On Monday, July 16, 2001 10:09 PM Miriam English firstname.lastname@example.org wrote:
> >On Miriam English's point above: the US system is NOT privatized. It's
> >heavily regulated. In fact, I bet it's the most regulated part of the
> >economy -- unless banking is more regulated than it...
> My point above (even though it is really only a side issue to my main
> point) still stands. You are simply arguing that it is not as privatised
> it could be. Undoubtedly that is true.
I'm not completely sure about that, but I do know the US system is much less
free market now then it was four decades ago and even less than it was a
century ago. The general trend has been toward more regulation here and
increasing subsidization. Both cause costs to rise and this increase in
cost gives rise to calls for more regulation and subsidization.
> What I said was that the US health
> market is probably the most privatised in the world. It is also the most
> expensive. To get a broken leg fixed in US is way more expensive than in
> Australia. (Forget drugs -- just basic health care: x-ray, cast,
> physiotherapy.) Australia has mostly had a publicly funded health system
> the past. In recent years politicians who have been mesmerised by the
> economic rationalist religion have been dismantling that and the costs for
> health have been rising as a result. One of our states, Queensland, has
> always had the most public hospital system in Australia. Health care in
> that state is cheap and universal, and the same high quality elsewhere in
I'm not sure about the true costs there. After all, you might not have to
pay much directly, but what about indirect costs? Taxes and the like are
the main vehicle for payment in Australia, IIRC. This means your out of
pocket cost might be low or zero, but the cost is not low or zero. I've not
seen any serious analyses of Australia, so I don't know the exact figures.
Several years ago, when national healthcare was a hot topic here in the US,
I read up on the Canadian and British examples and saw costs out of control,
long waits for simple procedures, and the like.
In the US, there are several ways costs are separate from price.
Prescription drugs, e.g., makes a third party decide what the consumer
actually wants. It's noticeable how when a drug moves from the perscription
list to the over the counter one the price drops, often to a fraction of its
prescription price. (It's also noticeable how drug companies fight to keep
their drugs on the perscription list.)
The solution here seems quite obvious. Abolish prescription drug laws.
(Also, abolish import restrictions, so that people can legally import the
drugs they need here.)
Another example is basic health costs. Since most people have health
insurance through their employer, they don't see the full cost of their
insurance. (Why people use insurance to fund healthcare is another matter.
Why, e.g., don't people use car insurance to fund oil changes? Imagine how
high car insurance rates would be if they did so? Imagine, also, if, in
order to combat the high cost of car insurance, we nationalized it, so that
national car insurance paid for oil changes?) Since they do not benefit
much if at all from holding costs down, many people abuse this employee
healthcare insurance. They don't shop around for the lowest costing x-ray,
perscription drugs, eye glasses, etc. Or even for the optimum level of
The solution here is also obvious. Scrap this system, giving the employees
the money that would normally go to health insurance go to the employee and
let him or her shop around for health plans. (Some here have proposed
medical savings accounts (MSA), to force the employee to put aside money for
healthcare. IIRC, the plan is that each employee would have to keep a
certain amount in the MSA each year and could put more in up to a certain
limit. I think after the year is up, the employee can then take the money
out, meaning that if he or she saved money -- through healthy life style,
frugality, or luck -- he or she would be able to then spend that. This
would give an incentive to not waste healthcare money.)
That the AMA controls licensing -- that licensing even exists -- also causes
increasd costs. The AMA drives up prices through basic legal monopoly
status in the US. It can control the number of seats in medical schools and
The solution here is obvious. Get rid of the AMA's legal priviliges and
allow real competition in the market for doctors.
> Health is just one of the things that I believe the capitalist system
> manages very badly. It is great for many other things, and in fact it is
> even good at certain aspects of medicine. But take balance and control out
> of the health system and it is like cutting the brake lines on a car: it
> may get you somewhere very fast but do you really want to be on board when
> it gets there?
Not so. The current US system is mismanaged because of government
interventions in the market. Removing these would make it more robust and
less unstable. The government does not "balance and control" the system.
Instead, it makes it less stable, as seen from the rising costs of
healthcare since the introduction of Medicaid and Medicare. Regulations and
subsidies like Medicare only destabilize the market.
> Please understand: I am not anti-capitalist. I'm not socialist, communist,
> capitalist, marxist... The thing that most closely describes my position
> anarchist, but I am not really even that.
Then how does that part of you that is close to anarchist embrace government
regulation of individuals?
> I don't think any one system has
> all the answers. Human society is way too complex and humans too
> unpredictable and too prone to do irrational things. It is very attractive
> to look for a simple answer to complicated questions, but maybe some
> complex questions just don't have simple, clean answers.
All the more reason not to use force in voluntary interactions. How can a
bureaucrat or a politician somehow be better able to decide these things
than the people themselves? Individuals have an interest in their own lives
well beyond any other persons. They also have the information -- even if
they sometimes use it unwisely -- that bureacrats and politicians don't
> I actually think capitalism is a very cool way to accomplish many things,
> but I also recognise it is bad at some things. To ignore its failures and
> excesses is risky.
My point here is not to make the free market out to be perfect, but to show
how some particular social problem is not really cause by market failure,
but by government interference.
Also, in most cases of so called market failure, people are usually
confusing a regulated market with a free one. If a regulated market causes
problem, one should not immediately call for more regulation or outright
socialization, but examine how the regulation has affected the market. One
might then see, that in many cases, that regulation is the cause of the
As for risk, each person has their own level of risk. Generally, however,
regulation and even socialization redistribute risks, so that those who take
them do not experience the full cost of the risk. For example, deposit
insurance in banking -- pretty much a worldwide phenomena -- causes banks to
take excessive risks. Why? All banks are guaranteed not to fail. So, bank
customers have little need to be picky and banks themselves take more risks
than they would without the insurance. Hence further regulations to make
sure banks don't invest in certain markets or keep a certain level of
reserve. (See Kevin Dowd's _Laissez-Faire Banking_ and George A. Selgin's
_The Theory of Free Banking: Money Supply under Competitive Note Issue_. In
his book, Dowd actually comes out with a concrete plan to abolish government
deposit insurance over a five year period, to prevent disruption.)
I'm only using the banking example because I'm most familiar with it.
> I think an economy should be seen as an ecology where
> many systems fill particular niches and work as controls on each other.
> Remember that when one highly efficient plant dominates an ecology we call
> it a weed. :-)
If you see the economy as an ecosystem, then government interference in it
is like strip mining. Why would you not, also, see the government as a
weed, since governments tend to dominate their economies, through all sorts
of controls. It seems your analogy actually works against your convictions.
This archive was generated by hypermail 2b30 : Fri Oct 12 2001 - 14:39:49 MDT