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Universal Healthcare and Economic Freedom Go Hand-in-Hand

David Callahan

One of the most pernicious myths of the past half century is that guaranteeing healthcare for all Americans would strike a mortal blow against this country's system of free enterprise. 

That claim has been made endlessly in the context of the Affordable Care Act, and Obamacare critics are now ramping up their predictions of doom as implementation of the law grows near.

But as Robert Frank explained this weekend in the New York Times, the lived experience of other countries like Sweden with national healthcare systems doesn't bear out the fears. 

In fact, you don't need to take the word of a progressive economist like Frank on this point. The Heritage Foundation's research indicates the same thing. 

Consider Heritage's "Index of Economic Freedom," which measures how friendly countries are to business, investors, and property rights. 

The countries that rank the highest on the list are: Hong Kong, Singapore, Australia, New Zealand, Switzerland, Canada, Chile, Mauritius, Denmark, and the United States. 

Of those ten countries, nearly every one has a universal healthcare system or mandates that individuals pay into medical savings accounts. Australia and Canada both have single-payer systems. Denmark's system is pretty much government controlled. Switzerland's system is similar in many ways to Obamacare. Among the top twenty nations on the list are Ireland, the U.K., Germany, Sweden, and Finland -- other countries that also have universal healthcare systems. 

There are some good reasons why such systems might go hand-in-hand with economic freedom. For one thing, as Robert Frank noted, these systems help keep down healthcare costs:

The United States spends more than $8,000 a person per year on health care, well more than twice what Sweden spends. Yet health outcomes are far better in Sweden along virtually every dimension.

Lower healthcare costs mean that business and individuals can channel more money into productive uses that foster a vibrant and globally competitive market economy. 

Universal healthcare systems also make it easier for people to be entrepreneurs or self-employed. While we think of the United States as a place where people are uniquely likely to strike out on their own, this is largely a myth. The U.S. actually has a much lower self-employment rate than most developed countries. Australians, Brits, Germans, Swedes, and so on all are more likely to work for themselves than Americans. 

It's hard to say how much universal healthcare insurance determines self-employment rates, but common sense suggests you're more likely to go out on your own if you're not worried about losing your health insurance. 

Now, does all this mean that Obamacare will produce more economic freedom in America? Not necessarily. Ironically, government run healthcare system are better for free enterprise than those -- like the ACA -- which impose mandates on employers.

I say ironically because, of course, such a truly "socialized" system was off the table during the healthcare debate thanks opposition by supposed defenders of economic freedom.