Question: Does (for example) smoking have additional costs that are not included in the market price?
Remember our discussion about externalities, this is an example of a negative externality.
As far as government programs like medicare, medicaid, etc. There are ways to justify them as ethical. For example, what if I believe from an ethical standpoint, that if any benefit can be given in our society, it should be given to those least well off? Then providing health insurance for the elderly and poor would meet my definition of ethical.
I think your definition of "ethical" is short cited. How do you feel about handicap parking spots. They are forced upon you and make someone elses problem your problem. Are they unethical? How could we possibly justify them as being ethical?
Sure, there are negative externalities. There are negative externalities in almost any market transaction. What is your point?
Second, there is nothing wrong with giving benefits to those are "least well off." I just don't favor the top-down, centralized approach to providing to some what others must sacrifice. Legalize cottage industries, reduce the taxes significantly, and leave people to their own devices. The elderly are capable of sustaining a fiscal crisis come 2030. We already spend something like six dollars on every senior for every dollar we spend on children. And the elderly make up the one of the wealthiest brackets of society. They've had years to invest and save for their retirement needs, while we're stealing from younger generations that will have to work twice as hard and face cuts that the baby boomers will never have to deal with. And that is ethical?
Finally, handicap parking spots are not bankrupting the country. They are the least of my worries, in terms of fiscal policy. I would rather favor the bottom-up approach to this problem, and leave businesses alone. Would it be easier for a smaller business to give a woman in a wheelchair an office on the first floor, or to force them to construct a $300,000 elevator? We wonder why small businesses can never keep up.
Have you ever looked at the effects of the government managing our graduate medical schools? Since they froze funding these schools since 1994 and have forced the hospitals to find alternative approaches to funding resident training, the same number (or less) physicians are being trained today then were in 2000. This is true despite our aging population. What is the result? Physician shortages in many areas. Next, the government routinely denies the construction of new hospitals in some states unless they are found to be needed in a certain community by state planners. So, now we are faced wth a shortage of hospitals and a shortage of physicians, thanks largely to government restrictions and licensing procedures. And businesses have taken full advantage of the law, as many communities are faced with having only one large hospital that lobbies to restrict a certificate of need (CON) for any emerging competition. Without competition, you can't expect to see the supply boosted, the costs reduced, or the quality improved.