The Conservative Logic of Obamacare

Today from Andrew Sullivan:
For conservatives, freedom is always coupled with personal responsibility. Your right to be free from government interference is also an implicit statement that you can take care of yourself – and won’t at some point suddenly change your mind. This is the core of conservative libertarianism: an assertion of radical independence, responsibility and self-sufficiency.

In many areas, this makes perfect sense – but healthcare isn’t one of them. Disease and accident make no distinctions among us. And since 1986, hospitals have been legally required to treat anyone seriously ill who presents himself at an emergency room, with clear medical needs. In the most fundamental way, that was the moment the US socialized medicine – and Ronald Reagan signed the bill. Alas, like so many Reagan domestic initiatives, there was no federal money provided to pay for this. And we all know what happened next: all those extra costs for the uninsured drove up premiums for everyone else, drove up hospital costs, giving them a reason to raise prices even further, and played a role in rendering healthcare unaffordable for many others.

What Obamacare does, like Romneycare before it, is end this free-loading.

The law is telling these young adults that if you want to go without insurance, you are not going to make everyone else pay for it if your risk-analysis ends up faulty. You have to exercise a minimum of personal responsibility to pay for your own potential healthcare. In other words, rights come with responsibilities in a liberal democracy. At least that is what I always understood the conservative position to be.
And that's why Obamacare was the product of conservative think tanks and was, during the Clinton years, a position advocated by Republicans.

Incidentally, I could care less about Obamacare. I'm happy to consider any other policy alternatives that extend quality (including preventative) health care to all Americas. We are the richest nation in the history of the world. It's a moral failure that we have yet to make this happen. Shame on us.

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49 thoughts on “The Conservative Logic of Obamacare”

  1. As I understand it, the core of libertarianism is non-aggression, not personal responsibility. And because Obama-care involves taxation and punishment, libs oppose it. I can't speak for conservatives, though.

  2. Hi Brandon,
    But you need to say more, to be morally and politically consistent. You need to go on to say that, if a person isn't carrying insurance, that we must repeal the Reagan legislation to allow emergency responders and hospitals to deny medical attention for lack of insurance. That, upon arriving at the scene of the traffic accident of the libertarian family--kids bleeding to death on the highway--the medical professionals must 1) take the time to check on the insurance status of the family and 2) if they aren't carrying any, to let them die on the road.

    Maybe libertarians can wear alert necklaces: "I'm a libertarian. Do not call 911. Do not allow any medical personnel to touch me. Do not take me to the hospital."

  3. We do the exact same thing with our motor vehicle responsibility laws. If you want to operate a vehicle on the streets of our state, you have to be insured. We don't want the taxpayer covering you for the damage you cause. You can pick the insurance company. You can negotiate the rates. You can even decide to get more insurance if you want. Your choice. But you can't go without motor vehicle insurance. It is a way of ensuring that people are managing their affairs in a minimally responsible manner because - in the end - it is a more equitable and efficient way to handle things.

  4. I don't think this is just a problem for libertarians, though. Wouldn't pacifists of all kinds run into this problem? Do the means (threats of imprisonment) ever justify the ends (making sure that doctors don't up and quit on a patient)?

  5. This is why I (and most Republicans) chose Romney, a candidate who did, indeed, come up with a conservative alternative to freeloading. I (and most Republicans) accepted the argument that Romneycare was good, and Obamacare was a much, much worse law, rammed through Congress and disingenuously presented (the Supreme Court made it clear that if the bill's initial claims of non-taxation hadn't been deceptive, the bill would have been unConstitutional).

    I often think that non-Republicans really think Republicans aren't trying to solve these issues, and miss the nuances. Of course, there are policy reasons for being careful when expanding government's role in unprecedented (in America) ways--but something clearly had to be done. I guess we'll see if ObamaCare was that "something"--most Americans seem as unclear on this as I am.

  6. Here's an irony. Liberals were upset with Obamacare because it's a Republican idea.

    What liberals really wanted was publicly funded health-care option, socialized medicine as it's called. So when people think Obama is a "socialist" on this issue I smirk.

    Obama is a moderate Republican, or at least what moderate Republicans used to look like...

  7. Richard, the subject is rather tangled. Brandon is right that non-aggression is the core axiom. However, a society can have good or bad health care with or without non-aggression--these discussions are constantly hampered by discussing a non-aggressive health-care system under the assumptions of an aggressive society, and vice versa.

    As an aside, emergency responders are already not allowed to refuse care for lack of insurance, and neither are hospitals. In fact, a system exists whereby such entities bill the government for "uncompensated care," which includes not just the uninsured, but any time there is a gap between the bill and the payment.

    In a completely non-aggressive society, it is not permissible to force one person to pay another person's bill at gunpoint--however, there are lots of ways that such a society can take care of those who can't take care of themselves, and lots of incentives to do so. There are so many ways that it's impossible to predict exactly how such a society would accomplish this. Several strategies would coexist, and overall the situation would be less clean and simple than in a (partial) command economy, where everyone is forced, upon pain of imprisonment, to adhere to a single system.

    With that caveat, I would say that I generally refer to insurance as "libertarian duct tape." Risk pooling solves many of the problems that government promises (and, usually, fails) to solve. Even here, insurance looks very different in a non-aggressive society than it does today. A complicated history has caused health insurance, in particular, to become something barely resembling insurance. Does car insurance pay for oil changes? Of course not: insurance is for unpredictable or catastrophic risks. Predictable expenses are handled in completely different ways, not involving insurance. And completely different strategies are used to contain costs--using insurance to pay for routine car maintenance would cause the cost to skyrocket, resulting in "millions of Americans unable to get around because of the high cost of car-care."

    I'll stop there. I haven't even scratched the surface of the problem, but I hope I've given at least a slight indication of how complex the problem is, and how resistant to sound-byte solutions--and how likely the sound-byte solutions are to make things worse, rather than better.

  8. Totally agree with the irony of how this flipped. Obama/Romneycare went from being considered conservative to being "socialist" the moment a Democrat moved it. In practical politics, "conservative" has come to mean "the opposite of whatever the Democrats happen to be doing." Political ideology pretends to refer to a set of beliefs and principles that are then applied to the world. More often, the terms simply indicate affinity to a particular group, which a person primarily queues off of to help make judgments about political issues. This can result in some hilarious circumstances, like a group of people, en masse, completely reversing their opinion on Obama/Romneycare. Still, the underlying heuristic has a logic to it, and we can't get along without it. To one degree or another, in a world as complicated as ours, the crucial question isn't "What do you know?" but "Who do you trust?" There is more to know than any individual could possibly learn, and so the question of who we trust is crucial and unavoidable.

    This heuristic can go badly awry when an entire group becomes unmoored from reality and principle...when a group, en masse, decides to trust a group of hucksters who appeal to principle, only to conceal crass political calculation.
    This is what has been happening to conservatives, and it makes me very sad. I think an essential moment in this transformation was Reagan's brilliant importing of classic liberalism, essentially libertarianism, into the heart of conservatism. For him, the ultimate impact (30 years on) was less a matter of policy than rhetoric. Today, we live in the aftermath, and "conservative" somehow came to mean something like "anarchist." It came to represent a generalized cynicism toward governance and toward cooperative activity, two areas that have traditionally played a central role in conservative thought. Of course, when Democrats mounted a conservative defense of governance, they were branded socialists. And so they adopted the kinds of libertarian ideas that have been branded "conservative." But then this, too, was branded socialist. So what is socialism? It has come to mean "whatever Democrats happen to be doing at the moment"...especially when they are stealing yesterday's "conservative" ideas, whether those are yesterday's libertarian ideas, or the pro-governance ideas of the day before yesterday.

    At least it is liberating in this sense: if we really do want to talk about principles, instead of groupthink, we are obligated to use these words in a way that is different than the contemporary uses. Even if we did try to use them in the contemporary way, they would mean something totally different tomorrow. I hope that some day, "conservative" "liberal" and "progressive" (and many other terms, besides) will all mean things that are good and beautiful and useful. I think it is possible to have an adversarial political system in which the best of various belief systems play off against each other; it would be worth a try. But instead, we have a system in Democrats just coopt old Republican ideas, and Republicans repudiate their own old ideas as fast as Democrats can coopt them.

  9. But really, advocating Single Payer (which is supported by Canadian conservatives), or even Government-owned health care (which is supported by British conservatives), are also entirely compatible with old-school "law and order conservatism." The particular rebranding of conservatism that Democrats coopted with Romney/Obamacare was the classic liberal/libertarian style of "free market conservatism." Yes, since the 80's, conservative (in the most common usage) means, rather precisely, liberal (in its traditional usage). Of course, the roots of this go back farther; classic liberal, propertarian arguments have a long history in the U.S. of being used to justify slavery. Which is why you find the otherwise surprising coincidence of Confederate sympathy and libertarian rhetoric. It was all about the freedom to own property, meaning slaves. Freedom is slavery, quite literally.

  10. What happens if someone in a completely non-aggressive insurance pool fraudulently embezzles funds from the insurance pool?

  11. Health care in this country is the best in the world. Paying for it is the worst in the world. Knowing how this mess came about is a good lesson. Go back far enough in time (about 1930) and most people didn't have health insurance. Then the government froze wages during WWII so companies offered health insurance as an inducement for people to work for them (there was a large labor shortage then). Now, decades later, health insurance is a right-which is what the argument is really all about-not health care. How to pay for this nice health care we have.

    Obamacare and Rommney care will not pay for it-eventually these programs will end up increasing debt and producing a strain on the country's economy as cost skyrocket.

    Anyone who follows the finnancials of this industry know that all are involved-hospitals, doctors, patients, government and insurance companies in the cost burdens. One rule-the hidden cost-we don't know what we pay for and as long as insurance pays for it...
    Comparing health insurance to auto insurance doesn't work. When my car dies, I can afford to fix it, or if finnancially able just buy another one. Most repair bills do not top $45,000, unless I am driving an Indy car. $45,000 will buy you a new knee. The vehicle I drive does not cost this much to replace.

    What Obamacare will do, I am afraid, is drive those most needing health care out of the ability to have health care. Yes, they will have a "subsidized" insurance, but already premiums are going up. Doctors are giving up self-employment and joining hospitals and again, a doctor shortage is looming (look up increasing use of PAs).

    Let me give you an example of what is happening. My mother lives in a town of 3,000. There is no hospital, and a three day a week doctor. The nearest place for medical care is at least, one hour away. If you can't afford to drive to the doctor or PA for routine health care (the best way to prevent increased health costs), then what are you going to do when you are sick? Either pass it off, self-medicate, or wait and call the squad and go to the ER. The most expensive cost of all in medicine.

    Finally, there is no painless way out of this mess, and the recent attempts will only make it worse, not better.

  12. I'm not sure. I believe in non-violence, which sort of implies property rights of some kind.

  13. *sigh*

    Better, more thoroughgoingly conservative/constitutionalist, physician-informed, and less privacy-intrusive strategies to accomplish the desired ends have been published, and published, and published, and the piont that there is no excuse for saying "Well, if not BHOcare, then what?" BHO extends waivers to preferred groups (monied corporations and unions) and denies them to individuals, which is but one of the symptoms of the statism that creates space for cronyism. (qb is happy to concede that Romneycare was BHOcare _in utero_, which is one reason conservatives were less than enthusiastic about his candidacy.)

    Many, many thoughtful and competent people have put their shoulder to the task of devising better means to the SAME DESIRED END: the helpless helped, the poorest subsidized, etc.


  14. I guess I haven't run into those liberals--I watched liberals touting Obamacare 24/7 for several years. I realize that the full public-funding issue was one they'd rather have, but they all seemed to say that Obamacare was a good "step" in that direction. In fact, I've heard several of them celebrate the fact that Obamacare really will push more and more people into a place where publicly funded healthcare will be the more feasible choice.

    I use "socialism" in a non-pejorative way to talk about greater government control over greater amounts of the economy. Increasing the government's role in providing welfare, public school, or road-building all makes a country slightly more "socialist." Every country is on a socialist-capitalist continuum, and tries to find the best balance. I often point out (both to Republicans and to Democrats) that Republicans have plenty of "socialist" elements in their programs--which is a good thing. They do, however, try to keep the balance a bit closer to the capitalism side than do their Democrat counterparts.

    I can't find a credible alternative to thinking that, in the wake of what were widely perceived as "failures" in capitalism (insurance abuses, and the financial sector collapse), Obama took us farther in the "socialist" direction, farther away from pure capitalism, than any American government had been able to do before. And I've seen Democrat after Democrat celebrate that. He may not have taken us farther than any given liberal wanted to take us, but he did take us farther than anyone every succeeded in taking us. In that regard his legacy will be similar to FDR's.

    So I'm genuinely dumbfounded by talk of Obama as moderate, or conservative--such that all Republicans should have lined up behind his programs.

  15. Please point me to some of these studies. Also, documentation of the claims about waivers for preferred groups would be helpful. I believe your claims are inaccurate.

  16. This is a good example of how this group heuristic works. Does it matter to you that Obama's plan was essentially formulated by conservative think tanks in the 90's, as a market-based solution to our health care problems? Because that is one way to look at it, and by that measure, it is obvious that it is conservative, in just the sense that you are using: the more market-based solution to a problem. I would suggest that instead of assessing the content of the plan, you are instead looking at what Democrats have been saying, and are re-coding the formerly conservative policy as "socialist" because they are the ones advocating it.

  17. I respect not being sure :) In what way can property rights be retained without violence? For example, if someone steals from you habitually and won't stop when you ask them, and when your neighbors ask them to stop, what do you think can justifiably be done about that?

  18. Here we wade into the waters of libertarian terms of art. "Aggression" is any physical action, or threat of same, against anyone's person or property, EXCEPT reasonable and necessary force used to REPEL aggression. In other words, libertarians are not pacifists: they allow for defense against aggression.

    This is usually almost impossible to discuss with non-libertarians, because they can't help importing assumptions from a different ethical framework--one which lacks the bright, fiery line between attack and defense. A non-libertarian will generally approve aggression in various circumstances, and will sometimes disapprove purely defensive force.

    Taking from others by force, "to give to the needy," is an example of force generally approved by folks on the liberal end of the spectrum. Folks on the conservative end will often approve of harassment and assault of persons they consider obnoxious--such as people who ingest unapproved substances. Neither, it seems, can FULLY accept the implications of a philosophy that says, "If this person isn't touching you without your consent, isn't robbing or vandalizing, then regardless what you think of him, you may not touch him, or threaten to touch him, or his property, without his consent. EVER."

    So, to answer your question, embezzlement is theft. The embezzler is an aggressor. The stolen property can be recovered. With all reasonable and necessary force.

  19. Brandon sounds like not only a libertarian, but also a pacifist. I certainly respect that.

    Libertarians generally are not pacifist. They allow the use of force to repel aggression, and ONLY to repel aggression. I.e., to stop an assault, rape, robbery, etc., and/or to rescue victims of kidnap or recover stolen property.

    Libertarians derive property rights from non-aggression. I.e., if I homestead unowned property, I have not aggressed against anyone. If you then try to take it from me, you HAVE aggressed against me. So property comes into existence, right after Eden, in a process of homesteading. Property continues to exist because, having homesteaded some property, I can voluntarily give it to someone else, either as a gift or in exchange for something, without committing aggression. Someone trying to STOP me from giving my property away, IS aggressing against me.

  20. Dan, in a way I agree that this is group heuristic. If a group of liberal analysts, and a group of conservative analysts, all tell me that Obama's plan is not really that similar to the market-based solution devised by conservative think tanks, and is a more public-oriented way of handling things, then I tend to believe them. And I tend to reserve judgment when a minority of analysts tell me that not only are the Repub analysts wrong about Obamacare, so are the Dem analysts! You're absolutely right--I didn't assess the content of the plan itself, in that I didn't read the hundreds of pages. The discourse is over my head. I accepted the analysis coming from a varied spectrum.

    Where we differ is that I think, in general, the consensus analysis is a good guide, and when a minority voice tries to say, "Look at the content, not what everyone else is saying!" it sounds a) like he is trying to capitalize on my ability to be confused by a discourse that is over my head, and b) he is implying, arrogantly and unfairly, that the analysts who disagree with him haven't looked at the content.

  21. Ok, great. That is clear and consistent, and I think that even non-libertarians can easily understand the concept. It becomes more complex in application. So if someone is polluting the river that runs through my property, upstream from me, am I allowed to use all necessary force to stop them from polluting the river?

  22. I appreciate your honesty :) It helps move the discussion forward. However, is this really a fair description of the consensus analysis? Obama himself has frequently emphasized the market-based character of the policy. That was an important selling point even during the campaign. And then you have folks like Andrew Sullivan making similar points. One core, highly public, aspect of the original debate was whether to include a public option or not, which some people did see as a potential step toward a single payer system. However, that did not make it into the final legislation. So on one level, the heuristic may actually be guiding who you consider to have the permission to define the legislation in the first place; I don't think the people you are referring to are the obvious candidates to be defining the nature of the legislation.

    On another level, I think these heuristics have redefined the entire spectrum on which you see the issue, in a remarkable way. I would challenge the legitimacy of a scale that runs from conservative(market-based) to liberal (state-based) on two grounds. First, it has become common, especially since the 80's, to think this way, but I don't think that conservatism is inherently anti-state or pro-market. Historically, that actually describes classic liberalism. This is an older shift, and so it seems more natural and is more widely taken for granted. But I don't think that it should be. I think that the conservative embrace of liberal cynicism toward institutions has badly deformed conservatism.

    Second, I think the scale itself is actually hard to apply, and this creates even more room for post hoc assignments of where something falls on the spectrum. For example, we might say that there is a continuum of health care options that range from entirely unregulated private insurance (Burkina Faso, probably) to highly unregulated private insurance (parts of the US system, before Obamacare) to a highly mixed but regulated system (US in 2015/Switzerland) to single payer (Canada, basically) to government ownership (US Veteran's Administration / Britain). But there are actually a bunch of factors here that are being lumped together: really, we should have at least 4 quadrants to parse questions of regulation vs ownership, and whether we are talking about insurance or care providers. In the US, we are implementing government regulations of insurance to deal with adverse selection (people being kicked off for being sick, which incentivizes insurance companies to insure people until they get sick), while maintaining private market-based ownership of insurance companies. This is standard, conservative market thinking: align the incentives so they aren't perverse, and let the market work. On the second set of variables, we are talking about insurance, not care; the question of Government ownership of hospitals (embraced by British conservatives) is not even on the table. From this perspective, it is immediately obvious that these are classic, relatively well-designed, market conservative reforms. The legislation is, at the most basic level, designed to correct market failures related to adverse selection and imperfect information (Imperfect information is being dealt with by standardizing the marketplaces in the state, so shopping is easier, much like standard weights and measures have been used to help make markets more efficient, since ancient times through the modern era.) The details of how to do this were essentially matter of consensus among conservative health policy thinkers, until Democrats started implementing it.

  23. "The law is telling these young adults that if you want to go without insurance, you are not going to make everyone else pay for it if your risk-analysis ends up faulty."

    This implies young people don't have insurance for one reason: the stupidity of youth. It says nothing about them not being able to afford it (which statistically speaking is a lot more likely.) If Obamacare also ends up making insurance more affordable for those people it will work, but if not exhortations for them to buy something they can't afford isn't going to do anything. In that case, paying the fines for not having insurance is still cheaper than getting it.

  24. I believe that "property rights" arise out of a mutual love and
    respect for the other person over time, but that might be all I can say.
    I don't much buy into the "natural law" idea of property rights because
    I don't much buy into "natural law." The best argument I've heard on
    property rights is from F.A. Hayek. His thoughts on "spontaneous orders"
    are well worth reading.

    That said, when I have disagreements with people, the best path to resolution I've found (so far) is to try and connect to their feelings and needs through non-violent communication (Marshall Rosenberg).

  25. Some libertarians see things this way. F.A. Hayek did not, and he's probably the libertarian I resonate most closely with when it comes to property rights. He keeps the ethics out of it.

  26. Brandon, but did you see the quote from Hayek in the Sullivan article from The Road to Serfdom? Here it is:

    "Nor is there any reason why the state should not assist the individuals in providing for those common hazards of life against which, because of their uncertainty, few individuals can make adequate provision. Where, as in the case of sickness and accident, neither the desire to avoid such calamities nor the efforts to overcome their consequences are as a rule weakened by the provision of assistance – where, in short, we deal with genuinely insurable risks – the case for the state’s helping to organize a comprehensive system of social insurance is very strong … Wherever communal action can mitigate disasters against which the individual can neither attempt to guard himself nor make the provision for the consequences, such communal action should undoubtedly be taken."

    Do you resonate with Hayek on this?

  27. Thanks; this is too deep for me, but it helps. There is, I think, a level of trust. (I.e., on a couple of issues, I view Obama's "market" rhetoric as not unlike his "no gay marriage" rhetoric--rhetoric that nobody on either side actually believed, so everybody on both sides knew that, if you were for gay marriage or for public over market, you winked and chose Obama.) But there are other issues as well.

  28. I have the RTS sitting on my self and I'm familiar with the quote (he developed this thinking more fully in The Constitution of Liberty, if you're interested in the later, not-quite-as-libertarian Hayek). I don't really resonate with this because as Hayek showed in his earlier economic work on the economic calculation problem (following Ludwig von Mises) these kinds of social programs struggle to allocate resources in non-wasteful ways that meet human needs. That being said, I wouldn't sacrifice anyone on the alter of the market economy.

  29. Dan, you should do your own homework, but qb'll throw you a bone or two.

    First, you may not be familiar with Sally Pipes, but she has published widely on the topic. See

    Second, Google, or use your preferred search engine, to look for [Obamacare] and [waiver], and find among the responses the following public media:

    Third, search for [health insurance] [policy] [alternatives] [Obamacare OR ACA], and find e. g. the following:

    If you haven't seen any of this, it's because you're not really trying. (There is plenty of scholarship BEHIND these easily located public offerings.) Which can mean a lot of things, but I suspect what it really means is that you default to statism to solve social problems. That's too bad.


  30. The comparison with motor vehicle insurance is a canard, oft debunked as a fundamental category difference.

  31. For the record, my default is definitely not statism. On health care issues, I think that government-based approaches have repeatedly been shown to be the most I'm not defaulting to anything here, but drawing conclusions based on evidence. Let's just focus in on the National Affairs article, which I think does a decent job of describing the problems; honestly, I'd recommend that part of the article to anyone :) However, its solutions are either already in Obamacare (taxes on expensive plans, health exchanges), or they are simply unproven or stingy (capping Medicare and Medicaid benefits, having exchanges implemented only at the state level, instead of a combined state and federal approach). In the case of capping Medicare benefits, the approach fundamentally misunderstands who has leverage and the relevant information to make key decisions in the health care industry; because of their expertise, doctors need to be incentivized to make good decisions. What's more, the article doesn't offer any evidence for assertions like this, which can be found throughout: "With cost-conscious consumers looking for the best value for their money, cost-cutting innovations would be rewarded, not punished as they are today... This is the only way to slow the growth of health-care costs without harming the quality of care." These kinds of assertions are demonstrably false.

    For example, Medicare actually does a much better job at controlling costs than private insurers, and the VA also does a far better job:

    Aside from being able to look up the CBO numbers if you want, I suppose we all have to ask ourselves this question: who here is more trustworthy? If the ratio of angry rhetoric and confident but unsupported assertions to actual information doesn't help you decide, the description of Health Affairs might help:

    "Health Affairs is the leading journal of health policy thought and research. The peer-reviewed journal was founded in 1981 under the aegis of Project HOPE, a nonprofit international health education organization. Health Affairs explores health policy issues of current concern in domestic and international spheres. Its mission is to serve as a high-level, nonpartisan forum to promote analysis and discussion on improving health and health care, and to address such issues as cost, quality, and access."
    Internationally, the pattern holds, as I'm sure you are aware, since you have done your homework:

    But if raw data provided by credible sources isn't enough for you, there is always the economic theory that explains this quite lucidly. I'd really recommend you read Kenneth Arrows highly readable and seminal paper on this from 1963:

    Still, if you don't trust nonpartisan sources who focus on hard data and eminent economic theory that explain it, you can always choose to trust the people who lard their work with angry rhetoric and confident, unsupported assertions. I know who I trust :)

    Oh, and on the notion that only institutions are getting waivers, and not individuals, a bit of your recommended Googling seems to suggest that this isn't true:

  32. I'm intrigued by your efforts to arrive at a consistently non-violent approach to issues of governance. Approached in the right way, I think that could be a worthwhile and challenging conversation.

    Still, I'm relieved that you have turned to just talking about empirical questions. IE: Do government programs struggle to allocate resources in non-wasteful ways? Some do, but when it comes to health care, the evidence all points overwhelmingly in the other direction. Medicare and the Veterans Administration are the most efficent parts of our own health care system, and around the world, countries in which the government plays a larger regulatory and/or ownership role all seem to get comparable or better results for about half the cost.

    International Comparison:

    And economic theory was able to predict and make good sense of all of this. Since you like to read economics, I'd recommend you get into some really good economists :) I admire your willingness to read dense texts, and you should have no problem with Kenneth Arrow.

  33. Hmmm, I posted a reply, but it was removed. At any rate, a little Googling shows that individuals are also eligible for waivers.

    Also, I think there are good reasons, based on the evidence, to question the claims in National Affairs that the only way (or even a good way) to control health care costs is through consumer choice. Medicare does a better job controlling costs than private insurers, and so does the VA. Internationally, every country in the world does a much better job of controlling costs, and getting comparable or better results than us, and the key isn't consumer choice. You can see my comments to Brandon Harmish for links.

  34. I appreciate the links and the care you put into your response, but my big, dense book days are probably behind me :) Anymore I try to focus on books that will give help me become a more happy, more caring person.

    With that said, I think might be talking past each other. I'm not comparing Medicare and VA programs to insurance. I have little doubt that in many ways such programs are better than private insurance as it is now, but the common refrain on the part of libertarians is, "What we have in he US today *isn't* free-market insurance! It's manipulated insurance!" And I think there's a lot of truth to that. But that's about when the conversation gets log-jammed. Because that's when the search for a scapegoat begins: government vs. market. And statistics are a whole mess of their own :)

    What I'm looking at is the economic calculation problem, and I think it is a fairly fatal blow to ALL government programs. This isn't to say that the government can't get a couple things right here and there. And it's not to say that they can't make beautiful libraries or modern marvels or achieve breakthroughs in science. But, what it does say, is that without a free, non-coercive price system, there is no way to know if those projects were useful relative to what *could have* been built.

  35. Great, that is clarifying. I don't think we're talking past each other; that genuinely helps me understand where you are coming from. So to be clear, when you say that government is inefficient, you are definitely not saying that it pays a higher price to deliver a given level of service. That is fine. But if what people want to talk about is the most cost-effective way to deliver a given set of services, we should be clear that your concerns are not relevant to that question.

  36. I'm excited to talk a bit more about this. Admittedly, it's been years since I've dug into Hayek and Mises and the economic calculation problem, but I'll do my best -- once I get home :) on my phone right now.

  37. If I'm not clear on this, I apologize, because as I said before, it's been awhile since I immersed myself in this stuff (college). I'm not a robot that can spit out wonderful explanations, though I have nothing against robots. :)

    So, no, I'm not talking about paying a higher price. There is nothing inherently wrong with paying a high price, because there is nothing inherently wrong with high prices -- they're just a "reflection" of the relative scarcity of a product/resource as that scarcity relates to human demand/wants/needs. There is no "correct amount" that a nation should or shouldn't spend on any given category of goods or services. The real question, I think, goes deeper than that, and it gets into a couple of things that make social-justice minded Christians (like myself) balk a little bit. However, when I think about things like prices, profit and loss, and private property, I always try to remember that at the root of all that talk is this: people are in need, and we want to get those needs met (pay a "low price," btw, is not the answer to this question).

    In response to your paragraph about price information, an economy doesn't need to be under complete and total command to encounter calculation problems. A single sector can fall into total ruin if enough coercion and control is lorded over the market (that is to say, people). And just having price information isn't enough. It's useful to know that the Soviet planners in the 50s, seeing that this was
    indeed an issue, tried to base their calculations on capitalist world
    market prices to no avail. Even something as seemingly innocuous as the minimum wage (which is an interference with the price of labor) is well-known to result in a lower demand for unskilled and teenage labor -- hence one reason for the incredibly high unemployment among inner city teens.

    The core issue here is coordination and information. If prices are not telling the truth about relative scarcity and demand, then the information they convey to investors are going to lead to wildly wasteful projects (roaring 20s, 00s housing bubble). To put it bluntly: whenever and wherever the price system is not permitted to operate freely and unmolested, coordination problems will result to one degree or another - in other words, all economic problems are price problems.

    This is one of the inherent problems with the idea of a "world monopoly." Have you ever seen the movie Wall-E? I love the movie, but one of the problems with it is the idea that any single company (Buy 'n' Large) could control all capital markets, because in the absence of competing parties bidding for resources there can be no market, and without a market there can be no prices, and without prices there can be no profit-loss calculation, and without profit-loss you're left groping in the dark with no idea what is wasteful and what is not. (So, it should be noted that this is not just a critique of the state, but of all monopoly operations).

    I wish I could be more specific about the American health care industry, but I just don't know enough to say more on that topic.

  38. I'm glad you don't think we should just spend as little on health care as possible, regardless of what we get. The point I'd make is that, if we had made different historic public policy choices, we could be providing everyone with good care while paying substantially less for it than we do now.

    Regarding the rest: there is some basic neoclassical micro in here, and those models do seem to often have some relationship to reality. But often, they get things completely wrong. The minimum wage example you give is a great case in point. I remember working through the details of a standard micro model, illustrating how this is supposed to work. But in reality, it isn't at all clear that economies work this way. For example:

    Economics, in general, has had major reification problems. Models are mistaken for reality. The map is mistaken for the territory. In many ways, what you're saying doesn't actually describe the world we inhabit; it describes an imagined world that is, in many ways, radically different than our own. Aside from that, there are a lot of normative assumptions behind the definitions of "balance" and "optimality" that are highly questionable; for example, Pareto optimality would suggest that in a situation in which 1 person has all of the wealth in the world, and everyone else is starving, that to take half of that person's wealth and feed the world would not be optimal. That's because one person was made worse off. All of this economic language of "optimization" is a neutral-sounding cover for a lot of non-neutral value judgments.

    As a conservative, I think that abstractions and ideas always need to be disciplined by a hard encounter with reality. Our ideas so seldom get things right, or even lead us to conclusions that are as good as settled traditional knowledge (with all of its problems.) I'd simply encourage you to question the models, and be attentive to the difference between a model and reality. Models are handy, but only when it is understood that they are models.

  39. Real quick, I should have said "other things being equal" regarding the minimum wage. There are undoubtedly examples of minimum wage increases *not* upping the unemployment numbers, but this doesn't change the rule - it just means that all other things weren't equal :) However, I think your example is problematic (that is to say, Keynesian ;) ). Depressions, in my view, are not caused by demand shortfalls, nor are they solved by more spending. A minimum wage does nothing but shuffle the money around, creating new jobs where the money is spent, but reducing employment where the money was taken (and leaving a trail of other problems along the way). To say that the minimum wage increases the overall economic well-being of a community seems dangerously close to committing the Broken Window Fallacy.

    I couldn't agree more with what you've said about economic models. However, I'm also not on board with the idea that economics is a "hard" science that can be subjected to testing and data collecting ala Karl Popper and falsification. Again, I rather like what Hayek has to say about this in his work on Scientism and the Abuse of Reason.

    I mean, to give an example, if Ben Bernanke were to make an announcement that the Fed had found new evidence that *other things being equal* "printing money" doesn't lead to inflation, I would have to brush off the study as insanity. It's like saying that 2+2=5.

  40. So you say, "the rule is that raising minimum wage increases unemployment." But then you say that this can't be subjected to empirical analysis. Why is it the rule to predict things happening in the real world, if it can't be shown to predict things happening in the real world? I don't need a bunch of fancy economics, or words like empiricism, to know that this is b.s. If I tell you that a bird will fly through your window tomorrow morning, and then I say that this is the rule, even if no birds fly through your window, you would be entitled to refer to that, politely, as hokum.

  41. I would prefer not to get into a discussion of economic methodology. More brilliant men than you or I have debated this sort of thing at length. I just don't have the interest in it that I once did.

  42. Don't quit now, we're just getting to the fun part. And anyone can read and understand this little paper on Mises and praxeology, if they just pay attention and google any terms they don't yet know:

    Anyway, this is the moment that you realize that Austrian economics is a faith system. And not just any faith system, but one that lays claim to absolute authority; it is the sort of faith system that claims to know the mind of God perfectly. Also, the article is very useful, because it uses liberal in precisely the way I have been using it here; Mises clearly self-identifies as a liberal, which means here that he has taken on the Enlightenment approach to reason, lifting specific instances of his own reasoning to the level of the absolute. This is, explicitly, the core of liberal thinking. It is, I think rather transparently, idolatry. Mises has made a God of his economic theory, and so, even when the theory is shown to not predict facts that Mises (at other points) claims it will, he and his followers do not say "Let us submit our minds to Creation, at least, if not to God." That, I could work with. Instead, they say, "My mind is God. And if Creation does not accord with it, so much the worse for Creation."

    This liberal ideology is explicitly being incorporated into the definition of "conservative" in the United States. It is only relatively recently that the Austrian variety, with its full-blown declaration of absolute authority (which is, of course, unjustifiable), has been accepted again; it had been marginalized by folks like Milton Friedman, who were realistic enough to be Keynesians in general terms (and who made important contributions to actual economics about the real world.) However, now that Milton Friedman's basic framework is being deployed in the context of another depression, and shown useful but not adequate to the problem at hand, it has created a crisis among conservatives. Looking for any excuse to justify austerity, they have created an opening for the idolatry of Mises. The process has been a long time coming. But I hope that conservatives who are aware of the actual content and implications of these ideas, will continue to resist them. As for your own thinking on this: go ahead and respect your intelligence. Read the paper. I'm think that you can see what is going on here, with just a bit of effort. It really isn't that complicated. They are claiming that their theories are obvious, irrefutable and absolute. They are so obvious, irrefutable and absolute that when the evidence disconfirms their clear and simple predictions (which they do make), they choose their "obvious" theory over Creation. It as if they believe their minds create the world, and that they are not themselves created beings in the world.

  43. Idolatry is an interesting accusation to make of Mises, because that is precisely what Hayek and Rothbard said of the positivists and (maybe) falsificationists (hence the title of Hayek's book 'The Abuse of Reason,' and the title of Rothbard's paper, "The Mantle of Science.") In what I can remember of the Austrian view, blindly applying the methodology of the physical sciences to economics is the height of Enlightenment hubris and this is what they see Milton Friedman, for example, as doing. Of course, Hayek was much more of a moderate Austrian than Rothbard, and his views on methodology changed over the course of his life. For Freddy, though, I think he very much opposed the idea of a "predictive" economics (central planning and all that) and resolved that the best the science can do is explain the principle behind what we see. I don't know about you, but I for one would rather live in a society
    where people aren't treated as test subjects for economic theories.

    Looking at Rothbard's paper, I agree with this claim:

    (a) [T]hat the fundamental axioms and premises of economics are absolutely true; (b) that the theorems and conclusions deduced by the laws of logic from these postulates are therefore absolutely true; (c) that there is consequently no need for empirical “testing,” either of the premises or the conclusions; and (d) that the deduced theorems could not be tested even if it were desirable.

    I should add that I agree with it partially because I do not believe the alternatives are much better. But, truly, this is all I can say. I haven't read the literature in almost 4 years.

    I'm sympathetic to Jubilee, but to say that an inflationary policy is a form of Jubilee is something I can't get on board with. Inflation, even if it does lighten the load of debtors, hurts savers, encourages malinvestments, creates discoordination, and leads to boom-bust cycles -- even slow-motion inflation. It's like giving a depressed man a bottle of vodka and claiming to have set him free from his pain. This is to say nothing of the fact that inflation widens the gap between rich and well-connected and the poor, as the rich have access to the money before the currency is debased. This isn't forgiveness. It's a big manipulation by men with power.

  44. So do you believe in predictions in economics, or not? Because you are making a bunch of predictions :)

  45. I agree on all counts.

    I also think contemporary political discussion confuses liberal with Democrat, and conservative with Republican, when in reality the Democratic party is overwhelmingly neo-liberal and the Republican party is overwhelmingly neo-conservative.

    I know lots of Democrats who love Obamacare. But I know lots of liberals who don't (I'm one of them). And from the wings I watch/listen as Democrats defend a law that was more or less created by Republicans and Republicans demonize a law that seems a lot like something they would love had it been created under a Republican administration.

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