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What I think I am nearly certain about
My apologies if this list sounds dogmatic or polemic. I'm not trying to persuade you (now), I'm simply listing the inner contents of my mind, so you may compare this with my post on what I am uncertain about. Here is an incomplete and desultory list of what I (think I) am nearly certain about:
1. Polarizing America won't make interest group politics go away, no matter how hard either the right-wingers or progressives wish it so. It may even make interest group politics worse, and in the meantime the polarizer is simply demonstrating a lack of meta-rationality on the part of the polarizer.
2. We cannot do economic policy as we might arrange pieces on a chessboard. What you ask for is rarely what you get, and your recommendations had better be prepared for this discrepancy.
3. Government-dominated health systems, insofar as they work well (a number of them do), succeed simply by lowering costs. Health care has a murky relationship to human health, pharmaceuticals and broken limbs aside. A version of the single-payer system, as might be adopted in the United States, would not lower costs. We would be raising taxes and lowering medical innovation to give poor people a good deal more financial security and a slight bit more health; that is the relevant trade-off.
4. Overall, despite its many flaws, America is a force for liberty in the greater global community.
5. We are programmed to respond to the "us vs. them" mentality and highly intelligent people are no less captive to this framing. We should try very hard to get away from this framing.
6. America is a beacon of innovation for the world, and it is critically important that we allow the preconditions for American innovation to continue.
7. It would be a disaster if American taxation ever reached 55 percent of gdp.
8. Which institutions work well is often country-specific.
9. The West European way of life is a marvel, unprecedented in human history. That said, I am not sure that the degree of economic security to date can persist in a more mobile and more diverse future (this second sentence retreats to what I am uncertain about).
10. No one has a good idea what the equilibrium looks like for nuclear proliferation. This is very worrying.
11. The possibility of pandemics receives insufficient attention. The world sleepwalked through AIDS for a long time, mostly because "it doesn't affect people like you and me." The next time around could be much worse.
12. It is a big mistake -- even in rhetoric -- to conflate concern for the poor with comparative egalitarian intuitions. The left ought to turn its back on this mistake, although it would mean losing one of their most effective rhetorical tools.
13. Most people are sincere in their views (even if wrong), and polemic attacks on them signal a weakness of the attacker, not the attackee.
14. The chance that a protectionism will be an economically rational form of protectionism is very low.
Posted by Tyler Cowen on January 4, 2008 at 06:07 AM in Data Source | Permalink
Comments
Could you explain what you are referring to in 1.? It is formulated in general terms, but you probably have specific cases in mind. What interest groups might or might not go away? Who are the people that promote polarization as a an antidote to those interest groups?
Posted by: GreatZamfir at Jan 4, 2008 6:53:19 AM
And on 14.: what about East-Asian style protectionism for developing industries?
Posted by: GreatZamfir at Jan 4, 2008 7:29:48 AM
The benefit of socialized medicine should be certainty that you (and your child) are covered. I'd pay a little more for "coverage denied" horror stories to go away.
Posted by: odograph at Jan 4, 2008 7:47:46 AM
odograph... would you pay for the horror stories to go away or to go out of sight? I mean the Bastiat's 'What is not seen' horror stories that are not seen...because lack of innovation just didn't create the means to cure some diseases?
I would add: most people think that if the problem is in the 'what is not seen' area, it doesn't exist. Be prepared for people pushing for solutions that change problem that is seen into a problem that is not seen. And considering that most people don't understand basic economics, nobody persuades the majority that the problem was not solved....
Posted by: andy at Jan 4, 2008 8:04:16 AM
Anyone seen the illustrated Road to Serfdom?
Posted by: jon at Jan 4, 2008 8:22:13 AM
andy, I think they are largely out of sight and out of mind now, and that is the problem. Most people pay their health insurance through their employer, and since they seldom file a (large) claim, they seldom run into red tape. When they do they may be shocked. They may need to do 4 phone calls or even 4 letters ... but do their peers really want to hear about it?
No, they want to pay their premiums and believe that they, at least, are safe.
Posted by: odograph at Jan 4, 2008 8:26:29 AM
BTW, my short story is that in simply extending my COBRA coverage my insurance company told me X. I was lucky that I called California's health insurance hotline. They told me to call them back and say that I knew X was illegal.
This is a system?
No, but most people don't want to believe it is our system.
Posted by: odograph at Jan 4, 2008 8:31:38 AM
6. America is a beacon of innovation for the world, and it is critically important that we allow the preconditions for American innovation to continue.
Well said! I am certain that both sides of almost every issue can get behind that statement. Both RIAA and the pirates. Both the free traders and the protectionists. Both the hawks and the doves. Both the supporters and opponents of No Child Left Behind and the like. All of the supporters of increased state independence, the supporters of increased federal power and the supporters of smaller government all over. And so on.
Posted by: monkey think, monkey write at Jan 4, 2008 8:36:04 AM
The benefit of socialized medicine should be certainty that you (and your child) are covered. I'd pay a little more for "coverage denied" horror stories to go away.
But I do not want to trade that benefit for treatment denied or delayed, or the outlawing of the freedom to purchase private insurance or seek private care.
http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/1118315110253_28/?hub=TopStories
Posted by: Mcwop at Jan 4, 2008 8:51:51 AM
6. America is a beacon of innovation for the world, and it is critically important that we allow the preconditions for American innovation to continue.
Do those preconditions include:
1) increasing the length of copyright
2) suing existing and future customers instead of changing your business model (see RIAA)
3) allowing patent trolls to sue companies that actually create products (ie NTP vs RIM)
4) allowing patents on software and business processes
5) implementing laws such as the DMCA that essentially kill fair use
6) demanding other countries to adopt laws such as the DMCA as a condition of free trade (who knew that promoting monopolistic powers is something that should be included in a free trade agreement)
I think that beacon of innovation is in danger of being extinguished.
Posted by: Vincent Clement at Jan 4, 2008 9:02:28 AM
There was "employee", then "payee" and now finally "attackee"! Aaaah! *keels over and dies*
Jokes aside, I didn't get the 12. point at all. How can one conflate concern with institutions?
PS: Orwell was right when he predicted the evolution of English in the direction of isolating languages.
Posted by: A Tykhyy at Jan 4, 2008 9:07:34 AM
That's a terrific list and I agree with almost every point.
Number 5: "We are programmed to respond to the "us vs. them" mentality and highly intelligent people are no less captive to this framing. We should try very hard to get away from this framing."
That is one that I see doing lot's of damage in the world and the nation. It's a pity that we evolved to have such strong tribal instincts and so many leaders quite willfully seek to tap into them. Perhaps they can be re-directed redefining "us" as humans and them as problems that make humans worse off. (Or failing that, sports rivalries.)
Posted by: A student of economics at Jan 4, 2008 9:13:08 AM
Wow, this is the kind of inane doctrinaire bullshit that has made me unsubscribe to carpe diem, and now your incessant barking. Vietnam, Cambodia, Laos, Guatemala, El Salvador, Nicaragua, Iraq, etc. all thank you for your unflinching support of liberty.
Posted by: Theodore Scroatsky at Jan 4, 2008 9:28:28 AM
a Tyler--
Could you state #1 and #12 more directly? I don't understand the mechanism you're disagreeing with in #1--the one that is supposed to lead to a reduction in interest group politics. And I don't understand what you're referring to with "comparative egalitarian intuitions".
We are programmed to respond to the "us vs. them" mentality and highly intelligent people are no less captive to this framing. We should try very hard to get away from this framing.
I agree with this and the vast majority of the posts on this blog are obviously written with this in mind. That's one of the things that makes this blog so valuable. My one reservation about this point is that I wish we could just get the rest of them to use less "us vs. them" thinking. :-)
Posted by: MostlyAPragmatist at Jan 4, 2008 9:46:39 AM
Mcwop, I suppose it is unavoidable that any health care system have an adversarial barrier to care. We want, and they pay, with private or national health.
I think though, that I'm more comfortable with the barrier being with a nurse or doctor across the table from me, rather than a traditional insurer at the end of a phone.
Maybe that's why I'm in an HMO now. My card always gets me in the door, and a doctor or nurse tells me if I need anything.
That can be abused, HMO horror stories are similar to Canadian horror stories ... but I honestly think there is less pure BS in that kind of barrier.
No "you said your shoulder was sore last year, so we are denying you for pre-existing condition, even though you never sought treatment of any kind."
Posted by: odograph at Jan 4, 2008 9:48:35 AM
The world sleepwalked through AIDS for a long time, mostly because "it doesn't affect people like you and me."
Mostly, yes. Also several other reasons contributed:
1) Some gay groups strongly believed that bathhouses and casual sex were an important, hard-won part of their culture, and that efforts to close them down were based on intolerance (indeed, partially true);
2) AIDS is a relatively hard to get STD (unlike airborne or even waterborne pathogens), fairly slow to kill but still virulent and deadly, which makes it quite different from the point of view of epidemiology from most pandemics. It's not clear how much the AIDS experience translates to, e.g., bird flu;
3) Due to reason 2, quarantining is thankfully not necessary like in other pandemics-- and if the different response were simply because it affects "others," then more people would have been like Huckabee and proposed quarantining (or like Castro, who implemented it);
4) Also due to reason 2, activists have pushed for much less notification of positive tests (such as to sexual partners who could catch the disease) than with other pandemics, and have been successful in places like NY;
5) Understandable efforts to prevent discrimination because it affects "others" led to contradictory and in some case plain false messages about AIDS being hard to get, or easy to get for anyone regardless of demographics or behavior, and the prevalence in various groups. A public health campaign predicated on ignoring or obscuring some facts for political reasons will eventually have problems, because people will find out and will discount the health campaign's true and useful messages.
AIDS is not like a normal pandemic. Treating it like one would be unduly harsh on those living with AIDS; treating other pandemics like AIDS would be disastrous.
Posted by: John Thacker at Jan 4, 2008 10:24:05 AM
We cannot do economic policy as we might arrange pieces on a chessboard. What you ask for is rarely what you get, and your recommendations had better be prepared for this discrepancy
Probably true for all types of policy, not just economic policy.
Posted by: Peter at Jan 4, 2008 10:30:41 AM
I hate it that people think that the "coverage denied" problem exists only in private (or quasi-private as exists in the United States) medical systems.
People in Canada (where I live) are denied medical care all the time. There is no garantee whatsoever that you will get the medical care you need. When there is a shortage of care (which is common), the government simply denies some people medical care. You can't legislate away scarcity.
The thing that systems like Canada garantee is that you will not be billed for health care. People still go without health care as much or more than the U.S., but no-one is going to lose their home, or their automobile, or not get a job, because of their health problems. No one has to make the decision not to go on vacation or forego buying that big plasma TV in order to pay for their health insurance.
If you want to argue that modern medical treatments like Chemotherapy, MRIs, etc., have very little effect on life expectancy (most of our increased life expectancy comes from immunizations, antibiotics, plentiful food, and floride / dental care), and that finacial security should be the overriding concern when comparing medical systems, then we can have a rational discussion. Maybe state-run health care IS better at providing people a feeling of financial security. Perhaps state-run health care can make better decisions on who should be denied health care than the market (i.e. state-run systems tend to let older citizens die off without a bunch of expensive treatments... perhaps it is more "ethical" to deny old people care instead of people who have less money).
However, as long as people keep presenting the myth that poor people in Canada or the UK or wherever have greater access to medical treatment, that they aren't just as likely to be outright denied coverage, then there can't be any sort of rational discussion.
The discussion isn't about "making sure everyone has access to healthcare", because there has yet to be a system that provided everyone access to healthcare. What we should be discussing is how hard we should protect people from the choice of bankrupting themselves in order to pay for expensive treatments.
Posted by: Rex Rhino at Jan 4, 2008 10:42:06 AM
Would someone be kind enough to explain what "12. It is a big mistake -- even in rhetoric -- to conflate concern for the poor with comparative egalitarian intuitions" means?
In particular, it is not obvious to me what the meaning of "comparative egalitarian intuitions" is. Thanks.
Posted by: Gerard D. at Jan 4, 2008 10:48:01 AM
Tyler, please say more about rhetorical tacks like avoiding us-versus-them framing (#5) and polemic (#13). What else are you (not) doing?
I ask because MR gets favorable citation on Crooked Timber and other quality left-blogs---something noteworthy for a libertarian blog. Also, I notice I'm never tempted to leave snarky comments on your posts---why is that?
Posted by: Lee at Jan 4, 2008 10:49:31 AM
11. The possibility of pandemics receives insufficient attention. The world sleepwalked through AIDS for a long time, mostly because "it doesn't affect people like you and me." The next time around could be much worse.
What about the slow drip of car deaths over a long period of time is a pandemic worse?
Posted by: Floccina at Jan 4, 2008 10:50:58 AM
Okay a slight bone to pick with #5.
There is a level at which we all have to define things intellectually by their contrast class. Things are not only defined by what they are, but also by what they are not.
How can a capitalist (Austrian, Neo-classical, or otherwise) deal with someone that preaches socialism, redistribution, etc. and NOT look at it as an 'us vs. them'?!
It seems to be that when you stop identifying with ideals and figureheads to oppose you lose part of the very nature of what you are and what you believe.
This isn't to say that in ALL things we should be out for blood, winner take all. But at some point you have to view some things as right vs wrong.
Just my .02
Posted by: Jon at Jan 4, 2008 10:51:11 AM
@Jon: Given that basically every developed country in the world has both redistribution and capitalism, seeing them in another light then us vs them can't be that hard.
Posted by: GreatZamfir at Jan 4, 2008 11:06:24 AM
Gerard, I think Tyler is urging the Left to attend to making the poor better off in absolute terms and to change its political rhetoric accordingly. This might include a greater emphasis on concrete measures of poverty, like ability to afford energy bills. Compare this to the now prevailing concern on the left (for example, in Paul Krugman's columns) with income inequality per se. That, I think, is what Tyler calls an appeal to our "comparative egalitarian intuitions."
Posted by: Lee at Jan 4, 2008 11:08:14 AM
What you ask for is rarely what you get, and your recommendations had better be prepared for this discrepancy.
The reason is seldom given, namely that all the problems that can be fixed by direct action have already been fixed. What remains are problems that respond to fixes with perverse results.
Which is why conservatives are mostly always right today.
The fallacy of composition (``If everybody stands on their toes, everybody can see better'') eventually stands alone.
Posted by: Ron Hardin at Jan 4, 2008 11:27:59 AM
14. The chance that a protectionism will be an economically rational form of protectionism is very low.
What would an economically rational form of protectionism look like?
Posted by: Aaron Brown at Jan 4, 2008 11:33:00 AM
I have an EPISTEMIC problem. What does it mean to THINK that you are (nearly) certain about something? You ARE nearly certain or you are NOT. When someone says "I am nearly certain..." it is a statement about his degree of belief. He still could be totally wrong about whatever he says he is nearly certain. Now it is possible that sometimes Tyler is nearly certain about these things and sometimes he is not. That is okay. He should have said so. But presumably at the time he wrote the post he was of one mind.
Yes, this is a pedantic comment!
Posted by: Mario Rizzo at Jan 4, 2008 11:36:24 AM
Interesing that what one person thinks is nearly certain, another thinks is mostly false. Let's have a look.
> 1. Polarizing America won't make interest group politics go away, no matter how hard either the right-wingers or progressives wish it so.
I can actually agree with this, but do not (as seems to be suggested) take it as an argument against polarizing America (or anything else, for that matter).
First of all, the nature of governance as it is currently is that it will reflect interest group politics, because the evolution of policy is based on the organization and cumulation of support, much more so than the nature or rationality of the position. So interest group politics are currently inevitable with or without polarization.
And second, polarization is not inherently a bad thing, or more accurately, polarization is not always a worse thing than the alternative. From my perspective, if the abatement of polarization requires that I agree to a version of policies that (say) sanctioned unprovoked warfare, arbitrary dentention, surveillance, torture, and the rest, then my response is to accept polarization over a dangerous concession to arbitrary rule.
> 2. We cannot do economic policy as we might arrange pieces on a chessboard.
Perhaps, but surely some economic policy is better than none.
> What you ask for is rarely what you get, and your recommendations had better be prepared for this discrepancy.
This is because economics is a complex discipline, not (as it is so often portrayed) a simple cause-and-effect system, in which given inputs produce given outputs. What this means is that the algebraic representation of economic principle is seldom, if ever, reliable, and should not be used to formulate policy or predict the consequences. Saying simple things like 'tax cuts will stimulate the economy' should be discouraged as sophistry and nonsense.
That said, so much as possible, we should attempt to model economic systems, so that we can be as forewarned as possible of dangerous feedback loops or the potential for catastrophic interventions. Saying 'there is no way to predict the outcome', for example, is no excuse for allowing a government debt to run out of control, because in most scenarios this creates an unrecoverable predicament.
3. Government-dominated health systems, insofar as they work well (a number of them do), succeed simply by lowering costs.
This is false.
Although, as a matter of fact, government health case systems lower costs, their great benefit in a society is greater security and protection from risk.
In Canada, it is not possible to 'become uninsured', for example, which means not only that people are freed from the worry that a serious illness will ruin them financially, they are freer to move from job to job or to work for themselves.
Moreover, in a government health care system, the major motivations for misrepresentations and outright falsehoods is greatly decreased. People are more inclined to trust recommendations made by health care practitioners because the financial incentives are not there for them to lie.
Finally, because the system is accessible to everyone, people are more likely to access health care services earlier in the case of an illness or injury, which has the impact of preventing much more serious consequences later.
These factors would make a government health care system worthwhile even if it cost the same as a private health care system (and, indeed, because of the disinformation spread by America lobbyists, many Canadians actually believe their system is more expensive - but they *still* won't support abandoning it, by margins of 85 - 90 percent).
> Health care has a murky relationship to human health, pharmaceuticals and broken limbs aside. A version of the single-payer system, as might be adopted in the United States, would not lower costs.
It is ironic that this simple economic prediction comes only a few sentences after the assertion that you cannot do economic policy with simple predictions. Perhaps this sentence should have been extended to include prohibition on *unsupported* economic predictions.
The American health care system is the mot expensive in the world. It is hard to imagine any form of government insurance that would not lower costs. The systems used by other nations, most of which involve some or another degree of government intervention, all involve lower costs.
> We would be raising taxes and lowering medical innovation to give poor people a good deal more financial security and a slight bit more health; that is the relevant trade-off.
With 50 million people in the United States currently uninsured, the benefit reaches substantially more than just 'poor people'. If we include the people who dare not risk losing their corporate health care, we find that it includes most of American society.
As for the measure of 'a slight bit more health', current measurements - including factors such as infant mortality and life expectancy - indicate statistically significant differences in outcomes, a difference that becomes all the more evident when we take into account that most of the health in America is concentrated in a small percentage of the population.
> 4. Overall, despite its many flaws, America is a force for liberty in the greater global community.
This is not currently the case, sadly.
The current administration is an occupying power in two nations, has supported proxy wars (such as in Somalia) in others, supports military dictatorships (including one that is nuclear-armed), 'disappears' people in foreign and domestic abductions, sanctions torture, runs concentration camps in which innocent people are detained without trial or representation, surveils its citizens constantly and in violation of the law, subverts election results with rigged electronic voting systems, awards contracts without tender to government insiders, exposes American agents for political purposes... and more.
You simply cannot do all of this and then claim to be a 'force for liberty'.
What is most damaging to the cause of liberty, however, is that the government does all this and is *still* defended by its supporters as a beacon of liberty. And people look at this and say, "If this is what 'liberty' means, then it's a lie." And then the tradeoff of liberty for stability doesn't seem so bad. because, after all, this is the route very clearly and obviously being prusued by the United States. Sadly, and tragically.
> 5. We are programmed to respond to the "us vs. them" mentality and highly intelligent people are no less captive to this framing. We should try very hard to get away from this framing.
Forgive me if this sounds like someone saying "let's be friends" right before he hits me over the head with a 2x4.
The fact is, polarization isn't something that was 'programmed' into anyone's head, it was a policy that was deliberately adopted by the American right, which resulted in divisive politics of religion and race, and saw the proliferation of 'Republican attack dogs' that relentlessly sowed division and hate into every online and offline forum they could find.
And we saw the 'us versus them' approach adopted as a deliberate instrument of foreign policy, an approach intended to tell people, Americans and otherwise, "if you're not for us, you're against us." When we see an end to the support for a policy of American exceptionalism, we will be willing to believe that the days of the deliberately fostered 'us versus them' politics are over.
> 6. America is a beacon of innovation for the world, and it is critically important that we allow the preconditions for American innovation to continue.
This is not currently the case.
Closer observation will reveal that the perception of 'American innovation' is a consequence of three factors:
a. Purchase - American companies routinely import talent and creativity, which is why many innovations appear to be American even though they have their origins on foreign shores. (It's the Canadian business model - create something new, build a business, sell out to some American corporation - it happens over and over).
b. Publicity - Americans are relentless self-promoters, taking credit for innovation whether or not this credit is deserved.
c. Monopolism - American companies and government policies act to squelch innovation elsewhere by leveraging ts large market (and sometimes its military) in order to preserve the U.S. business advantage (Canadians, again, know this well, in everything from the Avro Arrow to the Blackberry).
It is worth noting that all three of these factors are currently under pressure. Americans, because they are deeply in debt, can no longer afford to import talent (and besides, the government's "us vs. them" policy is keeping many immigrants out). Media is increasingly in the control of non-Americans, and hence, so is the publicity. And American military and economic muscle is not what it was (and arguably, will never be again).
> 7. It would be a disaster if American taxation ever reached 55 percent of gdp.
This is another one of those simple-minded economic predictions.
Is it ok if taxation is at 54.9 percent and then a disaster once one more tax is added?
Is it a disaster if the result is that every single American is well educated, well fed, healthy, happy and creative?
It is ridiculous to adopt a unidimensional definition of 'disastrous' and then to say that this, of all things, is 'certain'.
> 8. Which institutions work well is often country-specific.
A better way to say that might be to say 'which institutions work well is often culturally specific'.
Because it is culture, not nationality, that makes institutions work better or worse.
> 9. The West European way of life is a marvel, unprecedented in human history. That said, I am not sure that the degree of economic security to date can persist in a more mobile and more diverse future (this second sentence retreats to what I am uncertain about).
It is worth noting that western Europe has achieved its status by (a) embracing diversity, and (b) redressing economic inequality. The difficulties faced in western Europe are caused, not by diversity, but by a new economic inequality that developed because of enlargement and an old inequality that is a residue of the colonial age.
The Europeans, to their credit, mostly realize that the way forward is not to stifle mobility nor to discourage diversity, but to address the hopes and aspirations of currently disaffected minorities by addressing their social and political disadvantages.
Nothing is sure. As the environment continues to degrade and as Europe works to adapt in a dwindling resource base, it will be more difficult to meet the needs of all its citizens. ut efforts under way in Europe to support environmentalism and to reduce consumption are th best hope for economic sustainability.
Unfortunately, no such effort appears to exist in American politics, and indeed, efforts are underway to actively undermine environmentalist and conservationist policies. As the delegate from Papua New Guinea said to the Americans at the Bali conference, "If you're not willing to lead, then at leas get out of the way."
> 10. No one has a good idea what the equilibrium looks like for nuclear proliferation. This is very worrying.
It would be less worrying if the American government was not propping up a nuclear-armed dictator in Pakistan. But I digress.
The fact is, the only 'equalibrium' that could exist is one in which all nations have nuclear weapons, or at least, like Canada, have the capacity to obtain them but have chosen not to. This would require that nations deal with each other through reason rather than force, since the consequences of using force are too terrible. If even North Korea understands this, we can hold out hope for reason.
Otherwise, the divide between those that have nuclear weapons and those that do not is the most dangerous flashpoint, particularly when those who have nuclear weapons are unable to resist using the threat of force against those who do not. The Iranians, for example, know very well that the continued threats from the U.S. would abate after the explosion of its first test missile. After all, it has worked for much more unpalatable and repressive governments.
The best way to prevent nuclear proliferation is to make them unnecessary. This, however, requires a submission to international law - a step that the United States is singularly unwilling to take.
> 11. The possibility of pandemics receives insufficient attention. The world sleepwalked through AIDS for a long time, mostly because "it doesn't affect people like you and me." The next time around could be much worse.
Agreed.
It would be nice were the next logical inference drawn, that discrimination against subgroups that are 'not like you and me' is an irrational policy, one that leads to willful ignorance regarding very important events happening in society.
> 12. It is a big mistake -- even in rhetoric -- to conflate concern for the poor with comparative egalitarian intuitions. The left ought to turn its back on this mistake, although it would mean losing one of their most effective rhetorical tools.
I am uncertain whether this means the left should turn ts back on the poor, or whether it should turn its back on egalitarianism. Either way, it' not going to happen.
The corollary of point 12 is the fundamental (but so often unstated) right-wing dictum that people who are poor are poor, not because of systemic inequality, but because of character deficiencies. In other words, it's their own fault.
On a case-by-case basis, you can make that argument. You can look at a poor unemployed crack addict with a grade 4 education and a criminal record and say that it's his fault, that he made some bad life choices, like dropping out of school, packing a weapon, and shooting up.
On a society-wide basis, however, you cannot ignore the fact that the best predictor of things like health, education and crime is the person's socio-economic status. And no, you don't solve it simply by throwing money at people who grew up poor, and no, you don't solve it simply by moving poor people into rich neighborhoods.
But you do address it systematically, and you *can* address it systematically. We know it can be done, because it *has* been done, in nations like Canada and Australian and Europe, and it's not something that American culture specifically makes impossible - only the deeply held self-interest of people unwilling to bend even one iota toward a progressive social policy makes it possible.
> 13. Most people are sincere in their views (even if wrong), and polemic attacks on them signal a weakness of the attacker, not the attackee.
Well, it depends on how you define 'polemic'. Every statement of a position is in one sense or another a polemic.
In my own mind, the 'rules of debate' are the same as the 'rules of rationality', which I have tried in part to sketch elsewhere (I do have n update planned). http://www.onegoodmove.org/fallacy/welcome.htm
I will observe that I have found very little attempt by those opposed to my point of view to attempt to engage me rationally, based on reason and evidence. This - I'm sure you would agree - leads me to believe that reason and evidence are predominately in support of my own position.
And I would even go a bit further as to question the sincerity of some people I have faced in discussions. I have seen many times the advocacy of a position purely because it distracts from a deeper or more fundamental issue. I have seen advocacy at the behest of some foundation or corporate agent seeking to poster a certain frame or way of seeing the world. I have seen outright (and knowing) dishonesty about the facts of the matter (and sometimes on network television!).
My believe in the sincerity of my opponents is these days something that I need to see demonstrated rather than something I take for granted.
> 14. The chance that a protectionism will be an economically rational form of protectionism is very low.
This is another one of those simple economic statements.
Protectionism can be economically rational for a large number of reasons. One current example is protectionism as a response to dumping or economic subsidies. One country can absolutely ruin an industry in another country is the first country is large enough to sustain a loss in order to support its own industry. Thus, for example, subsidized grain production by rich western nations creates a situation in poor countries where their own farmers cannot survive, and the government cannot respond by matching the subsidy. The only way to remain self-sufficient in grain (necessary, in order to resist rising prices in a monopoly market) is to enact some for of protectionism.
It is also worth looking at different ways 'protectionism' can be created.
The simple and obvious type of protectionism is that created by duties and tariffs. They are basically a blunt-instrument mechanism for slowing the flow of foreign product into a domestic market. Viewed in this light, domestic subsidies can be viewed as an only slightly less blunt instrument for accomplishing the same aim.
But (as the negotiators at WTO know well) there is a whole raft of measures that can effectively perform the same function.
Measures such as standards and specifications also play this sort of role. For example, after one case of mad cow was found in Canada, all beef imports from Canada to the U.S. were banned for a number of years. This ban continued long after it was medically necessary to do so, at the lobbying of the U.S. beef industry. Given the incidents of mad cow in the U.S., the bad was medically meaningless. Yet it persisted. It was a form of protectionism.
Conversely, the United States has long lobbied for the abolition of the Canadian Wheat Board and similar agricultural marketing agencies. These bodies do not provide direct subsidies, but rather, the act as a 'single desk' marketing agency for a certain agricultural product. The board has a history of negotiating higher prices for Canadian wheat (and other products) and is strongly supported by farmers. It is, however, considered a form of 'protectionism' by American interests, if for no other reason than that it is protected by law and provides better marketing than American industries can provide on their own. Yet, removing this 'protection' would be devastating to Canadian agriculture, which would in effect be reduced to a third world status producing cash crops for the commodities market.
Posted by: Stephen Downes at Jan 4, 2008 12:14:10 PM
"Polarizing America won't make interest group politics go away, no matter how hard either the right-wingers or progressives wish it so. It may even make interest group politics worse, and in the meantime the polarizer is simply demonstrating a lack of meta-rationality on the part of the polarizer."
I couldn't agree more. I just wish you were more unequivocal than saying that polarization "may" make interest group politics worse. I don't think there should be a "may" about it.
The trouble with polarization is that it leads myriad interest groups to hitch all their hopes to one political party or the other, resulting in the interest groups conforming their secondary and tertiary interests with the polarizer's. When this takes place within the context of a political party, it creates the equivalent of one mega-interest group; people are defined as either a hundred percent part of the team or as actively working to undermine it. The result is that the party simply represents the top priority issues of each of its constituent interest groups. Since the constituent interest groups each have their own top priorities, the end result is a kind of "pu-pu platter" partisanship that is more concerned with keeping constituent interests happy on their top-line issues than it is with anything resembling principle.
Effectively, this means that polarization undermines the constitutional safeguards meant to mitigate faction by reducing all or most of politics to two mega-factions. The corrupting influence of subsidiary factions becomes tremendous because those subsidiary factions effectively have a monopoly on the party's political positions within their interest area.
Posted by: Mark at Jan 4, 2008 12:38:48 PM
Mario, I also thought about commenting on that. I think Daniel Dennett inveighs against these sorts of I-know-I-believe-X statements, since they can, on his account of consciousness, always telescope down to I-believe-X.
Or something like that. Anyway, I'm not a philosopher.
Posted by: Lee at Jan 4, 2008 12:39:23 PM
6. America is a beacon of innovation for the world, and it is critically important that we allow the preconditions for American innovation to continue
What's the spirit behind this one? As a "citizen of the world", a paternalistic "we-need-the-beacon-for-the-good-of-the-rest-of-the-world"?
Posted by: Raul at Jan 4, 2008 12:55:01 PM
4. Overall, despite its many flaws, America is a force for liberty in the greater global community.
This is a dubious claim at the moment. Certainly it's odd to be certain about. It is very imprecise which may mean I'm not getting the jist of what you mean by liberty. Arguments against this assumption include:
a) The US is well-known internationally for invading other countries without justification, sending people to Cuba where they can be tortured and held indefinitely. Hardly a strike for freedom there.
b) The US is well-known internatonally for being an economic bully, protecting its own industries while it forces other countries to open up. The EU does it too. I don't know whether liberalisation under duress is being a "force for liberty". Perhaps.
c) One of the main arguments given in Europe for not liberalising economies, reducing taxes and so on is that we "don't want to end up like America".
d) An awful lot of people are "anti-American" (mostly without good reason, but they are). Anything the US does is seen as idiotic and thus, to the extent the US exemplifies liberty it damages its perception abroad.
Posted by: Finnsense at Jan 4, 2008 1:07:54 PM
What is it that makes America a force for liberty around the world?
Posted by: TGGP at Jan 4, 2008 2:38:40 PM
Yes, it would be nice if some explanation of these points was provided so that we could understand the basis for the conclusions. It's not nearly as interesting to know what Tyler Cowen is sure of in a vacuum than it would be to see what has convinced him of those things and whether it convinces me. Particularly the more vague and unclear points.
Steven Downes, lacking this sort of explanation, seems to have made up his own in order to further his biased agenda of America bashing that is six and a half pages but has zero evidence or support of any kind. It's amazing how you can misconstrue someone else's words when you have a powerful and consuming prejudice and agenda. Suddenly everything you read becomes related I guess, even when it's not.
Posted by: Cliff Hyra at Jan 4, 2008 2:53:11 PM
Stephen Downes - nice set of rebuttals!
Cliff - how exactly does Stephen's mention of specific examples of human rights abuses by the US or the discussion of higher life expectancy in Canada constitute "zero evidence or support of any kind"? The stats are everywhere on the health system - outcomes higher, costs lower in a universal health care system (not to mention the hidden costs that Stephen alludes to).
Stephen, I am 100% convinced that elements in the US would rather sabotage a universal health care system rather than admit it works just to prove their ideology is right.
Two final points: "which policies work best is country-specific" is another way of saying that "just because it works in Europe and everywhere else in the world doesn't mean it will work here". (see sabotage point above).
"lack of attention to AIDS" - I would say that the gay lobby ensured that massive attention was paid to AIDS in the 1980s. Watch the excellent documentary by British actor Stephen Fry (himself gay) on how the gay community has forgotten or ignored the AIDS message (or in some cases deliberately seek infection).
Posted by: Steve at Jan 4, 2008 3:32:07 PM
Mario's point is a good one, but he does not (yet?) know when I am teasing you all. America has many misdeeds but overall the record is very strongly positive, Germany, Japan, and the Cold War outweigh all the counterexamples put together. Or ask Taiwan, Singapore, or the not always sufficiently grateful South Koreans.
Posted by: Tyler Cowen at Jan 4, 2008 4:00:45 PM
I think I can boil this list down to three items:
1) Something fundamental has changed and caused groups to self-select for orthodoxy of opinion much more than they did in the past. (1, 5, 12, and 13.)
2) Complex, self-organizing systems work pretty well if you leave them alone. (4, 6, 8, and 9).
3) Complex, self-organizing systems are largely resistant to all known forms of engineering. (2, 3, 7, 9, 10, 11, and 14.)
Posted by: TheRadicalModerate at Jan 4, 2008 4:29:33 PM
Finnsense's comment that US is an economic bully is flat wrong. The US has lower barriers to entry (both in tariffs and redtape) than 99% of our trading partners.
That such an ill-informed caricature is "widely-known" speaks to the ignorance of world opinion.
The farm subsidies (which I oppose and should be eliminated) are the exception that proves the rule. Our trade in goods and services is a model of openness that other's would be wise to emulate.
Posted by: jim at Jan 4, 2008 8:20:23 PM
3) Government-dominated health systems, insofar as they work well (a number of them do), succeed simply by lowering 'wages', 'outcomes', and 'expectations'.
Fixing your "typo"...
Posted by: Better than Ezra at Jan 5, 2008 1:07:45 AM
Let me just point out that the comment on America as a force for liberty may not refer to the past eight years. When looking at any broad phenomena - and a country that has existed for more than two centuries qualifies as a 'broad phenomenon' - we don't usually look at only a thin slice of the data, but at long averages over time. I'm unsure, but I suspect this is what Tyler means. The American mean is relatively high, and regression to the mean suggests we'll start moving back there.
I think as a broader, world-historical point, what he says is absolutely true: America has had some deep, fundamental problems, but overall has been one of the strong positives of the past two hundred plus years.
Tyler may correct me if this is wrong.
Posted by: Daniel Merritt at Jan 5, 2008 3:08:32 AM
Whoops, I just bothered to read the last few comments, and Tyler already addressed that.
Let me also note that this comment: "(i.e. state-run systems tend to let older citizens die off without a bunch of expensive treatments... perhaps it is more "ethical" to deny old people care instead of people who have less money)." gets to the heart of why America has the worst of both worlds right now. We do have a strong, state-managed health care system - it's called Medicare. Instead of the state stepping in to help the poor or those who's health problems render them unemployable (a huge, huge gap in the current system), we essentially give massive government subsidies to highly questionable treatments for the elderly and massive outlays of money on the last weeks of life. Sometimes the 'patient' is too far gone to even care, but we milk all the procedures we can out of it, because darn it, that's what the government subsidies and biases the 'rationing' (ultimately, up until the magical day everybody can have any procedure they want, there WILL be rationing of some form or another) towards. It's much, much harder for young people to get inexpensive treatments that could give them dozens of productive years of life.
If we want government involvement in health care, let's go whole hog and reap the benefits associated with comprehensive plans and weather the downsides. If we want to let the market deal with it, we need to scale back Medicare. Since the second is politically infeasible, I think the only real option has to be the first, which will likely indirectly up reforming Medicare in a way nothing else can.
Posted by: Daniel Merritt at Jan 5, 2008 3:15:48 AM
Stephen Downes;
I'm not sure much of what you are arguing against is actually what was said. Tyler says that "What you ask for is rarely what you get," which is really quite different from making predictions because there is a translation of theory to practice in the middle of the former. You distill this to "the assertion that you cannot do economic policy with simple predictions." That is your assertion, not his, and thereafter you keep coming back to your re-statements of this as a substitute for Tyler's actual claims.
As to whether some policy might be preferred to none, you might be interested in either Peter Leeson's study of Somalia, or Dani Rodrik's recent post on the subject in which he says, "I, along with much of the profession (I think), became a lot less convinced that we had the right fix on what the requisite reforms were."
Also, while you have several good points under 6, they do not entirely support your claim that this is not currently the case. For one thing, if American companies are buying good ideas from abroad, doesn't that imply that American venture capital -- one of those preconditions -- is supporting that innovation? For another, the fact that some companies are self-promoting or attempting to stifle competition through licensing -- while unfortunately true enough -- does not mean that they or others are not actually innovating. [Couldn't the licensing laws underlying this problem be one area where some policy is worse than none?]
BTW, in trying to make your point, you missed out on the opportunity to note that a very strong engine of innovation is the US taxpayer-supported university research system, something which benefits students and their employers, both foreign and domestic.
Tyler, I wonder if you could qualify some of these by listing your expected probability whenever you claim such with words such as "may", "rarely", "often", "most, "chance", etc.? It seems that the things of which you are certain still contain some ..., uh, ... unknowability. Strangely, that reassures me because few things jangle my skeptic nerve as much as flat-out, unqualified assertions of truth or falsehood when discussing complex systems.
Posted by: Eric H at Jan 5, 2008 11:26:46 AM
This is a complete tangent, but Better Than Ezra, your typo fix on healthcare doesn't make any sense to me. Lots of health outcomes are better in other countries, like life expectancy, infant mortality, etc. Granted, there are tricky measurement and demographic differences. But those measurement differences also make some of the US's supposedly superior health outcomes, like Giuliani's prostate example, highly questionable. To my limited knowledge, outcomes are basically comparable across systems except perhaps at the technological margin, yet other countries pay about half as much for health care. In the US, you also find a very high incidence of unnecessary procedures, partially due to torts and partially due to the fee for service system. Private insurance also leads to very high billing costs. And the uninsured end up sometimes creating higher costs in the end by foregoing basic care.
I'm still unsure of how exactly I would improve the US healthcare system, but here are some ideas:
1) Go to single payer to minimize billing overhead, provide economic security for people, and encourage greater consumption of basic care
2) Systematically ration some procedures with questionable utility and high cost - not sure exactly what this list would entail, but caesareans, hysterectomies, and spinal fusion come to mind.
3) Pay doctors salaries with bonuses for good outcomes, rather than fee for service.
4) Moderately reform the tort system to shift away from jury verdicts and high damages on the whole, while allowing some recourse for particularly egregious cases. This would also help reduce overutilization of things like MRI's, I believe.
I'm curious to hear counter-proposals, but just saying that the current system works well enough seems oddly complacent.
Posted by: Greg Gentschev at Jan 5, 2008 11:31:37 AM
OK, Greg I'll bite:
First off, I'd like to discuss some of your solutions. I'm a government policy analyst down here in New Zealand, so I have some experience how the sausage factory works in practice.
1) I doubt you will actually get efficiency gains. Thanks to a host of instiutional factors governments are simply less efficient than the private sector. I once mentioned at work that some Anericans though administrative efficiency could be improved by bringing a process into government. We all got a good laugh from that.
2) Not a bad thought, but if people were paying for their own care overtreatment wouldn't be a problem.
3) If you can develop a robust framework for measuring good performance in doctors (as opposed to satisfactory performance) that doesn't seriously distory behaviour, I will give you a cookie. Seriously, I spent a significant chunk fo last year desigining an evaluation framework for a government policy initiative and its a lot easier to say it than to do it.
4) This sounds like a plan to me. In New Zealand there is no right to a jury at all in civil cases (juries are available, for a fee. They are rarely used). Also, juries are only used to determine verdicts. Damages are awarded by a judge. There are other complications with torts in New Zealand (e.g. we have a government insurance system that replaces all torts for personal injury), but the points I noted above would help a lot. Of course that would require a constitutional ammendment.
In short I would go with 4), but not 1), 2) or 3). I would then add:
5) Eliminate government mandates for specific treatments in insurance policies, as well as restrictions on setting premiums based on risk. These are the reasons so may people find it impossible (or unreasonably expensive in the case of the young and healthy) to get insurance in your country. Sure, this is a states matter, but just threaten to take away their federal highway funding, that seems to work for everything else.
6) Push health insurance back to being proper insurance, not a pathetic attempt by everyone to get everyone else to pay for their healthcare. Insurance is meant to protect agaisnt low probability, high impact events, not paying for a doctor to look at little Jimmy's sniffles for the 18th time. That what causes overtreatment, classic moral hazzard. Restrict the tax break on insurance to catastrophic care i.e. deductibles under $1000 need not apply.
7) Insurance needs to be separated from employment. There is no earthly reason for your employer to pay for your insurance. Remove the tax credit for all employer health plans, and apply it to personal insurance plans, subject to the change noted above.
8) Dealing with the poor. Yes free market types generally don't want the poor to suffer any more than the left does. I would propose a standardised insurance plan with high deductable (see above) that would get a government subsidy for any poor people who used it (how this subsidy would be abated with income is a separate question). Any private company could offer this plan to the poor, knowing the government would make it affordable, and thus profitable.
9) The pre-existing condition problem. Point 5) should fix most of this, but there are some conditions that, once diagnosed, result in a high probability expense over time. Think diabetes. It may be necessary to offer government payment for these conditions. The criterion woudl be any situation where the afflicted person must pay a high costs with near certainty for the rest of their lives.
I think this should fix the problem with your current system. For the record I would advocate the same system in my own country, though we would be reforming from a vastly different starting point.
Posted by: James at Jan 5, 2008 2:55:00 PM
James,
Excellent points, although I'm not sure I agree with all of them.
1) I agree government workers and processes tend to be inefficient, but I still think that eliminating most of the billing and reimbursement complexity in the current US system would yield significant efficiency gains even while giving up some individual worker efficiency. For example, I've heard anecdotes of comparably sized US and Canadian hospitals having billing staff of 300 and 3, respectively.
2) Paying for your own care would minimize overtreatment assuming you have a transparent market. Even with the Internet and whatnot, I would argue that most people rely on doctors rather than really knowing what they're getting, and medicine is an even easier area to get screwed in than car repair or housing contracting. And that's saying something.
3) So are you saying this is impossible? I would start with simple things like giving hospitals a bonus if people don't get IV infections, bed sores, sponges in internal cavities, etc. Rewarding outstanding performance is probably harder, but it seems doable. Even now, hospitals are starting to realize how widely their infection rates, life expectancies for chronic conditions (e.g., cystic fibrosis), and recoveries vary. I'd say the biggest obstacle has been medical providers' unwillingness to publish data.
4) Not up on my constitutional law, but judges do criminal sentencing in the US. I imagine the same would be doable for civil penalties without an amendment.
I like 5-7 a lot. I'm heading to dinner, so I'll have to think about 8-9 later.
Posted by: Greg Gentschev at Jan 5, 2008 6:20:08 PM
re: egalitarianism
When I was at LSE I attended a lecture by Gosta Esping-Anderson (author of The Three Worlds of Welfare Capitalism, very influential Danish welfare statist). His definition of poverty was 50% of the median income for a given country. By that definition, you might be able to claim there's more poverty in Monaco than North Korea. I tried to get him to acknowledge that being poor doesn't mean the same thing in every country, but he avoided it.
That same year, I also saw Krugman speak on inequality. His main idea was that the richest one-tenth of one percent were getting too far ahead of the rest of us. So basically, he was very upset at the income levels of about 300,000 people. If you take away Hollywood actors, famous musicians, professional athletes, and Krugman himself, we're really not talking about that many people. I really don't see the problem. I'm not a jealous person, no matter how badly Krugman wants me to be. I'm pleased when someone else does well, and I want them to be able to keep their money. Rich people aren't the reason I'm not rich.
Posted by: Joe at Jan 6, 2008 4:24:46 AM
"The USA" sees itself as a force for liberty in this world, but sadly this is far from the truth.
i would agree that the People of America have been a wonderfully significant force for human change and cultural evolution all over the planet; inventive and courageous, inspiring in their creativity.
However i am very concerned about the tendency of the US Government to weaken and destroy the liberty it claims to champion. This government has consistently over the last fifty years undermined liberal democracy around the world in favour of military control, and recently begun to systematically destroy the civil / liberal underpinnings of democracy at home as well.
Ask anyone in Latin America who has seen their regime toppled by clandestine CIA activities; (and now in the Middle East, outright illegal invasion for cynical purposes concealed by media spin.)
11 September 1973..? Democratically elected government of Chile overthrown thanks to US govt determination. Many years of brutal dictatorship follow.
The military imperialism of the US is now dedicated to entrenching its supreme hegemony, especially under the recent neo-conservative regime. Can it be true that the US population is largely unaware of the situation, due to the secrecy of the president's private army (the cia)?
i would love to agree with you, because i too believe in some of the ideals behind the US-American adventure. But something has gone terribly wrong.
Posted by: michael chalk at Jan 6, 2008 4:49:49 AM
It is a very interesting post. I would like to comment on 3,7,9, and 14.
First 3.
The main problem with the private health care system in the USA is that the overhead is far too large compared with other countries.
I have an example here:
The administrative cost of the private American health system is 31% of the total costs. In Canada that has a semi-public system, it is 16.7%. That means that 309 billion dollars or 17.2% of the total American health budget is the price of excess administration costs for having a privatized system.
Totally the health system cost is 1800 billion dollars a year of which 1242 billion dollars was for the basic health care and the 558 billion dollars was paid for administration.
The Canadian model with the same basic health costs of 1242 billion dollars would have administration costs of 249 billion dollars totalling 1491 billion dollars a year.
With a number of households of 114 million of which about 18 million is not covered, given 2.6 person per household in average, the total average cost of each of the 96 million covered household today is 18.750 USD.
Source for the percentages:
The New England Journal of Medicine.
Volume 349:768-775
August 21, 2003
Number 8
Costs of Health Care Administration in the United States and Canada
Steffie Woolhandler, M.D., M.P.H., Terry Campbell, M.H.A., and David U. Himmelstein, M.D.
As you can see from the numbers above, the surplus by using the Canadian model amounts to a little more than 300 billion dollars a year in saved administration costs. For that money it would be possible to secure health care for the uncovered part of the population. In fact you pay today 30 billion $, or about 310$ per secured household a year, in order to keep the uncovered out of the health system. So the reason not to do it is not the money, but purely ideological and an extra punishment on poverty.
7. No welfare state in Europe has a tax level of 55%. The highest is the scandinavian countries with 45-48%.
9. I agree with you that it is strange how a region with few raw materials and densely populated can achieve such a high standard of living and welfare rights for all.
But there are a number of reasons like pre-capitalist virtues, The urge to cooperate after 2.500 years of constant wars, revolutions ect., of which alone in the first half of the 20th century cost more than 100 million European lives. The creation of the European Union is probably the most important single issue in European postwar history. Furthermore lack of natural resources force you to be either poor or ingenious. We try to be the last. At the same time we have a sound respect for securing balanced economies especially when it comes to inflation and foreign trade. The last thing is, that we have so many political wievs and economic models represented. We have many more tools in the toolbox than the much more ideologic thinking American politicians.
On 14. Protectionism doesn't work in the lomg run. In the upstart every country has been protectionist. England, the mother of free trade, had the Navigation Act saying, that goods to and from England could ony be carried on English ships. Japan and the other Far East economies build their industrial basis under protectionist cover, so that the developing countries are protectionist is only natural. But when you have achieved a certain level of development, protectionism doesn't work any more.
The most protectionist country in Europe in the 60ties and 70ties was Albania. It was also by far the poorest.
Then again it is important not to use globalilasation as a sore excuse for rich to grab an even larger share of the pie.
No country will in the long run survive a race to the bottom as one society, but will then be divided in two. One wealthy part and one 3th world part for all the helots.
And not many Europeans want that kind of society.
As the examples of the welfare states shows especially in Scandinavia, the race to the bottom is no natural law, but a choice made by humans, who could choose otherwise.
I haven't commented the other posts, not because I agree, but in order to keep my comment from being too long.
Mogens
Posted by: Mogens at Jan 6, 2008 9:49:58 AM
Overall, despite its many flaws, America is a force for liberty in the greater global community.
This is true, but not for the reason that some may think. The US has a decidedly mixed track record in its global actions and interventions; rather, its main influence has been as a kind of economic role model. Other countries take note that America has for some time been the richest large country in the world, and wishing to emulate that, they are receptive to emulating the democratic institutions and personal liberties and popular culture that are perceived to be part of the recipe for prosperity.
Today however, we are witnessing China's rise. So far they are defying the conventional wisdom that prosperity and authoritarian government cannot go hand in hand. If China continues to boom but America and the West falter badly in the current credit crunch, it will be interesting to see what conclusions are drawn by ruling elites worldwide. African governments, for one, are already eagerly accepting Chinese trade and aid with no pesky human-rights strings attached.
It is not entirely out of the question that large parts of the world will conclude in the coming decades that democratization was a failed experiment. Russia is already there. We are far from the "end of history". Pundits shouldn't sneer at the ideals that America represents and sometimes falteringly fails to live up to. You'll miss them when they're gone.
Posted by: at Jan 6, 2008 3:48:10 PM
Greg:
1) Reducing required activity may reduce costs, but there are other costs to consider as well. One of them is the deadweight loss of taxation. This is conservatively estimated at 18% of tax revenue, and it only gets higher as taxes increase. That would wipe out whatever gains you made.
2) At the end of the day, consumers will have to decide whether they are willing to question their doctors to reduce costs. I suspect most overtreatment is a result of doctors realising their patient will not suffer the costs of extra precautionary treatment. A change to payment plans may be just what is needed to shift attitudes.
3) Its not impossible, and measuring poor vs. adequate care is easier than measuring adequate vs. good care. My concern is that some of the most important parts of good care are intangible, and any targets-based approach will tend to neglect them. In any case, if private insurers are providing the care they will eventually come up with a workable system (the private sector is much better at innovation than government).
4) I was thinking more that removing the right to civil juries would require constitutional ammendment. The other thing might not, I don't know.
In a nutshell, my idea is basically: let the market handle it, and use a welfare system to help the poor. The only excpetion is point 9), because expensive chronic conditions may not work too well with health insurance.
Posted by: James at Jan 6, 2008 11:24:44 PM
James,
Aren't you essentially advocating a system similar to the current US one with some fiddling at the margins? US healthcare costs are roughly double those of many other countries, I don't see that as a great solution.
1) Just tax cigarettes more! Haha, just kidding. I'm not nearly familiar enough with taxation to comment.
2) Not sure I understand what you're saying. Overtreatment is a result of patients not being willing to pay?
3) In general I'm a proponent of the market processing information better than government and so on, but US insurers and healthcare providers have not been able to provide good quality measures, control costs, and so on over a matter of decades. Based on that evidence, I'm inclined to conclude that there are one or more market failures at work. Otherwise, I wouldn't even propose such extensive government intervention.
Posted by: Greg at Jan 7, 2008 6:44:18 PM
Greg: I am essentially advocating the US system, with a few slight modifications. I beleive these modifications will have a profound effect on the problems in your system. Many people who aren't policy analysts don't understand the Law of Unintended Consequences, that even very small rules can cause massive problems.
As I see it the problems with the US system are:
A) Some people are being denied health insurance at any price.
B) Some people can get health insurance in theory, but cannot afford it.
C) Too much is being spent on healthcare, with little to show for it.
D) Some people lose their coverage when they suffer a chronic condition, leaving them sick and desitiute.
My diagnosis of these problems is:
A) Insurance companies cannot price for risk, causing them to avoid high risk clients.
B) Standard poverty problem.
C) Cost insulation. Not only are consumers insulated from health care costs by their insurance policies, but often those policies are forced to provide treatments that should not be part of insurance (insurance is a form of risk hedging, any regular or near-certain expenditure should not be covered by insurance) and the cost of the policy is obscured by making it employer-provided. (I consider this to be the biggest problem of the 4).
D) Insurance isn't meant to cover near-certain expenditure.
I suggest point 5 to correct for problems A and C, points 6 and 7 deal with problem C, point 8 deals with problem B and point 9 deals with problem D.
Broad-based government funding will only increase cost insulation, making things worse. The US is different to the rest of the world. You get very high amenity care and I don't believe for a minute any system you actually develop will be able to stand up to the demands for more extensive and luxurious care. Make people pay for the luxury and extra tests, and you change the equation.
Posted by: James at Jan 9, 2008 12:47:35 AM
I am uncertain whether this means the left should turn ts back on the poor, or whether it should turn its back on egalitarianism. Either way, it' not going to happen.
I am certain it didn't mean either one. The point very clearly was about the conflation of the ideals, not the abandonment of either one. Strawmen very rarely bring evidence and rationality to any debate, but I applaud your skill with the matches ...
And on a different note, I think am nearly certain that Tyler's irony wasn't comletely lost on almost all of the readers of this post....
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