Tuesday, July 28, 2009

Why I'm not a Libertarian

I feel like I have been reading and hearing a lot from Libertarians recently. I guess they proxy for the intellectually (more) honest opposition in the health care debate, and I suppose there are a few friends I love dearly who are of the persuasion, so I get exposed to the arguments more than I would otherwise.

There is absolutely no daylight between me and Libertarians on social issues (legalize drugs--though I might regulate more than the most ardent Lib; government absolutely stays out of the bedroom and the body; individuals decide for themselves what constitutes a family, etc.). I also really believe in many of the economic insights generated by neoclassical economics. So why is it that the GMU crowd drives me so utterly crazy?

Somewhere along the way, and I blame the Reagan era for a lot of this, a myth developed that government was by definition incompetent and free enterprise is by definition infallable. There is no empirical evidence for either claim and plenty of counter-examples. Most importantly, private enterprise is often utterly incompentent, mendacious, and willing to trample liberties far more quickly than any government bureaucrat. And occasionally, when those government bureaucrats are given respect, resources and a functional institutional structure, they can do fabulous and great things. Health care is a great example of this, but by far not the only one.

As a result, I believe that when the assumptions of the fundamental theorems of economics are met: well-defined and -defended property rights, symmetric information, and large numbers of parties on both sides of the potential transactions, there is no good reason for government interferrence. On the other hand, those assumptions are almost never met, and when they are not, there is potential for constructive collective intervention--i.e. the government could play a useful role.

The Libertarian ideology cuts off the search for constructive answers to difficult problems by excluding out of hand a host of possible solutions, and all too often the argument devolves into denegrating government workers and ignoring evidence that doesn't fit. I'd really rather have the conversation focus on where collective action is necessary and appropriate and how best to structure the government's involvement in facilitating such action so that it protects our liberty and social welfare to the extent achievable by mere humans.

I'd also like to be able to talk about the very real problems in dysfunctional competitive environments without having to wade through silly ideological objections to the existence of the problems.

Saturday, July 25, 2009

The utter insanity of US health care

I saw this quote from David Cutler's paper on insurance premiums via Matthew Yglesias:

This analysis shows that without health reform, average family premiums will grow to more than $22,000 by 2019, up from $13,100 today.
In contrast, here in Australia I have to purchase health insurance privately, since I do not qualify for their national health care plan, Medicare, nor does work offer it (health insurance isn't tied to employment here). I have the cadillac plan, chock full of bells and whistles--it pays for 100% of my acupuncture up to a very generous limit, for example--designed for people on my type of work visa. For the privilege, I pay a whopping AU$2500 a YEAR. Granted the comparison is not perfect, since this is an individual cover, not a family one (the family costs $5000). But I am quite confident that the coverage is also far better and more reliable than the average US plan that currently costs $13,100.

I think if people in the US realized the magnitude of the excess expense they are paying today, not even the flood of insurance and PhRMA money could stop reform.


I know that the very worst way to encourage people to become regular readers of a new blog is to not post for a coon's age. To help make up for the long silence, I have added an RSS option over on the right, so that for those of you who use RSS feeds, you don't have to check in here directly.

I don't actually use RSS, so I have no clue how it works.