Choice and Competition

I am watching Meet the Press at the moment and David Gregory is interviewing David Axelrod on healthcare. I've heard Axelrod invoke the ideals of choice and competition and that implementing a public choice option is essential to ensuring the optimal amount of competition and providing the American people with the most options. Merriam-Webster defines "competition" as "the act or process of competing as a : the effort of two or more parties acting independently to secure the business of a third party by offering the most favorable terms b : active demand by two or more organisms or kinds of organisms for some environmental resource in short supply".

A few things to note. First, I am becoming more and more convinced that the interpretation (or misinterpretation) of language is the root cause of many conflicts in the world. Gay marriage strikes me as a great example of an issue that suffers from this language disparity. Ala, how does one define "marriage"? Where does that definition come from? What makes it legitimate? Has it evolved at over time? How does culture change the definition? Naturally, many answers can be given to these questions. Consequently, people will fundamentally disagree on the premise, and it will thus be impossible to move forward.

Axelrod makes the claim that competition is enhanced if the government enters the fray. Given the above definition, I have enormous difficulty in seeing how this is possible. The state is not a desirable producer. There are two distinct reasons for this. The first is the state has the unique power to shape the rules of the game, aka regulations. Consequently, would be like having two teams participate in a basketball game, but the ref is employed by one of the teams. He will clearly be biased and enforce the rules in favor of his team.

Secondly, the role of power and the government's ability to use coercion, has direct effects on the incentives of the state as a producer. When you can collect billions of dollars in taxes, borrow billions of dollars for low interest, or print money at any rate you wish, and the public MUST fall in step with such policy implementions, the government gains an advantage over private companies that can ONLY end in monopoly. Look at public education. No one would suggest that public education in this country is at a desirable level given the cost. Yet what is public education? Quite simply, it is a public option. If a public option or something like it is implemented, we will see the same inefficiency, malaise and perverted incentives that make public education what it is infect the healthcare industry. The cost will be overwhelming.