Good Monopolies – Medicare?

Good monopolies escape competition. A service monopoly often implies a greedy, exploitative weed that thrives off a niche habitat of bureaucratic rot and legislative fertilizer.

Peter Thiel wrote about good monopolies in the Wall Street Journal. He uses Google as an example. Despite protests insisting that Google has real competition, it actually owns its market space. And we love it, because Google treats us well. Google knows that great service is the best way to own the whole market. (see also Google’s Utopian Quest)

Nationalization

Canadian Medicare enjoys a monopoly only if it offers reasonably good service most of the time. Escalating wait times and arbitrary cuts to doctors and nurses undermine the Medicare monopoly and tarnish the whole franchise of parliament.

Nationalization evangelists argue that many industries show ideal conditions for natural monopolies. Take the military. It seems logical to have one army; same thing with the courts.

Looking to other services, large swaths of uninhabited Canadian countryside make basics like travel and telephone a challenge. But people need these basic services. We ought to provide them in the name of compassion, of Canadian values.

Apologists pause at this point in their sermon.

With right hand on chest, they remind us of our success when we all laboured together under the war measures act. They leverage our patriotism and national pride as reasons to support nationalized monopolies in education, health, transportation, hydro, phone and every other service they can imagine.

Queue a few bars of John Lennon:

Natural Monopolies

Forty years ago, Medicare fit the natural monopoly narrative. Widely separated communities defied even the most ardent laissez faire capitalists to come up with a true market.  It’s pretty tough to have meaningful healthcare or educational choice in Atikokan.

Canada looks different since Tommy Douglas first sermonized about Medicare.  Our population is larger (18 million in 1960 vs. 35 million today) and older (average age mid-20s in 1960s vs. 41 yrs old today). We travel more, and do so more easily. The number of Canadians exploited by niche monopolies based on geographic isolation has decreased dramatically. Retailers cannot gouge customers in Shebandowan like they used to. Everyone has eBay.

Same Motivation, Different Reasons

The arguments supporting nationalized services thin and fade with improved technology and population growth. Canadians do not need a national airline anymore. Privatized ones offer better service and quality for a fraction of the cost. We do not need nationalized telephone service or nationalized railways today.

No nationalized telephone service in the 1970s meant Nipigon went without telephone. Now Nipigon has cell phone service as does Marathon, Terrace Bay and all the other communities over the North Shore.

NOTE: Just because nationalized telephone outlived its usefulness does not mean we can do away with government. We need politicians and bureaucrats to do the work that only they can do. We just don’t need them to run telephone or airline companies anymore.

Despite all that has changed, our motivation remains the same. Compassion dictated that we nationalize services in the 1950s. Compassion now dictates we improve Medicare by allowing competition to improve services just like we did with air travel, telephone and mail. Healthcare stands to improve with a bit of competition.

Is Medicare a good monopoly today?

photo credit: bussiness2community.com