How dismantling the welfare state would improve your quality of life

Book Review of 

Market Incentives Versus Government Planning
by Randall G. Holcombe
(reviewed by Jim Powell, February 1995) 

For more than a century, most writers claimed government intervention is needed to protect your quality of life -- assure good health care, a cleaner environment, nicer neighborhoods, safer products and so on. Now economist Holcombe boldly demonstrates why your quality of life can be improved only if government intervention is swept away. He is straightforward and appealing -- reminds me of plainspoken Henry Hazlitt. 

Holcombe shows why government intervention triggers serious quality of life problems. For example, he exposes the sham of government health care regulation. He tells how bureaucrats restrict the number of doctors (thereby propping up doctors' fees) yet fail to monitor the quality of health care after doctors are licensed -- private malpractice insurance companies are the real watchdogs. While the Food and Drug Administration aims to keep bad pharmaceuticals off the market, Holcombe tells how millions have suffered and often died because it keeps good pharmaceuticals off the market, too. 

Moreover, Holcombe's analysis demonstrates why government intervention is responsible for escalating health care costs. He recommends ending it, restoring individual responsibility for health care and liberating health care markets. 

He denounces government intervention for degrading our environment. He tells how bureaucrats discourage the development of cleaner technologies, promote the destruction of endangered species and the ravaging of government-owned wilderness. 

Holcombe explains why drug prohibition is primarily responsible for America's catastrophic crime epidemic, perhaps the biggest complaint people have about the quality of life. He tells why drug prohibition will never succeed in banishing drugs, how it corrupts police, how it devastates inner cities and harms millions of innocent people who have nothing to do with drugs. Holcombe examines case after case to show how competitive pressures drive private companies to improve your quality of life, while government regulations undermine it everywhere. Holcombe explains how free markets help reduce housing costs and improve housing quality. 

Wherever housing markets are free, he affirms, there's plenty of it. Unrestricted private landlords have the means and motivation to maintain their rental properties. Holcombe shows how much-criticized "urban sprawl" cuts pollution. In addition, he continues, it reduces commuting time, so people can spend more time with their families. He explains how such problems as traffic congestion reflect the chronic failure of government roads and land use restrictions. 

He tells how government intervention makes good housing harder to find and more costly. He talks about a politically-popular law which provokes housing shortages -- it's the main reason why almost two-thirds of New York City housing is over 60 years old! Holcombe explains how zoning laws as well as building codes needlessly add to the cost of housing. For example, one union-inspired building code regulation mandates the use of costly plumbing materials even though cheaper, easier-to-install and perfectly safe alternatives are available. As for neighborhood nuisances, Holcombe shows convincingly how they are resolved without zoning laws. 

Product quality? Holcombe tells how brand names make it easy for customers to find products when they're good, avoid them when they're bad. To minimize risk exposure, insurance companies insist on tougher standards than the federal government's for jet airplane pilots. Holcombe cites two intriguing examples of private regulation: Best Western, an association which handles motel room reservations and verifies the quality of participating independent motels; and Underwriters Laboratories, a firm testing electrical equipment. It's hard to sell electrical equipment without the UL seal. 

Evidence is overwhelming, Holcombe shows, that the welfare state is a drag on your quality of life. Things tend to get better only when you are free, private property is secure and markets can flourish. 

Market incentives to improve life now and for the future 

"People have an incentive to preserve [private property] for people they do not know, or who are not even born yet, because those people will pay the current owner more for a more valuable resource... The same is not true in politics. While some people might altruistically think of future generations when they engage in political activity, they derive no personal benefit from doing so. The unborn are actually represented better in markets than they are in politics." -- Randall Holcombe

© 1995 LAISSEZ FAIRE BOOKS . Republished by permission 
Public Policy and the Quality of Life
(hardcover) 180p. Published at $55.00
(No longer available at Laissez Faire Books, but you can find it HERE for as little as $17.) 

also see: Private Rights and Public Illusions

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