Kenneth Arrow on Health Care: It’s Not What You Think

Kenneth J. Arrow at Stanford University. Credit: LA Cicero, 11/4/1996.

As a health reform discussion lengthens, the probability that someone will cite Kenneth Arrow approaches 1. Close behind is the probability that this person will cite Arrow inaccurately.

Arrow showed that health care markets fail, goes the ritual invocation of the Nobel Prize-winning economist’s 1963 article “Uncertainty and the Welfare Economics of Medical Care.”1 Therefore, government should do X.

As a rule...