Whenever I do those quizzes that purport to reveal where you fit on the political/philosophical spectrum, they insist I’m a social democrat. This rather surprises me because I tend to think of myself as more of a liberal.

Whatever. I am a strong supporter of the free market. In fact, I don’t see any alternative as a foundation for the economy. But I am no free market fundamentalist. I recognize a variety of reasons why, depending on what the goals are, other mechanisms may be preferable.

It’s important to keep in mind that the free market and capitalism are two different things. Capitalism is the greatest instrument we’ve ever had for creating wealth, but free markets were around for a very long time before industrial capitalism.

Free markets tell us that that people and products exist in isolation. They tend to atomize us. But we don’t exist in isolation, we live in societies, and the choices we make have consequences that run throughout society. We can’t even be sure we know what we want without knowing the wishes of others. We cannot know what the aggregate result of our individual decisions is and if it is, in fact, what we really want. Only through some kind of collective process can we do that. Choices that we make together as a society may be very different from those we make in isolation. The whole may be very different from the sum of the parts.

I was reminded of this the other day reading about the parliamentary budget officer’s estimates of the cost of universal pharmacare. He predicts a single-payer universal drug plan would cost federal and provincial governments $11.2 billion in the first year and $13.4 billion in five years.

That is a lot of money. But he also estimates that even if we used a public system more (he suggests 13.5 percent more) we would still realize cost savings of $1.4 billion in 2024-25 increasing to $2.2 billion by 2027-28. The savings result from better price negotiations leading to lower prices. By acting collectively through a government program rather than individually in the free market, we save billions.

And this is only cost. We also achieve an important social goal. We ensure that everyone gets the drugs they need regardless of income.

The advantage of communal effort fulfils other goals than universal health care and education. For example, the CBC provides us with news and views that are not controlled by corporate interests. The lack of a major public broadcaster has been suggested as a significant cause of polarization in the U.S.

Sometimes simple efficiency demands a collective approach, e.g. public utilities, fire and police service, etc.

The choice of provider, in my opinion, should depend on which provides the highest quality product and the best value for money combined with achieving sound social objectives. In other words, which best serves the needs of all the people. It should not depend on ideology.

Perhaps that does make me a social democrat. If so, then I guess the quizzes are right. They’ve nailed me.

One thought on “Limits of the free market”
  1. Revealing comment from friend in the opposite camp came as a shock this week:
    ‘Government is NOT in the business of health care. They’re in the business of governing.‘

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