Rock 'em Sock 'em Health care

[Hugo]

ever wonder why, say, portable cd players have been the same price for a decade?

They haven't. I bought a portable CD player about 7 years ago for about $200. I bought another one 4 months ago for $80, and it had more features (MP3 playback) and longer battery life. It was also smaller and lighter, and had a longer warranty. And it looked cooler.

how about the price of gas going up at every gas station at the same time?

Maybe because gasoline is not supplied in a competitive market but dependent upon state-controlled OPEC production, and the price rises are caused by a universal increase in the cost of crude as determined by OPEC?

If the price of flour doubled tomorrow, would you expect some bakeries not to increase the price of bread?

a first year university economics class is all one needs to know...

Ever tried taking one? Preferably in a non-Warsaw-Pact nation, or in a university that does not exclusively espouse Soviet Communism?

in a mature market (which covers 99% of everything),

Markets are never mature. There are less mature (flat-panel TVs) and more mature (foodstuffs) markets, but no market is ever "mature", in the same way that no human being is completely developed - it is an ongoing process that will continue for the lifetime of the individual, or the market, defined as being the period of time for which some consumers somewhere continue to demand the product.

players have their cut of the pie and don't rock the boat. sure there is an occasional stirrup (eg. wall mart) but for the most part things remain the same and market players use 'industry representation' to communicate etc...

This displays a complete lack of understanding of markets. Consumers set the pace for markets, not suppliers. As they demand more, prices rise due to scarcity, as they demand less, prices fall due to glut. It tends towards equilibrium, or most efficient allocation of scarce economic resources which, at the end of the day, is the sole purpose of economics. Producers can affect things at the other end of the scale but it produces the same results - pushing prices up creates a fall in consumer demand, resulting in a glut, which pushes prices down again, thus tending back towards equilibrium. A producer cannot increase prices while also increasing or even maintaining demand.

why is it that a company that sells you something at a 'market determined' prices (ha ha ha ha...) is not committing a crime when they are laughing all the way to the bank?

Because you agreed to buy it. Consent makes it a non-crime, in the same way as consent differentiates rape from lovemaking and theft from gifts.

Or can't you see a difference between rape and lovemaking, charity and theft, murder and euthanasia, slavery and employment?

sure, some of the 'operations' of these things can be privatized (provided that we get to look at the books)... but you own it. its yours!

All of those can be privatized. You can look at the books if you're an investor, otherwise it's none of your business. Do I have the right to look at your personal finances?

why is dentistry so expensive? lack of competition!

Well, dentistry is expensive for a great many reasons, for instance, that the profession requires a great deal of skill and training, and the procedures require a lot of expensive equipment. Dentistry is not any cheaper in Japan, all you are seeing is that the costs are being borne by people who aren't deriving any benefit from the work, as opposed to being borne by people who are. There is a big difference between price and cost. Do not pretend that they are the same.

the school of dentistry dictates how many dentists will be produced in this country every year... at our expense!

What school of dentistry? You mean the Royal College of Dental Surgeons of Ontario (for instance), which is created by the The Regulated Health Professions Act (RHPA), the Dentistry Act and other provincial laws?

So in other words, the government?

oh, and i'd like to weigh in on the taxation is stealing thing.

Then weigh in, because none of your examples have any bearing on this question whatsoever.

[August1991]

If I can go back to the original (worthy) idea of this thread:

BD quoted a study that purports to argue that private for-profit hospitals are worse than public not-for-profit hospitals.

The study was compiled by a P. J. Devereaux, a cardiologist, who seems to have taken an interest in health economics and has published several polemical papers in defence of State health care.

Here is a critique of one of Devereaux's earlier efforts.

The paper does not, however, compare public and private health services. Instead, it looks at private non-profit hospitals and private for-profit hospitals. Drawing sweeping conclusions about privatization is premature -- at best, the study finds that certain types of privatization should, maybe, sometimes, be approached with caution.

IMV, this thread started on the wrong foot. We should measure comparables. I'll venture on.

Cameron:

What if you allowed private health care in, kept the same ammount of funding for the public system and over the years reassess the funding needs to the public system so that it is run efficiently and cost effective.

Some refreshing, open-minded thinking. I'll return to this idea.

BD:

In short, I don't trust the people who benefit most from chopping the system (people who don't really depend on public health care anyway) to be trustworthy guardians of the public system. Foxes and henhouses, don't you know.

Call this the thin of the edge of the wedge argument. Ideological.

TS:

Splitting the heath care system into public and private systems would raise costs in the public system by creating resource competition: e.g. both systems would need to bid for the same doctors.

Nonsense. The State hires some but not all lawyers.

Also, if you think of health care as an insurance/risk sharing thing, then keeping it all in one pool should be the least expensive option, actuarially speaking.

I'll keep an open mind on this idea.

Argus:

Right off the bat I see a major problem with relevence to our situation. No one is asking for a US style health care delivery system.

I agree completely. It seems it's either the Canada Health Act or an American-style atrocity. Surely the choices are greater.

eureka:

Utilities and services of every kind are less expensive in public hands. The so-called, and questionable, benefit of competition does not apply to the supply of these necessities.Quality is also not sustained when they are in private hands.

I think this is where the thread truly unwound in an ideological direction. It is now discussing whether the State can better direct the "commanding heights" of the economy. (No offense intended eureka, see below.)

BD adds more fuel to the ideological fire:

Frankly I have no desire to see public dollars eaten up by private sector inefficienceis any more than what is already occurring. private health, while wholesal like the U.S. or two-tiered as in some European countires, has failed.

The ideologue Hugo responds:

So many fallacies, so little time.

What follows is an ideological debate divorced from the real world except for an example of UK water (of all things). (Do the British leak extensively?)

(Hint to Hugo: Be less normative and more positive. Read this interview with Coase. It will make you feel really good, but note that Coase's argument is entirely positive.)

Hugo did get practical though by transferring Friedman's school voucher idea to health:

If you want a proposal on how the problem can be fixed in the narrower field of health care, I'll borrow Nobel laureate economist Milton Friedmans idea. Basically, the whole healthcare delivery system is auctioned off to private enterprise. Then the government issues vouchers to citizens, paid for from tax money, which they can redeem for healthcare. Standard vouchers for things which are regular, like checkups, eyeglasses, prescriptions etc. and extraordinary claims for unforeseen needs.

Argus tries to get this thread back to health care:

I think the evidence is that private clinics have opened which don't charge the patient, but which take only OHIP fees. Somehow, on OHIP fees, they can do their scans and still make a profit. Ultimately, capitalism is all about supply and demand.

----

I generally have a reputation here as being a Conservative. To coin a phrase, I think government is too often part of the problem, not part of the solution.

But I have defended State health care. My initial preference would be for privately delivered, State financed health care. IOW, I would like State health insurance.

IMV, if you have a car accident, you choose the for-profit garage for repairs but your insurance company picks up the tab. I'd say the same for health except the State would be the insurance company.

This car comparison works also for catastrophic illness and general maintenance. But the comparison of cars and health breaks down in two ways: health is an existential question and car mechanics are not unionized.

Going back to BD's original post, I realize that comparisons are extremely complicated. I would like to read studies that do not have an ideological slant. For example, the US has many not-for-profit hospitals - some public and others private. (I'm not even certain I understand the difference anymore.)

I'm bothered that studies of the Canadian system ignore the hidden costs of waiting hours in an emergency room. Waiting time should be part of our health costs. They're not.

In general, I prefer the price system. The collapse of the Soviet Union is very strong evidence that State or centralized organization of resources doesn't work. To me, the onus is on the Left to justify State or centralized health care.

In Canada, patients pay no money when they see a doctor. Not surprisingly, many people want to see one. So patients willing to wait the longest get to see a doctor. Is that how we should organize health care?

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Montreal's main francophone children's hospital, Ste-Justine, has had an emergency entrance under construction for about two years. The entrance was started but hasn't been finished. Such wasteful situations are costly. (I won't describe the hospital's computer system.)

A State, bureaucratic, unionized system tends to function at first but then people prefer stability to change and internal signals misdirect resources. Markets make collective wisdom available to all.

I would like to see the market mechanism used somehow in our health system but I'm not certain how. I like Harper's idea of allowing provinces to experiment.

My post is an attempt to bring a good thread back to a good debate. I'm willing to consider different points of view. Maybe I'll even link to supporting evidence for my viewpoints.

[Hugo]

Your return pleases me, August, you were often a voice of reason here.

The ideologue Hugo responds

I am dedicated to my principles, at least until I encounter an argument that confounds them beyond my ability to reconcile. This is why I gave up being a socialist and became a capitalist - I have neither been able to refute capitalist arguments against socialism nor seen anybody else refute them.

So I may be an ideologue, but only as my ideology is the one that I have found to hold the most reason and logic in my lifetime. I have already discarded many of my beliefs when I found them to be obsolete to me. So I reject your charge.

IOW, I would like State health insurance... The collapse of the Soviet Union is very strong evidence that State or centralized organization of resources doesn't work. To me, the onus is on the Left to justify State or centralized health care.

Then does that not put the onus on you to justify State health insurance? Basically, if you argue that market allocation of (scarce) resources leads to more efficiency and greater prosperity, but that you prefer State health insurance, can you demonstrate to us that health insurance is the exception to this rule rather than another exercise of it?

In Canada, patients pay no money when they see a doctor. Not surprisingly, many people want to see one.

Say's Law. Reduce the price (i.e. send a market signal of increased supply), and demand increases. Reduce the price infinitely and demand will increase infinitely. Basically, if you make healthcare "free", demand will always outstrip supply, which means waiting for service, forever, because supply cannot be increased infinitely as long as the universe exists under the Law of Scarcity.

A State, bureaucratic, unionized system tends to function at first but then people prefer stability to change and internal signals misdirect resources.

It only functions at first because of economic time-lags. Things don't happen instantaneously - a company that makes a loss one month does not instantly lay employees off and close factories. They wait awhile. Same thing with inflation: an initial boom is produced, followed by a slowing and then a recession (unless further inflation follows). This would happen instantaneously were it not for the time-preference of humans, or the ability to weigh present costs and benefits against prospective future ones.

With state enterprise, it functions until the effects of the inefficiencies of allocation it creates catch up with it. Then it starts to unravel.

I would like to see the market mechanism used somehow in our health system but I'm not certain how.

In the same way that the market mechanism has been used for thousands of other goods and services. Healthcare has been turned into some kind of Holy Grail in Canada, and a true solution will only come when people realise that healthcare is actually just another combination of goods and services, like plumbing or cars, that obeys all the economic laws applicable to any market.

To paraphrase von Mises, if we had nationalized the car industry and left healthcare as a free-market, today people would be saying that of course cars could not make profit like healthcare does, that it is unreasonable to expect the car industry to advance as fast as the healthcare industry does, that cars are an indispensible service, nay, a right of the people and must be provided by the government and could not possibly be turned over to private enterprise etc. etc.

That is my position and so far, nobody has been able to rouse a decent argument against it - at least, not one that they were willing or able to defend beyond my first rebuttal. I'm willing to discuss how to get there, but so far discussion of the principle itself has only reinforced it.

[Guest eureka]

Thanks for that, August. This was a valuabale discussion.

However, you again misread me. My point was not ideological in the least and, in fact, I also said that centralization does not work. I did not expand on that since it opens this up to what did happen. There are many reasons that we all have some understanding of - the Soviet Union is the best modern example.

That does not necessarlily apply to services, though. It particularly does not apply where there is local administration and a degree of autonomy. Helathcare can in no way be looked at as a commodity or a consumer product. It is a standard need of all and price is not a consideration of individual affordability.

Healthcare is simply something that must be made available to all equally for whatever the demand is to the limit that the nation, through comment assent of citizens, can commit to its provision.

I am surprised that you do not agree that the introduction of private care will take resources from the public sector. It will remove the agreement of those who can afford private from the consensus and create a political friction that the minority of wealthy can manipulate as they do now.

It will remove doctors and nurses and other personnel from the public system out of proportion to the numbers of users of each system. The loss of funding to the public system will create a technological gap.

However, the standard of care in the private system will also decline as they have to the South of here as competition drives price down to keep profit margins high. That is, unless there renains government control of every aspect: an absurd situation that leads to government enforced higher pricing to maintain a margin for profit.

[Hugo]

Helathcare can in no way be looked at as a commodity or a consumer product.

Like any other commodity, product or service, healthcare has an opportunity cost which must be borne by somebody. Just as consumers sacrifice a larger car to buy a big-screen TV, so the government must sacrifice the armed forces or police spending for healthcare. Therefore, healthcare is another service that obeys the law of supply and demand and of scarcity.

The fact that public healthcare always has had queues demonstrates that, like any other commodity, product or service, it is following Say's Law. This is even more apparent when one considers that those parts of healthcare that are still private (dentistry or optometry, and large parts of the US healthcare system) do not have the waiting times associated with public healthcare because the price mechanism matches supply to demand. The market-based prediction for "free" healthcare is that demand will always exceed supply, as with any good whose price is artificially reduced below the market clearing price, and sure enough this has been borne out empirically.

Healthcare is simply something that must be made available to all equally for whatever the demand is to the limit that the nation, through comment assent of citizens, can commit to its provision.

Food and water are commodities which are far more vital to people than healthcare. I have not used any healthcare services for five years. I challenge you to find me somebody who has not consumed any food or water for five years. The question of how essential healthcare is must be decided by individuals, not by bureaucrats. Publicly provided healthcare assumes that everyone must put health first and be forced to pay for it. However, it simply is not the case. The country is flooded with people who put their health second to something: smokers and substance abusers, extreme-sport participants, etc.

Therefore the essence of public healthcare is to say to the citizenry: we know what you need better than you do, so we shall make your decisions for you. You are simply too irresponsible to be allowed to do what you please with your own property and your own bodies.

I am surprised that you do not agree that the introduction of private care will take resources from the public sector... It will remove doctors and nurses and other personnel from the public system out of proportion to the numbers of users of each system.

This does not make economic sense. If additional private healthcare did demand more personnel, then the demand in excess of supply would create increases in the wages of those personnel, which would induce more people to the profession, thus tending back towards equilibrium. Once again, supply and demand. The same thing was observed during the dot-com bubble, when demand for web-specialised IT personnel outstripped supply causing salaries to skyrocket. Then after that bubble burst the situation reversed, and now those personnel are no longer particularly well-paid on the whole. IT is no longer seen as the sure-fire money-making career it was ten years ago, so people are turning to other professions. This reduces supply of labour to the market equilibrium.

[Guest eureka]

If you could stick to looking at healthcare you might not be so confused. The amount of moneys avaolable will b decided by government with the approval of citizens. The standard of services will reflect that and that only. Wages will not rise attracting more to the professions. That could happen only in a private system for the wealthy who could afford to pay.

Say's Law and the other economic shibboleths have no bearing on this. The amount of money at any given time is finite but it can be changed but not in consort with supply. Both demand and supply are regulated. It is one of very few things that can be managed this way, and that should be.

Food and water; IT and anything else have no place in the discussion. It is a stand alone question that can be related only to the amounts of money approved by the people through their taxes.

[Hugo]

The amount of moneys avaolable will b decided by government with the approval of citizens.

Actually, no, available resources are beyond the influence of government. The state cannot create prosperity or something from nothing, as the Soviet Union proved so graphically.

What the state has to do is decide how to allocate resources, and what history has proven time and time again is that the efforts of a few bureaucrats to do this are inferior to the contribution of hundreds of millions of minds applied to the same problem.

The amount of money at any given time is finite but it can be changed but not in consort with supply.

What are we talking about here? Changing the amount of money in the economy causes prices to rise or the value of money to fall. Allocating more money to healthcare has an opportunity cost elsewhere (the military, policing, First Nations transfers, etc). As long as the price remains zero demand will remain higher than supply. This is simple logic: if something is free, people will demand as much of it as they want so long as that thing is considered to be anything more than completely worthless. Human nature is never to be satisfied with anything, as availability grows, want-needs grow. Our present lifestyle would be unimaginably luxurious to those who lived a hundred years ago and beyond the wildest imaginings of those who lived a thousand years ago, and yet we still want more. This is why there will always be more demand than supply for anything whose price is artificially reduced below market clearing level. Human nature.

Both demand and supply are regulated.

Yes, supply is regulated as we have seen by bureaucratic allocation, and demand is regulated by queueing. But people generally see waiting lists as a bad thing. They do not understand that it is the only way the government has to regulate the demand for a zero-price good.

Food and water; IT and anything else have no place in the discussion.

I think they do have bearing. You claim that healthcare is essential, well, food and water are even more essential! You claim that the market does not adjust to demand for workers, the IT industry proves that it does.

[Guest eureka]

Once again, Hugo, you are being deliberately obtuse. Where does state creation of prosperity come into it? The only decision is the allocation from available resources. Not that it really matters, since that is not "public vs private."

The amount of money allpcated can be changed to make it a little clearer for you.

Copulation is also a need that ranks above healthcare. Just where it ranks in relation to food and water is an open question and some might even put it first. Is it also subject to the "laws" of the marketplace?

[Hugo]

The amount of money allpcated can be changed to make it a little clearer for you.

However, the problem is that the resources that that money is allocated from are scarce and the government cannot expand those resources. Therefore, expansions in healthcare spending can only come at the expense of something else. What you propose essentially places in the hands of government the sole power to prioritise goods for people. What the free market does is to place that power in the hands of individuals so that they may decide for themselves what is most important for them.

The further problem is that it does not matter how much more money you pump into healthcare. So long as the price is artificially reduced below market clearing, in this case to zero, demand will always outstrip supply. If you increase the supply of healthcare with more money, people will demand even more healthcare. This is simple human nature: people as a whole are never satisfied with what they have. Therefore you will always have queues, because this is how excess demand manifests. Unfortunately, healthcare is an industry where fast action is a measure of quality, so public healthcare will always by definition be of lower quality than private healthcare.

Copulation is also a need that ranks above healthcare. Just where it ranks in relation to food and water is an open question and some might even put it first. Is it also subject to the "laws" of the marketplace?

Indeed, it has been proposed that it is. Nobel laureate Gary Becker has already explored this.

[August1991]

I am dedicated to my principles, at least until I encounter an argument that confounds them beyond my ability to reconcile. This is why I gave up being a socialist and became a capitalist - I have neither been able to refute capitalist arguments against socialism nor seen anybody else refute them.

Fair point. Keynes famously said, "When I realize I'm wrong, I change my mind. What do you do?"

As to arguments, the essence of a Pareto optimum (is the Sweal lurking about?) is that all good deals occur. There is ample reason to believe that free markets don't achieve that efficient bliss point, in all cases.

Why? Transaction costs, or the often impossible cost of finding out if someone is lying.

This is one "ideological" argument in favour of State health insurance.

Copulation is also a need that ranks above healthcare. Just where it ranks in relation to food and water is an open question and some might even put it first. Is it also subject to the "laws" of the marketplace?

The fact that love and relationships are not decided by markets might explain why so many people are unhappy in this world.

Hugo: What aren't relationships decided through markets?

What the state has to do is decide how to allocate resources, and what history has proven time and time again is that the efforts of a few bureaucrats to do this are inferior to the contribution of hundreds of millions of minds applied to the same problem.

True. Hayek's main point. And my point about Canada's hospitals.

Canada's hospitals are increasingly divorced from reality. They survive now on the information from an American price system. Canadian hospital administrators have no way of knowing whether they should spend money on a new elevator, or a new emergency wing. They would be utterly incapable of negotiating salaries (a task they thankfully give to the ministry).

The money that goes into a hospital is now totally disconnected from the money that goes out. This makes Canadian hospitals Soviet. Such situations can survive for quite some time, if the managers are intelligent and humane.

----

I fear that I seem to support Hugo's idea and disagree with eureka. Not true.

Hugo, around the world, the State is involved in health care. This is true even in the US. A large percentage of Canadians would approve of State involvement in health care.

Moreover, countries such as France devote a smaller portion of their incomes to health care than countries such as the US or Canada. (We can debate quality of health care if you want but from what I've seen, French hospitals are as good as ours.)

So Hugo, I ask you why? Are all these people fools? Dupes? Let's be pragmatic about this issue.

BD started the thread by arguing that not-for-profit hospitals are best. I think BD is wrong.

[Hugo]

As to arguments, the essence of a Pareto optimum (is the Sweal lurking about?) is that all good deals occur. There is ample reason to believe that free markets don't achieve that efficient bliss point, in all cases.

The problem is that a Pareto optimality only exists on paper, because the values it deals in are subjective. Pareto does not require optimality of efficiency, just that no change in the deal make any party "worse off" without making another "better off". These are highly subjective. It is impossible for an impartial observer to decide whether or not any trade is Pareto-optimal.

This is one "ideological" argument in favour of State health insurance.

To quote David Friedman, utopia is not an option. There is no need to pretend that markets are perfect, they are not. All one needs to do is to demonstrate that markets are better than any other alternative we know, and that is easy. Market failure is no argument for State interventionism, because history shows that State failure is both more common and has worse consequences than market failure. Market failure is Enron. State failure is a Cultural Revolution or a Stalinist Purge.

I'll take loss of stock over a bullet in the back of the head any day.

Not to say that state healthcare is about bullets in the back of the head, although there is evidence to suggest that such a system takes a very callous and inhumane view of life - see below. However, we must recognise that human beings all want to help themselves in life, and that agents of the State have been given license to use violence to better themselves. In State healthcare, this is why the system is so inefficient: why try to reduce the ranks of bureaucrats and pencil-pushers, to replace filing cabinets with computers, or to seek cheaper ways to perform surgery, when the effective gains could simply be taken from the taxpayer without having to lay anybody off and enrage their unions?

Hugo: What aren't relationships decided through markets?

Who says they are not? As I said to Eureka, Gary Becker says they are, and the fact that his peers saw fit to award him a Nobel Prize demonstrates that he is not a fool.

The money that goes into a hospital is now totally disconnected from the money that goes out. This makes Canadian hospitals Soviet. Such situations can survive for quite some time, if the managers are intelligent and humane.

But Hayek's other main point is that the managers of such a system may well be intelligent, but never humane. You see, planned economics are manifestations of huge amounts of power. The economic planner has massive power over other people. People attracted to such positions are people with a taste for power, and the lust for power does not accompany individual values such as compassion, moderation and empathy.

Consider that in free market healthcare, the industry has a vested interest in keeping you alive: they can continue to sell you healthcare products and services. In public healthcare, however, if you are sick the bureaucrats wish you would die, because then they won't have to waste their finite resources on you.

This has probably occurred to somebody in the Canadian healthcare system. Consider that with cancer, it is generally accepted that the earlier it is detected, the better the chances of survival. However, Canadian healthcare won't even start treating cancer until it is at least 3 months old (I know this because everybody in my wife's family has had at least one form of cancer - something that regularly keeps her awake at night). Somebody seems to have decided that the trade-off between cost and patient mortality at 3 months was "just right".

In the free market, if costs for your treatment would exceed what your insurance company would be able to get from you in your lifetime, then your insurance company has an interest in seeing you dead instead of healthy. However, they are not in charge of your care: the hospital is, and they have a vested interest in keeping you alive. State healthcare, however, incorporates the caregiver into the insurer. What do you think the result is?

Hugo, around the world, the State is involved in health care. This is true even in the US.

Yes, and the US healthcare system kills 177,000 people annually through malpractice. The US system is still a state-run system and as such, has huge failures.

So Hugo, I ask you why? Are all these people fools? Dupes? Let's be pragmatic about this issue.

It is an ad populum fallacy to assume that if everybody does or believes something, that thing must be correct.

Consider that the State has a vested interest in perpetuating the status quo, and that the State is the most powerful entity in any nation today. Does that answer your question? The state healthcare system perpetuates because the foxes are running the henhouse.

[Hugo]

Helathcare can in no way be looked at as a commodity or a consumer product. It is a standard need of all... Healthcare is simply something that must be made available to all

Eureka seems to be asserting that healthcare is a right or an entitlement of which every human is deserving. In a free society, this cannot possibly be true.

The only rights that can be granted equally to all are negative rights, the right to live, to not be harmed etc. These are called "negative rights" because they do not award anything and the only thing required of others is inaction. I need take no action to respect the right of another to live. That right only requires that I not kill him.

Healthcare is a positive right. If a person is to have healthcare, and cannot provide it himself, then someone else must provide it for him. If that person does not want to, then for everybody to have healthcare as Eureka suggests, he must be forced.

This means that for this person who is forced to pay for the healthcare of others, neither his labour nor the fruits of it are his own. What he has will be appropriated to pay for the healthcare of those who cannot provide it themselves. A person whose labour is appropriated against their will is a slave.

The argument that healthcare is a "right" is an argument for tyranny. To grant healthcare as a right for all is to make some in our society privileged (the net recipients) and to enslave others (the net beneficiaries).

This is completely incompatible with all traditional meanings of liberty and freedom - the notion of individual independence, the right to pursue ones own goals unhindered by others, the right to life and property, the right to live free from violence, and so forth. If Eureka believes that universal healthcare can truly be provided by the state - which I reject on practical grounds - it will be a slave state that provides it.

[August1991]

Hugo: What aren't relationships decided through markets?

Who says they are not? As I said to Eureka, Gary Becker says they are, and the fact that his peers saw fit to award him a Nobel Prize demonstrates that he is not a fool.

Gary Becker claims no such thing. All Gary Becker claims is that an assumption of individual rational behaviour can be used to draw conclusions (make predictions) about social out comes.

Even Gary Becker would not claim that we have a marriage market with a clear price in the same sense that we have a retail gasoline market with a price.

The problem is that a Pareto optimality only exists on paper, because the values it deals in are subjective. Pareto does not require optimality of efficiency, just that no change in the deal make any party "worse off" without making another "better off". These are highly subjective. It is impossible for an impartial observer to decide whether or not any trade is Pareto-optimal.

Precisely the point, Hugo.

Which leads to the next point:

So Hugo, I ask you why? Are all these people fools? Dupes? Let's be pragmatic about this issue.

It is an ad populum fallacy to assume that if everybody does or believes something, that thing must be correct.

Ad populum has nothing to do with it.

We are in the situation we are in because, presumably, people value this situation better than some alternative. If there were any Pareto-improving alternatives, then why haven't people found them?

My point is that State involvement in health care is Pareto improving.

Market failure is no argument for State interventionism...

Agreed.

... because history shows that State failure is both more common and has worse consequences than market failure. Market failure is Enron. State failure is a Cultural Revolution or a Stalinist Purge.

I'll take loss of stock over a bullet in the back of the head any day.

C'mon, Hugo. Let's not compare extremes.

A fire can kill people; is that reason to forbid fire?

But Hayek's other main point is that the managers of such a system may well be intelligent, but never humane. You see, planned economics are manifestations of huge amounts of power. The economic planner has massive power over other people. People attracted to such positions are people with a taste for power, and the lust for power does not accompany individual values such as compassion, moderation and empathy.

I am not advocating a single large bureaucracy in charge of health care.

Consider that in free market healthcare, the industry has a vested interest in keeping you alive: they can continue to sell you healthcare products and services. In public healthcare, however, if you are sick the bureaucrats wish you would die, because then they won't have to waste their finite resources on you.

Hugo, this is the key point. Except for routine check-ups, health care is never bought in a market like other commodities. Health care is a contingent commodity; it is bought typically through an insurance scheme. Any discussion of health care must involve insurance.

And like most insurance markets, there are problems of assymetrical information.

One advantage of universal coverage is that it avoids problems of adverse selection. In the case of health care, these can be so severe as to make premiums unaffordable and, in effect, to kill the market.

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Hugo, the basic premise of Hayek and von Mises and Friedman and so on is that individuals know best what is best for themselves. Is that an ad populum argument?

[Hugo]

Gary Becker claims no such thing. All Gary Becker claims is that an assumption of individual rational behaviour can be used to draw conclusions (make predictions) about social out comes.

Even Gary Becker would not claim that we have a marriage market with a clear price

Now you're attempting to construct a strawman. The marriage market does not have to have a clear price, as Becker himself has said, people do not conduct themselves as though marriage were a market like gasoline, but nevertheless they follow market behaviour. It is not necessary to understand why you are doing something, to do it.

Becker's theories on the marriage market have been well documented. Here you can read a column by Professors Labland and Sophocleus on Beckers work. Here is an interview with Becker himself in which he discusses the marriage market. Indeed, just do a Google search for "Gary Becker' and 'marriage market' and see what comes up.

It is quite easy to see how marriage would be a market. There are people with things to offer, looking for things in a spouse. When two people marry, they make a contract to exchange what they have and satisfy each others want-needs. The opportunity cost is that both remove themselves from the market, making them unavailable should anything better come along.

Ad populum has nothing to do with it.

We are in the situation we are in because, presumably, people value this situation better than some alternative.

That is very silly, August. The same could have been said of Nazi Germany, Stalinist Russia and so forth - they were in that situation because people valued it better than 'some alternative.' You assume that human history is a non-stop series of progressions towards better and greater things, but even a cursory glance at history will show that it is fraught with massive stagnations and set-backs.

If there were any Pareto-improving alternatives, then why haven't people found them?

Because the exercise of violence can destroy market outcomes. Markets allow people to pursue welfare-improving alternatives, abrogation of markets with violence does not.

My point is that State involvement in health care is Pareto improving.

Then make that point. You have already said that the onus would be on you to prove it, so make an argument.

A fire can kill people; is that reason to forbid fire?

It's a good reason to forbid arson.

I am not advocating a single large bureaucracy in charge of health care.

How are you going to prevent that happening anyway? The history of the US and Canada shows that federalism is very difficult, if not impossible, to preserve. If you advocate creating multiple bureaucracies for healthcare, you must demonstrate how you will get them to compete with each other for efficiency rather than simply ganging up on the taxpayer.

Except for routine check-ups, health care is never bought in a market like other commodities. Health care is a contingent commodity; it is bought typically through an insurance scheme. Any discussion of health care must involve insurance.

And like most insurance markets, there are problems of assymetrical information.

Assymetrical information is not necessarily a problem. Were it not for assymetrical information, Disneyland would never have been built, with all the jobs, industry and wealth it has brought to the Florida economy.

One advantage of universal coverage is that it avoids problems of adverse selection. In the case of health care, these can be so severe as to make premiums unaffordable and, in effect, to kill the market.

Premiums would only be unaffordable if the healthcare was unaffordable. Is it better if we are forced to pay this outrageous price through taxation rather than given a choice? If you feel a Ferrari costs far too much, is it then OK if I steal the price of a Ferrari from you?

In any case, you have no reason to believe that this would only be a temporary situation. The history of capitalism is a history of products becoming more and more affordable all the time, and now products that were 50 or 100 years ago only available to a very few are now within the grasp of all - computers, cars, etc.

If people wish to buy something, but cannot afford it, that means that there is a big, virgin market just waiting for some entrepreneur to exploit it. This is a big incentive for people to find a way to bring costs down. There is no incentive for public healthcare to find any way to bring costs down, quite the contrary. They can have a seemingly unlimited supply of tax cash, but to be more wasteful means that they can get pay raises, jobs for their family and friends and so forth.

Hugo, the basic premise of Hayek and von Mises and Friedman and so on is that individuals know best what is best for themselves. Is that an ad populum argument?

No, why would it be?

[Hugo]

Editing function is broken. Instead of:

In any case, you have no reason to believe that this would only be a temporary situation.

substitute

In any case, you have no reason to believe that this would be anything but a temporary situation.

[cybercoma]

Helathcare can in no way be looked at as a commodity or a consumer product. It is a standard need of all... Healthcare is simply something that must be made available to all

Eureka seems to be asserting that healthcare is a right or an entitlement of which every human is deserving. In a free society, this cannot possibly be true.

The only rights that can be granted equally to all are negative rights, the right to live, to not be harmed etc. These are called "negative rights" because they do not award anything and the only thing required of others is inaction. I need take no action to respect the right of another to live. That right only requires that I not kill him.

Healthcare is a positive right. If a person is to have healthcare, and cannot provide it himself, then someone else must provide it for him. If that person does not want to, then for everybody to have healthcare as Eureka suggests, he must be forced.

This means that for this person who is forced to pay for the healthcare of others, neither his labour nor the fruits of it are his own. What he has will be appropriated to pay for the healthcare of those who cannot provide it themselves. A person whose labour is appropriated against their will is a slave.

The argument that healthcare is a "right" is an argument for tyranny. To grant healthcare as a right for all is to make some in our society privileged (the net recipients) and to enslave others (the net beneficiaries).

This is completely incompatible with all traditional meanings of liberty and freedom - the notion of individual independence, the right to pursue ones own goals unhindered by others, the right to life and property, the right to live free from violence, and so forth. If Eureka believes that universal healthcare can truly be provided by the state - which I reject on practical grounds - it will be a slave state that provides it.

This is the best post in the healthcare discussion that I've read to date. You couldn't have been more to the point. You need to look no further than to the doctors leaving for work in the United States to see that they are enslaved by our government. This doctor shortage is hurting everyone, especially down here near the border.

[Guest eureka]

No it isn't it is absolute twaddle.

Doctors "enslaved!" You must be wearing your idiot hat.

Doctors are leaving because they can and because the ones that leave are mercenary. The shortage of doctors is simply due to miscalculation of needs: another product of divided jurisdiction and provincial incompetence.

[cybercoma]

No it isn't it is absolute twaddle.

Doctors "enslaved!" You must be wearing your idiot hat.

Doctors are leaving because they can and because the ones that leave are mercenary. The shortage of doctors is simply due to miscalculation of needs: another product of divided jurisdiction and provincial incompetence.

You're hilarious to be referring to anyone as an idiot, when you won't even acknowledge the points that have been made.

Total government control means these people are forced to offer their services at the price the government feels it should pay them.

Doctors and nurses are leaving because they can make more money in the United States, thereby being paid what they're worth. I know this first hand.

Mercernary...absolutely hilarious.

[Guest eureka]

You don't know it first hand and doctors do not leave to get what they are worth. They leave for where they are in the position of a monopoly and can charge exorbitant fees.

Government control in Canada does not mean that they are "forced to accept what government is willing to offer them." They have the capacity to hold government to eansom if they should so choose - or to leave for more money; more that they will find nowhere but in the sick society where some have gone. What stops them from that in Canada may be the dedication to their profession or it may be the will of the people who will not tolerate robbery.

As for points, there have been none made that are not twaddle.

[sir_springer]

I'm not even going to read any of this thread.

I tend to avoid ideological BS, especially when it's raised to the level of religion.

You know...

Hitler had his Arian supremecy thing, Mao had his little red book, Lenin had his worker's revolution, N. Korea and Cuba have their cult of personality tyrannies...

And in Canada, we have "The Canada Healthcare Act/Medicare".

All of them effectively used to herd appropriately fear ridden sheep according to the whims of the State ruling classes.

[cybercoma]

You don't know it first hand and doctors do not leave to get what they are worth. They leave for where they are in the position of a monopoly and can charge exorbitant fees.

Government control in Canada does not mean that they are "forced to accept what government is willing to offer them." They have the capacity to hold government to eansom if they should so choose - or to leave for more money; more that they will find nowhere but in the sick society where some have gone. What stops them from that in Canada may be the dedication to their profession or it may be the will of the people who will not tolerate robbery.

As for points, there have been none made that are not twaddle.

I don't know it first hand, then you go on to tell me how they leave Canada to go and make more money.

Do you remember which point you were arguing?

Why can they charge that amount of money in the United States? Because that's the value of their skills and service, that's why.

Otherwise they're forced to work for the Canadian government making what the government deems to be an adequate wage for them.

In the United States doctors wages are controlled by what the public is willing to pay, not by what a government dictates to them.

If one doctor is charging $10,000 for a procedure and the rest of the doctors are charging $2,000 for the same thing, common sense would tell you the one charging $10,000 isn't going to make much money.

Regardless, we're not advocating an American style healthcare system where there is absolutely nothing as far as publicly funded healthcare goes. What's being advocated is a system whereby people have the choice of spending the money for advanced care and absolutely necessary lifesaving services are still free and universal to our citizens.

This is all going on today, but you're turning a blind eye to it. Not only are doctors going over the border but so are patients. Clinics across Canada are referring us to places in the United States to get the proper healthcare we need as quickly as possible.

This is a hell of a lot better than the system you're in bed with that forces very sick people to wait months and months for care.

Robbery is taking away the option from hard working and productive people who have third party benefits or are willing to pay money for extended care. Robbery is forcing the sick and suffering to wait for care, when all of this could be solved by simply allowing the option.

Outlawing private enterprise...I can't believe in a free country we actually do this and people support it. Amazing.

[sir_springer]

How do you know for sure that the "Canada Healthcare Act" is essentially ideological twaddle?

The State Ruling Class who use it to beat the masses over their collective heads, and to marginalize "non-believers" to the fringes of society (f'rinstance, reference Mr. Dithers hysterical rant at Stephen Harper in QP a couple weeks back), wouldn't trust their own health and well being to it for nothing.

They can afford real healthcare, and the price of airfare to get to it...usually in the US.

In the same manner as Communist ruling classes in the USSR, China, Cuba and N. Korea live, not like the working class, but wildly wealthy kings.

Baaaa....baaaa....baaaa...

[cybercoma]

How do you know for sure that the "Canada Healthcare Act" is essentially ideological twaddle?

The State Ruling Class who use it to beat the masses over their collective heads, and to marginalize "non-believers" to the fringes of society (f'rinstance, reference Mr. Dithers hysterical rant at Stephen Harper in QP a couple weeks back), wouldn't trust their own health and well being to it for nothing.

They can afford real healthcare, and the price of airfare to get to it...usually in the US.

In the same manner as Communist ruling classes in the USSR, China, Cuba and N. Korea live, not like the working class, but wildly wealthy kings.

Baaaa....baaaa....baaaa...

<{POST_SNAPBACK}>

NOT POSSIBLE!

Our healthcare is universal and FREE to everyone, why go to the United States and pay for it?

Just a general inquisitive thought to everyone:

I'd like to know how our healthcare system is even fair, considering it's based on need. Whose opinion of need? The specific doctor that assesses you? How does his opinion compare to the specific doctor that assesses me? What if there isn't enough of the particular product or service to go around? How then do we determine which doctor's assessment is more correct?

How too, is our healthcare system fair to the poor who can't afford prescription drugs anyway? What about those who have no fixed address and therefore cannot get a health card?

How is our healthcare system fair to those who work in it? They're forced to work for what the government determines the value of their work is, not what the societal demand is for their skills and services. How is that fair to someone who goes to school for years to become a doctor and spends thousands upon thousands of dollars?

How is our healthcare system fair to anyone who has to wait in an ER for 8-12 horus? How is it fair to someone who has to wait 12 months to see a specialist? How is it fair to the thousands of people who can't find a family doctor because there are none left (I don't know if that's a problem anywhere else...)?

And we're each paying hundreds if not thousands of dollars a year for this garbage? Give me a break.