I never saw him turn away — or heard of him turning away — any patient for lack of ability to pay. He just kept treating them even though the chances of his getting paid were minuscule.

Does this happen all over the country? You bet it does! But it takes a willingness to see it happen. The person who fails to see it is the person who does not want to see it !

It is useless to try to convince governmental officials of the caring nature of the American people. For public officials have a vested interest in the continuation of the welfare state.

Our battle must be for the hearts and minds of those in the private sector. They must be persuaded not only to have faith in themselves but, equally important, to have faith in others as well. People’s belief must go from, “I would help, but no one else would,” to “I would help, and I know that others would do the same.” Once this shift in mind-set takes place among the American people, the foundation of the welfare state will crumble.


Licensing is special-interest legislation for the benefit of physicians and other medical personnel. Its primary purpose and effect are to limit entry into the medical profession in order to protect medical people from competition.

Does licensing ensure competent doctors and nurses? If it does, then why do we continue to have so many malpractice judgments against doctors and other medical personnel? And one problem with licensing is that it seduces the public into believing that because a person has been licensed by the state, he must be competent.

What would happen if licensing were repealed? Well, no one would run out into the street looking for a quack to perform heart surgery on him. The current stock of physicians would continue to exist. People would probably continue using the doctor they are using today. What if someone needed a new doctor? The likelihood is the person would rely on the recommendation of his current physician. Moreover, well-established and well-known physicians in the community would band together to publish a list of recommended doctors in the area; private certifying agencies (i.e., Consumer Reports or Good Housekeeping) would do the same. The market would provide the vehicles that people needed for selecting their physicians and other health-care providers.

What,then, is the difference between a system of licensing and one without licensing? The latter enables people to reject the official or approved method of treatment ! For example, suppose someone who is not a licensed physician treats an AIDS patient in some non-approved manner. Under current law, he is thrown into jail for practicing medicine without a license. And governmental officials tell the AIDS patient that he cannot use the treatment because it might kill or otherwise injure him.

But what authority does the state have to prevent a grown-up from seeking out the medical care that he wishes to have? The decision as to what course of action a person wishes to take with respect to the treatment of his own illness properly lies with him, not with governmental officials. And, while it may appear unlikely to the established medical order, there is always the possibility that the alternative, non-approved treatment could prove to be effective.

The idea behind medical licensure can be summed up as follows: “We governmental officials will not permit you to seek alternative medical care, because you might hurt yourselves. No matter how old you are, you will always be a child of the state. We will take care of you, just as your daddy and mommy once did. We will not permit you to make mistakes. We will not let others take advantage of you.”

But one fundamental problem is that the state is not like daddy and mommy were. After all, very few daddies and mommies inject their children with malaria, hepatitis, and radiation, as the U.S. government did to hundreds, possibly thousands, of Americans, some of whom were innocently seeking medical care when they unknowingly received their injections. And most daddies and mommies would never send their children to a place like the Veterans’ Administration Hospital for medical treatment; in fact, if they did, they would surely be convicted of child abuse by any jury in the land.


Several decades ago, the American people were seduced into abandoning the principles of our ancestors. The state took control over our education. It took control over our earnings. It took control over our economic activity. It took control over our social activity. It took control over our charitable activity.

And now the state wishes to take control over our health care. If we permit this to happen, we will reap the whirlwind, for the results will be as disastrous as they have been in very other field of governmental endeavor.

Part 1 | Part 2 | Part 3

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    Jacob G. Hornberger is founder and president of The Future of Freedom Foundation. He was born and raised in Laredo, Texas, and received his B.A. in economics from Virginia Military Institute and his law degree from the University of Texas. He was a trial attorney for twelve years in Texas. He also was an adjunct professor at the University of Dallas, where he taught law and economics. In 1987, Mr. Hornberger left the practice of law to become director of programs at the Foundation for Economic Education. He has advanced freedom and free markets on talk-radio stations all across the country as well as on Fox News’ Neil Cavuto and Greta van Susteren shows and he appeared as a regular commentator on Judge Andrew Napolitano’s show Freedom Watch. View these interviews at LewRockwell.com and from Full Context. Send him email.