Should the U.S. government create its own chain of grocery stores — “Uncle Sam’s Club”?
Should it begin a new government-run restaurant ? A new government chain of gas stations — “7-Eleven Trillion,” perhaps?
Should Uncle Sam build his own line of patriotic American cars (“Government Motors”)? How about government oil-drilling and coal-mining companies, or government makers of solar panels?
Sen. Elizabeth Warren, D-Mass., may or may not agree with these ideas. Unfortunately, the ethnically confused presidential candidate is promoting an idea that’s just as bad, perhaps even a bit worse. She wants to get Uncle Sam into the generic drugmaking business. And we mean that literally — she doesn’t want the government to subsidize or to provide drugs, but to manufacture them in government factories with government workers.
Like most terrible ideas, this one comes complete with good intentions. Warren wants to prevent common drugs that are off their patent — insulin, for example — from experiencing price hikes due to scarcity.
This is not an unreasonable goal. Insulin, in fact, is one of the specific drugs she wants the government to make. Its price has risen because of the explosion of type II diabetes in the U.S. Of course, the body of evidence keeps growing that this has been caused by poorly conceived government dietary recommendations that were never grounded in science. And now we’re going to put one more responsibility into government’s hands?
There are several reasons this drugmaking scheme won’t work. The first is that it’s flagrantly unconstitutional. Congress lacks the legal authority to manufacture goods for commerce, full stop. But even setting that aside, just look at what happened when government stepped in to prevent “market failures” (i.e., sudden price swings) in agriculture after World War I. That sector of the economy has been dysfunctional and addicted to subsidies ever since.
More importantly, the U.S. government isn’t a drug company. Consider the effort, the capital investments, and the expenses that the government would incur in beginning its own drug manufacturing operation. Don’t forget about the costs of regulatory approval and the hiring of experts who actually know how to run a drug company. Then add to that the need to create some mechanism (other than profit, presumably) by which the government’s new drug company will decide what to make in any given week or month. After all, scarcities change; markets change; medical science changes. We may not even need insulin in 2025. Will someone in government know what to make, then, and how much of it?
It quickly becomes obvious why government doesn’t do these things anymore. Government doesn’t even directly make the weapons the military uses, and that’s a good thing. It’s far easier, cheaper, and smarter to hire or contract private companies to supply such needs to Uncle Sam.
The U.S. government learned this lesson long ago. The British learned it more recently, when after a failed post-war experiment in government ownership of the means of production, they finally privatized their airlines, railroads, canals, and iron, coal, and gas companies, among others.
To have the government sign large drug contracts may still be a bad idea, but Warren’s idea is immeasurably worse. She should be punished by the voters for such a silly scheme. To have the government actually make drugs would be to un-learn most of the 20th century’s most important lessons about governing.
