Tuesday, September 29, 2009
I watched an interview with Michael Moore conducted by Wolf Blitzer last night and I honestly wasn't sure whether to be upset or laugh. Most of Moore's past works were pretty laughable as serious documentaries, but his upcoming film on "capitalism" is going to be something special. And for those who wonder, I place "capitalism" in quotes because it's not evident from the trailers that he is actually criticizing capitalism as opposed to mercantilism. It seems like he wants to beat capitalism over the head with the weight of the bailouts that were provided at the tax-payers' expense...which is clearly NOT a feature of capitalism at all...but we'll have to wait and see the film to critique his stance in its full glory.
The first thing Blitzer brought up seemed to be a point of personal contention. As such, let me say, as I always have for ad-hominem commentary, it does nothing to deface the views of Moore but rather Moore himself. That being said, Blitzer questioned how Moore can be against capitalism (which he described as "legalized greed"...I chuckled) when he has clearly become rich embracing the capitalist paradigm by selling his movies. And in a moment that was almost too embarrassing to watch, Moore tried to deflect the question by responding with something like, "Yes...I know it's rare that someone who actually has money is fighting for the poor, but I was taught that we are our brothers' keepers." Excuse me? Did Moore just try to turn Blitzer's accusations into a badge of nobility? Wolf re-adjusted the question just to make sure Moore did not misunderstand it. But he gave a similar retort the second time...I think it's pretty clear he understood the question.
This is a point of personal contention that I have with many neo-liberals (they aren't really worthy of the title of "liberal" anymore). Let me preface my comments by saying that this does not apply to all neo-libs but it does apply to the vast majority of them. There ARE some who actually live their beliefs to the hilt. And even though I may disagree with their ideology (and even despise it to some degree) I can certainly respect them for their integrity. My problem, however, is that most (neo)liberals draw their lines of altruism in front of themselves. That is to say, they insist that people in general must sacrifice for the good of others, but they never seem to be willing to sacrifice primarily of themselves before they look to others to do so. It's hard for me to sit there and listen to someone proselytize about how it's not only morally acceptable but actually preferable to steal from others to provide for the needy when the person preaching to me reclines in their air-conditioned house on Saturdays, fiddling with their new iPhone, and watching the game on their plasma wide screen. You're richer than Herod could have ever imagined and suddenly you think you're excluded from the responsibility of your own views? Why? Has an incredibly high standard of living and a woefully inept appreciation for history led you to believe you're actually one of those "poor" people? You're not. If you're going to demand that others be forced to sacrifice at gunpoint, you better be damn sure to walk the talk first. Did you sell your TV, computer, cell phone, or extra furniture to help the needy? Do you volunteer your extra time to charity? Did you pick up that extra job to help someone in need? How can you expect me to take your views seriously when you can't even claim the moral high ground within your own altruistic paradigm? Instead it seems you just expect the rest of us to pay, literally, for your personal lack of moral integrity and consistency. What a novel approach to ethics.
Later in the interview, Blitzer asked, "If you dislike capitalism, what system would you favor? Socialism?" Moore first exclaimed, simply, "Democracy!" He then prefaced his forthcoming explanation by saying something like, "You know, capitalism was invented in the 16th century. Socialism was invented in the 19th century. This is the 21st century...we need something new!" Without taking up additional time by dismantling his innocuously childlike Whig view of history, let me first respond by clearing up a couple of historical errors here. Capitalism was certainly not "invented" in the 16th century. Here, Moore is confusing the historical return to private property in the wake of feudalism to an "invented" system of some type. Unlike other socio-economic systems (communism, socialism, fascism, etc.) capitalism arises naturally out of a system in which property rights are present. What Moore is actually describing is the rebirth of private property and voluntary exchange in the 16th century. It wasn't until the 17th and 18th centuries that we even began to understand market phenomena. Up until the time of classical economists like Smith and Ricardo, markets were like a lonely tree in the forest, waiting for botanists and biologists to study it and explain why it naturally does what it does. In fact, there was no term called "capitalism" until the 19th century. "Capitalism" was a term invented by Karl Marx in an attempt to actually smear what occurs in a system of free exchange and private property. Despite his disparaging views of free markets and his propensity to embrace a few big mistakes that classical economists before him had made (the labor theory of value comes to mind), Marx was, ironically, correct regarding the emphasis that is naturally placed on investments in a system of free exchange. In the end, purveyors of voluntary exchange and property rights actually came to embrace the label.
Moore went on deflecting the charge of socialism by explaining that Americans have traditionally loved democracy, so why wouldn't we embrace economic democracy? Now this is pretty interesting. He previously rejects the idea of socialism and claims that it's outdated. But in this explanation, it seems as if he's not only embracing socialism but specifically Marxism! I want to first argue that socialism, in some form or another, has actually been around for quite a while. In fact, I would consider feudalism itself to be a direct predecessor to modern socialism. But the term socialism, as well as the fundamental theory behind it, was developed by...you guessed it...Karl Marx. Marx used the word "socialism" to provide contrast between his economic system and the free-market system, which he dubbed "capitalism"; Capitalism favors a narrow band of capitalists whereas his system, socialism, was social and favored everyone. This is, of course, an over-simplification, but it is actually where these two terms came from. The irony is that although Moore is trying to deflect the "socialist" mantle, he's not only (wittingly or unwittingly) supporting it, but making the EXACT same arguments Marx made. Marx argued that socialized democracy was the next natural evolution in economics. Democracy is a great system that politically empowers the masses, so why wouldn't we adopt such measures in the economic realm? Moore, while emphatically denying it, not only asks the same question but proposes the same solution.
One of two things is happening here. Either Mr. Moore is extremely ignorant regarding economic history, which I'm inclined to doubt, or he's simply trying to mask his own socialist beliefs for public relations purposes. Now, if you really believe in socialism, capitalism, pink bunnies, or any idea under the sun, you shouldn't have to hide those beliefs and be deceitful about it. If you really believe in what you're saying, you shouldn't be afraid of it. That being said, I think the claim that democracy is good in many, if not all, contexts is ridiculous.
Although it does seem like that from an early age we are led to believe that democracy is as American as apple pie, history tells us otherwise. To the extent that our founding fathers found application for federal government, it was implemented primarily as a republic. And while many of them extolled the virtue of the democratic process in state and local governments, they were certainly weary of it in terms of centralized power. I can't think of a better illustration of this (outside of the text of the constitution itself) than the fact that we (still) do not hold direct national elections. That distrust is not only reflected in the national fragmentation of power but in the actual scope of government power. We don't accept "democracy" in every facet of our lives because our nation was primarily founded on the Lockean concepts of Natural Law and personal sovereignty. Imperfect as it may have been at it's inception, the basis for our entire system were these classically liberal ideas of natural rights and private property. The reason we don't let democracy dictate our economy is the same reason why we don't let democracy dictate what church you go to or what shoes you put on this morning. The economy, left in a free state, is a reflection of voluntary exchanges of ideas, goods, and labor. And by extension, any violation of our rights to do as we wish with ourselves and our belongings is primarily a refutation of private property and self-ownership itself. People tend to forget that the free market is not some separate entity unto itself. Rather it is merely the manifestation of personal liberty in the realm of trade...nothing more and nothing less. We understand that it wouldn't seem right to let the government quash our freedom of speech simply because a majority of the people may support it. Yet we seem to be eager to part ways with arguably our greatest freedoms in the name of democracy. Of which name does tyranny and the abolition of personal sovereignty become an acceptable practice to you? Is the act of ten people assailing you somehow more righteous than a single person doing so?
Liberty, Mr. Moore...this is capitalism.
Tuesday, September 22, 2009
They had a guest on who was speaking about the "secret" nature of the pyramids. At some point in the discussion they were talking about how the Egyptian government heavily restricts and tolls those wanting to investigate the pyramids. She began to get side-tracked on some of her points by trying to explain that the fines, of course, were really being positioned by corporations to make a profit...which in itself is kind of funny if you think about it. But then she went on to yet another extraction in which she was going on a tirade about the evil of profits. Now, I hear this all the time from people who don't know their ass from a hole in the ground concerning economics, so that didn't surprise me at all. However, what she said next did:
"Just think...if we didn't have money, we could just barter everything!"
Wow...Exactly how uneducated would you have to be to believe that actual currency is a bad thing? I'm not sure, but I was laughing pretty hard when I heard that.
Firstly, let me make the quick, and patently obvious, point that the medium of trade (or lack thereof) has nothing to do with acquiring profits. Not having such a medium may make purchases more complicated (and actually probably more expensive now that I think about it). But there is nothing about dropping money that would keep people in a free market from returning interest and profits (in any medium) to capitalists. And even if it did work that way, we would all owe you a debt of gratitude for putting the kibosh on personal purchasing power and our standard of living.
Put simply, money is just a medium for trade. In fact, until this past century, money was typically a service or good in and of itself (silver, gold, copper, etc.). I think that maybe some people take their distrust of the government controlled fiat money-system (which arbitrarily destabilizes and inflates economies today) and pin that negative conception against all "money." But, believe it or not, money is not an invention of governments OR capitalists. Money is a fluid good that becomes valued as a common means of exchange in any market-economy. It could be, and has been, things as simple as alcohol or grain.
In this way, money is simply a heavily traded good that actually lets you indirectly barter. You ARE bartering when you use money (well...non-fiat money...but that's a whole other discussion). You are just trading whatever good or service you provide for something that's more easily tradable (silver for example). Now, this became pretty obvious even to our ancestors tens of thousands of years ago, but we can elaborate a little more for the woman on the radio this morning. You REALLY don't want a direct barter system...especially in a complex economy. The town butcher or baker may not have too many problems getting the goods and services they need for bread and steaks but I can guarantee you that you're going to have some serious problems trying to get that fracture X-rayed for the latest copy of your book on the pyramids.
Some people just don't think.
Wednesday, September 16, 2009
The discussion came out of a story I was relating to her regarding a group of classmates from junior high who had decided to involve themselves in some self-made Wiccan/magic circle. I was having a good laugh about it, in part, because I believe a large part of it was directly due to them viewing "The Craft" (a movie that I actually somewhat like by the way), but also because I felt that it reflected a kind of special comparative ignorance to make a semi-religious move like that. Now, this point wasn't made in order to try to apply some interpersonal value on religion. I'm fairly respectful of all religions, even though I feel many followers of them are blindly led by their convictions. But given that both my friend and myself ascribe a kind of primitively mystic value to most religions, we were both approaching things from a point of view where both Wicca and Christianity are equally ridiculous from a religious perspective.
The conflict, if you can really call it that, arose when I made the assertion, upon being questioned, that I felt that rejecting the religion of your upbringing and replacing it with an equally ridiculous belief made those people even more silly than people who simply continue to accept the religion of their upbringing by default. She disagreed, making the claim that they were equally stupid feats. Now, I know it seems like we're being overly-critical of various religious beliefs here, but please know, at least on my part, my intentions were not to trample on the things other people hold sacred. Religion is a personal thing and I would never begrudge anyone for it. I'll admit that at first, I thought that her general disregard for religion as an atheist was causing her to mask her own view with personal prejudice. But when I started to think about what she was saying, I realized that what I was feeling and relating was actually a fairly new perspective for me...if you would have asked me five years ago, I probably would have agreed with her.
What's happened, over time, is that I've adopted a very Misesian view of human thought. And because of that, I think my approach to those kinds of judgement calls have been more subjectivist in nature. See, I think her view of those two different examples of people come from the belief that essentially a person believing in one form of mysticism equals a person believing in another form of mysticism...and this view is primarily anchored in the equating of the two religious beliefs. But what I think she was missing, and what really grabbed me right off the bat having been familiar with Mises' work, is that the adoption of religious beliefs does not have quantitatively equal value between two different people; that regarding the personal judgement of one's character or actions, they really aren't likely to be subjectively equal between two people because the people themselves aren't equal.
I know I'm probably doing a poor job of explaining this, but consider the following; Let's say you have a situation in which a mentally handicapped person is working as a janitor at a restaurant, and you also have a highly intelligent person who has graduated from MIT with a doctorate in Computer Science also working as a janitor. Now, we know that value is ultimately subjective, so there is no right or wrong, I believe, in this answer. But, in general, would we be more likely to criticize the mentally handicapped person for the position he's achieved or the MIT grad? I think we would mostly agree that the MIT grad is worthy of more general criticism because he's seemingly wasting a large degree of productive capacity, which may not be true of the handicapped person. In this instance, we can understand a subjectively ordinal view regarding the character of each person, even though ultimately they hold the same position.
Much in the same way, I think we can come to different conclusions regarding young people who cling to their beliefs by default and those who choose a new religion. I pointed out that I felt that anyone who is willing to rationally, in the Misesian sense, choose a new religion is at a very different place mentally than someone who never approaches such a point in their life. Without digging too deeply into it, I feel that being able to rationally decide that your previous beliefs were inadequate and to act insofar as to adopt new ones indicates a cognitive capacity for introspection and critical re-evaluation. On the other hand, and in a way I actually believe I'm the one being much more malicious here, I believe there are people that never reach the mental plateau where real philosophical re-evaluation is possible, and simply continue to live their lives with the religion, culture, and traditions that have been passed down to them by their family and society. Now, to be perfectly fair, there are obviously a good amount of people that do rationally re-evaluate their beliefs in a very real way and continue down the path they were on before regardless. But we must also remember, in this particular example, that we are talking about young teens who may not have hit such a point yet.
My general argument was that I feel I could be more highly critical of a person who I believe has a greater capacity to make correct choices and yet continues to make bad ones than someone who has a much more limited capacity and continues to make bad choices based on that circumstance. And so, given the views my friend and I have regarding most religions, I really felt that someone capable of re-evaluating their religious preference who simply chooses an equally silly religious preference is not on par with a person who may not really have the cognitive capacity to do either. My friend, having the black heart that she does, says that I was trying to be too empathetic.
Maybe there's compassion in subjectivism after all...
Monday, September 14, 2009
What's lacking here is the intellectual will and fortitude to appropriately combat the nonsense that's being thrown in their direction. They are suffering from the same malady from which their opponents suffer; namely, an eagerness to react emotionally, and without reasoned forethought. And while there are clearly things that one can certainly get emotional over regarding the use of government, blanket statements like "the government wants to kill old ladies with death panels" and "no one should die because they don't have insurance" only scratch the surface of the issues, and in an entirely child-like way at that. The issue at hand here is the moral, philosophical, and political efficacy of proposed solutions to the problems in front of us. And while I think that the claims of many on the left on these grounds are both weak and pedantic, I feel that they will ultimately walk away the victor. Not only are the views of many conservatives somewhat conflicted in their own right, but they have seemingly lost the ability to even frame their arguments correctly.
To be perfectly fair, I have to at least acknowledge that the views of those on the left regarding federal government are obviously far more atrocious than those on the right. All my dealings with those on the left have led to the conclusion that their view of the role of the federal government is unambiguously arbitrary and quite frankly almost limitless. In fact, about the only time I've ever heard liberals clamor about the limits of government are in matters surrounding censorship. Even their deep-seeded hatred for GWB seemed to stop at the edge of simple disagreement with policy. We've all certainly heard the phrase "illegal war," but few took the time to elaborate on the propensity of such a statement. In any case, it's always seemed to me that social democracy was their prime directive, and by proxy the federal government should be able to do whatever the people wish it to do, simply because they have majority support. It's ironic because, you'd think, after eight years of an administration they hated so much, that they would fear the unwieldy power of the state, and subsequently the nature of their views on democracy and federal power. But that isn't the case. In fact, I believe part of the reason, and maybe subconsciously, that many of them still frame the Bush years with the qualifier that he "stole" the election is that it legitimizes the efficacy of the democratic process in their minds; that the past eight years were simply a proverbial systemic hiccup and that a real democracy wouldn't produce that kind of outcome.
Of course, our forefathers knew better than this. Which is why they not only felt that government power should be spread out amongst competing states, but that federal power should be severely limited. These limits are of course embodied in our federal Constitution, which legally binds the government to a very small set of powers and responsibilities. And this is where conservatives and libertarians can find the low-lying fruit for their arguments. As the closest things to minarchists we have today, these groups should be furious about how far the government has been allowed to overstep its boundaries. But that's not what we're seeing at the forefront of discussion. Instead we're left with rants about spending and tax policy; which is important, don't get me wrong. But how far into an argument about how much the government is going to spend do you wade before you bring up the fact that the programs in question are far out of the legal jurisdiction of the federal government in the first place? The constitutional argument has been so lost in the fray that I'm starting to hear retorts regarding the claims of socialism that reference the police and roads. To which any minarchist should be able to easily refute with a simple, "Oh...you mean things that are actually constitutional?" But that refutation isn't even coming to the forefront anymore. It's as if this entire country, over time, has become so divorced from the idea of limited government that not only do those on the left seem to ignore the idea entirely, but those who purport to uphold it can't even seem to cite the writ binding the idea in and of itself, our constitution.
And as if this isn't bad enough, minarchists ultimately must face the philosophical consequences of their position. And if they aren't even willing to point to binding legislation to combat perceived aggressors, I think we can safely say they aren't going to start delving into the inner-workings of their own beliefs. At some point even the minarchist has to justify the line he's drawn in the sand. We've seen the rather wide and lateral scope of neo-liberal conceptions of centralized power, but we've yet to entertain the reciprocally arbitrary views of those who believe in limited government. We laugh voraciously, and other times gawk in abject horror, at the left's inability to really hold federal power to any standards of limitation, yet we rarely think to laugh at the arbitrary nature of the line that people have drawn before us. It's bad enough that minarchists seem rather unwilling, or even incapable, of playing their tried and true trump card, the constitution. But if they can't even bring themselves to make such an argument, how are they ever going to deal with others pushing the prodding even further? After all, exactly why is it alright for the government to supervise the building of roads and post offices and not insurance plans?
There are other arguments, outside of the constitution, for these limited roles, albeit weak ones in my opinion. Fortunately, as a self-described anarchist, I don't have quite the same uphill battle to fight. And although I find myself sympathizing with so many people of that mindset, in many ways they are not as distant, philosophically, from their opponents as they think they are. In fact, in many ways, these two groups are two sides of the same coin, keeping us in spin with the centripetal force of their supposedly opposed convictions. But in a very real way, both points of view ultimately seem to leave us with a government that doesn't respect individual sovereignty. With the wealth we've been able to amass over such a short time as a nation, it does suddenly seem all for not if we've simply left the back door open for thieves. In fact, in an odd way, to the extent that free markets had been allowed to persist, it seems in some ways as if it's only contributed to our prolonged self-cannibalization. The disease of government almost feeds on our discretionary wealth and complacency like a rich alcoholic overseeing the slow construction of his own distillery.
Most anarcho-capitalists envy and admire the intellectual efforts of the purveyors of limited government that laid the foundations of our country. But we've also seen how, in many ways, that this noble experiment has crumbled over time, turning into an anathema in light of those very foundations. We understand that the arguments regarding the nature of man that progressives hold up as evidence of the NEED for strong government are the exact reasons why men, elected or not, cannot be trusted with such plenary powers. If conservatives and libertarians are going to convince the left that government power has grown unchecked, and that our current course must be changed, then they must be prepared justify their own beliefs in limited government...or at least be able to acknowledge the fact that one is legally owed to us.
"The United States Constitution has proven itself the most marvelously elastic compilation of rules of government ever written." - Franklin D. Roosevelt
Thursday, September 10, 2009
I've often been puzzled by people in the latter group, which seems to encompass the behavior of most people I discuss various issues with. The confusion arises from an inability to determine whether they are feigning such concessions, which would push them into the former group, or if they truly acknowledge the folly of their beliefs and yet continue their advocacy in the face of it all. As someone who holds what I would consider to be an unconventional view, politically speaking, it's disheartening to think that so many people simply refuse to listen at the offset. But it's almost depressing to think that no matter how many times you dispel their their arguments, that they continue to press on with the same talk-shown questions, in the same incurious fashion...over and over and over.
So here, I would like to highlight some of the reasons I have come to view the world the way that I do. And I'd like to share these views by focusing them through the lens of the health care debate that is still raging on every TV, at every dinner table, and on every social-networking website. My goal is not to simply pull more people into my perspective viewpoint, but rather to set for the record straight on a world-view that is maligned only by the truly malevolent in the mainstream politic of today, but only when it is not dismissed entirely by the ignorant.
My primary objection to the state-run "public option", or any regulation of the health care industry for that matter, is primarily, and most importantly, anchored in philosophy and morality. But unfortunately moral and philosophical objections are never enough to dissuade thieves, whether writ small or large. However, there IS a large portion of the population who is more than willing to argue from the utilitarian standpoint. Therefore I will engage the arguments on both fronts and hopefully expose the consequences of a statist view.
Utility is probably the most prominent argument for and against the various proposed health care reform bills floating around. The pragmatist argues that his ideas benefit the greatest number of people in the greatest way...whether he be for or against such legislation. As stated previously, my true objections to such programs are in the realm of philosophy, but given the staggering unwillingness of those who support the currently proposed reforms to consider the consequences of such programs and even the cause of the current problems, it's very easy to see why people who are inclined to support free-markets are calling these people out on their inconsistent views. As I see it, the following items represent the main thrust of Obama-Care supporters, and I will address the problems I have with each.
- There are 45 million un-insured Americans today. We must provide insurance for them.
- 14% of our GDP is consumed by health care costs. People simply cannot afford to keep paying so much for such care.
- Greedy insurance companies don't operate to give a service but rather to make a profit. A company seeking profit is in conflict with providing medical care.
- Insurance companies do not provide cheap coverage, if any at all, for pre-existing conditions. This bankrupts families, especially in times of economic turmoil when people lose their jobs and often subsequently their employer-provided coverage
Would it surprise you that, to the degree that each of these points are true, government is largely at fault? Let's explore...
My first objection to the claim about the un-insured is the figure they use and how advocates for government intervention gather statistics for political influence. The "45 million un-insured" figure is simply a statistically abstracted guess as to how many people, living in this country at the current time, are not covered under any plans at this time. This may not seem like a consequential deliberation of the issue to most people, but consider this: For what reasons would someone not have health coverage? What purveyors of government intervention want you to believe is that we have 45 million people who are simply too poor to afford any type of coverage. What they don't tell you is that their abstract also includes young people who may have declined to purchase expensive coverage at such a young age, people who qualify for Medicaid already, and illegal immigrants. An estimated 20-30 million of these 45 million fall into one of these three categories. Now, this is not pointed out to disregard the 15-20 million people that really cannot afford coverage, but rather to illustrate how alarmists of all stripes will often inflate the issue to garner sympathy from those who aren't willing to be as cynical as they should be.
Aside from the statistical point, it's important in this debate that we remember that health care is not health coverage. We're having a discussion, for the most part, about how risk is pooled and medicine is paid for...not whether or not people are dying in the streets without coverage...we leave that to single-payer systems. As most providers are well-aware, a lack of coverage isn't going to automatically oust you from the ER. If you come into the hospital suffering a heart-attack or an aneurysm, they're not going to refuse you simply because you have no health insurance. In fact, as it stands now, that would be against the law. Case in point: My old roommate suffered from a sudden bout of appendicitis one night and rushed over to the hospital. He was in college working only part-time at the time and was not covered under any plans his parents might have had. The doctors proceeded to run various tests and blood work, set him up for surgery, and had his appendix taken out the next morning. He spent a couple of days recuperating in the hospital and when he was well enough he came back home. Later on he received his separate billing from the hospital, the anesthesiologist, and the surgeon. They were eager to work out almost any kind of payment plan with him. He told them his circumstances and they were very understanding and offered a low, long-term payment plan to get his bills paid off. Now clearly, because he was not insured, the entire cost of all the various procedures, services, and tests were ultimately his responsibility. If he was covered under some kind of plan, the costs on him personally would have been much less. But again, the price of coverage and the provision of medicine are two very different things. And if we are going to address the problems with health care, we need to focus on the real issue at hand: cost...and not simply obfuscate the issue by scaring people into thinking that millions upon millions of people are being turned down by ERs around the country simply because they lack coverage.
There are a couple of things with this line of reasoning that bother me. And the first is a personal point of contention given the economic viewpoints of Obama and those in his administration. As someone who enjoys reading about economic concepts (yes...go ahead and laugh), I find it almost painfully funny that Obama here seems to be insinuating that consumption might actually not be a good thing. I, along with various prominent economists, cringed in the same way when he fed us with rhetorical flourishes about American consumption leading to many of our current economic woes. It seems that on the one hand we are lectured about spending beyond our means. But on the other hand, the economic remedies his compatriots advocate over-consumption to "stimulate" the economy. Which is it? Should we be saving, as Americans are now doing, naturally I might add, in light of the current economy or should we simply consume more even in light of our debt? How can you malign families spending more of their income on health care when you encourage them to spend more of it on new cars (and only if they destroy perfectly good ones they had before!). By his own Keynesian beliefs, an increase in spending on health care should be applauded because it should stimulate growth and employment in the health sector. How can you reconcile these two very different beliefs?
The second point picks up where my comments regarding the un-insured left off. No one doubts that prices are very out of wack in the health sector. So how will these plans lower the cost of care?
The ugly truth is that they won't. And although I think people are bright enough to realize current prices are way too high, I don't think they've taken the time to figure out why or even how this plan will attempt to remedy the problem. Unfortunately I think what tends to happen, and maybe this is a symptom of a failing public education system, is that these people think the government is going to bring down the cost of care because individuals in the program will not have to pay as much as they did before. Of course, I think, that having someone else pay the bills does not lower the cost but rather shifts the cost onto another group of people.
As is often touted, there's no such thing as a free lunch. Even the school lunch program has a cost... even if you misconstrue it to somehow be "free." The government still has to pay someone to make, deliver, and prepare the food and the tax-payer at large writes the check. In the same way, Medicaid and other mandatory government programs are not free, even if the recipient perceives it as such to them. Simply having someone launder forced payments for goods and services doesn't change the price.
Now, supporters of such programs will make the argument that government forces providers to accept less for procedures when paid for by Medicare and Medicaid and this lowers prices. Unfortunately, and as someone who works in the medical billing industry I know better than most, this is definitely not the case. In fact, what it does is largely decrease the quality and quantity of care over all and raise the bar for people trying to purchase private plans. Simply forcing a doctor to accept less pay for his services does not change the bottom line. A doctor needs liability insurance, office space, tools, medical equipment, assistants, etc. When you force a provider to take less, and the relative capital cost (all the things he uses to run a practice) stays the same, one of three things happens. The insurance companies reluctantly re-negotiate payment schedules (passing the costs onto the privately insured and putting more pressure on insurance companies to defraud their own customers), the doctor sacrifices quality by seeing more patients in the same amount of time so that he can bill for more procedures to make up for his losses, or the doctor scales back his practice to a more maintainable size, decreasing the supply of care available and consequently raising the over-all price of medical care. And this doesn't even factor in the compensation for the government-funded bureaucracy that would have to manage such a system, which may end up costing tax-payers more per procedure, over-all, than the difference between the original fees and government-mandated ones.
Why are we inclined to believe that any government program, even if it's designed to ease the burden for some kind of product or service, actually lowers prices? What industries are the government most directly involved in regarding various subsidies and regulations? Medical services, higher education, and housing come to mind. Can you think of any industries where CPI-adjusted prices have been more out of whack? Do you think it's a coincidence that government now pays 55-60% of the total receipts to hospitals and private practices and prices have sky-rocketed since the advent of such programs initiated via The Great Society?
If you really want to cut prices, get consumers back in the market. The way things are set up at the current time, we end up dealing with third-party payers (be they government or private insurers) for almost every single medical service imaginable. Isn't insurance supposed to be for catastrophic ailments and trauma? Do you think it's odd that our grandparents used to be able to pay for births out of pocket and after fifty years of trying to "control the price of care" almost no one can afford to do that without insurance? How did we go from a system where competition in the health industry was so alive that doctors would make affordable house calls (that could be paid for out of pocket) to an industry where you have to wait in some sterile office waiting room for an hour to get an insurance-covered immunization that costs $500? Does that make any sense? There's a massive disconnect here that we have to look at more closely. We need to stop thinking that the solution to every problem is simply making the tax-payers eat the cost.
Profits and Greed
There's a point that's been made far too often lately, even by those who would usually be on my side economically speaking; since insurance companies operate for a profit, that they cannot provide cheap health care. I'll have to be honest, this point of view is utterly baffling in light of...well...just about everything around us. I think it's fairly safe to assume that ALL COMPANIES, and for that matter most individuals, operate for profit at least at some level. Is the public's understanding of capitalism so warped that they think this is bad or that it ultimately drives up prices? If that's the case, then there are some core misunderstandings that the layperson needs to deal with before assessing what he or she believes to be the best way for us to achieve affordable health care.
Do computer manufacturers operate for a profit? Do car companies work for a profit? Do clothing companies work for a profit? What about food producers and sellers? If attempting to maximize profits arbitrarily increases prices in a market, then why do the costs of such goods relative to quality and inflation go down over time? If companies that seek profits cause costs to go up, why does American purchasing power increase over time, even in sectors where wages remain stagnant? The answer is that, in a truly free market, profits perform roughly the opposite function of the misconceptions people hold. Profits, ultimately, lower prices and increase purchasing power.
To someone who doesn't understand economics, and particularly in the areas of capital and interest theory, such a statement can seem very counter intuitive. But when a person better understands the function of profits, it's easier to see why it's actually a good thing. Simply put, profits are the interest on capital and the difference between capital costs and the marginally subjective value of a good as determined by purchasers of the good. When a venture yields a large profit in a free market, profit acts as a signal that the given product or service is in high demand and subsequently attracts competition. Competitors give the shareholders and owners of the company incentive to re-capitalize their profits by investing in better facilities and equipment for their workers to decrease labor costs (by being able to hire less people to do the same work or to utilize the same workers to a greater capacity) and increase productivity. Recapitalization continues amongst the competitors who must decrease costs or increase quality in order to maintain or gain market-share in the given industry.
Without a frame of reference regarding time and the stages of capital investment, it's easy to see how profits could be construed as something that's bad. But understanding the nature of capital investment, we can see how profit actually functions as a signal that there is high demand for a product or service and it is currently being exploited. It is actually the very greed so many people decry that draws competitors into bidding wars of attrition and refinement to drive the cost of the service down and increase their market share. This is why capitalism works and has provided the highest standard of living the world has ever seen. It harnesses our natural inclinations toward greed and self-preservation to provide ever cheaper goods and services to the masses. Getting upset about profits is like getting upset at an x-ray for revealing a fracture. You might not like the fact that you've suffered a fracture, but the x-ray is what lets other people know something is wrong and sets them on the path to make things better. Likewise, profits reveal something that is in high demand and low supply in the short run, but functions as a signal that more capital and labor must be devoted to this need which will increase the supply and lower the cost...and it can be fueled solely by greed.
The question we should really be asking is,"If profit and demand in the health insurance industry is so high, why is there not more competition and innovation driving down the prices?"
I hate to beat a dead horse, but again the primary culprit here is government. Earlier I discussed how, through forcing lower payments onto providers, government can actually pass costs onto private insurers. But this is only the tip of the ice burg.
It's often a joke in truly free-market circles that we are all shills for corporate giants and that we defend the stance of almost any given business...because we are gluttons for punishment I suppose. But that's not the case at all. In fact, because we somewhat uniquely hold the understanding that corporate empire owes much of its largess to government meanderings, we often find ourselves at odds with large corporations and businesses. This is often a point of frustration with many anarcho-capitalists, as we understand that, without government intervention, a company is only as solvent as its customers choose to make it. And in this way, free-markets are far more subject to the people then any representative government would ever pretend to be. And we also understand that a free market is not what we have now nor have had for quite a long time. Instead we have something much closer to a mercantilist system which unfortunately fuels the hatred for a system that isn't even in place, capitalism. And large corporations reap the benefit of our misgivings.
I'll give you an example: regarding this push for health care reform, Walmart came out in support of a government mandate that would force employers to offer coverage to employees or pay an 8% payroll tax. Now this stunned a lot of people considering Walmart doesn't currently offer coverage to its employees. It even stunned many people who are considered free-marketers. But it didn't stun ANCAPs (Anarcho-Capitalists). Of course Walmart would support something like that. Think about it. Walmart has the strongest bottom line among its competitors (K-Mart, Target, etc.). Is it possible that Walmart believed it could weather that kind of burden and maybe its competitors wouldn't be able to do so, putting them out of business while increasing Walmart's market share and subsequently their profits? Could greed actually be motivating their advocacy of government intervention or do you believe that maybe the company so many decry as being the center of all things greedy suddenly adopted altruistic motives?
The truth is that often large businesses favor government regulation and intervention because it stifles the prospect of competition. We pile corporate taxes and regulations onto companies because we believe them to be rich and greedy but do we ever consider how much this may increase the overhead and startup costs for new companies? There have been dozens of books written about how large corporations actually benefit from some taxes and regulations simply because it leaves them with a larger market share despite the initial burdens.
In the case of insurance companies, regulations abound. Each state has its own list of mandated treatments which these companies must cover by law. Health insurance cannot be purchased across state lines. Payment schedules are often, at least partially, negotiated according to various legislation at the state or federal level or even through government entities with various providers. Insurance companies and providers alike are the victims of some of the most agregious frivelous lawsuit cases the judicial system sees, inflating liability costs and increasing premiums for innocent customers. Even with profit margins peaking at 4-5% (and yes that's true...look it up), insurance companies enjoy what would almost be considered massive municipal monopolies largely because of such government involvement. The CEO's of some of these companies, even on the low margin, bring in BILLIONS in profits. If greed is so prevalent (even if you believe it to be a bad thing) competitors should be busting down the doors of the health insurance industry to reap the rewards, and subsequently provide lower costs through capitalization and competition. But instead, burdensom regulations and government intervention actually work to keep competition from ever truly forming and instead entrench corporate giants like Blue Cross Blue Shield, Anthem, and Aetna, who maintain borderline cartels and monopolies in virtually every state in the union.
Profits and greed do not inflate health care costs. The government intervention that stifles the response of entrepeneurs in a free-market to the carrion call of high profits and demand inflate health care costs. In a time of distress and emergency, you do not seek to cut off the lines of communication (profit signals), you remove the barriers (government intervention) impeding those who wish to satiate your wants and demands.
This item of contention may be the most infuriating of them all as someone who decries government intervention. This is because government fault should be the most directly evident here. The problem that people are continually running into, and the effects of which are amplified by the current recession (depression?), is that people have a hard time getting cheap insurance when they lose coverage after changing jobs, being fired, or moving to a different state. Many of these people are therefore looking for either mandates on companies to supply such coverage (which is being done on a state level right now in many places) or a public option outside of COBRA in which they could purchase affordable care.
The first problem I have with this is that it seems to indicate that people aren't aware of what exactly insurance is. Insurance is a service that hedges against catastrophic occurences by pooling risk. You're essentially placing a bet that something bad is going to happen to you (as awful as that may sound). You pay a monthly fee so that if said catastrophe occurs, you are covered by the fees of others paying into the system. The insurance company is betting, and hoping, that such a thing will not happen to you, or that the premiums you incur over your period of coverage outweigh what they will have to pay out for you.
That being said, it's hard to grapple with the fact that so many people don't understand why they can't just purchase cheap plans from one of these companies after the catastrophic condition has already occurred. And while we understand the terrible condition these people are in, it shouldn't be that hard to explain why companies would deny coverage to such people. In racing terms, it would be the equivalent of asking someone to place a bet on a horse that lost...after the race was over. That doesn't quite make sense, does it? If you didn't have auto-insurance, would you expect to be able to buy a cheap policy to cover a car you just wrecked? If you didn't have home-owner's insurance, would you expect to be able to purchase a cheap plan to cover your house that just burned to the ground? Why not? Well, because pretty obviously you're just asking that company to pay for your house...they're no longer pooling risk for future events...they're eating losses for events that have already occurred. What would be the benefit of a company offering $200 a month coverage for someone they KNOW is going to cost an average of $5,000 a month? Would it be their urge to decrease profits, lower the wages of their employees, or increase the premiums for existing customers maybe? That's essentially what you're telling them to do. If you're going to simply make an insurance company pay for an illness that has already occurred, then you're not talking about insurance anymore...you're talking about government-mandated wellfare...targeted on a single industry no less.
But this, of course, does not deny the existence of the problem at hand. Why do we have this problem with pre-existing conditions regarding insurance? When do people lose their coverage? Often it can happen when people move to a different state. Because of various state legislation and mandates, as discussed earlier, insurance is not really portable accross statelines. So in these instances, it is government intervention that causes people to lose their coverage. Given that, it's pretty clear to see that removing these mandates and restrictions would allow for more affordable and portable nationwide pools that customers could choose from and would allow them to hedge against losing coverage simply for moving. But what about other reasons that someone might lose coverage?
I think the thread tying the real heart of the problem together is our system of employer-based coverage. There is no shortage of sob-stories (and most if not all of them legitimate) about people losing their job and subsequently the coverage they had which was helping them live with a debilitating condition. But you rarely hear anyone ask why a person should lose health coverage based on their employment status. It's almost as if people are blinded by the obviousness of the question. We've all grown up with coverage paid largely by employers, but why is that the case? The truth is two-fold. Originally the trend started because of WWII era wage and price controls. The government put a freeze on wages and prices for a short time. Subsequently, companies began to offer the purchase of health insurance and various other benefits instead of additional wages to bid away labor. This practice was later bolstered and, need I say, perpetuated by the offering of tax-payer dollars through various subsidies to employers who offered health insurance to employees. In short, government has allowed your employer to compensate you for your labor, in part, at the expense of the tax-payer, instead of their own pockets, through employer-based insurance write-offs. So now, seventy years later, it makes sense from a market perspective for employers to continue to use coverage as a bargaining chip instead of compensating us in full, directly.
But if that means that our insurance plans are based entirely on employment, which we understand is not stable by definition, wouldn't it be a stupid idea to continue such practices? The answer is yes...and most people who have an understanding of what's really occurring understand that. But the truth is that government subsidies offered to business provide incentive for them to keep purchasing insurance for employees. If those subsidies were to be repealed, it would lighten our tax burden and we would subsequently be compensated fully through wages, allowing us to purchase our own insurance as we see fit, as we do for cars and houses. And you would no longer have to worry about losing coverage after you've contracted some kind of medical condition. Instead you'd be able to move wherever you wanted, quit your job, or even be laid off and still maintain a cheap catastrophic health plan that you would maintain through illness.
Spending quite a bit of time refuting some of the utilitarian arguments for government intervention regarding health care, let me address the moral and philosophic issue at hand by dismissing all the views previously stated as irrelevant. That isn't to say that the things mentioned above are not true (indeed, they are true) but rather that the utilitarian argument, although often seen as rational, is often inconsistent at the least, and offers attrocity after attrocity as legitimate answers at the worst.
As someone who prides himself in rational thinking, I will admit that listening to people quote from the bible or wax poetic about our religious and moral obligations to support government theft, violence, and coercion absolutely infuriates me at times. The bredth and width of that kind of irony is so deep that even as someone who is not religious, I can only be reminded of Jesus in a tormented moment of realization and enlightenment offering a prayer to his Father for those who effectively murdered him, "Forgive them Father, for they know not what they do..." I don't make such a reference as to compare myself to Jesus in any way but rather to illustrate how difficult it can be to watch the ignorant transgress upon the innocent and realize that they may never understand why what they are doing is so wrong. Jesus was capable of forgiving such people. I'm not sure if I'm so ready to forgive the violence that so many seem to be supporting today.
At first, when I was digging into politics, philosophy, and economics, I always thought that people just simply didn't realize what they were doing. But as time has gone on and as I have engaged more and more people on these issues, my sympathy and patience has quickly been eaten alive by their sheer unwillingness to rescind their violent behavior and at least listen to the few of us that see there is another way to approach the world's problems. And in that way, I've come to admire the likes of Ayn Rand and Murray Rothbard all the more. These were people who did not give victim's sanction to society's transgressors and spent almost every waking moment of their lives fighting back against the forces of tyranny and oppression. And although their movement is alive and well today, I stometimes feel like the impression they've made is but the tiniest scratch on the lense the world politic. But their message of love and peace still stands today, as do the words of Jesus and other prophets throughout the ages, regardless of how badly their words have been twisted and tangled. They promoted one simple truth...
Do not trespass against others.
It's really as simple as that when it comes to my philosophy. Do not fraud, steal from, murder, or maim other human beings. We can get swept up in the minutia of economics and civic law until we're exhausted but it will not change the simple axiom that man should not inflict violence upon his fellow man. There are not many people capable of reading this that would not claim to espouse this viewpoint. And yet we continue to use government as a tool for violence and coercion on a daily basis.
All government programs and interventions are ultimately paid for by forcibly collected tax dollars. I am not given a choice as to whether I want to participate in government-funded programs (as my recent audit from the Columbus Tax Division will etify). Those taxes are taken from me with the threat of force. This means that a portion of the fruits of my labor are taken from me by others every single day. One hundred and fifty years ago, we used to call having to labor for the fruits of another man slavery, yet today people can't seem to recognize it as such. Am I really that crazy for being appalled that so many people support it? In truth, I'm more appalled by the fact that these people are un-ashamed by their demands for such violence than anything else. Even if you felt that it pragmatically served a beneficial purpose, why are you unable to acknowledge that you are taking part in such a coercive act? And even at that, why, when presented with a problem, is your first reaction always to offer government-endorsed violence as the solution?
These are the questions that I ask myself almost every day when confronted by supporters of statism both on the left and the right. And contrary to coming closer to understanding such people over the course of time, I find myself actually becoming more perplexed and befuddled by their inconsistent views. If you really don't believe in perpetrating violence upon innocent human beings, then please walk the talk. It's one thing to have your narrow view of pragmatic utilitarian arguments for such actions fail miserably when exposed to the light of reason, but it's a whole other thing to hide behind a shifting veil of moral superiority while you seek to betray the very core of your supposed belief.