Is There a Health-Care Problem in Western Societies?

Despite the health-care industry’s weight, the cost of government intervention is not the main source of problems for our welfare systems. Politically powerful groups ensure that privatization remains politically difficult to obtain. The rent-seeking game has succeeded in producing large coalitions of winners and very large groups of people who did not know whether reform would put them on the winning or the losing side. These large groups have now come to realize that transition would make society better off. Yet, the temptation to free-ride on the next generation has proved all but irresistible. That very rent-seeking game has seriously hampered our prospects for growth. The current connotation of social justice may crumble. In that event, large chunks of the welfare state, including government production of healthcare services, may collapse, and the notion of individual responsibility may regain center stage.

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