LAWS OF CONSERVATION. The Congressional Budget Office (.pdf) explains why government-provided health benefits do not provide competitive advantages.

The equilibrium level of overall compensation in the economy is determined by the supply of and the demand for labor. Fringe benefits (such as health insurance) are just part of that compensation. Consequently, the costs of fringe benefits are borne by workers largely in the form of lower cash wages than they would receive if no such benefits were provided by their employer.

Replacing employment-based health care with a government-run system could reduce employers’ payments for their workers’ insurance, but the amount that they would have to pay in overall compensation would remain essentially unchanged. Even though changes to the health care system could have various effects on the supply of labor, the underlying amount of labor supplied at any given level of compensation would hardly be affected by a change in the health care system. As a result, cash wages and other forms of compensation would have to rise by roughly the amount of the reduction in health benefits for firms to be able to attract the same number and types of workers.

Via Greg Mankiw, who warns readers, "This fallacy [the legacy car companies unable to compete with producers in countries with socialized medicine] may well be rearing its ugly, and illogical, head in the days to come." Consider some corroborative evidence: there has been a common market in automobile parts for years, and Canada has socialized medicine. The legacy car companies have not been moving productive capacity to Canada.