From the mouths of babes

So Iím getting coffee the other day and I somehow strike up a conversation with a guy who claims to be a writer. I figured he leaned a bit to the left when I saw him reading Barbara Ehrenreich, but that was just scratching the surface. Soon I was hearing about how all the good jobs were going overseas, weíre headed toward environmental crisis, and the United States is just four or five years away from going the way of the Roman Empire. I think he might have said that the U. S. government must have surely known about 9/11 before it happened, but Iím not entirely sure thatís what he meant so I wonít go casting aspersions. Suffice it to say that this guy had all the talking points of the far left down pat.

When he then mentioned that he had been a practicing physician for many years and was writing a book about how to fix American healthcare, I was all set to hear the argument for socializing it. I was therefore rather surprised when he said roughly the following:

ďThe problems all began with the development of Blue Cross and Blue Shield. These were originally meant just to insure against surgeries and long hospital stays, but were later expanded to cover nearly everything. Now no one pays directly for their healthcare, so thereís no working of supply and demand and the prices have all gone up ridiculously high.Ē

I eventually learned that these escalating costs were the main reason he gave up on private practice a few years ago. Now, it may be that his solution to the problem is to have the government buy and distribute everything on a low cost basis, but he was at least able to see how the lack of markets had negatively impacted the field he worked in. If we could get leftists like him to start applying that reasoning to everything else, we liberals would be in a much better position to make good policy.


6 thoughts on “From the mouths of babes”

  1. What does market analysis have to do with whether the U.S. is becoming another Roman Empire?

    I guess my problem with a Market approach to policy, at least as it’s commonly applied, is two-fold. First, I think the market doesn’t do a great job of evaluating long-term consequences (i.e. re: the environment). Theoretically, one could take the danger of permanently wrecking the environment and convert it into a dollar amount…and then take that as a cost and compare it to the economic benefits of, say, environmental deregulation. But come on! The future dangers are too uncertain, too vast, and ultimately too easy to ignore to enter into your standard market analysis.

    My second problem with market-based analysis is less with the tool of using market theory to analyze policy and more with its common use toward strictly Utilitarian ends. This is, to me, a moral question. I’m a Rawlsian in this sense. If a particular policy makes most of society increases the utility for most of society, but leaves the poorest people worse off…then it is an immoral policy. People of our socioeconomic class are living in unbelievable luxury, especially compared to world-wide standards. I personally believe we could stand to use a little utility to better the lot of the least well off. To paraphrase – a society’s true character can be seen from how it treats those at the bottom.

    That said, market analysis is a useful tool. I confess, I wish I was more adept with it.

  2. By “go the way of the Roman Empire” he meant collapse. Sorry that wasn’t clear.

    I agree with you that simply leaving environmental problems to sort themselves out would be very short-sighted. However, I suggest that market-based solutions can be much more effective than top-down regulation. An emissions trading approach to air pollution is one example; there are many others.

    A mistake people often make is to compare real markets to ideal regulations (many libertarians are guilty of making the reverse mistake at times). Regulatory approaches are subject to all kinds of problems, such as lack of information, bureaucratic zeal, inefficiency, and capture by the very interests they’re meant to keep in check. Finding imperfection in markets isn’t enough to make the case for regulation; the second step is making a case that the costs of regulation will be lower. Too often statists stop after step 1.

  3. Ha…be careful Jake. Don’t get too friendly with those medical statists. I have a similar though very disheartening story from today.

    I am in a class at Vanderbilt about Narrative Medicine, a movement in the medical establishment out of Columbia medical school that promotes interpreting the life of a patient as a story so as to best pick a treatment for him or her. Healthcare consumerism this is not.

    No one likes me. I blab about free-market this and consumer-driven that. Nothing. Now everyone laughs at me whenever I being to speak. Seriously.

    Almost all the students are pre-meds and the prof. is a surgeon at the VUMC, and my libertarian arguments are very counter-intuitive to them.

    But today I got into an interesting conversation with a girl who said that the 3rd-party payment system (3pps) is to blame for a lot of the mess in healtcare. Yureeka…I thought to myself. And we talked. We discussed how 3pp causes price inflation and how 3pp impedes competition. It was glorious. “Third party payment is bad,” she said. Yes! That’s right!! I answered. “And that’s why we need socialized medicine!”

    Huh? I thought that’s what we were talking about. No, she said. 3pp is what we have, and socialized medicine is what we do not have. Thus we need to replace the 3pps with socialized medicine. Wait…I think you’re confused or something. No, she said: try telling a poor child he can’t get medicine. I have to go to the bathroom.

    And she left the room and we didn’t talk anymore.

    Good grief. To quote Bull Durham, it was like a martian trying to have a conversation with a fungo bat.


  4. As my man Dionne says, “market values are values, but they’re not the only values.” Most important on my list is getting everyone health care, whether it’s done by strict price controls and government involvement or by a market-based solution. Frankly, it’s a matter of who you trust. I trust the market with a lot of things, but I don’t trust the marketplace any further than I can throw it when it comes to sufficient preventative and catastrophic medical care for those who couldn’t otherwise afford it.

    Nor do I trust the marketplace to be good environmental stewards until it’s way too late. Your emissions-trading thing, Jacob, doesn’t work. If we let people in Cleveland pollute because people in Maine are doing a super-good job, what should Clevelanders do? Move to Maine? And do you include the things we can’t put a price tag on – like clean air – in your analysis of cost? I hate to sound like a Mastercard commercial, but there are some things that go beyond money that we need to consider.

    That having been said, we never have had a free market in this country, so I confess I have nothing concrete to say about its effects outside of my theoretical misgivings. I do know that in the environmental sphere, things started getting better when – and only when – we started regulating. Maybe if we had never given subsidies to power companies, and had opened energy markets to competition… but then, if Grandma had balls she’d be Grandpa.

  5. [cross-posted from Jeff’s blog]

    Despite my misgivings about the market, I actually disagree with you about emissions trading, at least if it’s done on a more local scale. On the national scale you’re talking about, yes it’s ridiculous. But I don’t think that’s how it’s done…at least that’s not how it’s been described to me.

    Let’s say you want to cut pollution in, say, Cleveland by 1/3. One way you (“you” meaning the goverment) could do this is by mandating all factories cut their pollution by 1/3. But there’s a more cost-effective way to do the same thing. Allow emissons trading shares amounting to 2/3 of the pollution in the city. Then you set the price of shares. The factories for whom it is cheaper to cut pollution than to buy the shares will cut their pollution to the cheapest level. The factories that have a more difficult, costly time cutting pollution will buy shares. In the end, you will still have cut pollution by 1/3, but the overall cost of that cut is less.

    I can hear you potentially objecting that there would be some unfairness….that somehow all the pollution will end up over poor neighborhoods or something. Well, from living in Southern Smogville (Atlanta) I can say that air pollution ain’t that discriminate.

    So I actually think emissions trading is a good idea. Unless you want to cut all pollution entirely, in which case you better figure out a brand new method of manufacturing. (Hey, you’re the chemical engineer!)

  6. I wish I could get acquainted with the writer (at the same time doctor) Jacob told us about.
    Having the government buy and distribute everything on a low cost basis is of course a utopic idea. There should be a market mechanism in the field of medicine as well as in any other field, with the difference that certain services should be funded by government when it comes to social defense of disabled, etc.

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