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Righteous Orthodoxy

from the FEE, Foundation for Economic Education, Be Wary of the Orwellian “Enlightened” Class by Robin Koerner

He understood that the morality of a political ideology in practice cannot be determined from its theoretical exposition – but only from the actual experiences of those who would be affected by its real-world application.

To make the point to the people he felt most needed to hear it, Orwell, a self-identified socialist, called out the arrogance of his friends on the Left who experienced themselves as so “enlightened,” to use his word, that they did not need to consider the sentiments – let alone ideas – of those who were to them clearly politically ignorant.

Orwell had a name for this kind of self-righteous certainty – and it wasn’t fascism, capitalism, or communism.  It was “orthodoxy,” which he explains in 1984, “means not thinking—not needing to think. Orthodoxy is unconsciousness.” It is a state exhibited by people who already know they have the right answers – at least in the areas that matter.

There is no political system so perfect that it will not be deadly when imposed against the will of others by people sure of their own righteousness. Orwell saw that no political theory – even the egalitarian socialism that he believed to be the most moral – can prevent its adherents from being anything other than tyrants if they are committed to it in a way that is immune to the protests and experiences of other people.

In other words, tyranny is not the result of a belief in a bad political theory; it is the result of a bad belief in a political theory – and that is an entirely different thing.

Collective Delusion

from Let’s Get Metaphysical About Trump and the ‘Post-Truth Era’ by Crispin Sartwell

Likewise, truth cannot be a matter of social consensus. That groups are in agreement has no tendency to show that what they believe is true, or else flat contradictions are true in a situation in which we are polarized into groups with contradictory beliefs. As consensus tightens, it degenerates into self-confirmation and collective delusion. Each side already believes this about the other, so each side is committed to the view that truth is something more than agreement. Nor can “truth” mean merely what works, if by “works” one means persuading people or guiding their behavior or opinions in some desirable direction.

That makes it very odd to formulate the thing in terms of alternative realities or the disintegration of truth itself. Both sides need the truth, and they need it not to be relative to any group’s particular set of beliefs—or they need to stop attacking their opponents. There’s nothing unusual about a situation in which people disagree about what the truth is, and the concept of truth itself is not particularly at stake right now.

It’s a bizarre misapprehension, in short, that truth is disintegrating or in crisis. Fabrications do not undermine truth—they presuppose it. Lies can harm people, but they can’t harm truth itself. They conceptually depend on it. The right conclusion from all this isn’t that truth is disintegrating, but that truth is hard and intrusive, that it does not readily bend to human will or agreement or narrative. The power of the Russian intelligence services or a Sean Spicer press briefing is considerable, but it does not include the ability to bend the fabric of reality.

Rhetoric vs Reality

From economist Tyler Cowen at Bloomberg, What Democrats Won’t Admit About Voters and Health Care

But keep in mind that the American Health Care Act of 2017 does not prevent states from spending whatever is needed to cover pre-existing conditions, if they so choose. The underlying truth is that voters at the state level just aren’t that interested in paying for these benefits, preferring instead to lower taxes, or to spend the money on roads, schools and prisons.

In other words, when American voters are given a direct bill for health-care expenditures, they recoil, even when the beneficiaries are in needy or desperate situations. The Democrats are good at tarring the Republicans for indifference to the plight of these people, but less keen to admit that the larger popular indifference plagues their own health-care visions as well.

A meme I’ve seen going around on Twitter put it this way: Health-care expenditures are about 1/6 of GDP, but no American wants to spend 1/6 of income on health care.

The failures reflect scarcity in the world around us. It turns out we value health care for others more in rhetoric than in reality.

HKO

Promising benefits and hiding the cost is no virtue. This is the real reason that Gruber and the Democrats lied so blatantly. Usurping the power of the consumer will not improve health care.

Hayek Predicts Venezuela

Kevin Williamson makes an interesting distinction between the welfare state and socialism.

from National Review, Camino de Servidumbre

There are two ways of thinking about economics: Many progressives (and many right-wing populists) believe that economics is less of a science and more of an ideology, that all of that talk about scarcity and supply and demand is mostly mumbo-jumbo deployed by people who are getting their way to ensure that they keep getting their way. The alternative view (the view of most economists) is that economics is an effort to describe something real, that while it is important to understand the difference between the map and the territory, all those economic models and demand curves add up to a description of an aspect of reality that is not subject to negotiation and is not a matter of mere opinion.

That was what concerned Hayek and his colleagues in what has become known as the Austrian school of economics, Ludwig von Mises prominent among them. They believed that the central-planning aspirations of the socialists were not simply inefficient or unworkable but impossible to execute, even in principle, owing to the way in which knowledge is dispersed in society. Drawing on more recent work in fields ranging from physics to computer science, modern complexity theorists have expanded enormously on those insights, arguing that markets, like evolution, are complex beyond comprehending even in principle, hence unpredictable and unmanageable. As he famously summarized it: “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” From this Hayek, an old-fashioned liberal, concluded that while there might be room in a free and open society for a broad and generous welfare state, the project of providing benefits to poor and vulnerable people must be understood as distinct from the socialist project, which is to put economic production under political discipline. And this has been born out in our own experience: Sweden is simultaneously a free-trading, entrepreneurship-driven capitalist society and a society with a large and expensive (and recently reformed) welfare state. Sweden, sometimes held up as the model of good socialism, has in fact been following a policy of privatization and libertarian-ish reforms for 20 years, with an explicit commitment of moving away from an economy of government planning to an economy of market choice.

A Health Care Reader

The health care debates are particularly contentious because they are a focus of the fundamental philosophical differences in political and economic thinking.  While activists insist they are only trying to be pragmatic in providing care for all, they remain hostage to ideology much more than they realize.

Politicians want to provide benefits without paying for them. They hide costs, even from themselves, in the tax code, regulations, mandates, cross subsidies, and wishful thinking.

Righteous virtue signaling insists there is a moral right to health care.  There is no such right either in the constitution or in a moral code that will inevitably contradict that right with a claim on someone else that they have not agreed to.  Your right to health care does not include the right to get the services of a health care professional for free. This posturing also does nothing towards solving the problem.

Kevin Williams at National Review makes the point clearly in The ‘Right’ to Health Care:

Declaring a right in a scarce good is meaningless. It is a rhetorical gesture without any application to the events and conundrums of the real world. If the Dalai Lama were to lead 10,000 bodhisattvas in meditation, and the subject of that meditation was the human right to health care, it would do less good for the cause of actually providing people with health care than the lowliest temp at Merck does before his second cup of coffee on any given Tuesday morning.

Health care is physical, not metaphysical. It consists of goods, such as penicillin and heart stents, and services, such as oncological attention and radiological expertise. Even if we entirely eliminated money from the equation, conscripting doctors into service and nationalizing the pharmaceutical factories, the basic economic question would remain.

We tend to retreat into cheap moralizing when the economic realities become uncomfortable for us. No matter the health-care model you choose — British-style public monopoly, Swiss-style subsidized insurance, pure market capitalism — you end up with rationing: Markets ration through prices, bureaucracies ration through politics. Price rationing is pretty straightforward: Think of Jesse James and his “Pay Up, Sucker!” tattoo on his palm. Political rationing is a little different: Sometimes it happens through waiting lists and the like, and sometimes it is just a question of money and clout. American progressives love the Western European medical model, but when Italian prime minister Silvio Berlusconi needed a pacemaker, he came to the United States to have it implanted.

Obama invoked courage to save his health care bill. Neil Cavuto properly questioned how much courage it takes to hide economic realities from the voters:

Obama invokes courage because the only struggle he can envision is a moralistic one, between good and evil- between rich and poor.  He does not consider the intellectual dishonesty or consider that ends he pursues do not justify the means. He does not consider that there may be a difference in means to achieve the end he desires, one that is both moral and functional. His approach was neither.  Cavuto quotes John Kennedy, “The great enemy of the truth is very often not the lie-deliberate, contrived and dishonest, but the myth- persistent, persuasive, and unrealistic.”  That is a keeper.

The ACA is based on very bad analysis and ignorant economic thinking. There is a difference between health care and health insurance. Those without health insurance are not often without health care.  Insurance is not an effective means to cover routine known expenses; it should cover the unusual and rare chance of a catastrophic expense

Again from Kevin Williamson at National Review, Back to Reality:

In the same way that Washington has tried to manage housing by regulating and subsidizing mortgages, politicians have long tried to manage health care by regulating and subsidizing health insurance. It does not work. It has not worked, and it is not going to work.

Critics on the left, especially those who support British-style government monopolies on health care, insist that because demand for medical services is relatively inelastic — because you aren’t comparison shopping after a traumatic car accident — ordinary market operations cannot handle health care. But demand for food is inelastic, too, at the hungry margin. It’s just that we rarely get to that margin because food is plentiful, thanks to massive investment in its production, distribution, and improvement. Ultimately, that is what has to happen with health care, too.

But what about pre-existing conditions?

From Michael Tanner at National Review, The Vexing Question of ‘Preexisting Conditions’

A lot of numbers have been thrown around about how many Americans have preexisting conditions. Barack Obama, for example, has suggested that the number is as high as 133 million. But these figures grossly exaggerate the number of Americans who would be affected by changes to the ACA’s preexisting-conditions provisions. They include, for example, Americans on Medicare or employer-provided health insurance, neither of which are subject to medical underwriting. If you get your health insurance at work, the company’s overall costs may increase to reflect its claims experience in the event that Congress’s reform bill gives insurers the right to charge more for those with preexisting conditions, but your individual contribution will not increase because you have such a condition.

And The Pre-existing Lie by Rich Lowry

You’re not affected if you get insurance through your employer (155 million people), or through Medicaid or Medicare. You’re not affected if you live in a state that doesn’t request the waiver, a category that will certainly include every blue state and most red states, too. Even if you buy insurance on the individual market and live in a state that gets a waiver, you’re not affected if you’ve maintained insurance coverage continuously and not had a gap in coverage longer than 63 days.

By this point, we’re talking about a fraction of a fraction of a fraction of the population. If you do have a pre-existing condition in a waiver state and haven’t had continuous coverage, you can be charged more by your insurer only the first year. The state will have access to $8 billion in federal funds explicitly to ease the cost of your insurance, and the state must further have a high-risk pool or similar program to mitigate insurance costs for the sick.

Jeff Jacoby addresses some of the fundamental problems in our health care system,  Ditch Obamacare, and don’t stop there

If Republicans were serious, and willing to endure some political pain to reach a better outcome, they’d eliminate the tax deduction for employers who provide health insurance as part of employee compensation. They’d repeal laws that force insurers to cover a legislated array of medical benefits and treatments. They’d remove the barriers that restrict consumers in one state from purchasing health insurance across state lines.

And they’d break the destructive habit of treating health insurance as the logical and preferable way to pay for routine health care.

 

John Cochrane at The Hill, Here’s what healthcare looks like in a perfect world:

It’s wiser to start with a vision of the destination. In an ideal America, health insurance is individual, portable, and guaranteed renewable. It includes the right to continue coverage, with no increase in cost. It even includes the right to transfer to a comparable plan at any other insurer.

Big cost control comes from the only reliable source — rigorous supply competition. The minute someone tries to charge too much, new doctors, clinics, hospitals, and models of care spring up competing for the customer’s dollar. Access to health care comes like anything else, from your checkbook and intensely competitive businesses jockeying for it.

he original sin of American health insurance is the tax deduction for employer-provided group plans — but not, to this day, for employer contributions to portable individual insurance. Insurance then became a payment plan to maximize the tax deduction. It became horrendously inefficient as people were no longer spending their own money.

Worse, nobody who hopes to get a job with benefits then buys long-term individual insurance. This provision alone pretty much created the preexisting conditions problem.

Cross-subsidies are a second original sin. Our government doesn’t like taxing and spending on budget where we can see it. So it forces others to pay — it makes employers to provide health insurance. It forces hospitals to provide free care. It low-balls Medicare and Medicaid reimbursement.

The big problem is that these patches and cross-subsidies cannot stand competition. Yet, without supply competition, costs increase, the number of people needing subsidized care rises, and around we go.

HKO

The illusion that market forces do not work in health care is nonsense,  We have spent decades subverting market forces and then declare that it does not work. The problem with our health care is that market forces only work too well, and the system has responded to the adverse incentives created by poorly analyzed and poorly executed solutions.  If you pour money into a market, mandate an increase in demand, restrict the supply and reduce competition, then you will get the mess we have.

The debate is subjected to hyperbolic partisan ignorance, useless virtue signalling, intentionally misleading statements,  if not out right lies about both the nature of the problem and the solutions proposed to fix it.

Reality is not optional and it is an act of fraud and cowardice for political leaders to pretend that it is.

Further suggested readings: