perspective

For the past few years I have spent a good deal of timearguing with economic conservatives about the value ofmarket theory and practices for health care. I am dubi-

ous about the utility of the market and far more impressedwith the universal health care systems of Europe. The Nobellaureate Kenneth Arrow contended many years ago thathealth care was not a promising arena for market theory, andmarket practices in the United States have not generatedrobust health or economic outcomes.

Nonetheless, economic conservatives continue to presstheir case. The market, they say, has two distinct values: it canenhance our choices in health care,and it will force us to consider thecost of the care we want, which is cur-rently obscured by third-party pay-ments. They also dislike “big govern-ment” and “socialized medicine.”Consumer-driven health care is theirmoral ideal.

Actually, there is a far better tar-get for market enthusiasts than healthcare. It is the Department of Defense. No one has ever talkedof a “socialized Department of Defense,” which it surely is,nor objected to it on the grounds that it exemplifies big gov-ernment in a most flagrant way. Why that has not beennoticed mystifies me. But it is surely—as even conservativesmight concede—bloated, inefficient, reckless about costs, andthe ne plus ultra of bureaucracy.

I have a proposal. Why not privatize national defense,bringing to bear on the Pentagon all the virtues the marketsupposedly could bring to health care? First, if we should havea choice about the kind of health care want simply becausepeople have different needs and desires, that principle shouldsurely apply to national defense. We do not all want the samekind of security. Some of us want more high-tech planes andships and antimissile systems, others more feet on the ground.Some of us like massive arsenals of nuclear weapons, whileothers have a taste for biological toxins or poison gas. Second,if we had more choice about the kind of defense we want, wewould surely think about the cost and be willing to pay forour preferences. As it now stands we hardly have to give a

thought to the defense budget because the money is just onemore item of taxation—money out of our pockets, but not ina way that encourages prudent spending.

But how could we have both choice and cost control?The most straightforward method would be a voucher sys-tem. The government, or our employer, would give us moneyto buy whatever kind of defense we fancied. That would takecare of what economists call the demand side. As for the sup-ply side, a number of commercial plans would be set up to sellus the defense we personally want, knitted together by thegovernment in a form of managed competition.

I want to stress that this proposalis not meant as a direct response toour military problems in Iraq. Theyhave been brilliantly and efficientlymanaged, even if there has been a lit-tle muttering here and there. Howev-er, a really good market system indefense would have allowed us to hireour own inspectors prior to the warand to buy our own kind of military

campaign once it was under way—and a few of us wouldprobably have chosen an invasion of Venezuela, Canada, orMonaco instead of Iraq.

I have failed so far to mention the most important fea-ture of all—our right to purchase outright, or buy time sharesof, the various competing armies and navies. I could have myapartment house surrounded by my own tanks, artillery, andtroops. I don’t have that kind of choice now, which is whatyou get from a socialized Department of Defense.

What about pacifists and other simpering people whojust don’t like war and violence? They are a headache for anyfree country. I would not give them a voucher at all, under-standing that they would be “free riders,” their lives protect-ed by the economic sacrifices of the rest of us. That gesturewould surely be compassionate conservatism at its best.

A final thought. One objection to consumer-drivenhealth care is that it will be hard for many if not most peopleto gain the information they need to make informed choices.Similarly, who among us is competent to pick good defensepurchases? Not to worry: score cards, evidence-based defensedata, and information technology can tell us all we need toknow.

Privatizing the Department of Defense: A Proposal

B Y D A N I E L C A L L A H A N

Why not let the market

take control?

Daniel Callahan is director of international programs at The HastingsCenter and cowrote Medicine and the Market: Equity v. Choice.