Thursday, August 13, 2009

On Competing with the Government

"UPS and Fed Ex are doing just fine...It's the Post Office that's always having problems." (@ 0:53) So why would we want a medical insurance program that parallels the Post Office?



The Post Office does not do as well as private companies, even with the extra protection it receives form the government.

From Gus Van Horn:
[T]he post office is a government-protected monopoly; 19th century laws make it illegal for anyone else to deliver letters. It's also exempt from state and federal taxes and free from most government regulations.

President Obama (1:13) "There is nothing inevitable about this somehow destroying the market place as long as...its not set up where the government [the public option?] is basically being subsidized by the taxpayers even if they are not providing a good deal, we keep having to pony out more and more money"

Medicare has essentially eliminated the market for private insurance for Seniors and is posed to bankrupt the US government.

No government-run medical system has ever existed that has NOT required more and more money.

Claiming that a public option will not destroy private options and will not require ever-increasing taxpayer support, goes against both economic theory and real-world experience.

Is President Obama ignorant or disingenuous?


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7 comments:

Anonymous said...

You are evidently more versed in the health care systems of nations around the world than I. Could you elaborate on "No government-run medical system has ever existed that has NOT required more and more money," with specific facts and historical trends in the health care systems in France, Germany, the Scandinavian countries and other countries where there is either government subsidized or or outright socialized medicine? Please also contrast that with our current system, which, as I understand it, is costing us more and more money, an obscene portion of which is not spent on health care per se, but on insurance company profits and administration. Perhaps a more accurate statement would be: No medical system of any kind has ever existed that has NOT required more and more money.

If the preceding statement is true, then it comes down to the philosophical question of whether we as a society should provide health care for each other regardless of ability to pay. Reisman, in a rare passage not dripping with sarcasm and invective directed at those with whom he disagrees attempted to address the question in his blog within the last day, or so. He presents the two extremes: his position is based on selfishness and makes intellectually sound arguments about the inability of any system to eliminate the death and suffering of all. A reader argues for an altruistic based system. Reisman argues against it with examples from Soviet Russia. Unfortunately, I think he misses the point by arguing the extreme example of Soviet Russia. Perhaps if we look at capitalism as a system in which each is free to choose how he will support himself and contribute to the collective well being of society, instead of simply a system based on the freedom to satisfy his own selfish needs, we would reach a happy medium. Capitalism, through Ayn Rand's and Reisman's eyes views individuals other than the self in terms of what they can do for the selfish needs of the individual. That is a sad, impoverished view, in my opinion.

A good example comes from Ayn Rand in "Atlas Shrugged." Reardon gives Dagny a ruby pendant. Not for the joy it will bring her, but for his own selfish pleasure of viewing it on her. He has sex with her, not for the pleasure of giving her pleasure or of experiencing mutual pleasure with her, but for the selfish pleasure of having her. Everything is about what he gets out of it.

I think if this philosophy is carried out to the letter, the family unit could not survive. We all do things that are not to our liking or that benefit family members to the diminishment of our pleasure. Without a modicum of altruism we wouldn't do it, and our progeny would suffer. Sure, our actions can be twisted around in terms of ultimately achieving the selfish end the pleasure of seeing the outcome of our actions. That's just intellectual machination to justify a selfish outlook.

As I understand our history, we, as humans, wouldn't be here now if we didn't have the tribal, altruistic, collective tendencies that allowed us to survive on the savannah. It appears now that those countries that have deployed that innate regard for their fellow citizens in terms of socialized medicine are beating us economically. If I understand the situation in the auto industry, one of the things hampering the US industry is the cost of health care in this country versus the socialized medicine in the countries with which we compete. I am aware however, that this impediment has been exacerbated by the legacy costs of providing too much health care to retirees, and that there are many other factors involved.
-Anonymous1

Beth said...

Greetings.
Thank you for your comments. You raise some very important points, each of which deserve to be addressed but will take time to compose a thoughtful reply.

I actually do know quite a lot about health care in other countries and have read extensively on this issue. It will take some time to gather the information and sources to reference in order present a reasonable defense of my claims. As your comment implies, it is easy to make claims, but those claims need to be supported by facts.

One fact I know off the top of my head is that insurance company profits run at 3% which is typical of most businesses.

The issue of administrative costs is more complex and is actually a topic I am currently researching for a post. Much of the administrative spending by insurance companies actually increases efficiency and helps keep costs under control. Private company administrative costs are frequently compared to Medicare administrative costs, but this is done without accounting for the fact that much of Medicare's administrative costs are externalized and thus not accurately accounted for. It is highly inaccurate to state that an "obscene portion" goes to administrative costs of private insurance companies. When the externalized costs of Medicare (services which Medicare uses but does not pay for b/c it is part of the larger government apparatus)are taken into account---private insurance companies are shown to be far more cost efficient. I offer this tidbit only as a preview, not as a complete defense. Stay tuned!

The issues you raise in regards to selfishness and altruism are also central. I strongly disagree with your characterization of selfishness and of altruism. I view selfishness, understood in its full context, as the only basis for true benevolence and altruism to be the root of conflict and human sacrifice--but again, to explain myself will require a block of time to compose a thoughtful response. I am hoping that once school starts, and my children are occupied in their studies, I will once again have time to contemplate, write and respond.

Thank you again for taking the time to respond. It helps tremendously to keep me from simply "preaching to the choir" and alerts me to where I need to be more supportive in the claims I make.

Harold said...

Pt 1.

I won't attempt to speak for Dr. Beth, but I'd like to say a few things about this.

"If the preceding statement is true, then it comes down to the philosophical question of whether we as a society should provide health care for each other regardless of ability to pay."

What you've described is an economic issue. Philosophically speaking, the profits (which are based on exchange of values) are not the primary issue. The primary issue (morally) is whether or not people have the right to exist for their own sake. As far as "we" providing healthcare, who is "we" and what does that mean? Well, it means that force is initiated against some individuals and the money stolen from them is used to pay for someone else. That's what we're talking about. There is no undifferentiated superorganism that provides healthcare. It is the product of focused human effort. What we have now is not a free market in healthcare, for that would mean that the government has no role to play in the administration of care. Just like flat-screens and vacuum cleaners.

"A reader argues for an altruistic based system. Reisman argues against it with examples from Soviet Russia. Unfortunately, I think he misses the point by arguing the extreme example of Soviet Russia."

What's wrong with an extreme example? In this context, it means that to the extent to which a collectivist ideology is taken seriously and therefore applied to life, you get nationwide slavery. That's what it leads to. It make take a few years or decades, it doesn't matter. That's what's going to happen. And on what grounds can we argue against it if we agree that the morality of self-sacrifice has even a shred of validity?

"Perhaps if we look at capitalism as a system in which each is free to choose how he will support himself and contribute to the collective well being of society, instead of simply a system based on the freedom to satisfy his own selfish needs, we would reach a happy medium."

There's no such thing. Why? Because they are diametrically opposed systems. That's like saying there's a happy medium between freedom and slavery. Free to contribute to society? When men deal with each other as traders, that is all the "contribution" that is necessary. Either your life belongs to you, or it belongs to others, whether they be the poor, the incompetent, the monarchy, or a being in another dimension. There's nothing "impoverishing" about owning your own life.

Harold said...

Pt 2.

"I think if this philosophy is carried out to the letter, the family unit could not survive. We all do things that are not to our liking or that benefit family members to the diminishment of our pleasure."

That's in interesting point. The family qua family (a collective) is not the standard of value. It's the people inside it who count. Speaking only for adults, especially adult siblings, people probably would not put up with as much (if any) intimidation or pressure to live in ways others demanded of them simply because they were "family". You'd have to treat each other like the sovereign individuals you are--a novel concept in some families, I'm sure. Well, that would probably mean that some family members don't talk to each other much if at all anymore, but so what? In a modern society that recognizes individual rights, one does not rely on genetic similarities and the "strength in numbers" of pack animals to survive. Between adults and children, the context is different as children do not yet have the ability to support themselves. The parents have a responsibility (yes) to raise the child to point to where they can support themselves as they brought the child into the world. There are of course other factors that come into play and I'm not implying that one must take care of a 24 year old do-nothing, but I think you get the point. As far as doing things you don't want to do, we have to put that into perspective and we do so by creating a hierarchy of values. For example, you may not like the town in which your parents live, but you value them much more than you dislike Seattle or whatever. It's not irrational to visit them anyway. On the other hand, if they continually make hateful remarks about your spouse and attempt to separate you two (for no good reason), then you'd be doing yourself a disservice by listening to them and remaining in their presence.

"Without a modicum of altruism we wouldn't do it, and our progeny would suffer."

This is almost always brought up in discussions about rational selfishness. In some cases, people do sacrifice when they have children. Yes, they do and it's unfortunate. If having realized that you don't want to have children, you still give in to pressure from your spouse, or family, or church, then that is a sacrifice. In my opinion, those people will make the worst parents, as that resentment will inevitably find its way to the child. Those who derive value from caring for a child and raising it to be an independent and productive adult don't sacrifice or lose out if they can't go on vacation whenever they want. Minor "inconveniences" like that don't matter in the long term. I'd like to point you to Titanic Deck Chairs. He's a dedicated family man and an Objectivist. There's no contradiction.

Michael Labeit said...

Anonymous,

Ayn Rand approaches ethics from a distinctly individualistic perspective. Before she goes into what one should do for others, she discusses what one should to do for oneself. In this way, her ethics remains valid and relevant, even for (hypothetically speaking) the stranded Robinson Crusoe on a deserted island. Ethics, as Rand recognized, must answer the question "what do I do? - not simply what do I do to others? "What do I do?" is a much broader question that includes both autistic and interpersonal decisions. That is why, for instance, Rand is primarily concern with justice per se, not "social justice." An exclusive focus on social ethics, which altruism demands, completely disregards the field of individual ethics which nonetheless exists.

Anonymous writes,

"As I understand our history, we, as humans, wouldn't be here now if we didn't have the tribal, altruistic, collective tendencies that allowed us to survive on the savannah. It appears now that those countries that have deployed that innate regard for their fellow citizens in terms of socialized medicine are beating us economically."

If caring for others ensures reciprocal concern, than such "tribalism" is an selfish action - it advances one's life. "Those" countries (if I assume correctly Western Europe) are most certainly not performing better than the U.S. Productivity per capita is lower and unemployment is higher in Europe. Europe has chronic problems with immigration, racism, and poverty that do not exist with as much severity within the U.S., of course with a few minor exceptions (Andorra, Monaco, etc. the free parts of Europe).

Anonymous said...

Pt 1

Harold and Michael, thank you for your input. Let me address each of your responses in succession.

You are confusing the philosophical with the economic. First we need to consider whether it would be the proper course of action to do something (philosophy), then we need to consider whether or not we can afford to do it (economics). Here is an example: we need a new car. Should we buy a new car? Yes. Can we afford to? No, therefore we can’t buy a new car. Maybe we should buy a used car…. Should we, as a society that values individual human life provide health care for all members of our society? (Yes/no) Can we afford to provide it? (Yes/no) We should provide it (Yes/no). You apparently missed my comments on the nature of the health care market. In short, many of the transactions in the health care market are conducted under the duress of disease and financial stress and are therefore are not amenable to comparative shopping and therefore are not the free exchange that is the basis for analysis of free markets. Moreover, all health care transactions are subject to inherent information asymmetry that detracts from free exchange, unless, of course, you are a specialist in the field in which you need care. Furthermore, the role of insurance companies, coupled with the

Soviet Russia is not an applicable example here because it was a totalitarian regime that prohibited individuals’ emigration. No one is making you, or anyone else, stay here, or even asking you to stay. You are free to leave at your earliest convenience. As far as the whole “collectivist” part of yours and Reisman’s argument, please elaborate. In past conversations with objectivists I have ascertained, perhaps incorrectly, that in the objectivist view “the collective” has no basis in reality or any ascribable rights. These are reserved for individuals. It follows, then, that corporations have no basis in reality, nor any rights. On the other hand, if we assert that corporations do have rights and a basis in reality, for whatever reason, we have to acknowledge rights and reality to “the collective.” In fact, the American corporate entity is analogous to the republic form of government, if you think about it. Consider the fact that no one is forcing anyone to be a stock holder, nor is anyone forcing anyone to remain a resident or citizen of the United States. That does not mean that everyone always gets to do as they please, however. There is give and take in all social organizations, be they corporations, baseball teams, or our republic. Please tell me how objectivists square objectivist denial of “the collective” with the corporate form of business.

-Anonymous1

Anonymous said...

Pt 2

As far as your comments on the family are concerned, please see my comments regarding your freedom to leave the U.S. at your earliest convenience. You apparently are not concerned with your neighbor, your neighborhood, your town, your state, or your country. Only yourself. Altruism is not a dirty word, Harland selfishness is not a virtue. I think that perhaps your conflation of my comment about doing things we don’t necessarily want to do for the sake of the family with people who have children when they didn’t want them says more about you than anything else. My point was that vacations foregone so your offspring can have braces benefits the offspring a lot, but you not so much. Selfishness would mandate the vacation, unless there are bragging rights that provide pleasure associated with a kid with braces, much the same as the usual gaggle of morons proclaiming their children as gifted and talented.—have you noticed how nobody admits that they have a normal kid anymore? Perhaps the objectivist answer is to run a tab on the expenditures and collect the debt when the offspring is able to pay, or make them get a job to supply their own braces, etc. One thing you alluded to is the notion of short term selfishness and long term selfishness. Please elaborate. If the choice of vacations doesn’t matter in the long run, what is it that is satisfying the selfishness urge when the gratification of the vacation is foregone? And please avoid references to satisfaction from seeing a benefit to the offspring, as that would be altruism.

Finally, Ayn Rand uses quotes from fictional characters she created to support her philosophical assertions, which she created to explain her fictional characters. Somehow I find that intellectually unsatisfying, rather circular in construction, and a bit disturbing. It’s kind of odd for a philosophy that is supposedly all about rationality and reality to be to be based on proofs provided by fiction, don’t you think? On the other hand, Rand was a master phenomenon creator who would blow Tolkien and Rowling away. The latter author has merely created a merchandising empire, while Rand created a whole, if flawed, philosophy. Now that is masterful merchandising! Unfortunately, Rand’s philosophy is little more than that. It is to philosophy what the Harry Potter merchandising trinkets are to the real thing. And it is every bit as evil as the Soviet’s philosophy. In the political realm it boils down to plutocracy. Further, Rand’s attempt to mask the evil of base selfishness by putting the word “rational” in front of it simply illustrates how misguided she was. Humans don’t behave rationally, as the discipline of economics is only recently beginning to understand. So, any system that requires or assumes that humans behave rationally all the time is headed for trouble.

-Anonymous1