The Paltry Press

Marginalism, inequality, and security costs

2011-07-07T10:00:00.001-04:00

An article from Anna Morgenstern, cited by a comment on Reddit, claims that massive capital accumulation in anarchy is impossible because:

States subsidize police protection of private property, making possible absentee ownership of property over large geographical areas. Without state-subsidized police protection, absentee ownership would be impossible.
A self-interested militia raised in anarchy for national defense, comprised of the middle class, defending from an aggressor state, would not protect the property of billionaires.
The state creates fractional reserve banking, which enriches the wealthy at the expense of the public.
Central banking enriches the wealthy at the expense of the public.
Intellectual property is a state-imposed rent.

Claim 1 almost sounds plausible at first blush, but it's actually glaringly wrong, because it denies marginalism. As people grow their wealth, they are constantly bargaining with others for command of resources. Employees benefit from a business owner's investment capital, on the margin. An employee benefits from each additional unit of labor and skill they sell on a free market. We should expect that their salaries and wages will be competed up to how much value they create in the firm. The antagonism between employees and owners in leftist and syndicalist thought is overstated, because employment decisions incorporate opportunity cost.

Employees aren't always on the brink of seizing business assets from an owner, and a state police force isn't the driving deterrent. Employees benefit on the margin from their own employment. If employees really sought to seize business assets, why wouldn't they simply open shop with their own investment capital? Entrepreneurs serve their employees by taking on risk and offering up their own investment capital so that more risk-averse employees don't need to.

Police forces, whether state-run or private, exist to take advantage of the division of labor, and as such, coordinate economic activity far beyond any one economic agent's scope. A spontaneous order coordinates more activity than a planned order, and a public police force doesn't provide the Pareto-efficient amount of protection, but it does offer gains above and beyond autarkic production. It's the division of labor in protection provision that allows for absentee ownership, not distortions from the state, and absentee ownership is desirable because it allows capitalists to generate more wealth.

Claim 2 is trivially false. National defense is not a coherent concept for a stateless region. There cannot be national defense for a nonexistent nation. To introduce an aggressor state into the thought experiment is theorizing outside the scope of anarchy, but the same denial of marginalism from Claim 1 also underlies Claim 2. Free economic agents allocate the efficient amount of protection of private property, on the margin, whether to defend against jealous employees or external aggressor states. If a militia can form at all, and members of the militia are motivated by the protection of private property, the militia would protect the assets that people find valuable on the margin, which includes assets owned by billionaires.

The falsity is the idea that the wealthy just hoard their wealth. In reality, wealth isn't so liquid. Wealth is used by people other than the owners to profit through investment.

Claim 3 is a bizarre old Rothbardian myth, which Selgin has thoroughly debunked.

Claim 4 is almost true. Central banking is a way for the politically connected, not the wealthy per se, to extract rents from the public.

Claim 5 is plausible.

Why Teetotalism?

2011-06-04T10:00:00.001-04:00

I don't drink alcohol or take any drugs recreationally, and never have. I realize that that puts me in a fringe minority of the population, especially because it's not for any kind of religious reason. The drive to use psychoactive substances is nearly universal, so I'm an outlier. Why do I value personal teetotalism?

I consider Penn Jillette an inspiration for this decision. Penn's libertarianism obviously doesn't imply personal or political teetotalism, but personal teetotalism does offer a solid rhetorical point for libertarianism: that one can choose not to consume even a legal substance like alcohol highlights that the primary basis of a choice to use a drug isn't the law. Having this rhetorical point isn't a reason for Penn or me to choose teetotalism, but it is an additional compatible argument that disconfirms the omnipresent claims that libertarians advocate for drug legalization only out of a selfish, personal desire to use drugs.

One core reason for Penn's teetotalism is simply that he wants to be smarter, and using psychoactive drugs recreationally obviously makes you stupider, even if just temporarily. James Randi, who is an inspiration to Penn Jillette for his scientific skepticism, is also a teetotaler. Randi articulates part of my justification for teetotalism: having control over your mind and understanding and addressing reality as accurately as possible. This is a big part of my justification. Once you study a bit of the literature on heuristics and biases, you'll realize that your own map of reality is already hopelessly flawed. It seems base to me to handicap myself even more.

It is often said that the young drink to rebel. I just never picked up this habit. Maybe it was just to express my own individuality, rebelling against the popular notion of youthful rebellion? I have always been weirded out by conformity.

It's not just that as a utilitarian I want to appreciate and understand every precious moment of my own existence. It's also that as a materialist atheist I recognize that consciousness arises from a physical process in the brain only. Taking a psychoactive substance isn't modifying the access point to the mind; it is modifying the mind itself.

How does this play out socially? I find that drinkers roughly fall into two categories, those who use alcohol as a substitute for experience, and those who use alcohol as a complement for experience. I should caveat that obviously one person can be a different kind of drinker at different points in time.

Some people drink as a substitute for meaning and happiness. Unsatisfied with their classes, jobs, careers, or personal lives, they drink for a temporary escape. These kinds of drinkers have little to look forward to other than a break from an otherwise unfulfilled life.

Others use drinking as a complement to their own lives. Already having attained, or at least successfully striving for meaning, purpose, and value in their lives, personal and professional, they use alcohol to enhance their lives, enjoying the physiological effects for their own sake, enjoying the taste of the drinks for their own sake, and perhaps using alcohol as a social lubricant.

I think that substitute drinkers often suffer low self-esteem, and that they have a hard time socializing with principled teetotalers like myself. In a social situation, a substitute drinker feels threatened by a composed, happy teetotaler who doesn't use alcohol as a crutch. By juxtaposition, the teetotaler's very presence calls attention to the substitute drinker's void by not validating the substitute drinker's behavior. Since they're Insecure, substitute drinkers more often seek to socialize with other substitute drinkers to validate their decisions. Humans, after all, do have biological drives for conformity.

There's a habit among substitute drinkers to use the nuances of drinks as a vehicle for vacuous conversation. I find excessive deliberation about a drink's attributes, or talk about what a drink says about a person, endlessly insipid.

Complement drinkers on the other hand, well-adjusted and secure, can socialize with teetotalers quite well, because complement drinkers are not threatened by teetotalers. Complement drinkers can be interesting, can abstract, and can carry on conversations about more interesting things than the drink they're holding and what exists only in their immediate vicinity.

Exclusively socializing with other non-religious teetotalers would be a quixotic task, since there are too few, so I do my best to seek out complement drinkers instead of substitute drinkers.

Cross-posted to Whiskey and Car Keys

The Individual Mandate Is Unconstitutional

2011-03-22T14:42:00.001-04:00

My entry for the Independent Women's Forum contest:

Three Ways to Fix U.S. Healthcare

2011-03-22T14:39:00.001-04:00

Jeff Miron explains well.

Recent Media Diet

2011-01-17T12:04:00.002-05:00

My recent media diet has consisted of:

The Language Instinct
SuperFreakonomics
The Price of Everything
The Cleanest Race
Seasons 1 and 2 of Thumbs Up, on Netflix
The Vice Guide to Travel, also on Netflix

Comments and suggestions are welcome.

A couple of the many reasons why libertarianism and socialism are at odds

2010-08-29T00:30:00.007-04:00

Ross suggests that libertarianism and socialism may not actually be at odds.

So, I have a couple of objections.

One libertarian goal Ross posits is realizing a world in which people retain the full value of their labor. I fear that this is based on Kevin Carson's modern advocacy of the Labor Theory of Value. I haven't read Carson yet myself, but his basic idea as described to me is intriguing. It is plausible that it would be strategically productive to focus on the unjustness of rents captured through statist legal arrangements, but why ignore the Austrian contributions of subjective value? Advocacy for workers to retain the value of their labor doesn't make much sense, since it's not labor that's valuable; such a standard would be arbitrary, since the Labor Theory of Value is simply not true.

Class warfare is wildly wrong. Yes, there is economic inequality among different groups of individuals, but this is the wrong analytical tool to evaluate societal welfare and social mobility. In the United States, if you track the poorest quintile in different time periods, then you will seem to notice a class of people who are stuck in poverty. However, If you actually track individuals from the lowest quintile and follow those individuals into future time periods, you'll see a high degree of mobility into richer quintiles. Assessing the group is fallacious. It would be like checking to see what percentage of second-graders could do calculus in 1990, and comparing that to the percentage of second-graders that could do calculus in 2000. What you want to check in 2000 is the percentage of high school seniors, who were the second-graders in 1990, and see what percentage of those seniors can do calculus.

Aside from these quibbles, I do admire Ross's good will. One phenomenon that Penn Jillette has noticed is for folks to believe that their political opponents actually agree, but advocate the opposite because they're evil. Thomas Sowell has attributed that as characteristic of the unconstrained vision. Ross certainly does not fall into this trap. I admire the socialist drive to do good, but it is misguided, since it is generally ignorant of economics.

Whiskey and Car Keys and the evolution of The Paltry Press

2010-06-04T13:59:00.003-04:00

Recently I've been blogging primarily over on Whiskey and Car Keys, which was Aaron's brainchild to replace Incessant Dissent. I'm still trying to figure out what I'll blog about here. For now, I'm thinking that I'll use it for more esoteric or technical writing, but that's subject to change. Rest assured, though I haven't posted to The Paltry Press in a while, it is certainly not dead.

Charles Murray on Ayn Rand

2010-06-04T13:36:00.003-04:00

Charles Murray reviews the two recent biographies of Ayn Rand. I haven't gotten around to reading them yet, but I really should. I'm particularly interested and surprised by the kinder, gentler Rand of the early 1950s.

Both biographers also describe a kinder, gentler Rand who was just as real as the fierce intellectual combatant. To Martin Anderson, Ronald Reagan's long-time advisor, she was a "pussycat," who alone among a crowd at a café noticed that Anderson couldn't get his package of cream open (he had a broken arm) and helped him prepare his coffee. Joan Kennedy Taylor, for whose wedding Rand was matron of honor, once told me about Rand shushing Joan's objections when a recently widowed friend talked about rejoining her husband in heaven. If it gave her comfort, Rand said, Joan had no business trying to convince her she was wrong. There are repeated examples in both biographies of the ways in which Rand could be a sensitive, loyal, and affectionate friend.

Wasteful, delusional video from the UVA administration

2010-04-20T23:12:00.008-04:00

This year the UVA administration has produced a video providing safety tips for UVA students who will be attending Foxfield. This is, of course, a total waste of resources. UVA students are supposedly the smartest people in the state, yet the administration felt the need to instruct UVA students, as a parent might instruct a seven-year-old child, to drink water and wear sunscreen when spending the day outside. What UVA student doesn't know the risks of getting a sunburn, or that it's possible to get a sunburn through a cloud cover? What UVA student doesn't know that alcohol has dehydrating effects?

Why waste all these resources distributing such obviously unnecessary advice? It is, of course, a completely delusional attempt by the administration to assert that they have control over the situation, when in fact they don't. Foxfield is sheer, reckless idiocy. Minors know that it is easy to obtain alcohol there. Rather than acknowledge outright the immutable fact of underage drinking, the administration shrieks for authoritarianism as an appropriate response, as if punishment is an effective deterrent, and as if deterrence is somehow the most effective way to make underage students safer, healthier, or happier.

The video is a feeble attempt by the administration to demonstrate that they have control when in fact they have little. The administration is attempting to indicate that they're on board with the event, and that they have it under control. They would otherwise be embarrassed to acknowledge that the event is uncontrollable, and contributes to a reputation of drunken idiocy. The unintended message the video conveys is the administration's own powerlessness and embarrassment.

A mystery solved

2010-04-07T22:33:00.002-04:00

For a few months I had been wondering why so many scientific and mathematical academic papers were formatted the same way. It's because LaTeX is the industry standard. What I thought was Century, available in Microsoft products, is actually Computer Modern.

This American Life covers college partying

2010-02-01T00:15:00.003-05:00

I love This American Life, so it seemed strange when I found myself unimpressed after listening to their episode that chronicled the booze-soaked partying of college students at State College, Pennsylvania, where Penn State University is. Then I realized that as a college student, I'm just so used to the scene that they describe. It's so typical to me as to seem banal, but it actually is interesting. I was a fish who didn't see the water. The episode is no worse than any other. Indeed, it's great, as always, but because it covers a subject so close, listening to it forced me to step back and rediscover how insane this aspect of America really is. An outsider looking at the situation must be fascinated.

Why do academics lean left?

2010-01-29T12:17:00.002-05:00

A topic I've been thinking about for a while is why academics lean left. Bryan Caplan points to some thoughts about why it's not typecasting.

International Media Wall in Alderman Library Is Wasteful Signaling

2010-01-25T23:11:00.003-05:00

At UVA, Alderman Library has an international media wall. It's a couple of years old. Its stated purpose is to bring an international perspective to the University community. Four prominently located monitors display different non-English news stations.

Of course, this is completely wasteful signaling. The administration responsible for the wall wanted to signal that the University community is cosmopolitan and cares about international issues. It doesn't matter to the administration that no one really pays any attention to these monitors; actively watching requires checking out a headset from the circulation desk, and this doesn't really happen. Everything about this is a complete waste. The wall illustrates clearly the drive for pretentious signaling.

A Few Application Recommendations for the iPhone

2009-12-12T01:12:00.004-05:00

I have a few recommendations for applications on the iPhone 3GS. I do this out of love. Certainly no one is paying me to promote these.

1 Ustream Live Broadcaster
I've recently set up an account, so I'll be streaming video here in the future. So far, I've just playing around with it, but if there is something that I plan to broadcast seriously, I'll announce it, maybe here, or just on Twitter. Right in the application you can tweet to announce when you start, but I would give a heads-up before then as well. This app allows you to save the videos that you broadcast, and send them to YouTube. Also, complementary to this app might be the Ustream Viewing Application.

2 NetNewsWire
The popular desktop client has a version for the iPhone, and it is quite nice. It allows you to sort through your items from the past 24 hours in chronological order, in one feed. It syncs to Google Reader. Also, you can send items to Instapaper that would be better viewed on a computer later.

3 Dragon Dictation
This is awesome. The privacy concerns are overrated, according to Pogue, so the reviews on the iTunes Store right now don't reflect that it is a great product, revolutionary even. This is the product that has for years always seemed just a few years away. It's finally here.

4 Tweetie
This is currently the best client for Twitter on the iPhone, and it is worth $2.99.

5 Yelp
Everyone knows Yelp, but I call attention to the "monocle," which is pretty cool.

Having all these great applications might mean that I am a cyborg.

Primitive Political Strategy

2009-11-25T14:23:00.006-05:00

Megan McArdle points to an example of primitive political strategy. This kind of thing seems all too prevalent, especially among progressives. People call for ridiculous, giant institutional change for short-term political goals, and can forget about the fact that those institutions have served useful in protecting other policies that they favor. They compartmentalize. None of this is a surprise if you know that politics isn't about policy.

Calling for this kind of institutional change for short-term goals is a form of the belief that if only the proper people were in charge, policy would be implemented in the best possible way. Never do these folks question why these institutions exist. They might have important functions, you know, such as protecting individual liberty.

Life Experience Should Not Modify Your Opinion

2009-11-17T21:33:00.008-05:00

When I'm debating some controversial topic with someone older than I am, even if I can thoroughly demolish their argument, I am sometimes met with a troubling claim, that perhaps as I grow older, my opinions will change, or that I'll come around on the topic. Implicit in this claim is the assumption that my opinion is based primarily on nothing more than my perception from personal experience.

When my cornered opponent makes this claim, it's a last resort. It's unwarranted condescension, because it reveals how wrong their entire approach is. Just by making the claim, they demonstrate that they believe all opinions are based primarily on an accumulation of personal experiences, even their own opinions. Their assumption reveals that they are not Bayesian, and that they intuit that no one is. For not being Bayesian, they have no authority that warrants such condescension.

I intentionally avoid presenting personal anecdotes cobbled together as evidence, because I know that projecting my own experience onto a situation to explain it is no evidence at all. I know that I suffer from all sorts of cognitive biases that obstruct my understanding of the truth. As such, my inclination is to rely on academic consensus. If I explain this explicitly to my opponent, they might dismiss academics as unreliable and irrelevant, hopelessly stuck in the ivory tower of academia.

Dismiss academics at your own peril. Sometimes there are very good reasons for dismissing academic consensus. I concede that most academics aren't Bayesian because academia is an elaborate credentialing and status-signaling mechanism. Furthermore, academics have often been wrong. The Sokal affair illustrates that entire fields can exist completely without merit. That academic consensus can easily be wrong should be intuitively obvious to an atheist; religious community leaders have always been considered academic experts, the most learned and smartest members of society. Still, it would be a fallacious inversion of an argument from authority to dismiss academic consensus simply because it is academic consensus.

For all of academia's flaws, the process of peer-reviewed scientific inquiry, informed by logic, statistics, and regression analysis, offers a better chance at discovering truth than any other institution in history. It is noble and desirable to criticize academic theories, but only as part of intellectually honest, impartial scientific inquiry. Dismissing academic consensus out of hand is primitive, and indicates intellectual dishonesty.

New reason.tv series on Ayn Rand's legacy debuts Novermber 2

2009-10-12T23:56:00.001-04:00

When Cops Play Doctor

2009-09-26T19:38:00.001-04:00

Neuroeconomist Paul Zak on Markets and the "Molecule of Love"

2009-09-10T01:06:00.000-04:00

Address to The Right Way

2009-09-01T22:35:00.002-04:00

This evening The Right Way was put on by some conservative and libertarian groups at UVA. It was an information session for people interested in these groups. I made some comments on behalf of the libertarian student group. Here's the text of my speech.

So why are we here? We don't really consider ourselves part of the political Right, but our relationship with the Right has been complex. Maybe we're more accurately described as "liberals" because we appreciate and welcome the change and progress that free markets bring from their dynamic processes.

Libertarians in America have had a shaky alliance with the Right and the Republican Party for the last few decades. The conservative movement is not often described as heterogenous, but it is. It's full of social conservatives, national security hawks, and economic libertarians. These interests are at odds.

We fear that the conservative movement has strayed. Ronald Reagan told Reason Magazine in an interview in 1975, "I believe the very heart and soul of conservatism is libertarianism." We are concerned that conservatives have by and large abandoned a rich intellectual tradition of defending the empowerment of individuals, and lost their focus on individual rights and individual responsibility. The way we see it, conservatives have neglected the positive moral and practical cases for free markets, and unfortunately have let the Left frame economic issues. Resources aren't granted to people from governments. The government can't create wealth, but it can easily confiscate it. So, it's troubling to us that conservative responses have been reactionary. For instance, there's no real market-oriented health care reform on the table today.

Libertarians strive for consistency in the way we think about freedom. It doesn't make any sense to us to trust people with firearms but not marijuana. William F. Buckley understood this. We don't care for authoritarian obsessions with individual moral choices. If we're truly advocating individual responsibility, the government has no role to play in legislating personal morality.

We understand that free markets lift the poorest in society up more than central planners ever could. Winston Churchill famously said, "for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle."

Having a free market means that it's silly to waste money by "buying American" when we make more wealth available by purchasing goods and services from abroad for less money. We also understand that free markets include free labor markets, which means that people should be free to move across borders.

A free market means that we don't funnel money from taxpayers to reward mismanagement in the private sector. We believe that it is immoral and impractical to use military force to impose our will on the world. Striving to accomplish such an enormous task through government sounds like something the Democrats would attempt, but it too will fail as with all their quixotic attempts to engineer a utopia. We believe that international free markets intertwine the interests of all parties, so these arrangements lead to freedom, prosperity, and peace. We don't pretend that we can offer a utopia like those on the Left, but we can do better with free markets.

If you're interested in these ideas, I hope to see you at our events this year. We're excited to have the opportunity to participate in events and activities with the other groups present tonight. Thanks.

No Cognitive Dissonance from Bill Moyers

2009-08-28T23:54:00.002-04:00

It was fascinating tonight to watch Bill Moyers on Real Time with Bill Maher. He commented how disappointing it is that Obama is becoming entangled in Afghanistan, just as JFK did in Vietnam. Moyers explained that both conflicts were viewed as ventures that were originally regarded as morally justified and well-intentioned, but they would consume more of the nation's resources than was anticipated, and ultimately, more than what was acceptable. He said this right after he called for universal health care.

Private provision of police services in Tanzania

2009-08-17T23:05:00.002-04:00

It has been brought to my attention, by a friend who has lived there and knows the country, that police services in Tanzania are mainly provided privately, by a few competing firms. Corruption is low, which is to be expected when there is experimentation on a free market, and these firms have not deteriorated into warring gangs. I know very little about Tanzania, so this information is possibly inaccurate, but a search on Google turned up an interesting book on the subject. Perhaps this is more evidence for a positive case for market anarchy, like medieval Iceland.

Not quite utilitarianism

2009-08-08T15:24:00.006-04:00

In a good post defending his paper about inequality against two progressive bloggers, Will Wilkinson writes,

Most importantly, utilitarianism is false...Like Rawls, I think the fact that utilitarianism is completely indifferent to the question of whether an individual’s income and wealth is or is not a result of exchange according to fair procedures is one of the main reasons it is false. How we came to have what we have matters. Utilitarianism says it doesn’t matter. So utilitarianism is false. As far as I’m concerned, the main reason you can’t just take my TV or take the money out of my wallet and give it to somebody who would get more out of it is that it’s my TV, it’s my money. It’s not yours to redistribute.

This surprised and confused me because he recently paid lip service to John Stuart Mill. I guess I need to read more Mill so that I can understand this apparent contradiction.

It seems intuitively correct to me that a true ethical framework cannot be one where a system of violence is implemented to correct for the organic, peaceful actions of people. So, I think Wilkinson's point is totally correct. I suppose this means my position of being strictly deferential to ordinal utility, and not cardinal utility, shouldn't be called utilitarianism.

I only respect ordinal utility because, in a Hayekian way, it is not possible, nor in any way meaningful, to compare the value of one person's enjoyment of an activity or good to another person's enjoyment of the same. Have I stumbled upon some new derivation of a theory of natural rights? I doubt it; I'm just fumbling about as I search for ethical truths. I wonder who the intellectual trailblazers are that have advocated for a justification of individual rights by, at least partially, rejecting cardinal utility.

Massimo Pigliucci's mistakes about health care reform

2009-07-24T12:50:00.014-04:00

Massimo Pigliucci's post on health care demonstrates some profound ignorance. This surprised me. I like Pigliucci's writings on scientific skepticism and rationality, but here he seemed to throw his usual rationality to the wind, just to spew vitriol, without defending his points rationally. It saddens me when I see smart people compartmentalize.

The post is a treasure trove of fallacies and mistakes, probably just because he's shooting from the hip. This is to be expected from most people when they comment on politics, but I figured because Pigliucci is normally such rational person, he would at least honestly examine an opinion with which he disagrees. The comments on his post are an echo chamber, so I might be the first to offer dissent. Pigliucci writes:

Steele complained that “this is unprecedented government intrusion into the private sector.” Well, I don’t know about unprecedented, but Republicans don’t seem to have noticed that the almighty private sector has recently managed to bankrupt the country because of its endless (but not mindless, these people ain’t stupid) pursuit of greed. Steele added, again flagrantly demonstrating either his viciousness or his stupidity, that the current plan means “more debt our children will have to pay because this reckless administration has an unrestrainable urge to splurge.” This is rich coming from the chairperson of the very same party that has acted on its unrestrainable urge to splurge on open ended war efforts that have significantly decreased national and international security, or to waste money in huge tax cuts for the richest few in the country. Tax cuts whose cost is comparable to several of the initiatives that Obama wants to pursue with the rather different objective of making our lives a little better. Compassionate conservatism my ass.

This idea that the private sector bankrupted the country because of greed persists in leftist circles. Economists see self-interest as a constant. Does Pigliucci really buy this? If he's actually interested in this topic, has he really not read about how involved the government was in producing the financial crisis? This narrative from the left has baffled me since the crisis started. What does Pigliucci think changed that made people all of the sudden more greedy? Maybe he concedes that businesses are greedy, and deregulation is to blame, but does he really believe that people in government are any less greedy?

He's right of course to challenge the Republicans on their massive spending on the war machine, which is hypocritical, but that's just a partisan point. Let's focus on actual policy, instead of jeering at irrelevant problems. It's just as easy to challenge the Democrats for their failure to end the wars that they campaigned so much against. I doubt Pigliucci brings up Iraq because he values consistency. He's doing it because he's against the war. So is he willing to defend Obama's continued big spending on the United States's military presence in Iraq, since Obama is consistently growing the government? I don't think so.

Do the Republicans at least have a credible alternative to the much despised Democratic plans? Of course not. When asked directly at a recent press conference, Steele’s flippant reaction was: “Look I don't do policy, I'm not a legislator. My point in coming here was to establish a tone.” Right, and that tone included stating that he hopes health care reform is going to be Obama’s Waterloo. Bipartisanship my ass.

So, by "bipartisanship," Pigliucci means that he just wants Republicans to be Democrats. Bipartisanship is a wacky idea that receives much deference in the media. I see bipartisanship as quite ominous. If there's anything that both the Crips and the Bloods in Congress agree on, it's usually expanding their own power at the expense of their constituents.

Let us start with the public vs. private straw man. First of all, Republicans seem to forget that health care is about the welfare of people, not about profit. So even if it were true that a public option were unfair competition for private insurers, who gives a hoot, if that results in better health care for more people? Secondly, since part of the Republican creed is that the private sector always does things infinitely better than the public one, then what are they worried about? Surely the perennially wise “market” will soon make clear for all to see who’s got what it takes to run national health care, no? Thirdly, what keeps being underestimated here is the simple and indisputable fact that we already have a public health care system, it comes in the two varieties of Medicare and Medicaid. The first one is an example of the much dreaded single-payer system, run by the federal government, and which kicks in when people are over 65. The second one aids poor people throughout the country, it is funded by both the federal and state governments and run by the latter. Guess what? These public programs are much more efficient in terms of costs and overheads than any available private option, and they deliver one of the highest quality health care systems in the world. Indeed, I do not understand why Obama and the Dems aren’t simply going for the obvious solution, expand Medicare/Medicaid to the entire nation and be done with it. Oh, and next time you hear a Republican making the stupid pronouncement that government-run programs are by definition bad, ask him why he is so darn proud of our largest government-run program: the US military.

Saying that health care is about the welfare of the people instead of profit is really silly. Is the food industry about alleviating hunger, and not about profit? Grocery stores make profit, and they are not extracting money that would otherwise be used to feed people. Profit is a signal to firms that they are are producing something of value. I "give a hoot" about a public plan that might result in better health care for people, if the cost is higher than the benefits. Pigliucci is conveniently ignoring the existence of costs. Costs are abstract, so they're difficult for non-economists to understand, but they are very real. It's either quite dishonest or profoundly ignorant to just deny the existence of costs.

Pigliucci's description of crowding out is fallacious equivocation. A public plan that outcompetes a private plan has nothing to do with the difference between a free market and central planning. When free-marketeers say that the private sector "does things better" than the public one, they're not referring to the competency and effectiveness of government workers as against people working in a private business. They're referring to the system as a whole. In a free market, profit and loss signal creation and destruction of value, respectively, and profit and loss provide incentives to create value. Central planning has no such signals, and those incentives to create value are missing. The fear from free-marketeers is that the public plan will offer services provided for a much lower price to consumers and cause consumers to switch over to the public plan. Why would they pay more for a plan when they can pay less? This would effectively end private medicine, which one should see as troubling.

Now for this business of putting a bureaucrat between us and our doctors. Perhaps Steele and his colleagues haven’t noticed, but we already have plenty of bureaucrats between us and our doctors. They are the administrators of HMO’s (so-called “Health Maintenance Organizations”) and other private health providers who do precisely what Republicans dread a federal middleman might do: judge whether you have “pre-existing conditions” (and can therefore be turned down from any benefit whatsoever), or if your doctor wants to apply a treatment that is judged to be too costly to the insurance company (regardless of whether it may benefit your health or save your life), and so on. The difference is that a federal employee will not have the same motivation to increase at all costs the already fat bank account of the insurance companies at the expense of your health. Incidentally, what Republicans and some Democrats want to deny you is precisely the sort of high-quality public health care that they regularly enjoy as members of Congress. Now, how disingenuous and hypocritical is that?

This is another example of not understanding what a profit is. Profit doesn't drive up the price of a good in a free market; it provides an important signal. It's also laughable to say that health care in America is a free market, but that's the straw man that we hear from the left all the time nowadays. Pigliucci might actually be correct to be skeptical of profit though, but only because he's describing a sector that isn't a free market. Profit outside of a free market is often rent-seeking. Government interference is the problem, not the solution.

Look, I am not being naive here. I do not think that the government is the solution to all our problems, and I certainly do not think that the private sector is intrinsically bad. There are plenty of things that are best left to entrepreneurs (though I don’t think we should allow any private operation to become “too big to fail,” but that’s another story). I simply think that health care is one of those fundamental conditions that ought to be in place to allow us our constitutionally guaranteed pursuit of happiness (second section of the Declaration of Independence, adopted on July 4th, 1776). For one of the richest and most powerful countries in the world to allow 50 million of its people to go completely uninsured, and for many millions of others to risk bankruptcy every time their families might be hit by a catastrophic illness is immoral. Serious health care reform including a public option is the decent thing to do, and Republicans are acting viciously by opposing it. It really is as simple as that.

Well, yes, this is actually extreme naïveté, but nothing that can't be cured by studying economics with some intellectual honesty. Also, it's mildly amusing to see Pigliucci use the reference to Locke from the Declaration of Independence to try to advocate for central planning. I recommend a history book.

Arbitrarily calling attention to the fact that the United States is rich does not mean that costs don't exist! Authoritarian justifications for managing economies are an entirely wrong approach. There is no collective agent that "allows" people to be uninsured. Pigliucci should be asking what the institutions are that create wealth; the vast majority of humans have suffered abject poverty for the better part of our hundreds of thousands of years of existence.

Update: Pigliucci and I exchanged some comments on his original post.

Seth Goldin:
July 24, 2009 2:53 PM

Let me be the first, it seems, to offer some substantive dissent. I don't mean to just plug my blog, but I think that I've written too much as a response to fit into a comment here.

http://paltrypress.blogspot.com/2009/07/massimo-pigliuccis-mistakes-about.html

Thanks,
-- Seth.

Massimo Pigliucci:
July 24, 2009 3:20 PM

Seth,

interesting (though, frankly, a bit insulting) post. Now, I'm sure you realize that the government's involvement in causing the financial crisis was due to the fact that the Bush administration was in the thralls of private corporate interests and dramatically reduced the pertinent regulation, right?

Or am I still "shooting from the hip"?

Seth Goldin:
July 24, 2009 3:33 PM

Massimo,

If I bared my teeth a bit, I apologize; I just wanted to highlight some things with which I found problems.

I love to hate on the Republicans as much as the next guy, but for the right reasons.

I will absolutely not defend Bush. I am no Republican. You are correct, and I agree with you that the Bush administration advanced a kind of nasty corporatism in many sectors.

Massimo Pigliucci:
July 24, 2009 4:52 PM

Seth, no need for apologies. Yes, we need to disagree with Republicans for the right reasons. Of course the discussion is open about what exactly (or even approximately) the right reasons are...

caliana:
July 24, 2009 5:34 PM

"Now, I'm sure you realize that the government's involvement in causing the financial crisis was due to the fact that the Bush administration was in the thralls of private corporate interests and dramatically reduced the pertinent regulation, right?"

No. Bush was working on stronger regulation over lending standards for housing right before 911. The Bush admin realized full well that the standards were too loose. And at that point they made moves in this direction and it is well documented.

After attacks on US soil, those things got placed more or less on a back burner.

That only the entire world wants to see you fall flat on your face economically, that's not cause enough to call Bush's admin an actual failure.

Seth Goldin:
July 24, 2009 5:46 PM

I should clarify. It was bad government policy that primarily contributed to the financial crisis, not deregulation. I suspect that the myth that Bush was a deregulator will persist anyway.

http://www.reason.com/news/show/130348.html

Neil Young - "Old Man"

2009-07-23T23:02:00.002-04:00

February 23, 1971
Slippy Jenkins