Election poster from Harold Wilson's 1966 UK election campaign. He may very well do YOU good - but at whose expense?
I’m currently looking at GE’s recent thread at the DT, lamenting the rise of the Welfare State and the normalization of welfare dependency, helplessness, and self-righteous mendicancy; a subject LibertyGibbert has previously visited in detail.
The general tone of the comments at the DT, as well as under the original BBC story concerning a long-term unemployed father of seven, on which James’ thread is based, runs along the lines of doesn’t this bloke have any self pride?; or I started working straight out of school, swept floors to keep myself off the dole; to so demand for his skill set dried up? Why didn’t he retrain, the slacker!
As a matter of declaration, I got my own first paid job delivering newspapers at age nine. I was a member of a trade union at twelve, and have worked more or less continuously since leaving school. My parents told me they wouldn’t object to my pursuing a career in music, provided I completed my education first. Which I did. As it transpired, I spent only a few years in the music industry before drifting, via an alphabet of jobs, into the one I’m in now. But I guess most of you have already read about all that, so I won’t bore you with any more details.
But it got me thinking: as many great authors have pointed out, one of the fundamental flaws of a democracy is that pretty much everyone in it is trying to get more out of the system than they are putting in. What about someone who gets up every day, works hard, pays taxes and obeys the law of the land: should he have no more say in how his taxes are spent than the bloke across the street from him—a bloke who lays in bed till noon, pays no taxes, has never worked, but regards both his dole cheque and his vote as a God-given right, along with his right to join in any violent and destructive “protest” in which he may feel like participating? And what of the bloke across town who, with genius and hard work, built up over many years a large, multi-national business, employs thousands of his countrymen and pays millions a year in taxes?
What if the economy worked like that generally? Imagine a world in which the holder of 10% of a company’s shares had no more influence at shareholder meetings than someone who had bought only a single share? Or—far worse—someone who had no shares at all? In such a case, it’s clear the latter person would see to it that the company provides him with a highly-paid, do-nothing, unaccountable sinecure, complete with corporate credit card, unlimited travel, plus…
Hang on a minute: that is starting to sound awfully familiar.
Clearly, something’s not quite right here.
When a society’s net consumers outnumber its net producers—or at any rate, are handed grossly disproportionate power by the vagaries of the electoral system—and a decline, both in both the pre-eminence of the family as a nation’s core social building block, and in the self-esteem once sought by citizens as providers for themselves and their dependents; when this “perfect storm” of toxic social and economic factors takes hold of a society’s throat, we must ask the question, what is the root cause?
Riots in Birmingham UK, August 2011. Most of those involved were young, unemployed males. What gives them the "right" to vote?
I’m not as well-read as some of you on this issue. But it seems increasingly clear to me that, for one or more reasons, Western society has succumbed to the moral hazard of universal adult suffrage. Now, I’m quite aware that whenever anyone starts raising the question of the franchise, alarm bells start going off in the minds of many people. Images of one form of tyranny or another, be it feudalism, plutocracy, or whatever, get raised, Godwin-like, in an attempt to shut down all debate. But it’s a debate our society is one day going to have to have, or be left in the end with very little to vote for.
There won’t be a single person reading this (at least, I hope not) who would wish to limit the franchise on the basis of race, religion, gender or sexual orientation. In past centuries, the franchise was limited to landholders—not, as many believe, because the nobility wished to confine power to their own class; but rather, since the only form of domestic taxation at the time was land taxes. No representation without taxation. And at the risk of sounding like a broken record, surely the right to vote carries with it a concomitant duty to pay taxes?
And what about government employees? They, even more so than welfare dependants, have a vested interest in increasing the size of government, both its scope of operations and total tax take. The same goes for government-employed consultants and quango-dwellers. The income tax they pay is just recycled taxpayer money anyway, so should any of them be entrusted with the vote?
Back when our societies were liberal democracies, and the scope of government services was far narrower than it is today, this dilemma didn’t really exist. Sure, there was government corruption and cronyism, and only a fool would seriously believe we could eliminate it entirely. But when the “captive constituency” of the Welfare State of today’s social democracies grows to a size where it accrues the sort of electoral clout it enjoys today, the temptation of politicians—typically, but by no means exclusively, from one side of the political fence—to pander to the mob who keep them in power, at the expense of the minority who pay their way, becomes irresistible. It is not merely a moral failure on the part of venal politicians, but a symptom of a broken system that plays on that venality.
So folks, what do you think? When I floated the idea of this thread over at Knotted Prop, Kitler was of the opinion that the rich would simply “game the system” to suit themselves. But aren’t they doing that already? And in the process employing an army of tax lawyers and lobbyists to do so? I’d say that if they thought their taxes were buying them more influence—only this time, openly and honestly—they would be more inclined to pay them. And unless they want to spend up big on a private army to keep beggars off the estate, they would have a vested interest in maintaining a social security system that at a minimum furnished all the needy about them with the basics of food, clothing and shelter, such as I have described in my previous article on the subject. Those who find themselves without any political influence would likewise be encouraged to get themselves into paid employment, contributing taxes to society, and being rewarded with the vote they deserve.
Be Responsible - Be Free! 
Well to be honest democracy has always had a problem with dealing with and placating the mob ancient Rome is a perfect example of this. The rich knew that there positions were tenuous unless the mob was fed with the corn dole and entertained to distract them with chariot races and gladiator games. The famous “bread and circuses” the rich would from their own pocket pay for these to buy favour with the mob, Julius Caesar nearly bankrupted himself doing this once. Knowing if he had the mob in his pocket no one else would dare oppose him openly and he eventually recouped his losses through his accession to power.
Nothing much has changed since those days and like ancient Rome it ultimately becomes unsustainable over time as a countries fortunes rise and fall.
Ozboy,
This is a GREAT post. The time difference puts me at a disadvantage because I really want to have a nice drink of cold water and go to sleep right now. I’ll prime the pump with this. When I was about 19 or 20 my father related a quote from (I believe) a Scottish philosopher/economist. It was essentially that whenever a democratic society realizes it can vote themselves monies from the public treasury the Republic is doomed. This catchy little quote has been ascribed to many, including Ben Franklin, but I’m pretty sure it was this Scot as I have actually read the entire text (but I’ll be damned if I can recall his name). He went on to describe the “arc” of a democratic republic. They start with tyranny, oppression and dependency. They progress to freedom and liberty, then to free market prosperity. Eventually state influenced dependency is reintroduced and there is a gradual loss of personal liberty which ultimately leads to dependency, oppression and tyranny. This was described as a “200 year arc.” I’ll have to search for this one as I believe this guy was right on the money. Government dependency is the road to perdition…and the road to tyranny.
More after a nice coma….
I think you’re referring to this:
– Alexis de Tocqueville (one of the great authors I referred to above) – Oz
Ozboy would that be the the clan McTocqueville’s?
Ozboy,
I’m sure you’re probably right. I actually read de Tocqueville but I was much younger and far less interested at the time. What I remember reading was probably an essay that quoted and expanded on de Tocqueville. I vividly recall that the author was Scottish. I’ll have to dig around and see if I can find it. I remember that a friend of mine mailed it to me following the 2000 election of G.W. Bush. He took the essay a bit further and compared the post-election map (i.e. blue counties for Democrats, red counties for Republicans). Unlike most election maps which focus on states (where the electoral votes are), this one went right down to the county level. Amazingly, most of California was red. But the densely populated coastal counties in California essentially determine the allocation of all 55 electoral votes. The map was quite revealing. Geographically MOST of the country was red but almost all of the high population areas were blue. Interestingly, the blue counties had the highest percentages of government entitlement benefits paid per capita
I suspect that the entitlement benefits paid by the US every year eclipses the entire economies of most (if not all) other nations. We have gobs and gobs of entitlements in the US (e.g. food stamps, housing assistance, Social Security, Medicare, Medicaid, school lunches, agricultural subsidies, energy subsidies, unemployment benefits, etc.). This is “free money from the government” and it buys votes. The map I saw was from almost 12 years ago. Today the situation is much worse. Today it is estimated that nearly 50% of the US population gets some sort of subsidy or payment from the federal government (i.e. monies confiscated from the productive private sector). Who is going to vote against their own best interests in favor of the best interests of the nation? Some…but not many. The Progressives (i.e. Democrats) have aggressively pursued policies that promote governmental dependency since 1935. They realized that these “benefits” are addictive and that they buy votes (with taxpayer money).
I’ll expand on this later but right now lunchtime is over and I have to go and earn a living.
How about this bloke – the “Tytler Cycle”. Probably who you were thinking of.
And, if this is an historically valid précis of the rise and fall of great civilizations, it’s pretty obvious which stage we’re at today, n’est-ce pas?
Attribution of the original quote is problematic, since it appears in no primary manuscript; but it is most frequently credited to de Tocqueville – Oz
Oz,
The quotes fall into the fallacious trap of assuming a constant, or a teleological current in that mythical collective; “society”.
“Society” consists of individuals, each making their own free (and unfortunately also many coerced) choices and decisions.
All it takes is for sufficient weight of intellectual influence to un mask the direction we are going, and we can turn the bus around and get out of it, before we get to the cliff.
I don’t think that we need a numerical majority, just sufficeint people whose views are listened to, or who can shut the bar room utopian’s mouth with some well aimed insight / incite, and give his audience pause for thought.
If we assume teleology, we’re buggered. what drives the teleological prime mover? Giest? material productive forces? progress? that way lies Marxist inevitability.
By all means point out what the result is likely to be if we continue on the present course to its bitter end, but we can (with much opposition from the caste of net tax consumers) turn things around at any time.
ps, getting my own broadband connection next week – if the router will work without mains power…
Yup… that’s why I was careful to put in the “if” above (which I’ve now underlined). A society is composed first and foremost of individuals, each of which possesses free will and works towards his own benefit. That’s the theory, anyway. But people still are damn prone to going “crazy in congregations”… put it down to error cascades, maybe – Oz
I posted this over at Knotted prop the other day ( http://knottedprop.wordpress.com/2012/01/24/america-is-doomed-its-just-a-matter-of-when/ ), when Oz was considering writing this thread.
“Rothbard has a very good discussion of the internal contradictions of democracy, but I can’t remember whether it was in man economy and state, or in power and markets, I’ve been listening to the audio book versions of both on my MP3.
Hans Herman Hoppe’s “Democracy, the god that failed” has about 50 years more libertarian thinking in it than his late mentor and colleague, Rothbard’s work has.
I’ve got to warn you though, both depart from von Mises’ minarchist view point, and support the idea of a purely private law society.
Either way, clip the politician’s wings sufficeintly, and the questions of the personality of the wannabe politico, and who comprises the franchised electorate, both become much less important.
The Italians (those who are net tax contributors, rather than net consumers – such is libertarian class / caste analysis!) have a very healthy attitude towards politicians; they assume that they will all be psychopathically corrupt, and so get on with their family and business lives and try to keep as much dealing as possible in cash and so invisible to the net tax consuming caste.
And in England, a tale of wind and folly…
http://fenbeagleblog.wordpress.com/2012/02/04/hanging-up-by-the-constables/
You’re the Leonardo of lampoon – Oz
Ozboy,
You never cease to amaze me! Tytler was the guy I was thinking of. I heard something much closer to an abbreviated quote of what attribute to de Tocqueville from my father in about 1976. It made sense to me and I sort of filed it away in memory. I had almost forgotten about it until my friend mailed me the essay, his comments and the election map in 2000.
A lot of famous quotes are difficult to accurately attribute. When I was 19 I was the weekend evening shift supervisor of Housekeeping & Laundry at the local hospital. I was in my first year of college and living at home with my folks. I took the summers off from school because the local college didn’t offer the courses I needed during the summer and I needed to earn money so I worked an additional 3 day shifts during the week. The hospital hired some young, snot nosed MBA as the Assistant Administrator and he set about changing the world – from the bottom up. There were a series of meetings set up with the H&L staff to discuss how raises should be determined. In my 19 year old mind I had what I thought was a brilliant proposal – base raises on merit rather than seniority or at least some combination of the two. At the next meeting the minutes of the previous meeting were read and history had changed. According to the minutes MY proposal had been suggested by “Mr. Hamilton.” I was livid but didn’t say anything…hell, I was going on to bigger and better things. That evening at the dinner table I described the events of the day and my frustration and anger at having “snot nose” steal my idea as his own. My father very calmly said, “Well…there is no limit to what a man can accomplish if he doesn’t care who takes the credit.” This was 1976 and I took that nugget of wisdom to heart. It has served me well throughout my career. The best way to get somebody to do what you want is to convince them it’s the best idea THEY ever had. Ask any drug rep. But here’s the interesting part…my Dad said this to me in 1976 and the quote is generally attributed to Ronald Reagan in 1981. In fact it has become a “Reaganism.”
Now, I don’t for a minute believe my Dad invented that phrase. I suspect it was something he gleaned while in the Army during WWII (along with a host of colorful colloquialisms not generally employed in Michigan back in those days). But if you Google it you’ll find most ascribe it to Reagan and I know for a fact that can’t be accurate as I heard it 5 years before Reagan became President. But I promise…my next comment wil be on topic.
Dr Dave having met people who are rather good at having other peoples ideas may I suggest that an evil person could say suggest something that on the surface sounds fantastic and amazing and perfectly logical but contains a very small but fundamental flaw. Then let nature take it’s course and let them reap the benefits they so justly deserved, especially if it’s in the minutes as their idea.
Izen, where are you? We need a collectivist perspective on this.
Well Ozboy as you ask…
I’ve no wish to defend the myriad inanities of any welfare system, but neither do I see them as a Great Moral Hazard because the undeserving poor might get money from the honest working man. That all gets a bit Dickensian….
Welfare systems evolve as soon as human societies grow beyond the clan/tribe level. City states evolve central control of water, food and infrastructure. Some of that inevitable logistical governance results in redistribution of resources. Societies are composed of individuals, and I would agree that they are the primary causal agent. But the law of large numbers kicks in, lots of individuals interacting generates complex adaptive systems.
As Ozboy has remarked people go crazy in congregations. But they also form organizational structures with beneficial results. Look at the rise of the University and the spread of education. Those require individuals to ascribe to the concept of a institution beyond and bigger than the individual. It may be crazy, but pragmatically it is very successful.
As Ozboy has observed in the past article on this subject, welfare systems arose from a mix of religious do-goodery and enlightened self-interest. Health and social stability are enhanced. The major proportion of any modern welfare system supports the old. Make it past three score and ten and any culture has a choice of pensions or euthanasia. Welfare dependency in the old is rarely seen as a moral hazard.
The idea that democracy is doomed to collapse because people will vote themselves more expenditure than they pay in tax I find implausible. Monarchy Aristocracy and Tyranny all enable a power elite to grant themselves more resources than they collect – from medieval time onwards nations have suffered economic collapse, written of the debt unilaterally or invaded new lands to gain resources. At the moment I like the idea put forward by Taintor to explain the collapse of civilisations. He identifies the economic problems in the diminishing returns as the ‘low hanging fruit’ of resource exploitation reach their limits.
A new more efficient agriculture, new land to colonise, new mineral resources to exploit all give massive returns on the initial outlay. Further returns however start to require much greater outlay, the margin of advantage narrows and a nation either looks to go to war, or disinitgrates into regionalism and gets invaded… At least thats how it used to end.
http://campfire.theoildrum.com/node/6942
It is easy to find tables of nations ranked by their tax take of GDP. Such figures are always subject to ambiguity. France has half a million democratically elected officials and 20% of the population on the government payroll. Whether you count that as welfare…-grin-
But the point is that the Nations that do take the largest percentage of the wealth produced, and have the largest and most redistributive welfare systems are not societies riven with social unrest and low health indices. They are generally quite nice places to live compared to those nations at the lower end of government taxation. Utopian ideas about the perfectibility of society by changing the beliefs of the individual are fun to argue about. But Quality of life for the majority in the real societies of the present can be judged rather more pragmatically.
Much obliged, Izen. I guess I’m trying to bring the discussion back to the question I posed at the top. Seeing as all political power essentially boils down to who decides how to spend public money, what does this say about ideal suffrage? Your own comments about utility suggest your position on this (correct me if I’m wrong), but would you say a universal adult suffrage based on one-man-one-vote achieves this? – Oz
I’m still formulating some ideas and comments. But in the interim let me offer this interesting little column by Walter Williams (one of my favorite living economists):
http://econfaculty.gmu.edu/wew/articles/10/TaxesAndVoting.htm
And this thought provoking article from today’s American Thinker:
http://www.americanthinker.com/2012/02/whats_fair.html
I didn’t know that Walter Williams was an economist; I thought it was just a ‘pundit’. Interesting how the two black economists I know of are both conservatives. (Thomas Sowell being the other.)
I remember very distinctly an article by Williams in which he explained that only a black woman could qualify to be his wife, no matter how lovely and worthy other women might be. He wanted a black. He was being discriminating. And he thought that such discrimination was well within his rights, though I don’t remember anything more about the article. He might have been making the point that we all discriminate in our private lives. as to whom we wish to associate with, for reasons of our own, and that in those cases (in our private lives), we are perfectly entitled so to do. He may have had another point but I don’t remember it. It was just rather a striking article, at the time.
I’ll say this, though, on Williams’s analogy: There are lots of people, on the Left, that don’t like the freedom of association that the Internet allows for. They don’t think, in essence, that we should be able to pick our friends. Apart from anything else, we might find that good, decent people also share our views….
‘he’ not ‘it’.
I’m not at all sure we can extract any lessons from past democracies as to what happens when the masses work out they can legislate transfers of wealth from the productive/rich to the un (or less) productive poor ie wealth transfers from Them to Us. Instances of democracy are so few that patterns can’t be discerned. I know it is asserted that both the Athenian and Roman democracies failed due to the avarice of the poor but it needs to be remembered that those assertions were generally based on the cries of the aristocracy who were trying to hold on to as much wealth as they could manage. So I take writings of de Tocqueville et al not as predictions based on the past but warnings based on a degree of ambivalence toward democracy.
That said, it’s clear we are in new territory here, with the number of those on the government teat expanding rapidly and their needs outpacing the ability or desire of the productive sector to satisfy them.
It obviously can’t and won’t continue for too much longer. Either there will be a return to a less free society or the productive sector will go on permanent strike. Unless some other solution is found.
I’d go along with the views here that people aren’t going to be reasoned back into a work ethic and it’s unlikely that we’ll find politicians willing to even try. At the same time, I think that the one-man-one-vote notion is so precious and so fundamental to our freedom, that we jettison it at our peril. Giving Gina Reinhart or James Packer voting rights equal to those of Bathurst would hardly be conducive to social cohesion.
So I’ll just throw out a different idea I’ve been playing around with for a few years – the idea that we give the taxpayer a closer, much more direct say in how their taxes are spent. Suppose for example that taxpayers, when lodging their annual returns (both private and corporate, including BAS), were given the chance to say exactly where 60% of their funds were to go. So you lodge your return and then say that:
• 10% (of the 60%) goes to defence spending
• 20% to infastructure
• 15% to education spending
• 25% to health
• 0.0003% to the arts
• 0.00001% to single mother pensions
• .00000000009% to the dole
• etc etc
So the ability for the government to simply extract from the taxpayers and give to others would be severely curtailed although 40% of takings would still be available to them to cover those things that the political class consider vital.
Not a fully thought through idea but, in my view, more palatable than ditching the voting system and probably more achievable. Combine it with legislation and/or constitutional change that limits the government’s ability to borrow, and we’d be on the road to reining in the welfare culture.
I can’t be sure, but I very much doubt that Packer or Rinehart pay the equivalent of Bathurst in tax. Mudgee, maybe. Lithgow, possibly. Wallerawang, most likely (they can afford the best accountants and tax lawyers, remember). And if they’re paying that much, then they should get their money’s worth. As James’ dad once remarked to a Senate committee, “Why should I pay you any more? I don’t like what you’re doing with what I’m already giving you”
As to your suggestion, it sounds very Libertarian, but smells rather unworkable in practice. A very good starting point for discussion, though – Oz
@- Ozboy
“Seeing as all political power essentially boils down to who decides how to spend public money, what does this say about ideal suffrage? ”
I think the mistaken prior assumption is that the decisions about how to spend public money is a ‘WHO’.
Its a ‘what’.
Welfare systems evolve within cultures, they emerge from moral beliefs and logistic necessity. I strongly suspect that there are common organisational structures to all welfare systems in modern states. It is likely that there are inevitable methods of providing welfare services whatever the ideological motivation or basis for political decision-making.
Ideal or universal equal suffrage is as much a concurrent social trait rather than a major determinant of welfare provision. How public money is spent is shaped by logistical expediency as much as anything else. Much of politics is concerned with establishing the authority of those in ‘charge’ of those organisational inevitabilities. Theocracies have an obvious route, universal suffrage is another.
@- Amanda
“I remember very distinctly an article by Williams in which he explained that only a black woman could qualify to be his wife, no matter how lovely and worthy other women might be. He wanted a black. He was being discriminating. And he thought that such discrimination was well within his rights…”
In the past his individual choice would have been socially acceptable and legal, if his individual choice had been otherwise he might have been subject to miscegenation laws…
If the individual is subject to sanction for choosing NOT to share in the community/cultural/racial definition then individual liberty is threatened.
Perhaps rather more than being derided for conforming to racial/ethnic stereotypes.
Such choices are simultaneously common, socially acceptable and legal… just not generally spoken out loud – Oz
Izen,
how is taking money with threat of violence translated into the idea of a moral society?
I’m wondering how anything done under duress can be moral?
_______________________________________
PS
Kitler, you’ve got skype…
@-Luton Ian
“how is taking money with threat of violence translated into the idea of a moral society?
I’m wondering how anything done under duress can be moral?”
Ask the church. Any church, they all seem to require a tythe. Of course christianity could use the threat of eternal torment and a damned soul… but they actually didn’t go in for much of the leg-breaking by the heavy mob. They subcontracted that to the aristocracy….
Most of the population contributed willing and would have denied they were acting under duress. Faith would recast it as enlightened self-interest.
People are quite capable of ascribing legitimacy to collective organisations for any number of reasons. Once that acceptance of authority is made they respond to demands voluntarily, no duress is required.
” Faith would recast it as enlightened self-interest.
Parasitic institutions survive by convincing the much larger number of individual hosts they require to support them, that it is in their interest to support the parasite, and they employ many intellectuals to convince the masses of that supposed interest. Examples being the priests of old, and the state funded education system and state licensed (and sometimes funded) broadcasters. The states also license (or operate eg BBC, ABC, PSR etc) communications, mail, and transport routes, all the better to control your ideas of normality, your communication and your movement.
The state does indeed use the very real threat of violence to extract taxes. Any doubters can easily, but ill advisedly test this by volunteering NOT to pay their taxes, first come the letters threatening bad things, then the summonses to the state’s court room, following that, the boys and girls in blue ninja costumes, wielding the state’s electric cattle prods and other such accessories, will come to take you… Resist them, and you are unlikely to survive.
If you were wandering home and learned that a mugger was working your intended route, and you therefore took a different route to avoid him, you would be unlucky indeed if that mugger learned of your evasion and came round with his mates to take even more money from you to fund his services to society and to punish you?
That is exactly what the state does to you.
Only voluntary actions can be moral. there is nothing moral about doing the right thing with the threat of a visit from a SWAT team, or the offer of a holiday in one of Her Majesty’s “hotels” hanging over you.
There have been some exceptions to violent collection of tax:
Some of the German city states, Homburg, for example, did indeed fund government by anonymous voluntary contribution, and they survived and prospered for many centuries, until Bismark’s Prussia annexed them by force, around 1860.
The system is still not as good as a purely contractual society, as service delivery and payment are still separated, and service provision is still by a monopoly, hence higher prices for any goods and services received.
Some churches (those with establishment connections) used the coercive apparatus of state, others had their own heavies, check out the Bishops of Durham, who held the rank of prince, and fielded armies – they also tried and hanged any suspected of poaching in the Bishop’s or other high ranking clergy’s hunting parks – regardless of on going famines.
The churches had their own heavies (that is what the Dominicans specialised in), their own courts, their own gaols, and their own bonfires with stakes, suspended iron cages and gallows.
There is only one “church” which I know of which will sign you off their books if you ask them to; the Society of Friends (the Quakers). The others want to claim you for all eternity. some even try to claim the souls of your ancestors (the Mormons try that).
The church example (certainly for established churches) is of a sister form of coercive parasite to the state.
A notable exception to this was, in many places, the Church of Rome – true, in the Papal States, and in “peculiars” (areas under the temporal rule of a Bishop, for example the Principality of Durham, or the Peculiar of Masham), they could be as bad as any other temporal ruler, but where they were not the temporal ruler, they did provide a voice with the authority to challenge what the temporal authorities were doing, hence the tendency for Italian city state rulers to argue for a separation of church and state – they didn’t like having their actions criticised – no ruler does.
OT:
can anyone suggest a relatively libertarian email service (one that isn’t bending over to oblige the statists).
@- Luton Ian
I think it was Churchill who described taxes as the membership fees of the club.
While you may have developed an ideological dogma that re-frames paying a membership fee as a mugging, for most of the population it is voluntary – even if it is often resented and punishment may follow non-payment.
If you really think that the membership fee is too large because of the scale and type of benefits provided then you could try to influence the way the club is run… probably an exercise in futility.
However there are lots of alternative societies to choose from with different membership fees – and benefits. Presuming you are in the UK, you could pay ~20% more than you do now in Belgium or the Scandinavian states and enjoy a greater welfare provision. Or you could pay 50% less in Jordan, Lithuania or Chile.
Like the Quakers the UK imposes no punishment for abandoning your membership, you may even find that you retain certain benefits despite leaving the club.
Gaining entry to the new club that has a more acceptable balance of tax/benefits may be less straightforward. Many clubs want some evidence you would be a useful addition…
Sometimes there seems to be a presumption that money paid out in welfare is a complete loss to the nation. But it actually supports the economy. The US food stamp system is calculated to make back around 80 cents per dollar spent by generating retail trade.
Given that welfare recipients get the smallest percentage per head of the National wealth, and that most of their expenditure is on rent and food, they are often just a conduit for government money to be paid to property businesses and the major food manufacturers. As they are also disproportionately consumers of highly raxed alcohol and tobacco in local government accommodation, a lot of what they spend goes straight back into the public purse.
On the other hand as bigger consumers of what are called sugar sweetened beverages in the US, which are also subsidized as part of the sugar/agricultural support programs companies like coke seem to be getting a benefit at both the production and sale ends of the business.
All email providers, or more accurately the ISP that you link through are expected to provide government access to anything you put into the system. That was the problem Blackberry phones had, because the messaging system encrypted within the system governments could not read/listen to everything their subjects/citizens/members had to say. The US and UK had clearly come to some arrangement with Blackberry/RIM, but other countries found it unacceptable that people could communicate without the government being able to see what they said.
It is possible to use a secure foreign server which is theoretically beyond governmental access and encrypt all your communications.
But as Megaupload demonstrated even that is vulnerable. And while encrypting all your emails is easy enough with something like PGP, there is a UK law that requires you to reveal the crypt-key when asked by the ‘relevant’ authorities. I think about a dozen people have already been prosecuted for non-compliance, some went to prison.
Hi Izen,
many thanks.
I just re-found this essay on Mises Daily, it’s directly relevant to this thread.
http://mises.org/daily/3383
It turns out that Mrs Ian, actually knows the author from her time(s) at UCD, and there I was all this time, thinking that Ireland was strangely lacking in Misesians and Rothbardians.
Thanks for that one Ian, I’d forgotten it. I’d encourage everyone to have a read of it; you’ve given me an idea for another thread – Oz
@- Luton Ian
Interesting essay on your link.
While I would not entirely dissent from the notion that ‘representative democracy’ is a fig-leaf hiding the imposition of rules by the rulers on the ruled, I think it dismisses the ‘systems’ analysis to easily.
It also omits a definition of political representation that does avoid the lack of agency by the person represented.
An elected member of the governing body of a nation is NOT there as a puppet to spout the views and carry out the wishes of his constituency. Or even of the (probable minority) of the people who voted for him. As the essay makes clear the views and wishes of his/her constituency are unknowable and probably contradictory.
An MP is elected to follow his OWN judgment.
Take a simpler situation. A small business has a worker representative on the board. A workforce of around 20 have to elect (not necessarily democratically!) one person to sit on the board. They could have regular, and emergency, committee meetings to debate and reach a consensus that their representative could then reflect in his position on the board. That would be representation in the simplistic ‘personal agent’ or remote robot meaning of the term. But given the complexity of the issues, the changing situation and the volume of information that a board member may have to deal with there may not be enough evenings in the week for all the committee work to achieve that kind of representation.
So the alternative is to elect a person who in the view of most of the workers is able to exercise good judgment in such situations. They may recognise that her/his knowledge and ability to deal with the issues is better than theirs and they voluntarily defer to his decisions..
Note that once that person is the worker representative on the board they need to have multiple responsibility’s. Both to their constituency and to the business as a board member. That is not a flaw, its an integral part of the system.
Humans readily abdicate autonomy because the returns are good. Like a wolf in a pack, by taking orders from a recognised authority bigger prey can be successfully hunted. ‘Reciprocal’ cooperation is a successful strategy. Hypnosis gives an insight into just how deep our willingness to give up personal agency can be.
It is probably the reason we are such successful social animals, able to live in stable large groups with all the benefits that can bring.
So you’re buying the “trustee” definition of representation. Actually, so do I (the way it is, not the way it should be). I think we’re very close to uncovering a central problem of Libertarianism, which I’ll write something about over the weekend – Oz
New quickee post…
http://knottedprop.wordpress.com/2012/02/09/nazis-the-dark-side-of-the-moon-whats-not-to-like/
@- Ozboy
So you’re buying the “trustee” definition of representation.
Not sure I buy it, perhaps just recognise its a marketable commodity!
-grin-
Izen: ‘An MP is elected to follow his OWN judgement’.
My dime on this. First, any discussion of representative democracy — modern liberal democracy — has to acknowledge that there are two systems within it, the parliamentary and the federal/congressional. Whether there is something inherently more free about the American federal model — and I think there IS something freer, since it was expressly designed to protect the people’s freedom of self-government — there is no question that today, and throughout its history, America is freer than most other Western nations (Australia being perhaps an exception — I don’t enough about it to say — and Canada until recently being somewhat close behind, though definitely less free).
The problem lies in accountability, and accountability is reinforced and buttressed by frequent subjection of office-holders to elections. Senators in America are less accountable to the electorate — less responsive — than Representatives (typically called Congressmen/Congresswomen, though technically both Senators and Reps are Congressmen: they all sit in the Congress). Representatives are up for election, in a rotating schedule (as Senators are on a rotating schedule) every two years. Every two years: that’s VERY frequent. As against the senatorial term of six years: big difference.
So there’s a way in which, although Senators have more power and prestige than Representatives (and there are only 100 of the former, two for each state in the union), it’s the latter that really are ‘your man/woman in Congress’. If you want to complain to government, and get noticed, perhaps even with effect, it’s your REPRESENTATIVE you want to contact. I’m belabouring this because I feel that in Britain there is no such sense of having to be responsive to the needs of the electorate — or else.
In short, if electing politicians in a democracy that is not a direct democracy is a process akin to flying a kite, in America we still feel that we are holding on to the string, even if we’re down here on the ground. In Britain, it feels much more like letting go of the string, and hoping that you’ll see that kite again some time. And I think it has to do less with the moral compunction of politicians on one side of the pond or the other, and more to do with our specific constitutions. Accountability is built in to the American polity in a way that it isn’t for Britain’s parliamentarians. The consitution in Britain has shifted such that the monarch no longer has political clout, which has resulted in more power to Parliament without there being anything new to counterweight that Parliamentary power or make it more politically responsive. It’s no accident that Britain has been getting less free, even acknowledging the parallel development of the rise of the Left.
Correction: Sorry, I think it’s ONLY the Senators that are on a rotating schedule of elections, i.e. one-third of the Senate is up for grabs every two years. The members of the House of Representatives all are subject to re-election every two years, full stop. Currently there are 435 Representatives, which also explains the greater responsiveness: lower house, more of ’em, more ‘in touch’ with their constituents, more tied to local politics than to the state as such.
Wiki: ‘The delegates of the territories of American Samoa, District of Columbia, Guam, the Northern Mariana Islands, Puerto Rico and the United States Virgin Islands are also elected’.
Note that the above are delegates, a much more bound-and-responsive position than ‘representative’.
The difficulties with elections are many.
Worst, to my mind, is it makes the buggers even more desperate to rob the electorate before the time comes for the next election, after that, dealing with the mess becomes the next crowd’s problem, except it doesn’t, because then they’re robbing as fast as they can too.
Who decides in an election. It isn’t the committed believers, it is the don’t know and don’t really care crowd.
Why make it easy for such people to vote?
Why not make them pay a fee to discourage the luke warms. Make them travel to vote, make them remember their candidate’s name and write it on the ballot, make it public – scaredy cats are not going to cause any trouble for the rest of us. make “none of them” a counting vote and cut the permanent .gov accordingly.
Can a democratic vote to permanently end democracy be accepted, if not, why not, if it is the wish of the majority.
If on the other hand the wish of the majority is, say to exterminate some minority, why should the wish of the majority not be accepted in that, when it is taken as binding in lesser matters of pushing minorities around with batons?
If it were accepted, what does that then say about the supposed virtues of democracy?
what choice do we actually have when the established parties
-institute spending and air time limits to keep new parties out
-do pretty much the same things when in power
-vet, license and sometimes even fund the broadcasters who’s news reports form the basis of opinion.
And who are the candidates?
What proven abilities do they have other than making demagogic appeals and conning people into voting for them – the most sociopathic liars rise to the top.
If democracy within a “country” is good, why not for the whole world? We know the result of that, an Indian-Chinese coalition as a permanent majority
and we know which direction the wealth re-distribution would go then…
Lichtenstein, Hong Kong and Monaco have done very nicely without much democracy, Switzerland – one of the first democracies and one of the last to institute a full franchise – appears to be loosing its way almost as badly as the likes of the UK, US etc since that adoption.
Ian: ‘Make it public’: Totally disagree with that. Firm believer in the secret ballot. It’s bad enough that I and people like me are ‘outed’ by the Huffington Post to anyone with computer access simply for having filled in a form on a trifling campaign donation. (In my case, I shouldn’t have done it: I hadn’t donated enough in one year: I could have remained anonymous.)
You know why HuffPo has its donators list? Precisely so that you can look someone up and see what his political affiliation is. If you’re a Lefty in Lefty fields of business, that’s no problem. But I’m not: I’m a conservative. See the problem?
It quashes my ability to donate money (except for very small amounts), which is my right as a free citizen. I shouldn’t be ‘outed’ to all & sundry just because I back a particular politician’s or party’s campaign in compliance with the laws of the land. That’s just wrong.
Note that HuffPo is a left-wing publication. There are no right-wing or even vaguely conservative publications, to my knowledge, that also do this. That should tell you something, right there.
I could write a great deal about this, but note here that in both the U.S. and Westminster systems, the lower house is comprised of members each of whom uniquely “represents” (whatever that means) a geographically-defined portion of the electorate, and are answerable to their voters every 2-5 years. That makes them morally equivalent to that extent. I’d also like to ask those who (as per the essay Ian linked to) complain their “representative” does not vote the way they want him to, well, could you write down the bills on which your representative voted last year? How about last month? Not even last week?
You get the point. If you’re serious about wanting to be “represented”, individually and personally, in your legislature, then you should understand that parliamentarians are required to vote on a multitude of issues every session, not just “hot-button” ones, and if you don’t personally want to think every one of those issues through yourself, then you’re going to have to trust someone else to do that thinking for you. What’s the likelihood of your finding someone who is both prepared to represent you—literally—and agrees with you on every issue? In the case of most politicians, they are party hacks themselves who kick the problem upstairs further still, and let their party policy committees dictate how they will vote (raising the issue of delegata potestas non potest delegari). But it’s our own indifference and love of convenience that has allowed the current situation to evolve. Anyway, I’m straying into the next thread, so I’ll leave it at that for the moment.
Ozboy,
At least here in the US the members of the House of Representatives are apportioned by population rather than by geography. Our Founders’ original intent was that the Senate would represent the interests of the various states and the House would represent the interests of the people. It worked quite well until the Progressive, Wilson was elected and the 17th amendment to the Constitution was ratified that changed the election of US Senators to popular vote. Prior to that Senators were selected by State legislatures. At first blush it seems a minor and relatively inconsequential change, but in fact it eroded a lot of the political clout individual states had previously enjoyed and served to further party loyalty over fealty to the states’ interests.
Originally the Founders thought there should be one representative for every 20,000 of population. Throughout the 19th century the number Representatives in the House increased as the country expanded and the population grew, but it outstripped the 1 for every 20,000 very early on. I don’t recall the specifics off the top of my head, but sometime in the first half of the 20th century the House decided to cap the number of Representatives at 435. There were all sorts of rather specious arguments offered up for this. These ranged from the available seating and office space available in the Capitol building to making committees and debate on the floor too cumbersome. Bullshit. If more members were added the political influence of each individual member would be diluted. Politicians HATE a real or perceived reduction in power and influence.
Ancient Greece was a democracy and it failed. The US is Constitutional Representative Republic – not a democracy. But more and more the Progressives want to push us toward a form of government where a majority of elite rulers can dictate and “the people” (who now have the highest government dependency rate in our country’s history) will reliably reelect those who redistribute wealth and provide “free stuff from the government”. Our constitutional rule of law was devised to prevent the “tyranny of the majority”. I don’t know if you’re following the contraception/abortion imbroglio here in the US, but it is plainly evident that Obama plans to rule by executive fiat and circumvent those pesky checks and balances designed in our Constitution that he so despises.
Our House of Representatives, like yours, is population-controlled (electorates have strict population ranges and the Australian Electoral Commission often re-draws electoral boundaries to ensure this is maintained). You may recall me mentioning that our Founding Fathers in the 1890s modified Britain’s Westminster system with a close eye to the U.S. Congressional model. That’s why we have a Senate (instead of a House of Lords peopled by the aristocracy) in which the states have equal representation. Like yours, our senators are chosen by popular vote.
No, I haven’t been following the U.S. abortion debate recently – got any links? – Oz
Dr Dave: I don’t know why so many people insist that America is ‘a republic not a democracy’. With respect, that’s simply wrong. America is a republic *and* a liberal democracy, at the same time. It is, if you like, a liberal democratic republic. If you want to add ‘constitutional’ to that, fine: constitutional liberal democratic republic. But in Western nations, because we have the rule of law, we all have constitutions in one form or another: a constitution is assumed. It’s only in dictatorships that there is no constitution as such, since the dictator can change the rules from day to day, based on little more than his whim. Only practical constraints and infighting offer any kind of predictability — and precious little safety.
Good point, Oz. What you’re saying is that we necessarily, and gladly, delegate responsibility to our representatives; if they were delegates, we would not be delegating but instead directing. Which is almost like doing it/being there yourself. And as you say, that’s simply not possible, even if it were desirable (which for most people, wanting to get on with their private concerns, it isn’t).
Well, actually in 2012 it is possible. At the risk of pre-empting myself, check out this – Oz
Ozboy,
I’ll give you a very brief synopsis. Obama has decided that abortion services (both physical and pharmacologic) and contraceptives are to made available to ALL women in this country – FOR FREE. Absolutely no co-pay allowed. The Obama regime has hailed this as a great move forward for “women’s health”. There’s been a huge fight with the Catholic church as well as a number of other denominations who may not be so vehemently opposed to contraception, per se, but are fierce in their opposition to abortion. The outrageous part about this is that the executive decree was tacked on to the ObamaCare legislation and completely circumvented Congress. Obama has decreed that all insurance companies are to absorb the expense (presumably beyond what state and federal government doesn’t already pay for). This is actually a pretty big deal. If the executive branch of government can dictate to private companies what they must provide and how much they are allowed to be paid for it we’re clearly on the road to tyranny.
Not surprisingly, the American media is trying to minimize this story which has ignited a veritable shitstorm. But the blogosphere and talk radio is buzzing about this. I’ll email you with some additional links, but here are a couple to whet your appetite:
http://www.nationalreview.com/articles/290806/church-obama-mark-steyn
http://pjmedia.com/richardfernandez/2012/02/10/breaking-taboos/?singlepage=true
@- Dr Dave
“Obama has decided that abortion services (both physical and pharmacologic) and contraceptives are to made available to ALL women in this country – FOR FREE. Absolutely no co-pay allowed.”
So its not ‘FREE’, just covered by her health insurance premiums.
@-“This is actually a pretty big deal. If the executive branch of government can dictate to private companies what they must provide and how much they are allowed to be paid for it we’re clearly on the road to tyranny.”
Isn’t this exactly what happens with vehicle/driver insurance companies ? Is driver/vehicle insurance compulsory in the US ?
izen,
You’re extraordinarily wrong on both counts. The expense of contraception will be covered by an increase in EVERYBODY’S healthcare premium and we’re already paying taxes to fund Planned Parenthood and virtually every State DOH clinic that provides these drugs free. I’m 55 years old. Why should I have to pay for the oral contraceptives for a 25 year old woman? I feel the same way about the state mandating that my health insurance must cover OB/Gyn, pediatrics, chiropractic, acupuncture and massage therapy. Which brings me to your second inane “Democrat talking point”.
Auto insurance is not compulsory at the federal level, but rather at the state level. Further, if you don’t own a car or don’t drive you are not required to have it. At the state level a driver is required to have PLPD (Personal Liability & Property Damage) insurance. This is not for THEIR benefit, but for the benefit of any they may harm by operating a motor vehicle. Unlike a citizen who is compelled to purchase health insurance as a condition of being alive, the potential motorist has many options. For instance, my two cars are paid for (and have been for years) so I don’t carry comprehensive coverage. I carry PLPD which is required by law. But even if I did carry gold-plated auto insurance (which once upon a time was actually affordable), I wouldn’t whip out my insurance card to pay for an oil change. Hell, insurance wouldn’t even buy me new tires (or tyres, if you prefer).
DrDave…”Our constitutional rule of law was devised to prevent the “tyranny of the majority”.” so it’s a tyranny by an elite minority?
Amanda,
The US federal government is a “democracy” only in so much as our elected representatives vote democratically on legislation. “The People” really have no say in what transpires in Washington DC except every 2, 4 or 6 years at the polling place. The Republic functions as an elected representative government (quite by design). We have no provision for a popular referendum on the national level. Everything must be considered and decided by Congress. There are strengths and weaknesses inherent in this system, but then again no system of government is perfect. Let me provide you with my favorite example. If put to a public referendum, English as the accepted national language would win by about 70% of the vote. It will never happen because such a measure would have to go through Congress and these gutless bastards are under too much electoral (and media) pressure from special interest groups and let’s face it…their main goal in life is getting reelected and keeping one of the sweetest jobs in the world.
The “Constitutional” part is absolutely critical for it establishes the “rules”. It defines laws and principles which (in theory anyway) prevent the majority from trampling on and usurping the rights of the minority. That’s why pure democracies…every single one…have failed throughout history.
Kitler,
You’re absolutely correct! Google “The Ruling Class” which was an extraordinary essay published in the American Spectator. I forget the author’s name but it was an excellent piece of work.
Kitler,
Here it is…I found it for you. This is some powerful good readin’.
http://spectator.org/archives/2010/07/16/americas-ruling-class-and-the
Powerful indeed! Well worth a read, everyone – Oz
Dr Dave I only mentioned it because the original founding Fathers were “Gentleman” farmers or a Plantocracy in an agricultural economy, whom never seriously expected their social class to be challenged as the true leaders of the USA, mainly because they were educated and rich. The plebs were too busy earning a crust to concern themselves with higher matters such as politics. This changed with the industrialization of the Northern states and massive immigration from Europe changing the makeup of the USA.
Dr Dave good read describes the in laws perfectly remind me to suck up and get me one of them gub’mnt jobs.
@- Dr Dave
“The expense of contraception will be covered by an increase in EVERYBODY’S healthcare premium …. I’m 55 years old. Why should I have to pay for the oral contraceptives for a 25 year old woman? I feel the same way about the state mandating that my health insurance must cover OB/Gyn, pediatrics, chiropractic, acupuncture and massage therapy.”
You sound resentful of any payment that is not of direct benefit. That seems to miss the way an insurance system works. Its a risk spreading system, economically efficient, with benefits.
For a ‘small’ cost a large number bet they will need a large payout. Most lose the bet, making just small amounts back. Only a few ‘win’ a medical condition that gets them the big bucks.
But the advantage is that an expense that could not be paid by an individual IS covered by the spread bet. All that high tech medicine is financed by this system of many bets spreading the risk. It could not be paid for by individual contributions from those requiring it because without the insurance system most requiring it could not afford it.
Secondarily, without an effective insurance system those requiring medical services would not be able to cover the cost and would become financially insolvent as well as ill with all the damage to the social fabric that entails.
I dont know if US health insurance has different bands for male and female, or does the government mandate equal premiums? The economic advantage of as many as possible paying equal amounts to a risk-specific fragmented coverage with variable premiums is obvious. And why the bets have to be equalized in what they cover. Its inherent to the economics of spreading risk.
You have to watch out for regulatory capture of course. The Insurance businesses have an interest in covering as much as possible to maximize premiums, so will lobby regulators to avoid competitors undercutting by exclusions. Providers of health services will lobby to be included, all that insurance money dosn’t only go to finance high tech or evidence based treatment. The fad du jour can get in on the system, in the UK there is an ongoing situation with homeopathy!
There is another misunderstanding implict perhaps in your comments about contraception paid by raised premiums. This makes it sound as if private insurance systems paid out directly to the ‘winners’ of its largese the money it had received in premiums.
That is not how private insurance business works. They are major players in the stocks, shares and finance markets.
How radical a change is this new regulation on the non-exculsion of contraception/abortion provision? Does it affect most or a few of the existing insurance schemes, will it vastly increase the money available to those who provide the services at present ?
Izen contrary to your world view women choose to become pregnant or not it’s a choice in most cases (being drunk is a choice), contraception here in the states is cheap and easily available even free to the dumb asses of society. So why should my insurance rates rise to provide that? I have ethical concerns with abortion except where medically necessary and in the case of incest and rape. Why should I pay for someone else fucking about and their mistake make the guy pay child support or have the child adopted.
I also have a problem with paying for some old farts Viagra treatment apparently the bane of elderly women everywhere. My rates have risen because of this crap and if YOU had to face the reality from your wage packet you would be bitching as well but it’s hidden under NI contributions.
WTF are people paying for some confused idiot’s gender reassignment surgery I’m sorry but tough effing luck life’s dealt you a bum hand deal with it.
@- Kitler
“contraception here in the states is cheap and easily available even free to the dumb asses of society. So why should my insurance rates rise to provide that?”
They should fall, contraception and abortion is much cheaper (lower health risk) than the obs/gyn services required by full term pregnancy, not to mention the subsequent pediatric provision…
But I do understand that this is a bit of political populism. Give women a benefit via the health insurance industry…. It just seems a win-win situation as it reduces overall health costs?
apparently the bane of elderly women everywhere.
I’m glad you chose to spell ‘bane’ with an a, Kitler. : )
izen,
This controversy over contraception isn’t really about contraception, per se. It’s more about government overreach. And you’re right, economically it’s not much of a big deal. The argument that Obama wants to increase access to contraceptives is laughable. But here’s the hitch, except for Plan B (i.e. the morning after pill), condoms and foam, all the OCPs require a prescription and that requires a physician visit. Personally I believe most of these products are at least as safe as many other OTC drugs. So why aren’t they OTC? The big reason is that once a drug is OTC the insurance industry will no longer pay for it. Then there is the medical establishment who jealously guard prescriptive authority as a means of maintaining absolute control of the profession. Who would make a physician’s appointment for birth control pills if she could just go down to the drug store, ask the pharmacist for a recommendation and buy them? And another big factor is the pharmaceutical industry itself. They promote drugs for OTC sale when it’s in their best interest to do so. Ibuprofen is a good example. In the US only 200 mg tablets of ibuprofen may be sold without a prescription. The 400, 600 and 800 mg tablets are all labeled Rx Only, thus insurance plans will cover them. Albuterol metered dose inhalers are incredibly safe but the reason they’re not OTC is that the pharmaceutical industry knows the insurance industry won’t pay for them if they were OTC. This is an extremely common (and very safe) drug used for virtually all forms of asthma and COPD in children and adults. If it were to become OTC patients would have to buy their own out of pocket and the price per unit would drop precipitously due to market pressure. So it is in the pharmaceutical industry’s best interest to keep it Rx Only.
But back to oral contraceptives. The Imperial decree by Obama really only affects a relatively small demographic compared to the nation as a whole. Plan B is a bit pricey, but it is not used on a chronic basis. Most OCPs are available as generics and the cost of the drug alone to an insurance company would probably rarely exceed $200/yr. So we really have to look at women of child bearing age who wish to take oral contraceptives (when not medically contraindicated). Then we have to back out all the teens that can procure them free of charge at their school health clinics and all the women who already receive them free at Planned Parenthood and state DOH clinics. What’s left are some co-pays for 3 month supplies and the women whose health plans didn’t cover contraception. So I’m guessing that at most King Obama’s unconstitutional decree might end up costing the insurance industry a few billion. A few billion out of a multi-trillion industry is not much. But they run on very thin (1-3%) margins so they’ll just pass the expense on to consumers…just like a utility company. In reality “access” was not increased because virtually any woman can get these drugs for free if she bothers to visit a DOH clinic or Planned Parenthood. What he has done is assure that the cost remains high by divorcing the consumer from price and value of the product or service. I’ll expand on this in another post.
I have no problem with contraception. I’m actually quite a big fan (otherwise I might very have children to support). But I have moral misgivings when it comes to abortion. So does most of this nation – about 60% in fact. The use of abortion as a means of birth control is morally abhorent. Oddly, I only came to this way of thinking in recent years. Most of my life I have been staunchly pro-choice. I even subscribed to many of your collectivist beliefs that contraception and abortion were a net societal “good” (i.e. fewer unwanted children, less burden on the healthcare system, educational system, etc.). I even justified abortion with the rationale that anyone who would willingly abort their unborn child is not someone society needs as a parent. At most I was apathetic. I had an epiphany when reading some Libertarian material one day. What about the rights of the unborn? They are, in fact, human beings. Should not their rights to life, liberty and the pursuit of happiness be protected at least to the extent of those of the mother? I’m always astounded by backwards nations that willingly allow the murder of the innocent child in the womb yet refuse to execute convicted murderers.
This issue may prove to be a bridge too far for Obama. He’s conflating abortion and contraception and demanding that those opposed to either or both bend to his will. This is what sparked the controversy. Not the money, not contraception, perhaps not even abortion, but rather the Imperial unconstitution edict. I hope it sinks the bastard (and I use that term literally). This is pretty long…time to bang out a new comment about healthcare costs.
This is worth a look, the cartoon is excellent.http://blog.mises.org/20957/withholding-consent/#comments
@- Dr Dave
Thank you for the informative and knowledgable post on the contraception/abortion issue.
What you see as presidential hubris could also be read as regulatory capture. As you point out the scale of impact on costs and access is probably small. The main benefit is to Pharma and the medical profession which by incorporating the provision into obligatory insurance cover have effectively blocked the OCP from becoming OTC and defended their rentier advantage.
Although I rather suspect that making OCPs OTC in the US would prompt moral objections. Obviously a women is not competent to make the moral choice to use contraception without the moral oversight of a doctor…-g-
@-“So I’m guessing that at most King Obama’s unconstitutional decree might end up costing the insurance industry a few billion. A few billion out of a multi-trillion industry is not much. But they run on very thin (1-3%) margins so they’ll just pass the expense on to consumers…just like a utility company. ”
It may be used as an excuse to pass ‘costs’ on to the consumer. But the link between healthcare costs and premiums is indirect. Insurance companies do not pay healthcare costs from the income they receive from premiums. Like good capitalists they use that steady stream of capital to invest in financial markets and pay their healthcare costs from the earnings from those transactions. While rising healthcare costs do feed back to premium levels, the rate of return they get from the market on their investments has as much, if not more, direct effect on premiums as healthcare costs.
This discussion’s too good to interrupt – I’ll hold a new thread back for a couple of days- Oz
izen,
The healthcare insurance industry in the US does not function like auto or property insurance which do exactly what you describe (i.e. premiums are invested). The health insurance industry has tremendous overhead and a huge regulatory burden. In fact, it is probably the most heavily regulated industry in the country. Most of their premiums are, indeed, used to pay claims. And they do operate on very thin margins. However, 1-3% of trillions of dollars is a LOT of money for the industry as a whole. But over the last year or so several large and small insurers alike are getting out of the business. They have seen the writing on the wall and realize that Obama’s intent is to wring as much profit out of the health insurance industry as possible. If enough of them fail it opens the door to single payer, socialized medicine which of course is a Marxist’s wet dream.
There are a lot of reasons healthcare is so expensive in the US. But high-tech medical technology is WAY down on the list. We’ll come back to medical technology shortly The single greatest reason for high costs is the 3rd party payer paradigm which began shortly after WWII. The US economy was booming after WWII yet Truman had enacted a wage and price freeze. All the big industries were clamoring for labor but couldn’t compete on the basis of wages. So someone got the bright idea to invent “benefit packages”. The steel and auto industries with their unionized workers were the first to implement these. The big benefits were paid vacation and pensions (which may have seemed like a good idea at the time but have proven to be disastrous). As an added goodie they added medical insurance. At the time very few Americans had health insurance. They lived their lives taking their chances and paying their own medical expenses. Also at that time medical care was not very expensive. So this was a inexpensive benefit to offer back then. The insurance industry was only more than happy to provide the product.
Over the next decade or two a new paradigm was established – you and your family’s health insurance is provided by your employer. But the health insurance that was offered was essentially what used to be called “major medical”. It covered hospitalizations, heart attacks, cancer, surgery, trauma and stuff like that. It didn’t cover routine office visits, outpatient lab work, prescription drugs, vision, dental, etc. Healthcare remained reasonably priced until the mid 60s. Then, almost simultaneously, two very dreadful things happened. LBJ passed Medicare and Medicaid which established the federal (and in the case of Medicaid) state government as a 3rd party payer. The ever avaricious labor unions started demanding an expansion of their healthcare benefits. The health insurance lobbied the unions for this because the more they insure and the more claims they pay, the more money they make. Up through about 1980 the private, employer provided health insurance steadily grew as a bigger and bigger 3rd party payer. Through the 80s and 90s just about about every business larger than a barber shop was offering health insurance with low, almost meaningless co-pays with coverage for everything from routine office visits and dental checkups to prescription drugs.
Now, here is why these are bad things. First off, most of us don’t know how much this “pre-paid healthcare” really costs us. You can look at your pay stub and see how much of your income is being confiscated for Medicare and Medicaid. Medicare recipients don’t know (or care) because they are no longer working and are having the younger, working demographic pay for their healthcare for the rest of their lives. They also utilize far more healthcare resources than those who are paying for it. I never knew how much my last health insurance plan through my employer cost until I left and got all the info mailed to me about how to continue coverage out of pocket for up to 90 days. My payroll deduction was about $60/month. It actually cost the employer about $450/month to insure me. The average patient with employer-provided really has no idea how much this coverage really costs them. The employer may be picking up the bulk of the cost but a better solution would be to pay those premiums to the employees as salary and let them buy custom designed insurance just for what they want insurance for and put the rest in a Health Savings Account (HSA) to pay for all other medical related expenses. Already I can hear the screams of “unfair!”
But this would be completely “fair”. My insurance at my last employer covered pediatrics, OB/Gyn, behavioral health, chiropractic, Oriental medicine (I’m not making that up), massage therapy and a bunch of other stuff I am very unlikely to need. I very rarely take a prescription drug and for those I do, I would be willing to pay for out of pocket. That’s the problem with the collectivist “insurance pool” where a healthy single 45 year old man pays the same premium as a 30 year old guy whose insuring himself, his pregnant wife and his two small children. The latter should pay more as from actuarial standpoint, he’s far more likely to use (far) more healthcare resources. This is how “real insurance” actually works. Let’s use the auto insurance analogy. Should a 25 year old male with one DWI conviction and three speeding citations who drives a Corvette pay the same insurance premium as a 45 year old married woman with a perfect driving record who drives a Toyota RAV 4? Of course not! The auto insurance industry’s actuaries have the relative risks worked out pretty well. But even in the auto insurance industry there’s a bit of “brother’s keeper” built in. Older, safe drivers are actually overcharged just so teenage and younger drivers can afford auto insurance. This is mostly government mandated and not done by the auto insurers as an act of altruism.
So here’s why the 3rd party paradigm is so deadly. It’s set up so that “somebody else pays”. Under this paradigm nobody in the entire supply line really cares what anything costs. The provider doesn’t care, they will be paid in entirety, partially or not at all, but the cost is mostly immaterial (particularly if government is the payer). The patient doesn’t care what the cost is because they will pay either nothing or a paltry co-pay (perhaps a deduction). The insurance company doesn’t care because they can either deny payment or raise premiums. Same with the government. They simply reduce payments, deny payment or raise taxes. Not long ago it could be said that the manufacturers of medical high-tech, the pharmaceutical industry, the medical establishment and hospitals didn’t care…but they’re now feeling the bite. The 3rd party paradigm divorces the consumer (i.e. the patient) from the cost and value or the product or service provided. As such they don’t behave as informed consumers. If anyone had to pay for most (or even half) of their medical care out of pocket they would shop around and become far most cost conscious. As it stands today, medical costs are virtually set up to increase. There is too little free market competition and too much incentive to charge as much as possible. Nobody is concerned when “somebody else pays”. As an example I offer up the Lasik procedure for eye correction. This is not covered by insurance. The cost for this procedure has decreased every year. The same is true with a lot of plastic surgery not covered by insurance.
I spent over 7 years practicing in various Navajo clinics. The Navajo have two options; they can remain covered by the federal IHS capitated grants to a healthcare organization or get a “special” Medicaid coverage. In both cases they paid nothing. These folks would come into the clinic for things most of us would never think to trouble a medical professional with. Why not? It was “free”. What I witnessed was gross over-utilization. Though I railed against it, the upper management of the organization built in incentives for the providers to see as many patients as possible. They had some of these patients coming in 2-3 times a month!
Let’s get back to high-tech medical technology. Consider for a moment the cost of such high-tech items as cell phones, smart phones, personal computers, iPads, GPS units and a host of other consumer electronic gadgets. What has happened over the years? The products got better and cheaper. Some automated lab equipment in hospital labs is quite amazing. They can perform a Chem-24 or a CBC w/diff in minutes and the unit cost (minus the personnel costs) is under a dollar. They charge $40-50 for the tests because some 3rd party payer will pay that much. High-tech medical technology is not much different than the amazing technology found in digital cameras and laptop computers. The number of drugs that have become generic over the last 10 years is astounding. You can treat almost anything with inexpensive generics today. These drugs were “high-tech” just 10 years ago. High tech is not the problem. The problem is that the consumer doesn’t care what it costs. There is no incentive to seek out more cost-effective alternatives.
If people bought “real” health insurance for what they actually believe they need to insure and paid for everything else out of pocket you would see healthcare costs drop (probably precipitously). This has been seen with OTC drugs. There are a lot of special interests involved in American healthcare. Most of them don’t want any change because their business models are built around the status quo. Eventually we come to a situation where rationing is necessary. The free market distributes scarce resources better than ANY centralized scheme.
More later…this has already been WAY too long.
Dr Dave: A lot of women (me!) never need the things they are covered for, either. In fact they have to be quite insistent that they don’t need or want it since doctors routinely try to foist it on them, presumably because it helps pay for the yacht.
About employers: I wish that coverage weren’t through employers. Terribly complicating and expensive for those of us that would like to employ ourselves or live as, say, authors, with our own income arrangement.
Also, I dislike the fact that we (Mister and I) pay thousands every year for coverage and then have to pay out of pocket in addition: I feel that we’re only semi-covered. What I would rather by far is that we had a HIGH deductible — pay everything up to say, $10,000 — because frankly it costs us far more to be ‘covered’ under the current arrangement! So we’re ‘covered’ but we always fork out anyway, and we pay for the insurance every year but are healthy so we very rarely use it (one of the last times was when my h. needed a sling because he’d been mugged). Really we feel it’s not OUR health insurance but somebody else’s. What we really require is merely catastrophic insurance.
Annoys me when well-off people (like my in-laws) grumble about the cost of life-saving medicines that they can in fact easily afford — would they prefer to be dead? — when I know how much it’s all being subsidized by much less well-off people (sub-millionaires) like hubby and I. If people didn’t whinge and moan about spending a few bucks on drugs that they’d throw away anyway on lottery tickets, cheap candy and crummy beer, we’d all be much better off.
End of rant.
I think we’d all agree the crucial point is freedom of choice, or lack thereof. Insure for those things you want, ignore the rest, and it’s a private contract between you and the insurer. First principles Libertarianism.
I certainly appreciate the importance of insuring against “womens’ stuff”! Two children, including one emergency caesarian, would have really hurt us if we hadn’t been insured. As it was, we got priority treatment in a private hospital. But as Dave says, why should he subsidize my premiums? Sorry Izen, but that isn’t simply a spread of risk, some sort of “acceptable” collectivism in the name of a greater good: it’s contractual compulsion – Oz
Amanda,
You said a mouthful! Physicians don’t necessarily want to “foist” those services on you for financial gain. They do it out of self-defense. It’s to limit their own exposure to medico-legal liability. I think you’d be surprised at the income of the average physician. Make no mistake – it’s a well paying job, but it’s not quite as well-paying as you might believe. Sure, quite a few surgeons and specialists (especially surgical specialties like neurosurgery and cardiovascular surgery) knock down over a million a year. But most physicians make about the same as the owner of a successful body shop. Increasingly physicians are opting to become employees rather than going into private or group practice.(which functions like a law firm). They don’t make as much in gross income as their private practice counterparts, but they don’t have to pay for their own malpractice insurance, overhead, facility costs or support personnel. In the end they probably come out about the same. At my last job the average physician provider (these are almost exclusively Family Practitioners) was paid about about $160,000/yr. Not really a lot of money for four years to earn a B.S., four years of med school and 3 years of residency training. I know quite a few people who own yachts. Not a one of them is a physician.
Most employees are unaware of how much our income is diverted to healthcare and the welfare state. Take Social Security for example. This is a cute little government hat trick. You pay 6.25% of your income and your employer matches you “contribution”. This is bullshit. If your employer didn’t have to match your “contribution” they could pay the the employee that in wages. So essentially the government is confiscating 1/8 of your gross wages to fund the retirement of the wealthiest demographic in the nation (who paid far less over their working career than you are). If I had had the option to invest just 10% of my gross income into a private investment account from the age of 16 I would have millions in that retirement account. I could live in my own (paid for) house and buy my own health insurance. At my previous job they offered three health insurance plans. I opted for option #2 – not gold plated, but not the cheapest with the highest deductible. Total cost to me and the employer was $5,400/yr. In my entire career I almost never utilized my health insurance. I would see my dentist and optometrist (for which I paid at least half) and my personal physician now and then. Other than that all of that money I paid in for health insurance paid for other employees to have babies, take their kids to the pediatrician, paid for my colleague’s quadruple bypass and other employee’s medications for diabetes, hypertension and hyperlipidemia.
I want to be able to buy my own health insurance like I buy my auto and home insurance. I live in the mountains at 7,000 feet above sea level. I don’t really need flood insurance. We might get torrential monsoon rains from time to time, but the water very quickly runs downhill or is absorbed by the desert soil. My two vehicles are old and paid for. I don’t need to insure them against theft, window breakage or at-fault collision. I want that $5,400 paid to ME. From that I’ll buy a major medical plan that covers the big stuff. This is far less expensive and although the risks to the insurer may be greater in the event of a claim, from an actuary standpoint it’s a pretty safe bet. In any given year, any given insured individual is not all that likely to require hospitalization, have a heart attack, require treatment for cancer or be a victim of trauma so they can safely charge less. On the other hand, with comprehensive insurance the odds that any given insured individual will have an office visit with their physician or require a prescription drug is pretty high. The insurance industry LOVES comprehensive insurance provided to large insurance pools. That’s how they make the most profit.
Medical care is not all that different from most other products and services. Yeah, there is that “life or death” thing, but that’s far less common than a lot of medical establishment proponents would have you believe. We should transition to system of buying insurance for what we want. I’m 55, my GF is 56…we’re not likely to have to worry about pregnancy or pediatric visits. We’re more concerned about things like trauma, heart disease, cancer, hospitalization, etc. I want to be able to buy insurance for what I believe I might need and save the rest of the cash for whatever else we might need.
Amanda, apparently you would be hard pressed to pick an argument with me. I agree with you.
Dr Dave: I’m completely with you on that entire comment, and if you ever find a reasonable insurance deal that healthy people wouldn’t be foolish to pay for, please let me know!
—
Happy Valentine’s day, everybody!
I think we’d all agree the crucial point is freedom of choice, or lack thereof. Insure for those things you want, ignore the rest, and it’s a private contract between you and the insurer. First principles Libertarianism….But as Dave says, why should he subsidize my premiums? Sorry Izen, but that isn’t simply a spread of risk, some sort of “acceptable” collectivism in the name of a greater good: it’s contractual compulsion – Oz
It takes two to tango.
The implicit assumption in the above is that business or governments providing healthcover would find catering to First principles Libertarianism an economically attractive option. If individual choice over what is covered may making exclusions, or even the organisation offering differing rates depending on THEIR assessment of your individual was an effective market model it might be more common.
While I am always dubious of the ‘dismal’ science, standard economic theory regards universal fixed contributions as a means of covering the cost of variable and unpredictable individual costs as more efficient than trying to match cost and consumer. It is linked to Pareto optimality. If you move from a flat rate to an individually tailored rate in such a system the small gains made by some are outweighed by the large losses made by others. Because the ‘Daves’ of this world subsidise the ‘OZfamilies’ of this world the advanced obs/gyn care is available to reduce the maternal and neonate mortality rates.
There are inherent economic efficiencies in a poll tax to cover individually variable cost which may conflict with Libertarian ideology, but from simple resource considerations tend to win.
Of course as Dr Dave has detailed the system is also gamed by the insurers and providers. The more cover they include, the more test and treatments are moved from recommendations, to guidlines to protocols, the better the turnover of the insurers and providers. I know the Libertarian concept is that informed individual consumer choice can control these negatives. I think that is probably naive. One problem is that ‘choice’ by these consumers is constrained by need. If you require medical treatment the provider has a consumer with NO choice, they have to obtain that treatment for a cure. Individual consumer choice, shopping around for the best deal is not a big market force on the cost of provision of emergency Cesareans.
Remember that regulation, especially excessive regulation is allways a shared responsibility in market societies. The businesses are as active in framing the regulations as the government, regulatory capture is common and the regulations are often in place to protect the existing business model or market system. The last thing the health insurers in the US would want is new independents entering the market offering cheap insurance to the low-risk individuals, cherry-picking the demographics that subsidise the rest of the business!
Ozboy,
This contraception imbroglio is taking on a whole new complexion. Over a month ago during one of the GOP debates George Srephanopoulos (former Clinton political hack and now commentator for ABC) asked Mitt Romney if states had the right to ban contraception. It was bizarre. NOBODY was talking about contraception. Romney explained that no state or Republican candidate has any interest in banning contraceptives. Stephanopoulos wouldn’t let it go even after Romney told him it was silly, meaningless question. The talk radio shows the next day were laughing about this inane question from Stephanopoulos. Then it was quickly forgotten.
A month later Obama announces that insurance companies have to provide contraceptive free of cost. The Catholic church quite predictably had a fit. But Obama was adamant that he was not backing down and that this would go into effect in August rather than 2013. Now key Democrats are praising Obama and spinning the story that Republicans don’t want women to have access to contraceptives which are “vital for women’s health.” It’s a damn fabricated campaign issue!
@- Dr Dave
“It’s a damn fabricated campaign issue!”
And a damn clever one.
As we have already discussed it is marginal in terms of changing economics or access. The main beneficiaries are the providers of contraceptive services.
However it plays as a progressive improvement for women – difficult to oppose without looking like a authoritarian kook trying to deny women an improvement to their healthcare because of theocratic ideology.
If Mitt fails to oppose this Obama regulation he alienates his hardline wing of the party supporters.
Newt and Santorum are both vulnerable to the ‘Cat’lic menace’ smear. And they would be opposing something that the industry wants.
Somehow I doubt that any GOP candidate is going to suggest the libertarian solution of making OCPs a OTC item so that women have a truly free and much lower cost, choice!
Even Ron Paul….-g-
@- Dr. Dave says: February 14, 2012 at 7:33 am
“There are a lot of reasons healthcare is so expensive in the US. But high-tech medical technology is WAY down on the list. We’ll come back to medical technology shortly The single greatest reason for high costs is the 3rd party payer paradigm which began shortly after WWII. …
It is interesting to compare the historical trajectory of the development of the healthcare systems in different countries.
In the US the system is doctor/hospital based. The 3rd party payer paradigm actually emerged as a response by hospitals and doctors to the Great depression in the 1930s and the threat of a government, centrally organised universal healthcare system. A big idea with the progressives of the era. It was implacably opposed by the medical profession and the hospitals. However they discovered during the depression that as ability to pay does not correlate with healthcare need, healthcare demand was not inelastic. When people were too poor to pay, they died instead and hospital income and doctor’s fees plummeted. They responded by designing ‘sickness funds’ both to protect their income and as an alternative to the political initiatives for government regulated healthcare. IHospitals and doctors devised nsurance schemes by which individuals and groups could pay into and get medical cover free at the point of use. In return for this expanded provision of healthcare these hospital and doctor run systems obtained tax exemption and a regulatory framework that basically let them set their own fees with an incentive to increase and expand them. Blue cross and Blue Sheild were born.
Post WWII again in response to social demands for better medical cover the ‘Blues’ persuaded government that they could provide the 3rd party payer system to a greater number with a little help from the tax code. While little government funds went into healthcare a vast increase in the share of GDP directed towards medical services occurred as a result of the tax advantages of employer insurance schemes.bOth the hospital/doctorinsurance systems and the government had a mutual interest in expanding the number covered and entiled to healthcare.
The next big increase in the GDP devoted to healthcare was LBJ’s establishment of medicare/caid. Those too were doctor and hospital instigated models of provision, alternatives to more radical initiatives at the time.
Probably the closest any president has come to proposing a national, universal healthcare system in the US is Nixon.
In the UK in the 30s there was already a tradition of local poor relief and foundation hospitals financed by donations and sickness funds. The post-war establishment of a NHS, universal and free at the point of use was a centrally imposed, government run system. It was of course virulently opposed by the hospitals and medical profession. Eventually it was agreed that doctors and hospitals would be paid by the government as employees – after as Bevin remarked on negotiating with the medical profession that he had ‘stuffed their mouths with gold’.
Two very different ideologies and systems.
It is easy to look at other nations, (Australia, Europe, S America) and see a range of systems emerging with every shade of gradation from the US private insurance system to the most radical socialized UK type system.
And yet… the end result in most of the developed nations was that around the 50s they all had vastly increased the percentage of GDP devoted to healthcare. Either by direct government funding or tax exemptions and subsidy of private insurance schemes by the late 80s some sort of system that entitled most of the population to medical attention at reduced individual cost was taking between 5% and 10% of GDP.
Despite the very different ideological basis, and very different systems of delivery most modern societies have ended up with the same result. very wide, if not universal, medical care consuming around 10% of GDP.
That big increase in wealth devoted to medicine is what has paid for all the advances in treatment, drug development and improved mortality/morbidity figures. As well as for the exorbitant charges, spurious therapies and widespread waste of the various healthcare systems.
The increase was also driven by what was possible. From the 1900s onwards there were significant scientific advances in biochemistry and the understanding of biology combined with engineering technology that enabled many more forms and methods of treatment for many more disease processes.
The rise of healthcare happened with both socialized and private business models with very different ideological roots. Its ubiquity and synchronocity across many different nations and political processes might indicate that it is an inevitable feature of developed and developing nations. A measure of maturity and competence of a society however it is instigated.
At least I cannot think of a nation that fails to devote more than 5% GDP to some sort of general/universal healthcare provision that could also be described as civilised ?
izen,
I would recommend you read The Cure: How Capitalism Can Save American Healthcare by Dr. David Gratzer. Dr. Gratzer is a psychiatrist from Canada who is licensed and practices both in Canada and the US.
@- Dave
I would be more convinced by rhetorical arguments from ideology that claim to have the best method of delivering healthcare, if they could point to a working example.
Or at least had an explanation for the lack of this wondrous utopian solution having already been implemented, that doesn’t sound like a crank conspiracy theory.
As Britain sinks deeper under Green Treen control. Can Australia break free from the hearts and minds control?
http://fenbeagleblog.wordpress.com/2012/02/16/the-green-treens/
G’day Ozboy. Hope that affliction that was giving you a hard time has buggered on off whence it came by now.
Just wanted to say that I did look at your Senator Online link, thought it seemed intriguing and complex, and bookmarked it to get back to later. A very novel concept, and something that would need to be thoroughly investigated, not just glanced at in a sleepy wine-and-chocs moment. Anyway you said you might blog on it or a related idea. I for one would certainly be interested.
Thanks Amanda,
I am on the mend, in fact I even got out the other day to start cutting wood for the winter. I’ve pulled up a bit sore as a result, but I will get a new thread out shortly, if a bit briefer than I’d hoped – Oz
izen,
I suspect you have failed to comprehend the entire crux of my previous comments. Perhaps that’s a side-effect of collectivist delusion. Individuals make better choices about the expenditure of their monies than do bureaucrats. Market competition results in lower prices and better services. When “somebody else pays” is imposed, market competition evaporates. Without market competition prices increase unimpeded. It doesn’t matter if that “somebody else” is the government or private insurance.
Too good not to share:
Love it.
“Personal Freedom = Personal Responsibility”
Clearly, Bill Whittle’s been lurking in some good blogs – Oz 😉
@- Dr. Dave says: February 17, 2012 at 5:14 pm
“I suspect you have failed to comprehend the entire crux of my previous comments. Perhaps that’s a side-effect of collectivist delusion. ”
Entirely possible.
@- “Individuals make better choices about the expenditure of their monies than do bureaucrats. Market competition results in lower prices and better services. ”
Thats the standard ideological dogma, the free-market delusion.
@- “When “somebody else pays” is imposed, market competition evaporates. Without market competition prices increase unimpeded. It doesn’t matter if that “somebody else” is the government or private insurance.”
Not all human interaction is amenable to being reduced to a individuals making choices about their monies. As soon as you have a market, you have business organisations larger than individuals, collectavist systems with interests and goals that are related to the organisation, not the individual. Most financial transactions that people engage in are NOT with another individual, they are with a service or product provider which is a corporate entity. As I commented above, it takes two to tango, an individual is constrained in what choices they make about their monies by what the other party is willing to offer.
Clinical need is also uncorrelated with ability to pay which severs the link between individual choice and market competition.
You suggested I read a book by a free-market advocate which I gather from the reviews explains how this iconic concept of individual consumer choice is advanced as the solution to all the ills of the present healthcare systems in Canada and the US.
Would the system he advocates direct as much of the GDP to healthcare as global levels of spending in many disparate societies indicates is required to achieve good health indices?
Suppose I suggested in return you read a book about the Cuban healthcare system and how IT provides A wonderful service at much lower absolute cost… there was a fad for this a decade or two back, I gather that Micheal More, behind the curve as usual recently invoked the Cuban healthcare system…
In fact if you look at the independent peer reviewed literature on the Cuban system the evidence is thin. It is not that good a system and it has problems. What makes it look good is a comparison with the dismal systems in the rest of the region and in countries with similarly impoverished (verb?) economies. Compared to much of the rest of S America it has a healthcare system vastly superior with outcomes comparable with first world nations at third world prices for some of the major disease threats to its population.
Claims that a collectivist system is the way to provide economically efficient healthcare are not well supported by the Cuban example, it is too context dependent and has problems with social acceptability and professional/business opposition in other societies.
But at least for the collectivist example there IS a real world version to examine.
For the idealised free-market concept of healthcare…. where is the real world example to show its benefits?
Given the social outlook, the enthusiasm for market solutions and the disdain for governance systems it was inevitable that the medical system in the US would be captured by docs&hosps. That the medical business would spread risk by insurance schemes and adopt a 3rd party payer system because it is in the best interests of the provider. No individual has the option of exercising a choice over his/her health consumer spending because there is no other party to provide that choice. As with government led collectivist systems there is a ‘Hobsons choice’ when you need medical care. The massive growth in the percentage of GDP which has gone into medical treatment is funded by the 3rd party payment system that has emerged both in the ‘freemarket’ US and the collectivist UK model. The lack of any alternative successful model of modern healthcare provision makes me suspect that it is an inevitable corollary of having a developed nation with an effective general healthcare system.
Well according to the WHO Greece spends 10% of its GDP on healthcare, all I can say is our GDP must be very low in the first place!
@- meltemian
“Well according to the WHO Greece spends 10% of its GDP on healthcare, all I can say is our GDP must be very low in the first place!”
37th
Some way behind Argentina 9.5%, Thailand 4.3% or Austria 11%
But ahead of Denmark 11.2% and Peru 4.6%
Interesting to consider which nations it would be ‘best’ to be ill in. And what system of healthcare they use.
Just went and looked up the figures….
Greece and the UK spend about the same amount in absolute terms – a little over $3000.
Because of the difference in GDP this means the Greek spend is a much higher percentage. But then compared to the Greek NHS the UK system looks like a paragon of efficiency…
Health outcomes are about the same, life expectancy in Greece is actually a bit better.
Despite the fact they all smoke!
If anyone wants to compare countries, Australia and America perhaps… here are a couple of good links –
http://data.worldbank.org/indicator/SH.XPD.TOTL.ZS
for the absolute amounts.
http://www.healthofnations.com/ratings
For comparisons of inputs, outcomes and risks with a summary of the healthcare system available for each individual country. look for the country selector below the interactive map.
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I received an e-mail today from Julien Benney of Melbourne, who responds:
I have began to think that globally, the planet’s net producers and net consumers are becoming more and more detached from each other, certainly geographically and possibly beyond even that.
Modern industrial minerals – oil, coal, iron ore, aluminum, manganese, titanium – come chiefly from Australia, Southern Africa and countries bordering the northwest Indian Ocean. So does an increasing proportion of the food produced, one which would be much larger without EU and Asian farm subsidies.
In contrast, because the soils of Australia and Southern Africa are far too infertile to farm without superphosphate and trace “chalcophile” elements unavailable before 1900, most “consumers” live in the high latitudes of the northern and western hemispheres or in the geologically young and fertile Asian and Andean tropics. These regions lack cheap land to compete on a free agricultural market with Australia and Africa, forcing them to compete for a small range of “intellectual” (or high technology) goods and services.
Whereas Australia and Africa can indefinitely maintain their comparative advantage in farming from cheap land, northern and western hemisphere nations cannot maintain comparative advantage in industrial, high technology products permanently. Each newly industrialising northern or western hemisphere nation can initially outcompete previous nations, but as the next one “joins” previous ones lose their advantage.
This is what makes northern and western hemisphere nations net consumers and Australia, Africa and Arabia net producers. Geography gives net producer regions (geologically much older and flatter) much higher “connectedness” than net consumer regions, so the latter are faced with more intense competition for what goods they do produce. This has created a circle of bigger and bigger government, beginning with demands of the working class for suffrage and now seen in the paralysis faced by European ruling classes in cutting back on government spending.