Consider, Compare And Contrast

As companion to this brilliant must-read piece from Megan McArdle that lays out the libertarian philosophy on health care beautifully...

But even after you get beyond that, the more "practical" considerations remain. If the government crowds out private health insurance for many people--a result that a number of analysts on both right and left think (hope) is likely, then the government rationing regime becomes actual rationing for the majority of the population. There is also the fact that private insurers often base their services around what the government does, setting their rates as a percentage of Medicare rates, using Medicare to define what standard medical practice is, and so forth.

The core problem with rationing, for most libertarians, is that even if you think that the government's interference is just--and hey, in the case of World War II, I am probably willing to listen--that it has other effects we recognize as bad. Black markets breed crime. Government rules are necessarily extremely broad and will make some people worse off. But the core issue is that when you disable the price signal, you usually severely degrade the production and distribution of the good in question. I hate to drag out Hayek again, but that old chestnut is still the single best exposition of why you might choose not to ration, set price floors/ceilings, or otherwise disable the price mechanism, even if you would like to see some more just distribution of the goods in question:


Assume that somewhere in the world a new opportunity for the use of some raw material, say, tin, has arisen, or that one of the sources of supply of tin has been eliminated. It does not matter for our purpose--and it is very significant that it does not matter--which of these two causes has made tin more scarce. All that the users of tin need to know is that some of the tin they used to consume is now more profitably employed elsewhere and that, in consequence, they must economize tin. There is no need for the great majority of them even to know where the more urgent need has arisen, or in favor of what other needs they ought to husband the supply. If only some of them know directly of the new demand, and switch resources over to it, and if the people who are aware of the new gap thus created in turn fill it from still other sources, the effect will rapidly spread throughout the whole economic system and influence not only all the uses of tin but also those of its substitutes and the substitutes of these substitutes, the supply of all the things made of tin, and their substitutes, and so on; and all his without the great majority of those instrumental in bringing about these substitutions knowing anything at all about the original cause of these changes. The whole acts as one market, not because any of its members survey the whole field, but because their limited individual fields of vision sufficiently overlap so that through many intermediaries the relevant information is communicated to all. The mere fact that there is one price for any commodity--or rather that local prices are connected in a manner determined by the cost of transport, etc.--brings about the solution which (it is just conceptually possible) might have been arrived at by one single mind possessing all the information which is in fact dispersed among all the people involved in the process.

Mechanisms to distribute tin without prices have been tried, and found wanting. So have mechanisms to distribute practically every other good you can think of, from housing to hotdogs. Rent control distorts the housing market and discourages landlords from building or improving their housing stock. Price controls on bread result in shortages, and often distort the non-controlled sectors of the market. Fuel subsidies result in your precious tax dollars being diverted to Columbian roadside vendors who will siphon the gas out of your tank at great danger to themselves and pay something closer to market rates for it. Etc.

...a couple of Drudge links to illustrate the point (also well-made by others) in the real world.

Exhibit A -- Cold, uncaring capitalism:

NYC Man Survives After Heart Stops For 45 Minutes

Joseph Tiralosi was released from the hospital Tuesday. He had gone to the emergency room at New York-Presbyterian Weill Cornell Medical Center on Aug. 17 because he wasn't feeling well. Within minutes of his arrival, he collapsed and his heart stopped beating.

Doctors and nurses tried CPR and shocked him multiple times with a defibrillator. A last-ditch effort to break up any clots finally worked, and Tiralosi's pulse finally came back.

Doctors kept his body cold while they removed a clot and Tiralosi's heart started working normally.

Exhibit B -- Warm and fuzzy socialism:

In a letter to The Daily Telegraph, a group of experts who care for the terminally ill claim that some patients are being wrongly judged as close to death.

Under NHS guidance introduced across England to help doctors and medical staff deal with dying patients, they can then have fluid and drugs withdrawn and many are put on continuous sedation until they pass away.

...
"Forecasting death is an inexact science,"they say. Patients are being diagnosed as being close to death "without regard to the fact that the diagnosis could be wrong.
...
The warning comes just a week after a report by the Patients Association estimated that up to one million patients had received poor or cruel care on the NHS.

Rationing? What rationing?

I can only imagine how quaintly spendthrift the whole Terry Schiavo episode must have seemed across the pond.

UPDATE: Remember, the very idea of government "death panels" is just crazy talk.

UPDATE: Michelle Goldberg gets McArdled. Ouch.

posted by Dave on 09.02.09 at 06:03 PM





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Comments

Excellent. The government is in a classic conflict of interest once it foots the bill for healthcare.

Eric Scheie   ·  September 3, 2009 10:27 AM

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