Tuesday, January 28, 2014

Brief Note

As you may have noticed, I published a new article tonight. I have a second that is finished except for the links to other essays (as well as posting the few essays it cites from Random Notes which have not yet been copied onto this blog). As I was posting this essay, two thoughts occurred to me, and so I have decided to post them here.

First, I realized I had not mentioned to my readers that, ever since Townhall took down their blog pages, I have tried to observe a policy of avoiding any more links to that site. I have not yet gone back and redirected the links in my older essays, but all my recent essays, if they link to an article on TH, now point to a reproduction of that essay on this site. Hopefully, in the near future, I will finish copying all my old essays into this site, and will be able to redirect all the links in my old essay to local copies as well.

Second, about a month and a half ago, maybe a little longer, I reposted a large number of essays in a very short period, and, in order to get it done, I did not include any labels. Since then I have not added labels to either reposted articles or new essays. It is now my intention to correct that oversight. When I finish posting the four unfinished essays I am working on now, I will go back and add labels to everything posted since I started omitting them.

That is everything I wanted to say. As I said above, I have four more essay to get up, after which I will add tags for all my recent essays. I also intend to post the "Stupid Quotes" series from Townhall.cm here, and, time allowing, resume posting old essays on this blog sequentially (omitting those I have already reproduced), picking up from where I last left off (with essays written sometime in 2008, I believe). As far as fixing links in reposted articles, and articles written while TH was still hosting blogs, that is probably the last task I will undertake, as it will be much easier if I have everything posted here, so it will likely be delayed until then. On the other hand, most essays -- with a few exceptions which were updated at a later date -- cite only those articles posted earlier, so I could go in now and update the links in old posts. Whether I will do this or not depends on what else I have to do and how much free time I have.

Please check back, as I will update the blog on my progress.

A New View of Liberalism

For the past several years, at least since sometime in 2008, I have been inclined to describe liberalism in a very specific way. Originating in my tendency to ascribe liberalism to an arrogant belief that liberals know better than others what to do, I developed a more comprehensive explanation of the liberal mindset, or perhaps I should call it "interventionist", as not all who ascribe to it place themselves on the left. As developed in my, as yet unfinished, series of essays "Liberalism, Its Origins and Consequences", this philosophy consists of three part. First, the belief in objectively "best" answers of questions of governance and economics. Second, the belief that the majority, perhaps almost all of humanity, is too ignorant comprehend the correct path. And finally, that there exists a group which does know the right way. There are a few variations, for example sometimes the failure of the masses to do the right thing is ascribed more to the machinations of evil forces than ignorance, but as said forces can be so easily thwarted by simple government action, it seems their ability to do evil is, at the least, aided by an inherent ignorance of the masses.

And even now, I still believe that characterization is completely accurate, especially when making allowances for the small variations, such as the belief in evil conspiracies and the like. However, as with so many matters involving human choice, there is more than one way to perceive things. As I wrote once, we can look at scar tissue as the unfortunate result of an injury, but we can also see it as the body providing a small cushion to prevent future harm. Similarly, when humans internalize a given philosophy, it often so strongly colors their every thought that much of what they do seems to them completely disconnected from those core beliefs. Thus, it may be useful at times to move away from a given description, no matter how useful it might be in some contexts, and take a new look from a different perspective.

And this is what I have recently done.

In part, as with an earlier essay ("Ordered Liberty and Our Modern Mindset"), and one that remains to be published, my thoughts were inspired by Fischer's Albion's Seed, which I have been reading recently. While reading about the radically different perspectives on life, justice, childhood, marriage and the like held by Virginia "cavaliers" and New England Puritans (as well as the author's somewhat subtly, but noticeable bias), it struck me how ancient many of our arguments are, not to mention how much of what we believe rests on but a handful of basic assumptions, though we often fail to recognize it. even more interesting, and especially relevant to our topic, is how many of those beliefs continue to exert their hold on us, even when we reject the old justifications that once supported them. For example, much of Virginia and Maryland continued to behave as they had in the 17th and early 18th centuries, even after rejecting the aristocratic beliefs and royalist ideas that justified them. Similarly, many beliefs which were founded on Puritan concepts persisted in New England long after that faith ceased to represent a majority, and today even many who reject all faith continue to behave in a manner that arose from Puritan concepts.

Another peculiarity that struck me was the way in which completely discordant beliefs can often produce very similar expressions. Somewhat similar to the biological concept of "convergent evolution", that similar environments produce similar forms, regardless of the starting materials. For example, though Fischer makes much of the differences between the ways they expressed the veneration of the old, the fact remains that the very different beliefs and cultures of the tidewater and Massachusetts Bay both produced systems which set great store by age, in which, at least in certain age ranges, individuals were inclined to overestimate their ages in official records, unlike today's tendency to stay 29, or 39, forever. In both cases, there was a very sound reason for such a practice, provided one accepted the premises on which the society rested, so it is impossible to argue that one or the other somehow adopted the belief from an external source. No, quite clearly, despite very different beliefs, they both somehow reached the same point.

All of which brings me to the first point I wished to discuss, an aspect of liberalism, in fact almost all interventionist beliefs1, that I have only rarely discussed before today. ("Missionary Zeal and Human Discord", "The Great "What If?" - Advertising, Gullibility, Education, Capitalism and Socialism") That is what can best be described as the "postmillennialism of interventionist belief". And, from that name, you can probably see why I brought up the last two topics, as I intend to show, not only that relatively secular liberalism is driven by what amounts to a religious motivation, but also how both liberal and other interventionists, from the temperance movement to many social conservatives of today, reached the same belief despite radically different starting points.

For those unfamiliar with the distinctions of various eschatological beliefs, "postmillennialism" is the belief that, prior to Christ's return, there shall exist a period (there is disagreement as to the length) or righteous Christian rule on Earth2. In practice this belief has led many religious movement to argue for the enforcement of various ethical codes, even upon the unwilling, as any deviant behavior will prevent the righteous from seeing Christ's return. This is opposed to the much more well known "premillennialist" belief, which believes Christ will carry away the righteous before all of the events at the end of the world, and thus does not require universal good behavior for the righteous to be saved. As should be obvious, the two produced very different beliefs about the role of the state, and of coercion, in religious matters.

Of course, liberalism, and most other interventionist philosophies, do not base their philosophies on Christian eschatology, but I chose this term because, quite, simply, it is the only belief that finds an expression anything like modern liberalism.

The problem that gave birth to this description was a rather thorny one. You see, in thinking about liberalism, I started to run into situations where I simply could not figure out why liberals behaved as they did. For example, it is easy to understand why they favor minimum wage laws, as they wants to prevent the rich from exploiting the poor, at least in their minds. Similarly, environmental laws could be explained, either from the selfish motive that claims environmental damage will injure or kill us all, or from the more altruistic motive that sees some innate value in untouched nature, and sees environmental damage as depriving us of that value. But there were so many other laws, both those of a traditionally liberal cast and those sponsored by other interventionists, which are intended, for lack of a better description, to save us from ourselves. For example, the aforementioned temperance movement, though in some cases sold as providing selfish benefits3, was largely a move to save individuals from their own bad behavior. Same for the modern war on drugs4. Or the campaign against transfats, fast food, sugar, and so on. In each case, there is no real reason to enact the laws. Those proposing them could benefit just as easily by abstaining themselves5, but they feel the need to force everyone else to do so as well. There simply is no reason for it. What is the motive for forcing one's vision of good living on everyone else? Again and again, I found myself asking this same question, and, in the end, I never could find an adequate answer. The only thing that came even close to explaining it, was my realization of the incredible similarity between these legal crusades and the beliefs of certain postmillenialists.

However, this similarity, interesting though it was, still did not quite explain why the left was so interested in forcing others to behave in the way they thought best. The postmillenial believers had a clear cut reason, they thought that the misbehavior of others would postpone the salvation of everyone, that at least provides a clear motivation. But the left does not have any such obvious motive. Perhaps a few have some similar religious inspiration, as there are still some believers on the left, even in this largely agnostic/atheist era, and perhaps a few more are motivated by the simple human desire to be a busy body and meddle in the affairs of others, but for this phenomenon to be so widespread, there has to be more of a reason6.

I suppose the easiest starting point is to take many such laws at face value and ask if perhaps the left is acting out of simple altruism. After all, given my earlier description of liberalism as being based upon an arrogant belief that liberals know better than the ignorant masses, it would make sense that they might try to enact laws to make sure those masses act in their own interests. And this description works to a degree, especially when looking at laws such as minimum wage or social security, laws which either mandate action by suspect groups (employer, "the rich", etc.) or force the unwashed masses to surrender part of their earnings. However, it becomes less tenable when we look at laws that demand punitive action against those who misbehave, such as drug laws (which are as much a creature of the left as the right) and the like. Presumably, we could argue that the laws are akin to the way we punish children, demanding a harsh action only because we want to prevent even greater harm should they not learn. Or, less charitably, we could compare them to frustrated parents who, unable to get their children to listen, lash out and harm them.

But something about the altruistic description just does not ring true, mostly because some laws are so incredibly far reaching. For example, the many expressions of politically correct language codes, as well as the near indoctrination practiced at various times by university offices of diversity for new students. These actions do not only seek to prevent acts, they actively attempt to change beliefs. That goes beyond an altruistic desire to see the ignorant masses protected from harm, simple prohibitions would do that, these policies attempt to prevent even the hint of wrongful thought, seek to reshape the masses into something else. There is more than simple altruism involved, this is quite dedicated missionary work.

So, what could motivate such a thoroughgoing effort to reshape man and society? To craft every single one of us into the liberal ideal? It certainly isn't a religious motive, unless we accept my past off the cuff comment that liberalism is a religion. But even if we were to take that seriously, it really doesn't answer the question. There are plenty of religions which do not seek converts, which have no desire to see their faith shared by all of mankind7. So, even if we believe liberalism serves as a substitute religion for some individuals -- and I am not sure whether or not I believe this, but say it is true for the sake of argument -- what is it about the tenets of that religion that demand that everyone not just genuflect properly, but actually believe the right way as well? That everyone not just go through the motions, but have a genuine conversion to the faith?

One possible argument is a rather pragmatic one. In the liberal mind it seems that anti-liberal thought is much like Milton's Satan, not just a default position for the unenlightened, but a belief that is sublimely tempting even for those who have been elevated to the ranks of the enlightened. They rarely say so explicitly, but they way they speak of conservatives using warmongering, race baiting and the like to gain support suggests they see these beliefs as strong temptations, even to those who "know better". From their portrayals of the opposition, it seems they believe keeping to the proper path is a strenuous task, and thus, it is all too easy to fall from grace.

This may sound far fetched, but so much that the left does supports it that I cannot help but believe it is true. Just look at the countless campus lectures on the way that everyone is a racist, and the need for us to each constantly peel away ever more refined layers of racism throughout our lives. Or, to turn to the radical left, look at the many nasty debates among the communists and others, with one denouncing the other as lacking true class consciousness. Or one a more mundane level, turn to popular culture, be it literature or fiction, where well meaning liberal agonize over the conflict between their beliefs and reality, be it the costs of recycling or feeling guilty for employing a maid at wages that some may call exploitation. Time and again, it seems the left is constantly plagued by fears that they will slip up and allow their beliefs to be subjugated to practical concerns8.

Given this perspective, perhaps it is understandable that the left strives so mightily to eliminate not just conservative action, but even all hint of conservative belief. Think of it as a sort of quarantine measure, or perhaps sterilization. As they see the foes of liberalism as being so tempting, and not only to the masses, but even to the true believers, that they cannot see allowing even a trace of other beliefs to remain lest that taint lure back ever more of the converted. Granted, it may not be necessary to eliminate every last remnant to prevent such a mishap, but given the fear with which they view the attractive power of the beliefs of the right, as well as the innate liberal tendency toward excessive perfectionism9, it makes complete sense for them to desire nothing less than total uniformity of belief.

Of course, there is no way to really know what the motive is. Not is there likely one single motive. For some, they may hold certain beliefs because everyone they know does as well. Others may hold them because they were raised with those beliefs, or perhaps because they were raised with opposite beliefs. Some may hold to the altruistic motives. Some may do it from fear, but without fully understanding why. And some may hold the beliefs without really knowing why. So it is hard to say there is a single reason for the left's tendency to try to force comprehensive "right behavior" on everyone. However, given what I proposed above, I still believe that, for the most part, whether consciously or not, for most the belief is at least in part founded upon the fear I described, that is the need to eliminate all trace of wrong beliefs, lest they contaminate and corrupt those who have been so carefully wooed by the left.

Before wrapping things up, I want to examine one objection I have heard in the past, and expect to hear again. The argument is worded any number of different ways, but, in its most basic form it goes as follows: Granted, the left wants to use government to force people to behave in ways they desire, but is that not what government does? What is the difference between telling someone he cannot pay below minimum wage and telling him he cannot steal or kill? Is not all government a means to force desired behavior or prevent undesired?

Sadly, I have heard this argument far too many times, and from people who should know better. Perhaps, if one knew nothing else of government it would be a sound argument, but it is such a simplistic premise that I cannot believe it is so popular. Yet it does come up time and again, so, though I cannot believe it has persuaded as many as it has, I will take the time to explain the faults in this argument.

I suppose I could debunk this without offering a single theoretical argument, simply by demonstrating the absurd conclusions this argument can support. For example, I could argue "Of course the Nazis want to exterminate Jews, Gypsies, homosexuals, disabled people, Poles and others, but isn't that the purpose of government? Isn't it supposed to remove undesirable individuals and preserve what we believe is a proper society?" Or, perhaps, to stay closer to the original argument "Yes, miscegenation laws prohibit interracial marriage, but isn't that what all laws do, prevent acts we find undesirable?" Of course, such reductio ad absurdam is a sound rhetorical device, but it does not truly prove much. So, though many dismiss theoretical argument when it comes to politics, for those who do believe politics should rest on more than brutal pragmatism, allow me to explain why this argument is so very wrong.

The basic problem with this argument, and my two variations upon it, is that they treat all government actions as equal and all goals as well. This completely ignores the very simple premise that individuals have rights, and that government is, in some way, bound up with respecting and protecting those rights. If we dismiss rights, or the proper role of government, then, yes, these arguments are quite sound, but then again, if we dismiss rights anything is justifiable. However, if we consider rights, and the role of government to protect them, then these arguments become quite silly, as an a government act is only allowable, or equivalent to an allowable act -- such as prohibiting murder or theft -- if it does not violate rights. And this is why it is absurd to consider all laws forcing "correct behavior" to be equal.

Of course, there is an even more fundamental flaw, which I shall mention before ending things. That is the basic assertion that the state exists to promote desired actions and prohibit undesired ones. Perhaps in the broadest of senses this is true, but that is akin to saying the purpose of your liver is to "do stuff". The purpose of government is not to stop all undesirable acts, or encourage anything, it is, simply, to protect rights. And it is on that basis that murder and theft are prohibited. It is not because they are undesirable behavior in some nebulous sense, but rather because they violate the rights of another. And thus, the analogy falls flat, as it rests on a completely mistaken understanding of the role of government.

But I have probably spent more time on this rather trivial argument than was necessary, so let me end things here. Having already conclude my main argument, I shall simply close by saying that, while the motive behind liberalism's postmillenial missionary ambitions may not be certain, it does provide another interesting way to look at interventionist government policies, especially the non-economic measures which I examine less frequently, and thus, in the future, may appear a bit more frequently in my essays.


1. Obviously, one could argue that all such interventionist beliefs are "liberal" and simplify the descriptions in this essay, but that seems as self-defeating as the practice of some pseudo-libertarians who call everyone with whom they disagree "socialists" regardless of political belief. Calling Pat Buchanan or militant social conservatives "liberal" because they believe in extensive government in some regards is likely to make people dismiss my arguments, not understand them. Thus, for now, I will describe those who favor larger government as "interventionist", though I may from time to time forget and speak of "liberals" when I really mean believers in all forms of interventions. If I do, please forgive the error and bear with me.

2. Some Jewish messianic beliefs, especially in the Middle Ages, had a similar tone, such as the idea that the messiah would appear only in an age where all men where entirely good or entirely evil. This second clause led to some very peculiar heresies, one of which I discussed in "Jacob Frank and Hillary Clinton".

3. In the case of temperance, there is a very good reason many women were leaders, as in an age when husbands had much more control over family finances, a drunkard husband could be a terrible burden. However, those suffering personally from drink were hardly the majority of those supporting temperance or Prohibition, so the selfish motives are far from a complete explanation.

4. The war on drugs is sold with a number of supposedly pragmatic arguments, the money lost by "society" treating for drugs, or in lost wages, the increase in crime, and so on. There are strong counter arguments to many of these, but I have covered those elsewhere. ("Guns and Drugs", "In Loco Parentis", "All Hail the Victim", "Harming Society", "Drug Legalization", "It Doesn't Matter to ME...", "The Cost of Legalization", "Addicts?", "Rationality, Drug Use and Laws", "Unintended Consequences I", "Unintended Consequences II") For now, let us point out that when the first drug laws were passed, there was no general government funded medicine, and the "crime" we associate with drugs (street corner shootings, etc) was unknown, so many of the ills postdate the prohibition, meaning it was motivated by something else.

5. Discussing this with friends once, I heard some suggest that those who wanted to abstain hated the thought others would not do the same, and so favored prohibition to make everyone do as they did. I thought it absurd until I recalled my mother speaking of parents at various schools who denied their children certain things (sweets, cola, etc) and wanted them banned from the classroom entirely so their children would not feel left out. I still don't think it is the whole explanation, but it does raise some interesting possible motives for at least some individuals. (Lest anyone bring up food allergies and call me heartless, etc, the cases I am discussing had no allergies involved, just parents deciding for their children and feeling they had the right to impose it on everyone else as well.)

6. I would also note that this examination is not entirely limited to the left, the right has a few areas in which it too wants to force good behavior on others. However, in many such cases the right argues from the harm a given action does to others, such as the belief that gay marriage damages society as a whole or that drug use leads to various social ills. Whether I agree or not (see "Hard Cases Make Bad Law", "Harming Society", "The Sexual Revolution and Prostitution", "Another Look At Exploitation", "You've Come a Long Way, Baby!"), at least such a self-interested, pragmatic motive makes sense. On the other hand, there are still a few cases where the right does demand changes in behavior to "protect us from ourselves" or something similar, so this argument may apply to those borderline situations. (See "In Loco Parentis".)

7. Judaism is probably one of the best known Western faiths which does not seek converts actively, though it does allow for conversion. On the other hand, while it does not seek to convert the whole world, it does share a belief with other Judeo-Christian religions that, come the end of history, everyone will share one faith. Other examples can be found throughout the world. Most polytheistic/shamanistic religions, being specific to one culture or region do not seek converts, for example. Or, to move on to larger and more developed faiths, Hinduism -- outside of a few specific sects -- does not seek converts, though it does not discourage them. The same is true of Zoroastrians/Parsi. And then there are groups such as the Yezidi and Druze who not only do not seek converts but actively discourage or do not allow conversion.

8. This is not the place for this argument, but I have often held, if your ideals are that far removed from practical concerns, there may be a problem with your beliefs. Obviously, this is not absolutely true in all cases. I have at times been angry enough to strike someone, which my values tell me to refrain from doing, so there are cases where immediate urges and values can collide. But if a value system is so opposed to simple everyday tasks, as it seems many liberals feel liberalism is, then there may be a problem there. One need only look at the harmonious co-existence of free market, libertarian thought and ordinary life to see the difference. (See "The Triumph of Good", "Competition", "The Case for Small Government", "The Basics", "Greed Versus Evil", "Planning for Imperfection", "Self-Interest Versus Narcissism") Perhaps when I have time I will write more on this matter, as it is clearly a proposition which, while interesting, would benefit from some refinement and qualification.

9. See "The Threat of Perfection" and "Utopianism and Disaster".



I had initially planned to look at the reason the left chooses state solutions as opposed to private measures. (At least, for the most part. Obviously, the left does engage in some private persuasion as well.) However, the topic did not fit easily into this essay, and, as I reached the end, it just didn't seem all that relevant to this topic. Since I did not discuss it, however, allow me to offer a few quick thoughts. Obviously, the biggest difference between state and private is the ability to coerce, or, looked at from the other side, an inability to say "no" to the left's requests. And, assuming I am right about their motives, this is likely an attractive feature. On the other hand, perhaps the answer is even more simple. As I have argued elsewhere ("Volunteer Fireman, Barn Raisings and Government", "Government Versus Culture - A Forgotten Distinction", "Culture and Government", "Non-Governmental Communal Solutions", "The Magic Bureaucrat"), as a nation we have become used to always turning to the state, not giving a thought to private solutions. Thus, at least in part, the answer may be simply that the left uses the state for these purposes because everyone else does as well. Clearly, the two motives are not incompatible, and the truth is probably part of one and part of the other. But, as this is just a postscript and not a full essay, I will leave it there for now.

Thursday, January 23, 2014

Bad Economics Part 18

NOTE: I am posting duplicates of all the original "Bad Economics" posts that appeared on "Random Notes." there was a single installment posted since my move to Blogger, that being "Bad Economics Part 19". A full list of all 19 installments will be added at the bottom of part 18. (If you are reading this as it is posted, please wait, as I can't post the directory until all 19 are posted. Also note I will not immediately be fixing all of the internal links. I will do so eventually, but please be patient.)

I had been thinking recently of writing a comprehensive post making all of my arguments about the origins of our medical "crisis", showing how whatever problems did exist were either the result of government intervention, or simply part of the nature of the universe. However, as ObamaCare appears to have become law (well, has passed, but with fixes lingering in the senate), I have thought perhaps it would be fruitless.

But I then thought about the second category I listed above. Yes, I have written a lot about the ways the government created their own crisis (See "The Absurdity of Mandatory Insurance", "Preexisting Conditions", "Public Funding is Government Control ", "Private and Public Coexisting", " Who Will Decide", "Shameless Self-Promotion", "The Devil is in the Definitions (And Assumptions)", "Redefining Insurance... To Actually BE Insurance", "The Insurance Sham", "Government Efficiency", "High Cost of Medical Care", "Medical Reform, An Overview", "My Health Care Plan", "True Insurance Reform", "A Different Look at "Health Care Reform"", "Of Wheat and Doctors", "Bad Economics Part 10", "You Gotta Have Faith", "Why We Lose", "Our Suicide Bombers" and "Withholding Comment"), but I wrote very little about the ways in which the supposed "crisis" is simply part of the nature of reality. I did write in "High Cost of Medical Care" that some part of the reason our medicine costs more than other nations is because our care is just better, but other than that, I have largely ignored the way in which politicians often turn the simple facts of reality into a "crisis". And so, rather than write about the government creation of the medical "crisis" I am going to look at the simple fact that some shrotages, some scarcity, some lack of coverage is part of the nature of reality, and that the cure is not to pool all our scarce resources and dole them out, but rather to allow the market to work.

Let us start with a very simple point that most people seem to forget when it comes to government. Items are economic, that is they are worth something, because there is a shortage. Economists make this point by saying that items are only economic if they are scarce resources. And this makes sense. If you can have as much of an item as you want without effort, then you would never think of paying for it, nor ever be able to sell it. For example, air is free and available in abundance, and so we never think of air as a commodity. Yes, air packed into SCUBA tanks is worth something because of the packaging, or "clean" air at "air bars" is worth something because the buyer thinks it is somehow superior and has been treated in some way, but air itself is non-economic.

I make this point because often politicians act as if sellers are the only reason an item is scarce, when in reality there are sellers because it is scarce. If an item is not scarce, no one would sell it, as no one would buy it. And medicine is no exception. We pay for medicine because it is scarce. There are only so many doctors and nurses, only so many people capable of becoming doctors and nurses, and of those, even fewer willing to do so. There is only so much equipment, so much medicine. And often forgotten, only so many who can do the research to create those drugs and services, and only a few willing to risk their fortunes on funding such research. There is at every point a scarcity of resources, and, as a result, medicine is expensive.

However, politicians often seem to forget this simple fact. They act as if it were only the greed of doctors and hospitals and insurers which make medicine scarce. That if only insurers just gave away coverage, we would have more than enough care for all. And that simply is not true. Scarcity is an innate feature of reality. If an item were not scarce, then we would not need to worry about it, but if it is scarce, there is, by definition, not enough to satisfy all wants, and thus there will be a shortage no matter what the government does.

Faced with this, many will continue to push for redistribution or intervention by arguing that if a good is scarce, we should make sure that everyone gets "their fair share" by seizing it all and distributing it equally, or at least by establishing a government agency which makes sure everyone gets "the minimum" with the rest being sold. However, there are four problems with this.

First, there is no way to imagine what "the minimum" is. Services only exist because someone provides them, in nature man has nothing, so what is the "minimum" and what is "extra"? Second, by pooling services and removing competition for resources, we lose the pressures which lead to expansion. Third, if we redirect resources to this service, or even just fiddle with pricing, we remove the tools which tell us how much people really want, and end up not only producing the wrong amount of this good or service, but distort the rest of the market as well. Fourth, by removing competition for services, and by effectively eliminating "high end" services, we remove the forces that drive innovation, and also those that bring "high end" services within grasp of the common man over time.

Let us look at each.

First, the most simple point. Medicine is not something that exists in nature, the "right to medicine" is a human fiction. In nature, there is no medicine, and as it does not exist, one does not have an innate "need" for medicine. One may be able to make a semi-plausible argument for an innate need for food, water and air with some objective minimum, but beyond that, all other "needs" are human constructs, need snot recognized until someone began providing the service. And so there is no objective "minimum necessary" level. Someone could create one, but it would be an arbitrary creation. There is no way to say "all people need medical services X, Y and Z", as there is no definition of "need". At least with food or air one can say "you will die without X calories per day" or "without X cc of air per minute, you will die", but how do we do that with medicine? Any definition of "necessary" is arbitrary, and so anyone trying to enact some medical leveling scheme needs to either provide equal services to all, or at least admit it is an arbitrary "minimum" above which services may then be competitive. But there is no way to establish an objective necessary minimum.

Second, it is the willingness to pay extra for a service, to go beyond the norm that makes services expand. If we provide the minimum gratis, we will never know if we are providing too much or too little. In addition, by flattening the demand to make sure everyone has at least the minimum, we make many more expensive services unavailable. However, many of those services may be in high demand, but we will not know, as they will no longer be available.

Actually, the argument is even easier, and I made it quite clearly in "Who Will Decide". Someone will always decide how to allocate scarce resources. Under a government regime, they will take the resources, or the time of the providers*, and dole them out as they see fit. Under a free market,t he owners of those resources will dole them out. So far, there is little difference. 

But it is much different when it comes to expansion, or even providing adequate services.

The government will generally try to provide either the bare minimum, to leave resources to allocate elsewhere, or as much as the budget allows, as they need to spend up the budget. What they will never provide is what the users desire, as they have no way to measure that. Should there be a shortage it will likely eventually be corrected, but only by a bare minimum. Nor will the government recognize the shortage, as failure to provide enough is a political scandal. So, any shortage is likely to be covered up, rather than driving action.

On the other hand, driven by the price mechanism, the free market will see where need is developing even before there is a shortage. As prices rise, profits also rise, and that draws investment, which leads to expansion. The price mechanism creates its own self-correcting mechanism. It is far from perfect, it does not always anticipate shortages, but it is much better than the absolute lack of such a mechanism under government control.

In other words, government distribution of scarce resources leaves no mechanism to anticipate needs, to prevent shortages, and otherwise to adapt to the changing needs or desires of the consumers**. Only be allowing the price emchanism to work can we anticipate consumer needs and adapt to them. ("The Limits of "Scientific" Management", "Greed Versus Evil", "Planning For Imperfection")

Third, it is not a solution to argue that our problems arise from "poor allocation" or resources, "waste", or "a need for more resources". All resources are scarce. Our current allocation is the ideal, as the market makes inevitable. (A Very Simple Truth) If we try to make more resources available, we will create a shortage elsewhere, and in another area that, judging by the current prices and allocations, is more urgently desired than more medical care. Worse still, the more we shift to medicine, the more urgent the needs we leave unsatisfied. 

As I said, everything economic is scarce, and we must use our current pool of assets to fulfill all those needs. Of course, we will never fulfill all our needs, or else there would be no economy. If we could satisfy all needs, there would be no desires left, and we would have no need for trade. ("Bad Economics Part 16") That there is still trade means we will have less than perfect satisfaction, and it also means trying to shift resources forcibly to another area will result in even less satisfaction. Nor is eliminating "waste" a viable alternative. I have discussed this several times, from "Two Examples of "Inefficiency" in Capitalism" to "Bad Economics Part 10", so I won't go into it again. Let us just say that the supposed "waste" is more in the nature of support systems, and their elimination, far from increasing efficiency will just destroy the free market.

Which brings me to the fourth problem. Obviously, a fully government controlled medical system will eliminate the "high end" expensive and unusual procedures, but even under a system which simply provides "necessities" for the poor, while allowing something of a market to remain, many of the more expensive services will no longer be possible, due to the forcible reallocation of resources. Not to mention that the forced losses suffered by doctors, hospitals and insurers under most government schemes, which will leave few profits for research which leads to such experimental procedures.

And that will be quite bad for all of us. All procedures start out as expensive, experimental services, available only to the richest, or those willing to sacrifice a lot to get them. But the same is true of goods, everything from the automobile to the computer to the DVD started out as a "rich man's toy". But, over time, the high profits drew investment, and drew researchers, who made the goods cheaper to produce, or the services easier to provide. Over time, these services and goods went form rich man's toy, to a luxury of the middle class, to common to the middle class, to universal***.

But if we lack such services, then we have no place for new procedures to evolve. Without the rich to fund such procedures with their high payments, we lack the funds to interest investors or attract researchers who will make the process cheaper. And so, what would normally be a leveling process, making rare, new procedures become universally available, we will have a few expensive procedures which will simply be out of reach of everyone, forever.

And that brings me to my conclusion. Just as I argued about leveling incomes in "The Irrationality of Government Redistribution", scarcity is natural, as are inequalities. However, trying to eliminate those inequalities through artificial intervention lead to worse outcomes than doing nothing. Over time, the system itself tends to both increase the size of the overall pool of wealth and to flatten out the differences between individuals. Not that there are no inequalities, but as the amount of capital invested per worker becomes greater, individual differences begin to matter less, and so wages, at least on the lower segment of the scale, tend to flatten out. There is still a slope on the high end, but the differences between "poor" and "lower middle class" get smaller, and even "middle class" begins to look within reach of the poor.

And that is my argument. We live in a universe where scarcity is a fact of life, no humans cause scarcity. We can try to eliminate scarcity in two ways, by confiscation and redistribution, or by allowing the market to work. Neither will eliminate scarcity, but the latter will make it as small a factor as possible. When we try to enact redistribution, we end up freezing our assets at the point in time we enact the law. On the other hand, when we allow the market to work on its own, yes there may be greater inequalities for a time, but as the pool of wealth grows, even the poorest eventually have more than the rich do now, and, over time, the inequalities become ever smaller. Not to mention that with a free market, procedures now unavailable to almost all become commonplace, and costs consistently decline.

It may not be glamorous, and it may fit poorly with those who want to "save the world" and "do it now", but simply allowing the market to work, exercising patience, and taking our time, things can be made better than they ever could under government intervention. It is slow, and it does not make everyone absolutely equal, but if you still have more than you would have under redistribution, what is the difference****?


* That is one thing that is often glossed over in this debate, by forcing doctors to work for the salary defined by the state, they give doctors two choices, give up their profession, or lose the control over their own labor. Though no one ever bring sup the term, this amounts to a form of involuntary servitude. If you want to be a doctor, you have to provide services at this price or go to jail. Then again, we have become so used to government enforcing labor laws, basically forcing some degree of involuntary servitude on all of us, that such arguments usually fall on deaf ears.

** The classic example has to be the cliched Soviet department store which has 1000 pairs of boots and nothing else. Nor is that far from  the truth. Government factories produce what the administrators say, without consumer input. In addition, as political prestige is tied to funding, many times the best connected factories produce the most, regardless of need. And so it is very easy for government enterprises to manufacture things completely without demand, or to fail to produce items desperately needed. ("The Inherent Disappointment of Authoritarianism", "The Inevitability of Bureaucratic Management in Government Enterprises", "Bureaucracy Revisited")

*** The best example may be plastic surgery, which was, even in the 1980's, a luxury, if not out of reach, for many people. However, by the 1990's, it had become common for the middle class to pay for plastic surgery, and even the poor were saving for procedures. Now, plastic surgery is almost universally available. I am not saying whether that is good or bad, but it does show how expensive, rare procedures spread throughout society.

**** Would you rather have $5 or $10? How about, would you rather have $5 and a neighbor with $5, or $10 and a neighbor with $100? Sadly, many seem to think the former is better than the latter, which is why I often argue that the left relies on envy more than anything else. ("Envy Kills", "Envy And Analogy", "He's Bad So He Must Be Wrong")



Here is a list of all previous installments of the "Bad Economics" series:
Bad Economics Part 1 - A discussion of how prices disprove theories of resource depletion
Bad Economics Part 2 - A debunking of the many theories based on "defective" or "damaging" competition
Bad Economics Part 3 - An examination of the many absurd claims about deregulation
Bad Economics Part 4 - An examination of problems with economic studies and empirical evidence
Bad Economics Part 5 - An examination of consumer protection and the harm it does to consumers and others
Bad Economics Part 6 - A rebuttal of claims offered in support of various types of farm price supports and other aid
Bad Economics Part 7 - A discussion of what inflation is and is not
Bad Economics Part 8 - A discussion what our money really is and is not
Bad Economics Part 9 - A refutation of the common belief that "thinking outside the box" is inherently valuable
Bad Economics Part 10 - A refutation of the theory that there is "waste" which can be eliminated from the free market
Bad Economics Part 11 - Bankruptcies, Bruises, Fevers and Extinctions - Examining how perspective makes events good or bad
Bad Economics Part 12 - An examination of the futility of using regulation to protect consumers and employees
Bad Economics Part 13 - (Also called "The Sky's Not Falling Part 2") - An examination of the transition from mostly manufacturing to a mix of manufacture and service and the reasons not to fear this change
Bad Economics Part 14 - An examination of the causes of unemployment and whether long term, involuntary unemployment is possible in a free economy
Bad Economics Part 15 - A response to a user comment, examining many of the most common mistaken beliefs about the free market and capitalism
Bad Economics Part 16 - The myth of "economic man" and mistaken beliefs about the theory underlying the free market
Bad Economics Part 17 - An examination of our tendency to confuse interventionism and the free market, as well as to confuse free market business with companies seeking government favors
You can also read them in reverse order, starting with Bad Economics Part 17, as each post contains links to the previous chapters.

Originally posted in Random Notes on 2010/05/24.

NOTE: The promised links to all 19 installments are as follows:
Bad Economics Part 19
Bad Economics Part 18
Bad Economics Part 17
Bad Economics Part 16
Bad Economics Part 15
Bad Economics Part 14
Bad Economics Part 13 (a.k.a. The Sky's Not Falling Part 2)
Bad Economics Part 12
Bad Economics Part 11
Bad Economics Part 10
Bad Economics Part 9
Bad Economics Part 8
Bad Economics Part 7
Bad Economics Part 6
Bad Economics Part 5
Bad Economics Part 4
Bad Economics Part 3
Bad Economics Part 2
Bad Economics Part 1
If any additional installments are published, this list shall be incorporated into those essays, including links for the new installments.

Bad Economics Part 17

NOTE: I am posting duplicates of all the original "Bad Economics" posts that appeared on "Random Notes." there was a single installment posted since my move to Blogger, that being "Bad Economics Part 19". A full list of all 19 installments will be added at the bottom of part 18. (If you are reading this as it is posted, please wait, as I can't post the directory until all 19 are posted. Also note I will not immediately be fixing all of the internal links. I will do so eventually, but please be patient.)

This installment is, once again, not on economics itself, but on a mistake which helps people misunderstand economic phenomena, and which lies at the root of an unfortunate trend. But before I explain more, allow me to start with a rather basic introduction, which may help make my point for me.

Suppose, just for the moment, that we never made the distinction between bureaucrats and factory workers, that we called IRS agents and men on the assembly line "labor", and that we had no way to easily distinguished between them, in fact, that people in general considered them to be the same thing. Do you think that might make America think quite poorly of those working in industrial jobs, if we had to ascribe to them the misdeeds of government workers?

Or, suppose we never established a way to distinguish between government offices and productive firms. If we called the IRS, the EPA, and OSHA "businesses". Do you think that might lead to same serious resentment of those selling goods, when we had to think of them whenever a new senseless regulation was handed down?

Thankfully neither of those happened. Unfortunately, two similar situations have, and they have led to equal confusion. The problem being that we often use "free market" or "capitalism" to describe a totally free, unregulated market, but also to describe a semi-free market with heavy government regulation and a lot of government favoritism and patronage. In addition, we use "corporation" and "business" to describe both those companies which thrive by providing needed goods and services, and to describe those firms which tend to flourish not through competition but through the securing of government favor. 

Granted the confusion occurs because it was a real free market that eventually became the regulated "free market" we have now, and those companies living by patronage do still produce something, and probably started off as honest firms, but still, we need a way to distinguish between real, functioning firms and government parasites, ad we do to distinguish between the real free market and the pseudo-capitalism on its way to "communism of the German type" (that is Nazi/fascist command economy) that we presently have.

The reason I mention this is that  I think this confusion lies at the heart of a lot of resentment over the free market and hatred of corporations. Granted, some hatred of the market and corporations is just populist nonsense, or simple envy, but there are many for whom the resentment is not because of envy, but because they confuse the patronage seeking government loving firms and think they are characteristic of the real free market, at the same time mistaking our interventionist system for capitalism.

Just think of all the Coommunity Reinvestment Act nonsense, and how it was used to denounce "the free market", how those exploiting government subsidies were accused of "Wall Street greed", and how those who exploited government largesse were accused of being the "worst examples of capitalism". In other words, interventionist manipulation of the market, which forced companies to make bad loans, and allowed others to exploit those loans to cash in on government guarantees, was equated with a system free of government intervention.

Total nonsense.

But, unfortunately, total nonsense which many still accept.

I wrote before about the way the free market is often blamed for government intervention ("How To Blame the Free Market"), even how such failures are often used as excuses for even more government intervention ("The Endless Cycle of Intervention", "The Cycle of Compassion", "Of Wheat and Doctors"), with the failure of intervention confused with the failure of the market, and the very lack of success used to argue for more of the same. And in many ways this is the same. The market is made less and less free, with arbitrary government power favoring some firms ("Anti-Business Businesses"), and allowing some to exploit the government to make a fortune ("How Government Creates Crime"), and, once people begin to see the shortcomings of this state of affairs, all the failings of government involvement are blamed on the free market, justifying yet more intervention. ( "The Inevitability of Bureaucratic Management in Government Enterprises", "The Inherent Disappointment of Authoritarianism")

The simple truth is the free market does not provide the openings the government does In the free market, one must constantly produce or fail, and one must also surpass all competitors or go under. Once the government is involved, suddenly you do not need to defeat competitors, only win government favor. And, as most regulators come from established firms, the old established firms generally have an "in". Not to mention that the failure of a big existing firm scares politicians. And so, government intervention tends to favor stasis and the permanent retention of the status quo, which harms newcomers and favors lack of innovation and novelty by existing firms. On the other hand, thanks to the arbitrary nature of government, and the shifting laws, along with changing staff, it is also easy for small time individuals to exploit legal quirks to make a quick fortune without doing anything productive.

The differences are clear, and clearly favor the free market. At least, they do if we don't confuse the two, calling them all "capitalism" and failing to distinguish between production and patronage. Once you confuse the two, the free market doesn't look very good. And that is all to the benefit of the government, as well as anti-capitalist populists ("Beware Populist Deception", "Protectionism, "Protectionism Right and Left", "Deadly Cynicism")

However, there is no reason to confuse the two, and we need to do a better job of distinguishing between the two. Rather than saying that Obama's creation of a government favored cartel of insurers is a failure of capitalism ("Don't Fall For Populist Interpretations of ObamaCare"), we should point out that it is a socialist corruption of the free market, using private firms to do government work. We should not pretend he is some friend of big business or is creating a "compromise between socialism and capitalism", not any more than the Nazis or fascists were "free market" as they allowed nominal owners to retain their businesses. Once the government tells you what to sell, for what price, when and where, they own your store, whether they pay you or not, whether they pretend you own it or not.

We need to do a much better job making this clear to the rest of the public.


Here is a list of all previous installments of the "Bad Economics" series:
Bad Economics Part 1 - A discussion of how prices disprove theories of resource depletion
Bad Economics Part 2 - A debunking of the many theories based on "defective" or "damaging" competition
Bad Economics Part 3 - An examination of the many absurd claims about deregulation
Bad Economics Part 4 - An examination of problems with economic studies and empirical evidence
Bad Economics Part 5 - An examination of consumer protection and the harm it does to consumers and others
Bad Economics Part 6 - A rebuttal of claims offered in support of various types of farm price supports and other aid
Bad Economics Part 7 - A discussion of what inflation is and is not
Bad Economics Part 8 - A discussion what our money really is and is not
Bad Economics Part 9 - A refutation of the common belief that "thinking outside the box" is inherently valuable
Bad Economics Part 10 - A refutation of the theory that there is "waste" which can be eliminated from the free market
Bad Economics Part 11 - Bankruptcies, Bruises, Fevers and Extinctions - Examining how perspective makes events good or bad
Bad Economics Part 12 - An examination of the futility of using regulation to protect consumers and employees
Bad Economics Part 13 - (Also called "The Sky's Not Falling Part 2") - An examination of the transition from mostly manufacturing to a mix of manufacture and service and the reasons not to fear this change
Bad Economics Part 14 - An examination of the causes of unemployment and whether long term, involuntary unemployment is possible in a free economy
Bad Economics Part 15 - A response to a user comment, examining many of the most common mistaken beliefs about the free market and capitalism
Bad Economics Part 16 - The myth of "economic man" and mistaken beliefs about the theory underlying the free market
You can also read them in reverse order, starting with Bad Economics Part 16, as each post contains links to the previous chapters.

Originally posted in Random notes on 2010/03/19.