For the past eight decades, healthcare has been an industry largely dominated by insurance companies as consumers. This phenomenon was the result of a federal wage freeze that occurred during World War II. In order to attract laborers without the ability to offer higher wages, firms began instead to offer fringe benefits for prospective employees. Because these benefits were not classified by the government as additional income, they were not taxed like monetary income. One such benefit was healthcare; so the rise of healthcare costs began.

Several key contributing factors can be cited as to why healthcare benefits have caused costs to rise astronomically. The most obvious reason that prices have steadily risen is that the majority of consumers with healthcare coverage offered by their employer neglect to shop around for the most cost-effective healthcare services, because it is not coming directly out of their own pockets. Rather, many healthcare providers take advantage of the fact that insurance companies are their biggest customer, and subsequently keep their relatively unchecked prices high.

Moreover, privacy concerns prevent employers from tracking what specific health procedures its employees pay for with their healthcare benefits. This means that those with full coverage may get costly, unnecessary procedures done–unbeknownst to the employer whose insurance is paying for it–further contributing to rising prices. State mandates further exacerbate this issue, often requiring insurance companies to cover potentially unnecessary expenses.

Artificially low supply of medical professionals created by the AMA also contributes to an increase in cost, as do laws which prevent consumers from purchasing insurance from states other than their home state. The resulting lack of price competition for consumers further enables prices to rise.

Economists and historians who favor and promote the “warfare state” frequently cite World War II as a prime example of war stimulating the economy in the United States. However, an examination of the figures at face value does not provide an accurate representation of the actual economic situation during the period of America’s involvement in the conflict.

One such misleading statistic is that of the national GNP–that is, the gross national profit. This figure indicates an extreme boom in the economy during the War; however, it’s imperative to note the obvious yet overlooked fact that much of the economic production during this period was for direct use in the war, which does not benefit society as a whole. Tremendous though it may look as numbers on a page, the reality was that the economy–under the grasp of extreme government intervention and price controls–was suffering.

One may still argue that the unemployment rate tumbled dramatically during the War; but again, further analysis is necessary to determine why this actually occurred. By 1943, unemployment had fallen to 1.9%–seemingly quite a recovery from the historically high 24.7% during the height of the Great Depression, just a decade prior. Yet the shrunken unemployment rate fails to account for the fact that millions of the most skilled and experienced of America’s workforce were drafted to serve in the military. Economist Robert Higgs estimates that during WWII, “the government pulled the equivalent of 22 percent of the prewar labor force into the armed forces.”

Subsequently children, inexperienced women, and the feeble elderly were driven into the workforce. This undoubtedly inhibited economic productivity–all while millions of men involuntarily faced terrible conditions and risked their lives, no doubt worse off than before. Historian Thomas Woods likened this to the idea of executing the jobless population as a solution to the unemployment problem.

What we can conclude is that economic numbers reflect but a small part of the situation in the United States during the second World War. These numbers fail to take into account the devastation caused by war causalities, the diminished quality of life experienced both by those on the military front and those left at home to fend for themselves amidst a heavily regulated economy, and the sheer fact that much of the economic growth visible on paper came about from government spending on the war, and that this did not whatsoever benefit the consumer.🔹