Pooling is theft

We’ve heard much about the health care reform scheme and one thing that keeps popping up is “pooling”, i.e. combining people into larger “pools” of insured.  Ostensibly, this is to lower “costs”.  However, this is a sinister and subtle way to engineer theft on a grand scale.

When you pool, you are taking numerous people, i.e. consumers, and combining them into one homogeneous unit.  But the problem arises very quickly and very acutely when seen through an Austrian lens.  The pool is comprised of individuals, each with their own individual preferences and valuations.  Each has a different measure of the utility of the exact same services. It is only through the price mechanism do we discover the exact individual measurement.

As Ludwig von Mises wrote in Human Action

It is customary to say that acting man has a scale of wants or values in his mind when he arranges his actions. On the basis of such a scale he satisfies what is of higher value, i.e., his more urgent wants, and leaves unsatisfied what is of lower value, i.e., what is a less urgent want. There is no objection to such a presentation of the state of affairs. However, one must not forget that the scale of values or wants manifests itself only in the reality of action. These scales have no independent existence apart from the actual behavior of individuals. The only source from which our knowledge concerning these scales is derived is the observation of a man’s actions. Every action is always in perfect agreement with the scale of values or wants because these scales are nothing but an instrument for the interpretation of a man’s acting.

Furthermore, consumption of resources by one individual in the pool does not yield any satisfaction to any other pool member, and even more important, necessarily means that one pool member must forgo use of those same resources.

Let’s examine a simple example for clarity.

Hip replacement surgery might have a very high value to someone who has need of a new hip but little to no value to someone who has no need.  Thus, at the present time, covering hip replacement surgery for both presents a dilemma.  For the individual who has no need for hip replacement but is covered for one, this represents lost value.  They lose the value of whatever else they could have purchased instead of hip replacement surgery.  This is theft.

In addition, since the hip replacement surgery is being paid for by not just one, but two people (of course, probably many more, but this is a simple example), the individual who gets their hip replaced does so at much lower cost to them.  In other words, they give up less and in return receive much higher valued goods.  This is theft.

The individual not needing hip replacement surgery is paying for goods he does not value and will not benefit from.  The individual needing the surgery is receiving goods he did not pay for, or pay for entirely.  He is benefiting in excess at the expense of others.

There is but one person who actually is neither a thief nor victim: the median.  He is the sole person for whom pooling does not take nor give: he pays for and receives exactly in the same proportion.  but there can be only one (in a large enough pool, perhaps there are more than one, but it’s still a paltry number compared to the whole).

It is a simple fact that pooling benefits some and penalizes others.  It forces some to pay for more than they consume, to pay for goods and services they do not value, or do not value nearly as highly.  Pooling allows others to consume far more than they pay for, to force others to subsidize their consumption.

And once again, there is the broken window.  For when we force others to pay for things they do not value, and do not receive, they cannot purchase the goods and services they desire.

There is no gain from destruction and there is nothing worthy in theft.  Health care “reform”, as championed by our dear leader, is both.


One Response to Pooling is theft

  1. […] pooling theft? Filed under: Economics — tunecede @ 9:03 am A while back I wrote about pooling in regards to insurance and how it is theft.  I was asked by a colleague if all insurance pooling […]

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