New York Times blogger Paul Krugman, a former Enron consultant, is mad. He is mad because University of Chicago Professor Steve Levitt criticized the Affordable Care Act and suggested to British Prime Minister David Cameron that a fully nationalized system may not be the most efficient way to organize the health care market. Levitt’s professed belief in the principles of the free enterprise system is enough for Krugman to label him a “faith-based freak.” That is a harsh term.

Why is Krugman so convinced that market principles and the price system have no role to play in the health care sector? Because more of the health spending in the United States is private than in other countries, and total health spending in the United States as a percentage of gross domestic product is higher as well. That is it. As Krugman shows in a chart, there is no real relationship between the private share of health spending and the size of the health care spending in the full group of advanced economies.

One data point, that’s what Krugman sees as evidence that “strongly suggests that the proposition that health is an area where private markets work badly is borne out by experience,” and that’s what makes him refer to Levitt’s thinking as “free-market fundamentalism.”

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Of course, one data point in a cross-country collection of data points is not much. Fortunately, there are better ways to test how these things work. For example, the several states that form the United States have different health care systems, to some extent, yet are much more comparable otherwise than Canada and Greece. Professor Jeffrey Clemens of the University of California at San Diego has kindly provided me data on the share of private health spending and the shares of health care spending in the different states’ economies. His data are shown below, and they are fascinating.

