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What the State Cannot Provide (first draft) — part 4 of 4

Source: public/assets/writing/humanstructures/What the State Cannot Provide (first draft).docx · humanstructures

This returns the essay to the fable I started with. Rothbard’s thought experiment asked the reader to imagine a world in which the state had supplied shoes from time immemorial, and to notice the reaction when someone proposed to privatize the sector. Who would make them, how many, at what prices, and what about the poor? The move Rothbard did not quite complete is the one I have been working toward. The shoes we wear are universal. Everyone in a developed economy has shoes; almost everyone in the developing world has shoes; shoes are produced in quantities and varieties no central planner could specify and distributed through networks no ministry designed. The shoes themselves, moreover, are better than the shoes our grandparents wore and far better than the shoes of any previous era. We do not think of shoes as a triumph of universalism because we take their universality for granted. But they are, in the strict empirical sense, more universal than British healthcare, more universal than Soviet housing, more universal than any good the state has promised to provide on a universal basis. The state did not provide the shoes. That is why they are universal, and why they are good.

The pattern holds across every domain I have examined. Money the state manages produces inflation, Cantillon effects, and asset-price distortions whose victims cannot name what is happening to them. Land whose development the state permits produces housing costs ten times the average salary and a generation unable to form households. Medicine whose approval the state controls produces an invisible graveyard measured in hundreds of thousands of delayed or denied deaths per decade. Healthcare the state provides directly produces the seven-million-person waiting list and the sixteen thousand A&E deaths per year. Insurance the state has locked into a mid-century organizational form produces the adverse-selection pathologies the academic literature treats as structural features of the category, when they are features of the capture. Each of these sectors began as a promise of universal access or correction of market failure. Each has produced instead a promise that could not be honored, defended by a civic vocabulary that has displaced the question of whether the promise is being delivered with the question of whether the institution is being respected.

The argument I have been building toward is not primarily that markets should replace the state in these sectors, though that is the practical implication. It is the prior observation that has to be made before the practical implication can be argued. The word universal belongs to the mechanism that has actually delivered universal access across modern history, not to the mechanism that has promised it. Anyone who loves the sick more than they love the NHS wants healthcare to be genuinely universal, which means examining whether the NHS is the mechanism that will deliver it. Anyone who loves the housed more than they love the planning system wants housing to be genuinely universal, which means examining whether the planning system is producing the housing. Anyone who loves the saved more than they love the central bank wants monetary stability to be genuinely universal, which means examining whether the central bank is producing it. The love of the thing requires the willingness to examine the institution that claims to provide it. The institution has constituted itself in a way that makes the examination feel like betrayal. The examination is precisely what the thing itself demands.

Rothbard’s fable ended with the objection: who would supply shoes to the poor? The answer, which he did not quite say but which the intervening half-century of economic history has made unanswerable, is that the shoes are already being supplied to the poor, in quantities and qualities that the question’s premise cannot accommodate. The question was always the wrong question. The reader who could not see that was not missing a piece of economic theory. They were missing the evidence of their own eyes, which the vocabulary of state provision had trained them not to see. Every good that is genuinely available to everyone was made available to everyone by the mechanism the question was denying could work. The good is also, in each case, a better version of itself than any previous generation could have produced. Both facts are the same fact. The training can be reversed. The evidence can be seen. The word misused for a century can be returned to what it actually describes.