In responding to Peter's request that I address the question posed by Paul Krugman, I can do no better than to quote extensively from a piece entitled What is Wrong with the Individual Mandate? that I posted last December in response to a similar question posed by ParisParamus:
There is a simple answer to the question . . . . Government exists first and foremost for the sake of our protection. Without it, our lives and our property would not effectively be our own. Government exists also to promote our well-being. For its support, however, taxation is necessary, and we have tacitly agreed that, to be legitimate, these taxes must be passed by our elected representatives. By our own consent, we give up a certain proportion of our earnings for these purposes.
The money left in our possession, however, is our own -- to do with as we please. It is in this that our liberty largely lies. Romneycare and Obamacare, with the individual mandate, changes radically our relationship vis-a-vis the government. The former presupposes that state governments have the right to tell us how we are to spend our own money, and the latter presupposes that the federal government has that right as well. Both measures are tyrannical. They blur the distinction between public and private and extend the authority of the public over the disposition of that which is primordially private. Once this principle is accepted as legitimate, there is no limit to the authority of the government over us, and mandates of this sort will multiply -- as do-gooders interested in improving our lives by directing them encroach further and further into the one sphere in which we have been left free hitherto.
Managerial progressives see only the end -- preventing free-riders from riding for free. And they ignore the collateral damage done by way of the means selected. . . . For . . . social engineers, citizens are subjects to be worked-over by the government for their own good. [Managerial progressives] are inclined to treat us as children subject to the authority of a paternalistic state under the direction of a benevolent and omniscient managerial class. . .
Raising taxes to reward free riders is, of course, objectionable. We should oppose it on principle. But it does not in and of itself narrow in any significant fashion the sphere of our liberty. It is a question of the proper use of the public purse. The individual mandate sets a new precedent. It extends government control to the private purse.
The point I made in that can be put in another way, and this has been done. As George Will recently reported, the Institute for Justice (IJ), a libertarian public interest law firm, has argued that the individual mandate is "incompatible with centuries of contract law," which regards "a compulsory contract is an oxymoron." Here again, the point is that the individual mandate blurs the distinction between public and private:
The brief, the primary authors of which are the IJ’s Elizabeth Price Foley and Steve Simpson, says that Obamacare is the first time Congress has used its power to regulate commerce to produce a law “from which there is no escape.” And “coercing commercial transactions” — compelling individuals to sign contracts with insurance companies — “is antithetical to the foundational principle of mutual assent that permeated the common law of contracts at the time of the founding and continues to do so today.”
In 1799, South Carolina’s highest court held: “So cautiously does the law watch over all contracts, that it will not permit any to be binding but such as are made by persons perfectly free, and at full liberty to make or refuse such contracts. . . . Contracts to be binding must not be made under any restraint or fear of their persons, otherwise they are void.” Throughout the life of this nation it has been understood that for a contract to be valid, the parties to it must mutually assent to its terms — without duress.
Here again the key fact is that the government is intruding in a sphere where, in principle, the government cannot intrude. It is not protecting our liberty -- which consists in the right to dispose of our own property as we see fit and to enter into contracts or not enter into contracts as we see fit. It is violating that liberty.
If Krugman cannot see this, it is because he does not care one whit about our liberty. He sees himself -- no doubt rightly -- as a member of the managerial class, and he believes that he can run our lives better than we can do so ourselves, that he can spend our money in a more rational fashion than we can, and that he can make contracts for us in a more rational fashion than we can. The authors of Romneycare and Obamacare entertain a similar presumption.
There is one problem with all such arguments, and it is insuperable. Even if Paul Krugman were more rational than each and every one of us -- and his columns raise grave questions about that presumption -- he does not care as much about our welfare as individuals as each of us does.
I may at times be mistaken but I am a far better judge of what is good for me than is someone who cares far less for my well-being than I do. That is the ground for our right to life, liberty, and the pursuit of happiness, and it can be preserved only if we have the right to dispose of our property as we see fit and the right to enter into contracts or to refuse to enter into contracts as we see fit. Running roughshod over forms and formalities is fatal to liberty.