The Floor Beneath the Free Market
The strongest argument for universal healthcare and a basic income floor isn’t a liberal one. It’s Milton Friedman’s.
Amendment Media | Randy Flagg
Milton Friedman was not a socialist. The Nobel Prize-winning economist spent his career as the intellectual godfather of free market capitalism — the man whose ideas shaped Ronald Reagan’s economic policy, whose arguments against government intervention in markets became the foundation of modern conservative economics. He believed in competition, in individual choice, in the price mechanism as the most efficient allocator of resources human civilization has ever devised.
He also believed in a guaranteed income floor for every American.
Not as a concession to the left. Not as a reluctant compromise. As a logical extension of free market principles.
In Capitalism and Freedom, published in 1962, Friedman proposed replacing the existing welfare bureaucracy with what he called a Negative Income Tax — a mechanism by which Americans below a certain income threshold receive direct cash payments from the government rather than paying taxes into it, with the payment phasing out as income rises. His argument was not humanitarian. It was structural. The existing system of in-kind benefits, means-tested programs, and welfare bureaucracy was, in his view, inefficient, paternalistic, and corrosive to individual freedom — because it substituted government judgments about what poor people should have for the individuals’ own judgments about what they needed. Cash, by contrast, respects choice. It lets the market work. It treats the recipient as a capable adult rather than a dependent ward of the state.
He returned to the argument in Free to Choose in 1980, co-written with his wife Rose Friedman, making the case even more plainly: a simple income floor is not the enemy of a free market. It is a precondition for one. Because Friedman understood something that the current American debate has largely forgotten: a genuine free market requires that participants have real choices, and people who are one medical bill away from bankruptcy, or one layoff away from destitution, do not have real choices. They have the illusion of choices. A worker with no floor has no real bargaining power. They cannot walk away from a bad deal. They cannot take an entrepreneurial risk. They cannot participate in a market as a free agent — because they are not free.
Markets built on the illusion of choice are not free markets. They are something else.
This is not an argument for socialism. It is an argument that the strongest free market economies in the world have already run the experiment Friedman described — and the results are in.
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Before making the case, the strongest objections deserve a genuine hearing. Because they are not frivolous.
The cost objection is the most powerful. A universal payment of $1,000 per month to all American adults costs approximately $3.1 trillion annually — more than the federal government spent on Social Security, Medicare, and Medicaid combined in 2021. Universal healthcare, depending on the model, would require redirecting or supplementing trillions more. These are not rounding errors. They are structural questions about the size and role of government that do not have easy answers.
The moral hazard objection is also serious. When you guarantee an outcome regardless of behavior, you change behavior. Economics 101. If people receive income without working, some will work less. If healthcare is free at the point of service, some will use more of it than they need. The question is not whether this happens — it does, at the margins — but whether the magnitude of the effect justifies the cost of the alternative.
The innovation objection is the one the free market conservative makes most forcefully: America’s healthcare system, for all its dysfunction, produces the majority of the world’s medical breakthroughs. Pharmaceutical innovation, surgical techniques, medical devices — the profit motive drives research that saves lives globally. A system that removes the price signal from healthcare risks removing the incentive to innovate. This is not nothing.
The freedom objection is philosophical but real: there is something distinctly American about the belief that individuals, not governments, should determine the course of their own lives. The resistance to government guarantees is not always selfishness. Sometimes it is a genuine conviction that dependency on the state corrodes something essential about the human character — the drive, the self-reliance, the willingness to take risks that built this country.
These arguments deserve respect. And they deserve a response.
What the Evidence Actually Shows
The Cato Institute — not a left-wing think tank — published a piece in 2025 titled “U.S. Health Care: The Free-Market Myth.” Its central argument is striking: among wealthy nations, the United States may have one of the least-free healthcare markets. The American system is not a free market that has failed — it is a heavily regulated, heavily subsidized hybrid that has produced the worst outcomes at the highest cost of any wealthy nation, while calling itself a market. The Cato piece argues that making healthcare more universal would actually require more market competition, not less — eliminating the regulatory and tax distortions that prevent genuine price competition from functioning.
That is worth sitting with. The most rigorous free market critique of American healthcare is not that it is too socialist. It is that it is not capitalist enough — that the current system is a cartel dressed up in market language, and that genuine competition would produce both lower costs and broader access.
On the income floor, Friedman’s position is instructive. He proposed a Negative Income Tax — a mechanism by which people below a certain income threshold receive payments from the government rather than paying taxes, with the payment phasing out as income rises. His argument was explicitly pro-market: unlike the existing welfare bureaucracy, which he viewed as inefficient, paternalistic, and distorting, a simple income floor would respect individual choice, reduce government overhead, and ensure that the labor market functioned with genuinely free participants rather than desperate ones. His endorsement of a basic income floor is, as one scholar noted, not aberrative or regrettable — it is essential to his case for free markets.
Singapore: The Model Nobody Talks About
When Americans debate universal healthcare, the examples cited are always Canada or the UK — single-payer systems with long wait times and government-run delivery. These are genuine tradeoffs worth examining. But they are not the only models.
Singapore has universal healthcare coverage for all its citizens and spends approximately 5 percent of GDP on healthcare — roughly half of what the United States spends — while achieving fourth-highest life expectancy in the world and the lowest infant mortality. It does this not through a government-run single-payer system but through a combination of mandatory personal health savings accounts, national catastrophic insurance, and a safety net fund for those who cannot afford care.
The mechanism is worth understanding. Every working Singaporean contributes between 8 and 10.5 percent of their salary to a personal Medisave account. That money belongs to them. They use it to pay for their own healthcare and their family’s. A national insurance scheme covers catastrophic costs. A government fund covers those who fall through the cracks. Public hospitals compete with private ones for patients — which keeps quality high and costs lower than they would otherwise be.
This is not socialized medicine. It is mandatory savings, market competition, and a safety net — three things that are entirely consistent with American values and entirely incompatible with the current American system.
As one analysis put it, Singapore has proved there is a middle way between free-market and socialized healthcare systems — universal healthcare without significant welfare spending. The United States could not simply replicate the Singaporean system overnight. The structural differences are real. But the assumption that universal coverage and market principles are incompatible has been definitively disproved by a country of 6 million people running the experiment for decades.
The American Touch
What would a version of this look like that fits the American character — the one that values individual responsibility, distrusts large government bureaucracy, and believes in the dignity of work?
It would not look like Medicare for All as currently proposed — a single-payer system that eliminates private insurance and centralizes all healthcare decisions in the federal government. That model trades one set of problems for another.
It might look more like this:
A mandatory health savings account — every working American contributes a percentage of their income to a personal account, owned by them, used for routine care. The money is theirs. They keep what they don’t spend. They make the choices about how to use it.
Catastrophic coverage — a national insurance pool covers the costs that individual savings cannot — the cancer diagnosis, the car accident, the chronic condition that would otherwise bankrupt a family. This is the one thing private insurance does poorly and government does adequately: pool risk across the entire population.
A genuine safety net — not a bureaucratic maze of programs with different eligibility rules and application requirements, but a simple income floor of the kind Friedman described: below a certain income, you receive support. Above it, you don’t. No caseworkers. No asset tests. No dignity tax for needing help.
Market competition everywhere else — drug pricing, insurance products, elective care, provider networks. Let them compete. Remove the regulations that protect incumbents and cartelize prices. Trust that competition produces better outcomes than consolidation, because it does.
This is not a left-wing program. It is not a right-wing program. It is a pragmatic one — built on the observation that the most successful market economies in the world have solved the problem of baseline security without abandoning the principles that make markets work.
What the Resistance Is Actually About
The most honest version of the debate is not really about markets versus government. It is about who bears the cost of a floor that most Americans — when asked directly — believe should exist.
Forty-one percent of American adults, approximately 100 million people, carry medical debt. A March 2025 Gallup poll found that 31 million Americans borrowed an estimated $74 billion to cover medical costs in 2024 alone. These are not people who are gaming a generous system. They are people who followed the rules, worked the jobs, paid the premiums — and still ended up with bills they cannot pay.
The free market conservative is right that markets allocate resources more efficiently than governments in most domains. The free market conservative is also right that guarantees change behavior at the margins. What the free market conservative has not adequately answered is what a market society owes to the person who loses the market’s lottery — not through laziness or bad choices, but through the randomness that governs human life.
The American answer, for most of its history, has been: nothing guaranteed. Pull yourself up. That answer has produced extraordinary dynamism and innovation. It has also produced 100 million people in medical debt and a generation of workers one layoff away from losing everything — people who cannot take the entrepreneurial risks that markets depend on because the floor beneath them does not exist.
The strongest free market economies have figured out that a floor beneath the market does not weaken it. It makes the participants braver. It makes the risks more rational. It makes the choices more real.
That is not a left-wing argument. That is Milton Friedman’s argument. And Singapore’s. And Germany’s. And every other wealthy market democracy that has solved the problem the United States is still pretending does not exist.
The floor and the free market are not opposites. They were always meant to work together. The only question is whether America is willing to learn that from the evidence — or whether it will keep insisting on an ideological purity that no other successful market economy has ever actually practiced.
Amendment Media exists to ask that question — and to follow wherever the evidence leads.