Every few months, the argument to “universalize” some sector of the economy captures national attention – be it for universal health care, universal childcare, or universal student loan forgiveness. All the arguments have an all-too-often overlooked fatal flaw: they assume goods are not scarce.
In economic terms, all goods have a limit to them which makes universality impossible. Thus, a term like “universal health care” is quite literally too good to be true.
Now, it is true that some public goods are provided to everyone through taxation, such as drinking water or fire protection.
In the case of drinking water, modern innovations have made water cleaner and more available than ever before. With fire prevention, fires throughout the country plummeted with the adoption of building codes and standards.
But even today, some communities in the United States face drinking water crises. And California struggles to find enough manpower to put out the raging wildfires the state experiences every year. Thus, even public goods that are usually readily available occasionally face scarcity.
Another issue with rhetorical oxymorons such as “universal student loan forgiveness” is the presumption that student loan forgiveness would benefit everyone. Universal student loan forgiveness is actually a particular good, only benefitting a small subset of the population.
Using the word universal implies everyone is helped, but that is simply not the case. Student loan forgiveness merely shifts the tax burden to Americans who worked hard to avoid student loan debt for themselves.
In the same way, the idea of universal health care is inherently false, as it too fails to recognize the natural limits of health care services.
No nation knows this more acutely than Canada. A recent survey from a Canadian research foundation found that 35% of Canadians without a doctor have searched for one for over a year to no avail. An additional 29% gave up looking for a doctor altogether. By making health care a public good through taxation, Canada effectively dramatically reduced the amount of health care providers able to serve the population.
Advocates for “Medicare for All” must recognize that providing insurance to everyone does not translate to everyone receiving health care. In fact, universal health care often inhibits individuals who have rare or particular health needs from receiving the care they need.
Take for example the case of Charlie Gard, a British baby born with a rare genetic disorder. Rather than allow Charlie to receive experimental treatment in the United States, the High Court of London ordered the infant to be taken off life support. Britain’s “universal health care” apparently did not include little Charlie.
The United States pharmaceutical and medical innovation effectively subsidizes all countries reliant on government-sponsored health care. Because these nations cannot afford to use their own public health dollars to treat diseases, citizens with rare disorders often rely on the United States or are left untreated.
While useful rhetoric for politicians, attempting to universalize more services in an economic downturn will only harm Americans already stretched thin. Erroneously treating scarce resources as universal goods will exacerbate inflationary pressures.
Rather than look through the lens of universalization as the answer to our problems, we should look to individualization. Individualization promotes policies that allow individual choice to flourish. For example, school choice would provide more childcare options at affordable prices. Adjusting student loan interest rates would relieve burdened students. Transparency in health care pricing helps drive down costs.
Indeed, it is through innovation and increased choice that scarce goods become plentiful.
McKenzie Richards is a policy associate at the Pacific Research Institute.