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As FA Hayek pointed out many years ago in his masterpiece, The Constitution of Liberty, if healthcare is paid for out of general taxation and delivered free at the point of delivery, then in a world of scarce resources – and healthcare is always constrained at any time by the supply of doctors, drugs, etc – then such care must be rationed by some form of bureaucratic/political rule. As Dr Hayek presciently warned at the time (1950s), any such rationing will put doctors, politicians or other people in power in the position of a god, in having the decision about who gets treatment for what, or whether life A is more “worth saving” than life B. For example, one such utiltarian consideration might be that it is more “cost-efficient” to save the life of a young kid with his whole life ahead than an 90-year-old. That is what happens when socialised medicine is established. It transfers key powers to people in ways that raise disturbing issues of accountability and control.
Now a socialist might respond that it is still better for health care to be rationed by some rule they consider to be “fair” than by the supposed lottery of the market, although in fact, as I would respond, there is, due to the benefits of competition and entrepreneurship, far greater chance that all but the poorest will get better healthcare under a genuine free market in health than under the system of centralised, state-provided healthcare. Also, if the possession of a large fortune is partly a matter of luck, then luck, being blind, cannot be either just or unjust. It just is. Some folk have access to better dentists or whatever because they are richer. That may annoy someone who cannot afford the whitest teeth, but that is not proof of unfairness, as such. To prove it, one would have to construct an ethical theory that says that humans have an apriori claim on their fellows to receive a certain amount of healthcare/watever as a “right”. But such “rights” are abuses of the term: one cannot have a right to X that requires that another be forced to provide X, such as forcing folk to train as doctors to serve the sick, and so on.
I was led to think about the latest twist in the US healthcare debate by reading an article by the US writer, Nat Hentoff. He totally bypasses the issue of how to deal with scarcity under socialism in ways that are fair. He rightly worries about the sort of brutal choices that state-rationed healthcare provides, but then does not see that any system of state-run, and socialised medicine, makes such issues of rationing unavoidable. Rationing by such tests of age, “need” and so forth is a feature of socialised medicine, not a bug.
(H/T: The Corner).
According to Radio Free Europe,
Rovshan Nasirli, a young Eurovision [song contest] fan living in the Azerbaijani capital Baku, says he was summoned this week to the country’s National Security Ministry — to explain why he had voted for Armenia during this year’s competition in May.
“They wanted an explanation for why I voted for Armenia. They said it was a matter of national security,” Nasirli said. “They were trying to put psychological pressure on me, saying things like, ‘You have no sense of ethnic pride. How come you voted for Armenia?’ They made me write out an explanation, and then they let me go.”
(Hat tip to Gene of Harry’s Place and Robert Wright of the The Daily Dish.)
In other news, Health Secretary Andy Burnham has accused Tory MEP Daniel Hannan who said on US TV that the US healthcare system was generally better than the NHS of being unpatriotic. Senior figures from both the Labour and Conservative parties have denounced Hannan and demanded an explanation.
Here is a story suggesting that employees might use the outbreak of swine flu as an excuse to extend their summer holidays. I guess this is inevitable, given that some people will try anything on, although in a recession, it does seem rather dumb for staff to risk a disciplinary warning or outright sacking to lie about their health in this way.
Talking of holidays, in a few days’ time, yours truly is heading off to Normandy, northern France, for a week’s holiday with family, including, I am very happy to say, my father, who has recently made a recovery from a serious illness.
There will be lots of Calvados consumed. My blogging is likely to be slow next week.
I had to read the headline twice. Then I read the article twice. I still don’t get it.
What I first thought it said was,
International development minister urges firms to pool HIV patients
Weird, obscure line, but no weirder than a lot of things that come out of the international development department, and potentially a lot more sensible. I suppose it might make sense for the big southern African companies, especially, to combine their employee health programmes. But if it were more effective, wouldn’t they already be doing it? Wouldn’t the South African government, in any case (now they have got rid of that barking health minister), be the one doing the urging?
What it actually said was,
International development minister urges firms to pool HIV patents
Now that makes a lot less sense. It is quite up to the standard we have come to expect from DFID, a real candidate for economic illiteracy of the day.
[Mike Foster MP] wants companies to contribute to a “patent pool”, which the international drug-purchasing facility, Unitaid – set up by a number of donor countries, including the UK – is trying to establish.
“While it is absolutely vital that we work to reduce the human cost of HIV by focusing our efforts on preventing new infections, we must also face up to the stark reality of the treatment challenge we face. The pharmaceutical industry has an opportunity to act now to help prevent future human catastrophe. It is time for them to state their clear commitment to make new HIV medicines affordable to those who need them most.”
According to the all-party report, if HIV patents are put in a pool, generics companies – which make the cheap combinations now used in Africa – will be permitted to make low-cost copies of newer drugs and devise new combinations in a single pill, which is important for people living in poverty.
What can this possibly mean? There’s no real explanation here of how a ‘patent pool’ might work. It sounds like pharmaceuticals companies are being offered to the opportunity to swap an unstable legal monopoly for an internationally approved cartel, and to pose as humanitarians while doing so. Would that really lower the cost of HIV medication, and improve its effectiveness in general? It is far from obvious why that should be the case. Would medicines that are both cheaper and more effective be permitted to flow back to Western countries? I doubt it.
Which points up the weirdness of the whole exercise. In order to be economic in Western countries, HIV medicines have to be very expensive to buy there. That is not just because they are expensive to develop, but because the absolute numbers of people who need them are small. In the West, just as in poorer parts of the world almost no individual can afford to pay for their own treatment. So there’s a different sort of cartel effect maintaining the oligopolistic market. Government protects the patentees; and government subsidies end up paying for the consequences.
You don’t have to be a believer in the efficacy of beetroot and garlic as anti-virals to notice that the difference between the scale of the epidemic in parts of Africa and the richest parts of the world is not a consequence of the availabilty of drugs – or at least not the availabilty of anti-retrovirals. We have fewer people getting the disease in the first place. But we have fewer people with all sorts of infectious diseases. Malaria and dengue are not more treatable than they were when they were endemic in Europe, and the US, less than a century ago. The difference is better living conditions that everyone will work for if they have the chance.
Patent pooling, it seems to me, is no better than patent farming, in that it seeks to exploit artifical restrictions on innovation that just happen to be there for the benefit of a restricted interest group. It is an exercise in dinosaur husbandry, with little real relevance to improving the lives of us mammals. A reconfiguration of corporarate welfare, with its concentration on subsidising treatment of a particular disease, and bureaucrats swapping targets with bureaucrats, is a distraction from the less collectively ‘manageable’ task of avoiding the spread of infection, which is the invisible part of the virtuous circle of the people who are not sick getting better general health and more comfortable lives. That isn’t going to come from government drug programmes. I suspect it might come from “people living in poverty” having a bit more access to the non-patent and never-patent – but still restricted – technologies of choosing their own priorities and exploiting their own comparative advantages.
A friend (you know who you are) informed me that the Economist magazine was “getting better”, for example it had a lead story denouncing government debt. Of course this was the government debt that the Economist had urged government to take on (to bail out banks and other corporations and then to “stimulate the economy”), but it was good that it was denouncing the debt.
So I decided to give the Economist a chance and read their article (“editorial”) on American health care. After drinking a bottle of cider to recover (what a nice new bottle shape Henry Westons have produced) these on my thoughts upon that article:
It starts with a lie – Barack Obama was elected in part because of his plans to “fix American health care”.
In reality it was Hillary Clinton who stressed her health care plan during the Democrat primary campaign (Barack Obama just attacked her plan and made vague noises about his own). And during the general election campaign it was John McCain who came out with a specific health care plan, allowing people to buy health cover over State lines and switching the tax deductibility of buying health care cover from employers to individuals, whereas Barack Obama just (dishonestly) attacked the McCain plan and was vague about his own.
Barack Obama was elected President of the United States for several reasons (white guilt about mistreatment of black people, the total ideological devotion of the education system and the mainstream media, the insane judgement by John McCain to back the bank bailouts…), but stressing some specific plan to “fix American health care” was not one of them.
Still the Economist does not let the truth stand in the way of its articles, so it then outlines its position.
“Starting from scratch their would be a good case for a mostly publicly funded system” even for a magazine “as economically liberal as this one”.
This is a standard Economist trick – propose some form of statism and defend it by saying even we, the free market ones (the European meaning of “economically liberal”), are in favour of this statism. Of course the Economist never actually produces any evidence that it is pro-free market – but it is at trick it has been using since Walter Bagehot (the second editor, the first editor actually was a free market man) so I suppose it is a lie hollowed by history.
However, we are not “starting from scratch” so the Economist reluctantly concedes that some little freedom (about half of American health care is already government funded and the rest is tied up in regulations – facts that the Economist avoids, see later) must remain for awhile – it suggests five years. → Continue reading: The ‘Economist’ and American health care
All the existing [medical care] schemes, including the present American mixed corporatist/socialist model, represent a transfer from the young and healthy to the old and chronically sick (and to the medical cartel, of course). The way it’s used in practice, the phrase “having health insurance” means having the right to place oneself on the receiving end of these transfers. No honest discussion of the situation is possible until the entirely false and misleading concept of “health insurance” is dropped.
– Commenter Ivan
Millions and millions of Americans support Obama’s desire to even more massively intervene in the market for medical care than the US state already does. And of course Obama’s moves are just the opening salvo in a desire to eventually end up with fully socialist healthcare, along the lines of Britain’s ghastly National Health Service, which has intermittently tried to kill me over the years.
I have tried pointing Americans at the British example to show them what an appalling idea it is to have the state directing any industry, let alone medical care. But alas it is very hard to overcome that special kind of insular American optimism that does not think what happens in another advanced first world nation can teach them anything, because in the USA things will be different.
Well yes, it will be different… in that the control obsessed Obama’s of this world will find new, innovative and oh so wholesome American ways to end up with a third rate health care system much like Britain has today.
This might be a good time for Americans to invest their money in Swiss medical clinics as I suspect in the coming years expatriated medical care will be a serious growth industry… plus it has the added benefit of getting your money out of the USA and US dollar.
“It is rare that governments successfully cut costs by first spending more money.”
– Tyler Cowen. He was talking about Mr Obama’s plans to socialise US medicine. I am sure that when the NHS was set up here in the UK, the advocates of said argued that it would “save” money in the long run. Meanwhile, here is some useful commentary from Arnold Kling.
Oh dear… seems the EU is being beastly to us again.
I wonder if I can buy brain futures or it is just pork bellies?
As here, for instance. Via Liberty Alone, I learn of a remarkable new recruit to the ranks of those who are panicking about the pandemic. Yes, it is none other than the US Libertarian Party. They have just issued a press release reprimanding the US state for not being statist enough about this medically trivial event, which is in any case only being plugged up in order to divert attention away from other governmental blunders and to excuse further governmental usurpations, despite all the blunders. Why can’t they see that? Or don’t they care about such things any more? One can imagine a true “pandemic” that really did need measures like draconian border controls to defend against it (sickness is the health of the state), but if this trivial flu variant is it, then, to put it mildly, an explanation to that effect should have been added.
The UK Libertarian Party should treat this pandemic pandering as an awful warning of what happens to small parties – parties “of principle” – who become gripped by the desire to pile up lots of mere votes, and who forget what they were started to accomplish. First they pick a regular politician to lead them, and he then picks more regular politicians to help him, and before you know it, they are behaving like regular politicians.
But it is more fundamental than that, I fear. Start a political party, and before you know it, it is behaving like a political party. LPUK beware.
One of the beauties of the blogs, I find, is that the link-rich medium enables you to fly off on all manner of tangents and think through issues that might otherwise not arise or come into one’s head so fast. The recent posting on Samizdata about Ayn Rand – which seemed to trigger a rather bad-tempered and long comment thread – led me to a site put together by this fellow, who wrote a rather rude comment about Rand – nothing very new there – and I decided to take a look at his own blog. This is what I found. James Hooper is a socialist who once, apparently, was a “teenage libertarian”. I guess one does not come across many libertarians who imbibed their Hayeks, Rands, or Rothbards and later decided that what the world really needed, in fact, was lots of collectivism, progressive taxes, and the rest of it. I suppose John Gray fits a similar path, although as Brian Micklethwait has noted, Gray is consistent in his pathological gloomsterism.
Anway, back to James Hooper. In his latest post, he writes this:
“Healthcare is an area where the market has proven utterly inadequate, indeed it’s hard to find any pure market approach outside of the Third World (company insurance is decided by CEO boards and unions, state insurance by governments), although I’d imagine that those who have died in America owing to lack of insurance didn’t rate the distinction that much.”
Now it seems to me that there is something very wrong about this statement. Human beings require health care, just as they require food. Now, in the West, food is – mostly – produced by the free market, although as a libertarian I’d be the first to note that there is a lot of regulatory control over food production (ask any farmer, slaughterhouse owner, food retailer, etc) and a lot of subsidies, such as under the EU’s Common Agricultural Policy. But by and large, the process by which we get our fruit, veg, meat and carbs is via capitalism. This seems to work tolerably well. It could work a heck of a lot better, of course, but in general, you don’t see people, even the very poor, starving in the streets as happened under communism in Russia (1930s) or Mao’s China (1950s, 60s), or see the sort of state-induced disasters in Zimbabwe, etc. So clearly, something as basic as food seems to work best when left to the market.
So what is so different about health care that it can only – according to various statists, including many right Tories – be provided by a mixture of private/public operations or even, only by state monopolies, such as the UK’s National Health Service? For sure, some people, such as the very poor, will not be able to afford all the healthcare they want, but then the same issue applies to very poor people who cannot get all the food or housing that they want. Their problem is poverty, not something peculiar about food or housing. I understand that healthcare purchases tend to be less frequent than purchases of food; there may be inefficiencies or supply-demand issues that perhaps don’t let a market in health care function as well as in say, baked beans. But even so, for a person to state as a bald fact that a market in health care does not work seems, well, to be a case of ideology trumping experience and elementary logic. This article by Ronald Bailey lays out a good argument for a free market in health.
Of course, if, like Marx, Mr Hooper believes that a socialist society will be based on the “From each according to his abilities, to each according to his needs”, then that of course begs all kind of momentous questions of interest to defenders of liberty and prosperity. As I have pointed out before, if you say, for example, that I have a “right” to “free” healthcare, what that really means, in practice, is that I have a right to coerce someone who is able to work as a doctor/nurse/lab technician to give me what I want. In short, the Marxian “from each according to his abilities” presumably means that the state must have the power to decide what are the “abilities” that Johnathan Pearce, or James Hooper, etc, actually have, and then have the power to harness those abilities to fullfill the needs, as the state has defined them. In short, the Marxian formulation requires conscription of abilities.
There is a word for this state of affairs. It is called totalitarianism.
This story is bizarre: China is ordering folk to smoke to boost the economy? Maybe the Chinese authorities figure that with air pollution already so bad, what could be any worse?
It goes without saying that being a good liberal that I am, I consider it as outrageous for a government to encourage smoking as to use invasions of property rights and censorship of things like adverts to stop it. This sort of issue cuts both ways. What next: forcing folk to get hammered every evening?
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We are also a varied group made up of social individualists, classical liberals, whigs, libertarians, extropians, futurists, ‘Porcupines’, Karl Popper fetishists, recovering neo-conservatives, crazed Ayn Rand worshipers, over-caffeinated Virginia Postrel devotees, witty Frédéric Bastiat wannabes, cypherpunks, minarchists, kritarchists and wild-eyed anarcho-capitalists from Britain, North America, Australia and Europe.
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