Book Reviews

The RightsRetainedby the Peoplehelps us bet ter understand why and how this disparity in the protection of human rights has occurred. It also provides an underpinning to reform Constitution al interpretation and better protect all human rights by giving proper emphasis to the Constitu tion's Ninth Amendment. The Ninth Amendment states: "The enumera tion in the Constitution of certain rights shall not be construed to deny or disparage others retained by the people." During the first 175 years of its his tory, this Amendment was cited in a total of nine court cases. Some Constitutional scholars began to call it the "Forgotten Amendment." Then in 1965 the U.S. Supreme Court decided Griswoldv. Connecticut.This case declared uncon stitutional a Connecticut statute which made it a crime both for a married couple to use contracep tives and a physician to counsel their use. The concurring opinion of Justice Goldberg in Gris wold cited the Ninth Amendment as support to declare the statute unconstitutional. Since 1965, the Ninth Amendment has been cited in over a thousand cases.

The Amendment's origin is fascinating history. James Madison proposed the Amendment to counter the Federalist arguments that a bill of rights was unnecessary or even unwise. The Feder alists argued that the government created by the Constitution was permitted to exercise only those powers specifically granted to it in the Constitu tion. The governmental structure itself with its checks and balances would be the best protection for individual rights. Besides, the Federalist argu ment continued, a bill of rights might even be dan gerous because a list of some protected rights might be interpreted to mean that all unlisted-or unenumerated-rights were unprotected. Despite the Federalists' arguments, several state ratifying conventions were so distrustful of centralized power that they made their ratifica tion of the Constitution contingent on the approval of a bill of rights. As one of its earliest achievements, the first Congress approved twelve amendments to satisfy the contingencies set up by the state conventions. Only ten of the twelve sur vived the ratification process. (An eleventh, per taining to the ability of Congress to give itself rais es just recently received the necessary number of state ratifications and has become our Twenty Seventh Amendment.) The Ninth Amendment is an open-ended provi sion. The Constitution contains other open-ended provisions such as the "necessary and proper"

clause in Article 1, Section 8 and the "due process" clauses in the Fifth and Fourteenth Amendments. Typically, courts have been skittish when called upon to use open-ended provisions to overturn the acts of the Federal and ~tate legislatures. Because interpretation of the Ninth Amend ment proved very difficult, it was largely ignored. Courts were generally concerned that using the Ninth Amendment to strike down statutes would be tantamount to usurpation of the legislature's role. Professor Barnett has brought together in this volume the most important literature on the Ninth Amendment and in the process added significantly to the interpretive theories with his own well-rea soned contribution. The collection is a valuable primer on the Ninth Amendment that should be essential reading for lawyers, constitutional histo ry buffs, and students of liberty. Randy Barnett's introduction begins by explor ing two legal philosophies of Constitutional rights: the rights-powers conception-the currently dom inant approach-and the power-constraint con ception. Using the rights-powers conception, rights are found to exist only where the appropri ate powers of government leave off. The power constraint conception, on the other hand, views rights as one of the two methods used in the Con stitution to limit the powers of government, the other method being the document's structural safeguards.

After explaining the error in the rights-powers conception, Professor Barnett explores three prac tical approaches to the Ninth Amendment and rights theory to fulfill the role they were given by the Founding Fathers. The crucial question faced by each of the authors in this volume is: Preciselywhich rights are retained by the people and merit protection by the Federal courts? The answers vary.Bennett Patter son would allowNinth Amendment interpretation to be an extremely dynamic force in protecting individual rights. Patterson believes our percep tion of rights to be constantly evolving.According ly, the rights retained by the people are forever being refined and distilled. The Ninth Amend ment is necessary protection for these newly evolved rights. The Founders had no way to describe rights which they were incapable of rec ognizing but which they somehow instinctively knew existed.

Berger is greatly concerned with the effect of a dynamic Ninth Amendment on the separation of powers. As a result, his analysis is largely prag matic. If courts could use the Ninth Amendment to enforce anything that suited their current whim, they would be usurping the role of the leg islature and violate the Constitutional separation of powers. Several other authors would answer this argu ment by formalizing in some fashion the process of judicial interpretation. If the courts stayed within the formalized interpretative framework, they would be constrained from usurping the proper role of the legislature. Russell Caplan would impose a severe restraint on courts interpreting the Amendment. Caplan 401 would allow the courts to use the Ninth Amend ment to protect only those rights which were rec ognized by the various states at the time of ratifi cation. This interpretation would keep the Amendment from being a dynamic element of constitutional interpretation such as the other open-ended provisions included in the Constitu tion. Caplan's argument is based on his historical study of the Amendment.

Mindful of Berger's concerns, Calvin Massey would impose a four-part test on the courts before a right could be enforred to overturn legislation. First, the court must find some textual foundation in the Constitution "however implicit or attenuat ed." Second, the right should have some historical roots in the laws of the nation, the states, colonies, or the common law. Third, the right should be con sistent with theories of natural law. Finally, the right should be broadly recognized by contempo rary society as "inextricably connected with the inherent dignity of the individual." Massey's four part interpretative analysis would result in a dynamic Ninth Amendment. The Rights Retained by the People is in certain parts not an easy book to read. It is, however, a fas cinating read for the history it contains, the lively debate it charts, and the important conclusions some of its authors reach. D Mr. Woehlke graduated cum laude from Grove City College and received his J.D. and M.B.A. degrees from Drake University. He is a manager with a national pro fessional association of accountants.

HEAD TO HEAD:mE COMING ECONOMICBATTLEAMONGJAPAN, EUROPEAND AMERICA by Lester Thurow William Morrow and Company, Inc., 1350 Avenue of the Americas, New York, NY 10019 • 1992 • 336 pages • $25.00 cloth Reviewed by William H. Peterson 1 980,1984, 1988, 1992. Right on schedule, industrial policy arises from the grave as a specter haunting the election. In April, for example, The New York Times Magazine pub lished "Facing Up To Industrial Policy" by liberal syndicated economist·Robert Kuttner. Mr. Kuttner takes the Reagan and Bush Admin402 THE FREEMAN • OCTOBER 1992 istrations to task for supposedly avoiding industri al policy and relying on free markets. (Would that were the case!) With a swipe at Adam Smith, he writes that in the 1980s and early '90s Smith's "invisible hand acted more like a sleight of hand, and major American industries began to crumble under an onslaught of cheap, high-quality imports." He quotes, approvingly, the statement by onetime presidential candidate Paul Tsongas that Adam Smith is woefully out-of-date: "Adam Smith was a marvelous man, but he wouldn't know a superconductor or memory chip if he tripped over one."

Now comes Lester Thurow with yet another plug for industrial policy and still one more swipe at Adam Smith. Commenting on America during the Reagan and Bush administrations in his lat est and well-written, scholarly looking work teeming with 487 citations, Dr. Thurow, Dean of MIT's Sloan School of Management and author of such previous plugs for industrial policy as The Zero-Sum Solution, writes: "Too often, Adam Smith's 'invisible hand' became the hand of a pickpocket. Free unfettered markets had a habit of discovering very profitable but nonpro ductive activities." To buttress his case against laissezfaire policies, so clearlypredatory in nature, Dean Thurow holds that unfettered capitalism betrays its tendency to drift into either monopoly or financial instability. For proof he points to the Dutch tulip mania, the South Sea Bubble, numerous nineteenth-century financial panics,the "robber barons" of yesteryear (neatly done in by the farsighted Sherman Antitrust Act of 1890), the 1929 stock market crash and ensuing Great Depression (brilliantly fixed up by the New Deal!).

No proof is provided for all these bald asser tions and misperceptions. Monopoly is confused with bigness and fewness and is unrelated to free dom of entry. No allowance is made for the bur den of heavy American government overhead including regulatory costs and the cost of defend ing Japan and Germany for almost five decades. Austrian or public choice business cycle theory and central bank proclivities toward credit expansion and debt monetization are ignored. Indeed, the entire counterproductive boomerang effect of government interventionism, such as government bank deposit insurance leading straight to the S & L crisis, gets short shrift. This is Lester Thurow's article of faith: The state is our planner; we shall not want. Thurow warns us: Our choice today is between producer economics (good) and consumer eco nomics (bad), between communitarian capitalism (good) and individualistic capitalism (bad), between Germany's "Das Volk" and Japan's "Japan Inc." (good) and the narrow-minded "I" of America (doubly bad). As humorist Dave Barry would say, I'm not making this up.

All this raises the question: Just what is indus trial policy? It is of course today's euphemism for government planning, i.e., more precisely, for what the French call indicative planning or dirigisme, for what I call soft socialism. Dean Thurow argues we must mount "an aggressive American effort" to counter Japanese and Ger man national strategies "with American strate gies" [read planning]. By design these strategies, while ill-defined here and subject to administra tive change, would arm government bureaucrats with coercive powers and subvert shareholder and entrepreneurial rights. So goodbye to entre preneurial insights and breakthroughs. Thurow, mesmerized by supposed Japanese and German planning proficiency, believes that Americans must fight fire with fire! Instead of seeing government as the cause ot our economic illstoday, Dean Thurow blithely jet tisons supposedly planless entrepreneurial capital ism, our great comparative advantage in interna tional competition, and pleads for still greater government intervention in the economy. He excoriates takeover battles and corporate raiders, the "financial Vikings."He would have sharehold ers hold their stock for five years before they qual ifyfor full voting rights. Government and selected industrialists or their minions, fortified with joint government and corporate funding, would pick i.e.,subsidize-the "winners" in the global compe tition of tomorrow.

He thereby fails to see the fallacyof plan versus no plan, to see what Mises and Hayek long ago pointed out. Free markets mean decentralized planning by many persons-private uncoerced planning that, thanks to the price system and eco nomic calculation, works for economic growth and human betterment the world over, wherever it is tried. Despite vaunted German proficiency,The New. York Times of May 26, 1992, reports that West German manufacturers are increasingly setting up new production plants abroad and that their loca tion of choice is the United States. German execu tives complain about being saddled with "some uniquely national disadvantages, such as the world's highest rate of corporate taxation and the highest industrial labor costs." Thus does South Carolina land a new BMW assembly plant. This lesson, the lessons of the demise of Euro communism, of what made America great in the first place, is lost on Lester Thurow. He forgets that subsidies and state planning deplete savings and tax capital markets; that as planners distort our free market system in myriad ways, govern ment-administered prices don't clear the market and economies stall. His scheme, moreover, undermines individual liberty.Commenting on the Thatcher and Reagan administrations, he pro claims: "Empirical experimentation revealed that a return to ancient Anglo-Saxon virtues is not the answer."

Head to Head is at once bad politics and sorry economics. 0 Dr. Peterson, an adjunct scholar at the Heritage Foun dation, holds the Burrows T. and Mabel L. Lundy Chair of Business Philosophy at Campbell University, Buies Creek, North Carolina. CAPITALFOR PROFIT:THE TRIUMPHOF RICARDIANPOLITICALECONOMY OVERMARXAND THE NEOCLASSICAL by Paul Fabra Rowman& LittlefieldPublishers,Inc.,8705 BollmanPlace, Savage,MD 20763 -1991 - 345 pages •$47.50cloth Reviewed by Raymond J. Keating P aul Fabra, an economics columnist for the French newspaper Le Monde, has written an interesting, recently translated book addressing the various shortcomings of both Marxist and neoclassical economics. His advocacy of classical economics in its Ricardian manifesta tion as the answer to these problems is even more intriguing. One might correctly refer to Mr. Fabra as a "serious" supply-side economist. Fabra deals with fundamental economic issues in Capital for Profit. He manages to redress vari ous errors about David Ricardo's economic theo ries which have been perpetuated by both Marxist BOOKS 403 and neoclassical economists. Fabra advocates sup planting subjective value theory with an objective, labor-based theory which focuses primarily on production costs rather than wants or desires. He also clarifies the definition of capital, and, most importantly, argues that profit must be at the cen ter of economic theory, rather than merely treated as a residual. In addition, the author attempts to explore the boundaries of the marketplace.

In fact, there is much to agree and disagree with in Capital for Profit. Perhaps that reflects the book's strongest point, i.e., that Fabra requires the reader to reassess many long held economic doc trines. And whether in the end one accepts or rejects the many arguments articulated by Fabra, the reader will come away with a richer under standing of how the economy works. A few of Fabra's thought-provoking statements are worth noting in this review, with the caveat, however, that his entire thesis be read in order to be fully appreciated: Fabra rebuffs the so-called Ricardian "iron law of wages," which states that "wages will always be brought down to the subsistence level," by citing Ricardo's own work, and concludes that "nothing could be more alien to Ricardian thought than the idea that the worker is condemned to a subsistence wage." On the definition of capital, Fabra clearly sees merit in the classical view: "The most significant definition is again to be found in Ricardo: 'Capital is that part of the wealth of a country which is employed in production, and consists of food, clothing, tools, raw materials, machinery, etc. nec essary to give effect to labour.'" The author later addresses the "conflict" between labor and capital: "On the one hand, [the classicalsystem of thought] too recognizes that the introduction of machinery (fixed capital) must necessarily put an end to cer tain jobs. On the other, the general definition it gives of capital-all commodities employed in production and necessary to give effect to labor -induces it to assert that the more capital grows, the more the demand for labor will increase."

In reference to neoclassical theory, Fabra won ders: "The very fact that profit can be alternatively included or excluded [Le.,from marginal product] shows how vague the theory is on a point that is, after all, fundamental." The preeminence of supply over demand, con trary to Leon Walras' views, is asserted by Fabra: 404 THE FREEMAN • OCTOBER 1992 "The mere fact that it is possible to state that in a market you cannot demand if you cannot supply shows that supply and demand in that market are not equivalent: Logically, supply comes first and demand second." Fabra also comments on the dif ferences between demand-and supply-driven sys tems: "In a society founded on primacy of demand, the spirit of competition that is so vaunted brings about a leveling of minds and tastes. This is because of the continued stimulation of 'consump tion.' In a society closer to the classical model, the spirit of competition would motivate each produc er to supply what he is best able to supply (goods or services). His incentive would be to perfect his own capabilities, not to imitate others. In other words, the system would induce every supplier to offer a product of labor that would tend to become 'individual.' "

Fabra's long-term view yields some interesting thoughts on the relation between consumption and capital: "It is often said that consumption is the motor of growth (whence the emphasis placed on demand), but this is a superficial view of things that only proves true in the short term .... But if things are considered over 'a longer period, they appear in a completely different light. The more the work force consumes, the greater the share of productive effort devoted to replacing the capital employed in production. If, conversely, consump tion were lower, there is no prima facie reason to suppose that total production-measured in terms of gross product-would be any less .... [A] part of the new production, previously devoted to replacing capital, would be available for fresh investment at home and abroad. In other words, the growth rate would be quickened, not slowed down." He concludes therefore, "The combina tion of lower personal consumption (in relative terms) and a high proportion of saving leads not to a fall but to a rise in employment."

Fabra also criticizes the theory of perfect com petition: "It is because competition is imperfect that profits are unequal, and it is this inequality that enables [classical] theory to bring out the salient feature of the exchange economy, the one that makes it technically superior, in our civiliza tion, to all other systems: the great mobility (which it makes possible) of all factors of production. Because the enterprise is constantly being encour aged by the hope of higher profit, it can contribute to progress." Capitalfor Profit attempts to resurrect many ideas about economics that perhaps should not have been fully discarded in the first place, espe cially in light of the current dismal state of the sci ence. In some instances the author succeeds, and in others he falls short. However, the endeavor to reconsider the propositions of Ricardian eco nomics is worthwhile. Capitalfor Profit not only undermines the foundations of Marxist eco nomics, while also severing Marx's thinking from Ricardo's, but also offers an articulate challenge to mainstream economic theory. D Raymond Keating is Director of New York Citizens for a Sound Economy.

WHY WE SPENDTOO MUCH ON HEALTH CARE by Joseph L. Bast, Richard C. Rule, and Stuart A. Wesbury,Jr. The Heartland Institute, 634 South Wabash,SecondFloor, Chicago,IL 60606 •130 pages • $8.95paper TWENTY MYTHS ABOUTNATIONAL HEALTHINSURANCE by John C. Goodman and Gerald L. Musgrave National Center for PolicyAnalysis,12655 North Central Expressway,Suite720,Dallas,TX 75243•88 pages •$10.00 paper Reviewedby JarretB. Wollstein T he political voices in America calling for mandatory, universal, government financed national health insurance are growing ever louder. We are told that health care costs too much, provides too little, and cares for too few. More and more Americans have no health insurance or inadequate coverage, and despite health insurance, long-term medical care can still be ruinously expensive. Our free market in health care, we are told, has clearly failed. Don't the American people deserve a humane and economical system, like that of Canada or Britain, where everyone who needs it gets health care, and administrative costs are a fraction of what they are in the United States?

Why We Spend Too Much on Health Care and Twenty Myths About National Health Insurance have been published just in time to help put an end to such myths. They are devastating critiques of the claimed failures of the free market and the "benefits" of socialized medicine. Why We Spend Too Much on Health Care focuses on refuting the myth that high health care costs in the U.S. prove that a free market in health care has failed. Twenty Myths about National Health Insurance debunks the claimed superior humanity and effi ciency of socialized medicine. Together they pro vide overwhelming intellectual ammunition for advocates of liberty and the free market. The thoroughly documented thesis of Why We Spend Too Much on HealthCareis that claimsthat health care costs are too high in the U.S. because of the failure of the free market are, depending upon context, either arbitrary or just plain wrong.

The authors don't deny that Americans spend much more per capita on health care than the citi zens of other industrialized nations: 11.9percent of Gross Domestic Product (GDP) in the United States versus 8.7 percent of GDP in Canada in 1987.But, the authors argue, this in no way means that Americans bear higher costs for health care than the citizens of other countries. First there is a tremendous difference between spending and costs. In addition to dollars spent on national health insurance in other countries, there are also the social costs of "pain, lost productivity, and sometimes ... premature death of ... people in waiting lines to receive medical treatment each year. Nine thousand Britons, for example, die each year because they are denied accessto kidney dial ysis" (p. 6). A host of Federal and state government policies also compound health care costs in the United States, including some 700 state government man dates which "have been estimated to increase the cost of health insurance by 30 percent"; "Certifi cate of Need" requirements for new hospital construction; occupational licensing laws that prevent nurses and other health practitioners from performing many routine health functions; and restrictions on managed care agreements (p. 14).

The authors also show the fallacyof internation al comparisons based upon spending. After all,the United States has far more injuries and deaths from violent crime and far more teen pregnancies than do Canada or England. In addition we have a rapidly aging population, a growing AIDS epi demic, and many other social forces pushing health care demand above what it is in other coun tries. Without taking such factors into consideraBOOKS 405 tion, international cost comparisons become meaningless. Thus the authors argue, "using their own numbers, we can show critics of the U.S. health care system that the U.S. has a betterrecord of controlling spending than several developed countries that have adopted the nationalization model" (p. 19). In addition to considering costs in judging health care systems, we also have to consider ser vices and benefits. Americans are much more affluent than Canadians or Britons, and through out the world as people become richer, they spend a lower percentage of their income on necessities (like food and clothing) and higher proportion of their income on discretionary goods and services, like health care. If Americans are spending more but getting more they are not necessarily spending "too much" on health care. That is precisely what the authors argue: "Compared to Americans, British patients are half as likely to have surgery of any kind and one-sixth as likely to undergo coro nary bypass surgery.British doctors prescribe few er drugs, perform half the number of X-rays as U.S. doctors, and use half as much film per X-ray.

Pap smears and blood tests are recommended only once every five years. Do the critics of U.S. health care believe we should adopt five-year intervals for Pap smears and blood tests? Of course not. But they compareU. S. spendingto thatof nations thathaveadoptedsuchpolicies"(p. 31). After this devastating critique of the idea that international comparisons "prove" that Americans spend too much on health care, the authors go on to expose the real culprits in high health care costs: govern ment spending, tax policies, and regulations. Far from having a free market in health care, we already have a semi-socialized market, increasing ly dominated by government. Government spending on health care has increased from $25 billion a year in 1970 to $280 billion in 1990. The authors report: "The health care industry expanded dramatically in the 1970s and 1980s to accommodate the influx of govern ment spending. The number of doctors rose from 151 per 100,000 of population in 1970 to 246 by 1986. The number of other hospital personnel increased from 2.53 million in 1970to 3.46 million in 1986" (p. 52).

This huge increase in government spending has bid up the cost of medical services for everyone: "With its huge market share, changes in the 406 THE FREEMAN • OCTOBER 1992 federal government's reimbursement policy are immediately felt by other players in the health care field. The cost-plus payment system under Medi care forced other health care buyers, who bid against Medicare for health services, to pay higher prices. The heavy traffic of consumers for whom health care was nearly or entirely free made it more difficult for those consumers who were still cost-conscious to have any effect on price" (pp.52-53). Government tax policies have encouraged pay ment of health care benefits by parties other than the consumer-particularly employers and insur ance companies. If your employer pays for your health care through insurance premiums, costs are generally 100 percent deductible from pre-tax income. But if you pay directly for visitinga doctor or buying medication, your costs are at best par tially tax-deductible. The net effect is to encourage third-party payments for health care. Thus "The share of health care spending paid by business increased from 17 percent in 1965 to 28 percent in 1987, while the share paid directly by individuals fell from almost 90 percent in 1930 to just 26 per cent in 1987" (pp. 55-56).

Third party payment for health care has the effect of destroying consumer accountability and pushing up prices: "Each individual with insur ance, consequently, has an incentive to overuse medical services and no incentive to comparison shop" (p. 66). The authors also briefly discuss how govern ment regulations push up the cost of health care through medical regulation, insurance mandates, price controls, and occupational licensing. The authors point out that national health insurance would destroy jobs, quality, and free dom of health care choice. For example, "The Partnership on Health Care and Employment estimates that between 630,000 and 3.5 million workers would lose their jobs under a mandatory insurance plan" (p. 81). And "In Britain, the wait ing list for surgery is near 800,000 out of a popu lation of 55 million." Why We Spend Too Much on Health Care concludes with a summary of two plans to lower cost and improve health care in America, without socializingmedicine. One plan was developed by a Health Care Task Force of the National Center for Policy Analysis (NCPA) in Dallas. A second, gen erally complementary plan, comes from the American Legislative Exchange Council (ALEC) -America's largest voluntary membership orga nization for state legislators.

Interesting features of the NCPA plan include "allow[ing] insurers to issue no-frills, catastrophic health insurance not subject to state mandated benefits, premium taxes, risk pool assessments, and other costly regulations" (p. 95); "allow[ing] individuals a tax credit for a portion of their health insurance premiums" (p. 95); and "creat[ing] tax credits for deposits to individual Medisave accounts, from which people would use their own money to pay small medical expenses" (p. 97). Some of the suggestions included in the ALEC plan are "repeal lawsthat limit the right of insurers to select providers" (p. 101); "make small group health insurance collectively renewable" (p. 101); "cap non-economic medical malpractice damages at $250,000or five times actual damages" (p.103); and "forbid wealthy,elderly individuals from shel tering assets in order to qualify for Medicare ben efits" (p. 105).

There is little to criticize in Why We Spend Too Much on Health Care. The authors are addressing themselves to sophisticated laymen and some of their policy analyses could benefit from less tech nicallanguage and expanded discussion.All in all, Why We Spend Too Much on Health Care does a fine job of refuting one of the most recent rational izations for expanding government regulation of our economy and our lives. Anyone who thinks that national health insur ance would improve health care in America should also read Twenty Myths About National Health Insurance. Goodman and Musgrave demolish virtually every conceivable justification for socialized medicine including: MYTH NO.1: Countries with national health insurance have been more successfulthan the U.S. in controlling health care cost. MYTH NO.2: Although the United States spends more on health care per capita than coun tries with national health insurance, Americans do not get better health care.

MYTH NO.4: Countries with national health insurance hold down costs by operating more effi cient health care systems. MYTH NO.5: In countries with national health insurance, all people have equal access to health care.

MYTH NO.6: Countries with national health insurance make health care available on the basis of need rather than the ability to pay. MYTH NO.7: Countries with national health insurance maintain a high quality of health care. The format of Twenty Myths makes it both easy to read and particularly valuable as a research tool. Key points are bulleted, there are 27 charts and graphs, and scores of major studies are cited. Some of the facts you willfind in Twenty Myths are: "During the 1980s, the real growth rate for health care spending was higher in 11 of 15 coun tries than in the U.S." (p. 8). "General population mortality rates tell us almost nothing about the efficacy of health care systems because, throughout the developed world, there is almost no relationship between health care and general mortality" (p. 9). In every country with socialized medicine, there are long waiting periods for health care and acute shortages of equipment. For example: "The United States has seven times as many radiation therapy units [to treat cancer] per per son" as Canada (p. 11).

"Because of a shortage of laboratory testing equipment in 1988,women in Newfoundland wait up to five months for a Pap smear and two months for an 'urgent' Pap smear" (p. 11). "Each year, about 9,000British kidney patients fail to receive renal dialysis or a kidney trans plant-and presumably die as a result" (p. 12). "In Canada, with a population of about 26 mil lion, the waiting list [for surgery] is more than 250,000" (p. 17). Goodman and Musgrave also debunk the myth that fully socialized medicine is more efficient than the U.S.'s semi-socialized sys tem: "While one million people wait for surgery in Britain, at any point in time about one in four hos pital beds is empty" (p. 20). "The average hospital stay is 39 percent longer in New Zealand, 42 percent longer in Canada and 61 percent longer in Britain" than in the U.S. (p. 21).Forget about the poor and elderly being better off under national health insurance. As Goodman and Musgrave state, "There is substantial evidence that when health care is rationed the poor are pushed to the rear of the waiting line. In general, low income people in almost every country see physicians less often, spend less time with them, BOOKS 407 enter the hospital less often and spend less time there" (p. 25). "Across Europe, 22 percent of the dialysis centers report that they refused to treat patients over 66 years of age in the late 1970s"

(p.40). You can also forget about national health insur ance making health care more equal: "Among Canadian provinces, the number of people per physician varies from a low of 471 in British Columbia to a high of 1,273 in the North west Territories-a difference of almost three to one" (p. 47). "Although more than half of Brazil'spopulation lives in rural areas, residents of urban areas expe rience nine times more medical visits, 15 times more related services, 2.7 times more dental visits and 4.5 times more hospitalizations." Twenty Myths also discusses the ruinous eco nomic costs were national health insurance to be enacted in the United States. Goodman and Mus grave estimate that NHI in the U.S. would initially require at least $339 billion in new taxes. This would mean that payroll taxes would have to be doubled or a new 10 percent across-the-board "consumption tax" would have to be enacted.

Many industries would be devastated. For exam ple "the cost of health care for auto workers would more than double" (p. 55). The worldwide failure of national health insur ance has led to health care consumers developing a variety of strategies to avoid long waiting periods and to obtain scarce drugs. Thus in Hungary doc tors are "tipped" 40 percent of their salaries by customers who want to make sure they get decent care. "In New Zealand, one-third of the popula tion is covered by private health insurance, and private hospitals now perform 26 percent of all surgical procedures" (p. 28). In Ontario, Canada, "A volunteer organization, 'Heartbeat Windsor,' arranges for Ontario heart patients to get treat ment in Detroit hospitals" (p. 28). Goodman and Musgrave also discussthe world wide movement away from socialized medicine, including re-Iegalization of private hospitals in Britain in 1989, introduction of a health care voucher system in the Netherlands in 1987, and new financial incentives in Chile for citizens to opt out of national health care.

Despite its worldwide failure, national health insurance continues to be very popular. Thus "the most recent surveys show that only 3 percent of 408 THE FREEMAN • OCTOBER 1992 Canadians and only 12 percent of the British public would trade the U.S. system for their own" (p. 76). Why does national health insurance con tinue to be popular in countries where objective evidence showsit has failed miserably? To find an answer, Goodman and Musgrave turned to one of the granddaddys of socialized medicine, Britain's National Health Service, established in 1948. They discovered two major reasons: "(1) the typical British patient has far lower expectations and much less knowledge about medicine than the typical American patient; and (2) most British patients apparently believe that they are 'getting something for noth ing'" (p. 76). In particular, "most people in Britain believe that the total tax they pay to finance NHS is about 1I20th of what it actually is!" (p. 77). In addition, politically motivated and pervasive propaganda has deluded the British people into believing that NHS is "free" and the "envy of the world!"

The final lesson we can learn from the experi ence of national health insurance in other coun tries is that socialism advances not because it is right or efficient, but because its advocates are vocal and well-organized. National health insur ance has destroyed quality health care and free dom of choice in countries throughout the world. To avoid that disaster in America, it is urgent that all lovers of liberty marshal their facts and raise their voices. We need to counter the relentless, socialist propaganda for government takeover of medicine, now filling our schools, media, and public forums. Twenty Myths about NationalHealthInsurance and Why We Spend Too Much on HealthCare are major weapons in the battle for health care free ~~ D Jarret Wollstein is a director of the International Soci ety for Individual Liberty and the founder of the nation al Liberty Speakers Agency. The Morality of Capitalism edited by Mark W. Hendrickson foreword by Hans F. Sennholz T he history of the last thirty years is little more than the register of the dismal economic failure of socialism in all its variations.

Yet many Americans continue to give it) their support and espouse its cause because they believe it to be morally superior to the private-property order. Arguments about efficiency do little to persuade them; capitalism needs to be defended because it is good and right. The essays in The MoralityofCapitalismhave been selected from earlier issues of The Freemanfor their strength of argument, clari~ and readabili~ The collection includes, among others, articles by Leonard E. Read, Paul L. Poirot, John K. Williams, F .A. Hayek, Ludwig von Mises, Israel Kirzner, Orval Watts, and Edmund Opitz. 128 pages, $11.00 paperback, prepaid To order, please phone or write The Foundation for Economic Education, 30 South Broadway, Irvington-on-Hudson, NY 10533.