What’s Wrong with the World

I never thought about the insurance industry that way - but that makes sense.
IIRC, one of the objections to Obamacare was that it would disallow "catastrophic care only" policies.

On a side note: I believe Tort reform should be at or near the top of anyone's agenda when talking about healthcare reform.
It's time to put a stop to the "ambulance chasers" as well.

Oh, and, btw, Al - one need hardly indulge in anecdotes about "welfare queens" (entertaining as they may be) to note, along with Charles Murray, that "the total package of benefits for single mothers has not been diminished despite the hoopla about welfare reform..."

Yes, Chucky D. It also disallows mini-med policies, unless you happen to get a special exemption from the Czar, as McDonald's just did, so that they wouldn't cut out healthcare coverage for their employees. Did someone say "A government of laws, not of men"? That's so...eighteenth century.

Mr. Darwin: while I was at the NIH, there was a very highly placed executive from one of the top health insurance companies who used to show up, all the time.

A scary, slimy guy, obviously fishing for an "in" with the government.

That's my general impression of folks in "big" (as opposed to "small") business. Scary, slimy guys, fishing for an "in" with the government.

I think the whole "health" "insurance" "business" is irredeemably corrupt. But we just can't seem to escape from it. Obamacare sure didn't help.

Steve,

If I could recommend one article to liberals to get them to start thinking differently about health care, Goldhill's article would be the one.

Then I would direct them to Dr. Gratzer for specific policy solutions:

http://www.manhattan-institute.org/html/gratzer.htm

There is no reason we can't remain entrepreneurial and dynamic in the health care sector while at the same time do a better job of providing affordable care to all. Competition promotes efficiency which promotes cost savings. What is true for dishwashers is true for hip replacement surgery.

JS - that's a *long* list of publications by Dr. Gratzer. Any suggestions on where to start?

Steve, one really radical suggestion I've seen and am really torn two ways about would be eliminating altogether the tax deductibility of health insurance premiums. The idea appears to be that this would remove the prima facie case that insurance is to be provided by the employer and would mean that fewer people would have insurance. The idea is that this would drive things more to a supply-demand model. As I say, I'm not real happy about the idea, but it's at least worth having in the mix. As you say, the entire Obamacare thing is running in exactly the _opposite_ direction and creating more over-demand. Perhaps a modified version would be to have only catastrophic plan premiums be tax deductible.

By the way, I don't know if you noticed this, Steve, but back in the early 90's I really noticed an interesting tie-in among the following things: a) the rise of HMO's, b) socialist thinking and talking about how "we" can best spend "our" healthcare dollars, as if already these dollars belonged to the collective and were to be doled out by the Anointed, c) a big emphasis, especially by HMO's (it's even implicit in the name) on increasing patients' demand on medical facilities for routine checkups, screenings, and the like, d) resentment about the cost of end-of-life care, with explicit statements that "our" healthcare dollars should be spent on the items in c instead.

The usual argument was that by pressuring patients to "maintain" their health with (possibly unwanted and unneeded) routine visits to their doctors and tests even when healthy, and by at the same time pressuring patients not to receive end-of-life care, "we" could reduce spending of "our" healthcare dollars overall while at the same time spending what we did spend more "rationally"--aka in ways that seemed more tidy and desirable to the Anointed writing the articles.

I think it is no accident that the result has actually been overdemand on the healthcare profession with no overall lessening of costs. And now we're going to try to pressure and induce (by the impression that it's all free) _more_ people to see their doctors even when they are healthy or, at least, not sick enough that they would bother to go if they didn't think of it as free.

I know of many, many parents by the way who believe that they are obligated to take their children to yearly checkups, at every age, even when there is nothing whatsoever wrong with them. Pediatricians foster this idea and make parents feel uneasy if they don't go along with it. Family doctors tend to be less high-pressure.

Paradoxically, the patients who do a really good job of taking care of their health - exercise, healthy diet, and so forth - through their late middle age and early senescence end up living a lot longer and costing a lot more of "our" health care dollars than their contemporaries who smoked, gorged on pork, and so forth.

The policy solution to all the problems noticed in this thread was already a part of Federal law before Obamacare came along: the Health Savings Account. It works like an IRA: contributions are before tax, and investment returns are not taxed unless distributed; but so long as disbursements are used to pay for medical expenses they are tax free. But the account is available only in conjunction with a high-deductible (i.e., "catastrophic") health plan. Benefits under the high deductible plan are triggered only in the event of a true medical catastrophe, so the premiums are very low: no paying for routine care by submitting a claim. Routine care is paid for out of the balance of the investment account. So because he is shelling out his own money to cover them, the patient has every incentive to economize on the first $x,000/year of medical expenses (let's be clear: the policyholder shells out his own money to cover routine expenses whether his policy is covering them, or not).

HSA's are in very good odor with health insurers (and, in fact, are the brainstorm of health insurers). Health insurers don't want to be in the claims administration business, see? Because it's a low-margin, fraud-ridden, expensive, nettlesome business. It is very difficult to improve economies of scale in the claims adjustment process, because by its nature claims adjustment is accomplished on a case-by-case basis, one claim at a time (insurance people hate paperwork as much as anyone else). All the other elements of the insurance business are, by contrast, fairly high margin: collect money, pay a commission, invest the proceeds, and collect dividends - what's not to like? Insurance companies want us to choose high-deductible policies in all lines - disability, long term care, auto, home, you name it - not only because adjusting picayune claims is stupid and inefficient (who would understand this better than the insurers?), but because the more skin their policyholders have in the game, the less likely they are to defraud the insurer.

Couple the HSA with portability, and the health insurance problem is basically solved. Consumer behavior will drive health care prices - and, therefore, premiums on all sorts of health insurance policies, high-deductible or not - down.

I have a few other suggestions for the health insurance system. They were published at VFR: http://www.amnation.com/vfr/archives/015445.html

I agree with Kristor here. HSA's are great especially when you budget for a monthly amount to go into the HSA account automatically. I have a peace of mind with my HSA that I never had with a regular health plan since I have a nice pool of money set aside and once I hit the deductible the plan covers 100%. Plus, the plan cost hasn't changed for the past two years.

Of course, this will all probably change since the gov't is going to "help" me.

The thing is, Kristor, most of us weren't using HSA's because employers were paying for insurance that seemed a lot more desirable. Let's face it: On a day to day basis, most ordinary folks, including me, wouldn't exactly enjoy having to pay for their own everyday healthcare costs if they could (it seemed) get someone else (like the insurance company) to pay for them while paying only a low co-pay. If you're one of the very few who is doing so, that explains a lot of the reluctance--the cost is very high. (I sometimes catch a glimpse of what a given medical bill was pre-insurance and am inclined to whistle.) And the cost is high because usually the insurance companies are paying, driving costs up in various ways. It's a little bit like body work on a car. I don't have comprehensive auto insurance and fortunately have been in few accidents. On one of the only occasions when I actually wanted body work done on my car, I was pretty shocked at the cost. The reason dawned on me: Most of the time, it's paid for by a third-party payer. I can live with that, because I rarely _want_ body work on my car. I want some sort of medical care more often than that.

So unless a _lot_ of people switch to high-deductibles and HSA's, the few who do may well find it undesirable (because they'll be paying the insurance company rate) and would prefer to have an employer plan that covers more.

That's why I was intrigued though rather shocked by the proposal I read to stop incentivizing pay-for-everything employer plans.

By the way, can anyone shed any light on this: Some years ago, a doctor told me this. If a doctor accepts patients who are with Blue Cross Blue Shield, _even if the doctor does not participate with BCBS_, the doctor can be sued for offering one of these patients services at a discount or for free. Don't get me wrong: The doctor wasn't saying this to get out of doing so (which might have raised questions about truthfulness). The doctor _did_ do so, but everyone in the office believed that this small act of generosity had to be kept secret lest they be sued.

What gives with that? How can BCBS possibly do that?

It seems to me that any legal structure that permits or encourages that needs to be attacked, because it's preventing cost-shifting and generosity that could be important for the poor in healthcare, and it keeps costs artificially high.

It seems to me that any legal structure that permits or encourages that needs to be attacked, because it's preventing cost-shifting and generosity that could be important for the poor in healthcare, and it keeps costs artificially high.

That would imply that doctors have a right to actually work for profit, which is highly offensive to people like Al and Maximos. God forbid that a doctor have the freedom to discriminate in favor of some poor patients, as that would also imply that he or she has the freedom to tell indigent patients to go away. (And here I note that whenever Maximos complains about the duties of "the great" his brush inadvertently sweeps up a whole lot of the professional middle class, and he tends to get highly offended when people like me point that out)

I don't know that it implies that they have the right to tell the indigent to go away, but it does imply that it is not inherently unjust for doctors to charge some people more or less than others. What's bizarre about this is that I would have thought fiscal conservatives and fiscal liberals could _agree_ that it's good for doctors to charge some patients less or even work for them for nothing--being generous to the poor is supposed to be something liberals like, right? But since learning about this I have realized that, no, the control-freak nature of the fiscal liberal is such that everything must be standardized, otherwise it's "unfair."

What I still don't understand is what stake BCBS has in punishing doctors for being generous, other than just throwing their weight around for the sake of it. Can they possibly be so stupid as to think that if the doctor charges one patient less or does the work for free for that one patient, the doctor could do that for everyone and is therefore cheating BCBS by not doing that work for free for all patients?

Lydia, the scenario you mention varies from state to state. Some states allow providers to give non-par discounts/write-offs while others do not. The BCBS thing is related to contract law, and also to specific BCBS plans/policies, both of which, again, vary from state to state.

"Competition promotes efficiency which promotes cost savings. What is true for dishwashers is true for hip replacement surgery."

Only up to a certain point. For the market to work its supposed magic takes time -- to weed out the providers of shoddy goods and services, etc. In the interim, however, while this magical process is happening, it is rather more consequential having bad hip replacement surgery than buying a crap dishwasher.

Although (Because?) I work for a large for-profit medical company, I am quite skeptical of the mixture of the profit motive with health care, at least on the corporate level. I have no problem whatsoever with individual doctors, practices, etc. making a decent living, however.

Interesting note (from my wife the doctor): Medicare and Medicaid reimbursements are based on the lowest price charged (by your practice/hospital) for the procedure or service provided. This has the perverse incentive of penalizing doctors that provide charitable care. Decide to give a 40% discount to a needy laborer for his yearly checkup? Congratulations, you've now reduced your income from all government-funded checkups by 40%. Or, of course, you can lie to the government about it. In particular, this messes with an old standard for providing charitable care: declare that one day a week, your practice will be providing charitable care free of charge to all comers. Can't do that anymore --- instead you have to go work for an official free clinic, with an administration that you're not familiar with.

Brett, that might help to explain what I was asking about: Perhaps BCBS, though ostensibly an insurance company rather than a governmental entity, operates the same way. (This wouldn't surprise me at all. Like Steve, I'm inclined to think that large insurers operate quasi-governmentally.) Perhaps on the occasions when they do reimburse the doctor (which can sometimes happen even if the doctor is non-participating), they base the fee reimbursed on some fee schedule provided by the doctor including the lowest price charged. If the doctor ever does that work for free and then doesn't list that as the "lowest price charged" on the fee schedule, _that_ could be the trigger for a lawsuit if discovered.

Okay, so reform of this kind of thing has got to be part of any market-based reform: Remove this perverse incentive and this penalizing of charitable actions.

Steve,

Dr. Gratzer's book The Cure: How Capitalism Can Save American Health Care would be my first recommendation, but since I know you're a busy guy, let me just say that in broad outlines he recommends we move to a system that is similar to the one described by Kristor with the caveat that he would remove the tax deductability of health insurance premiums for employers so they wouldn't have an advantage buying insurance over a consumer buying a HSA.

The question of incentives is huge and Lydia gets to the heart of the problem here:

On a day to day basis, most ordinary folks, including me, wouldn't exactly enjoy having to pay for their own everyday healthcare costs if they could (it seemed) get someone else (like the insurance company) to pay for them while paying only a low co-pay. If you're one of the very few who is doing so, that explains a lot of the reluctance--the cost is very high. (I sometimes catch a glimpse of what a given medical bill was pre-insurance and am inclined to whistle.) And the cost is high because usually the insurance companies are paying, driving costs up in various ways.

When you don't have to face the true costs of the decisions you make, those costs will become distorted over time (Goldhill discusses this problem in considerable detail). Here is Dr. Gratzer on how we got into this mess:

American health care is dominated by third-party payment. No one would suggest that third-party payment would work for food, clothing, or shelter — so how did this odd arrangement develop for health care? When the U.S. government imposed wage and price controls in the 1940s to help the war effort, employers began offering health insurance; they couldn't offer better wages to attract employees, but they could offer this benefit. Rather than stamp out this gray market, the IRS ruled in 1943 that health benefits would remain tax-free. "That was the key mistake," suggests economist Milton Friedman.

Because of this ruling, a dollar spent on health insurance would result in a dollar gained by the employee; a dollar spent on higher wages, however, might see only 50 or 60 cents reach the worker, depending on the tax rate. For employees, lavish health benefits have historically made sense, allowing them to get more bang for their employer's buck. Not surprisingly, then, most working Americans have coverage from their employers. The resulting system is fraught with problems: Between private and public coverage, Americans are over-insured, paying just pennies out of pocket, so patients do not have to think twice before demanding expensive tests or procedures.

That is from an older article he did for The National Review back when Senator Kerry was running for President: http://www.manhattan-institute.org/html/miarticle.htm?id=3140

And here is a more recent short blog post in which he outlines three broad themes for health care reform moving forward (and again, the importance he places on making sure consumers have 'skin in the game'):

http://www.frumforum.com/how-conservatives-are-winning-the-healthcare-fight

As for Rob G.'s contention that profits and medicine don't mix -- I say nonsense. Is there any evidence that socialized medicine and/or doctors don't perform bad hip replacement surgery? To the contrary, the evidence is that our goofy hybrid market/government system performs better than other countries when it comes to life-saving surgeries. Just as we regulate the sale of cars, we can regulate the sale of medical procedures. As Dr. Gratzer says, we do need to promote informed consumer choices and the government can certainly play a role in publishing hospital survival rates, studies on the effectiveness of various treatments, etc.

when I explained my position on all this stuff, you (and Maximos) simply ignored me.

Silence may have any number of meanings, ranging from the tacit concession of defeat to utter indifference; as such, nothing whatsoever can be inferred from an instance of silence, absent additional information. Some of my best work as a blogger has gone little remarked, or unremarked altogether, and, much as I might like to think so, I am not warranted in concluding that this is because there exist no counterarguments.

"A more consumer-centered health-care system would not rely on a single form of financing for health-care purchases; it would make use of different sorts of financing for different elements of care - with routine care funded largely out of our incomes; major, predictable expenses (including much end-of-life care) funded by savings and credit; and massive, unpredictable expenses funded by insurance."

Depending upon the details - within which the Devil lieth in wait, seeking whom he may ensnare and devour - I could perfectly well endorse this general schema; it all depends upon the divisions between the various types of care and modes of financing, and whether provision is made for an adequate pooling of health risks. As I perceive it, this rough schema has great utilitarian value, if guided by the presupposition that health, and the maintenance thereof, are goods of human flourishing, and not pure market goods, wholly to be regulated by supply and demand; that would be, on my understanding, to devalue human flourishing, by making it a contingency of economic forces alone, and to overvalue the economic, by making it the master of human fortunes. This is not to state, by any stretch of the imagination, that markets, or economic 'forces', have no role in health care, or other vital goods of human flourishing; it is merely to state that markets must be embedded in a wider cultural framework, which at once conditions the market, and is more than a mere utilitarian prop for the market (ie., all of the arguments about which cultural preconditions make markets work best, as though the task is to get people to think and act "rightly" about pure market exchanges, so that they'll just accept whatever happens in the market, without demurral).

It seems to me that any legal structure that permits or encourages that needs to be attacked, because it's preventing cost-shifting and generosity that could be important for the poor in healthcare, and it keeps costs artificially high.

Of course these things should be reformed.

And here I note that whenever Maximos complains about the duties of "the great" his brush inadvertently sweeps up a whole lot of the professional middle class, and he tends to get highly offended when people like me point that out)

Well, no, that's not what offends me. What offends me is that class of arguments which would defend middle class professionals who would privilege their lifestyle choices over legitimate human needs, as though they are entitled to a house in a swanky suburb, and a Mercedes or two in the driveway, while a poor person is not entitled to health care. Arguments that any sort of charitable benefaction would be supererogatory, and that no wrong would be done if charity were withheld in actual life and death situations.

Well, no, that's not what offends me. What offends me is that class of arguments which would defend middle class professionals who would privilege their lifestyle choices over legitimate human needs, as though they are entitled to a house in a swanky suburb, and a Mercedes or two in the driveway, while a poor person is not entitled to health care

I'm sure you'd say the same thing about middle class families like mine who privilege the ability to have a single income, traditional family over the "legitimate human needs" of others.

I've noticed that you never seem to acknowledge specific duties from the poor to the rest of society to not behave in ways that are burdensome like creating a small brood out of wedlock or getting into drugs. Like most Catholics and Orthodox, you've been quick to find some "culpability" argument for why they didn't know any better.

Of course these things should be reformed.

Well, once again, the news here is that we're going in the _exact opposite direction_ with greater socialization of healthcare. I don't know why this is so hard to convince people of. Perhaps what isn't clear enough is that the sort of standardization of fees and regulation of payments that permits these kinds of lawsuits and that prevent spontaneous generosity on the part of doctors are regarded by the regulators as a feature and not as a bug. Brett's comment was very enlightening.

"Competition promotes efficiency which promotes cost savings. What is true for dishwashers is true for hip replacement surgery."

This is broadly true, but it simply doesn't work all that well in certain cases. I don't think we want nuclear power plant operators to work their safety programs right down to the thinnest commercially feasible safety margin. In an area like this, we want there to be a social mandate for stronger than the thinnest possible margin, and the only way to achieve this (without government simply running the whole show) is to have the government mandate certain levels of safety that land on all operators equally so that none of the operators have a commercial incentive to cut those specific corners.

Efficiency vs accuracy issues in medical care have rather more import than dishwashers, but less than nuclear power plants. I do think that profit motives (even disguised as in non-profit entities like hospitals) can become an issue in medical care. Maybe, like Rob says, it is the combination of profit motive with corporate structure that is the issue, or the combination of insurance-like pay scheme with non-insurance-like benefits. I don't really know. Maybe we could have sufficient market-based rewards and dis-incentives if we had a more perfect level of information, such as (a) Dr. X charges $200 for this procedure while Dr. Y charges $300, and (b) Dr. X has 90% satisfied customer level with this procedure, while Dr. Y has a 98% satisfied customer rating.

I agree with Chucky that we desparately need tort reform. The current practices are obscene.

the only way to achieve this (without government simply running the whole show) is to have the government mandate certain levels of safety that land on all operators equally so that none of the operators have a commercial incentive to cut those specific corners.

This is where something similar to a felony murder statute for gross negligence, applied appropriately, would work well. If executives knew that they might face life imprisonment or execution for causing innocent people to lose their lives through sheer negligence, they'd have a more powerful motive than civil liability to go the extra step.

If that seems harsh, the motivation for that thinking in the Old Testament was that whoever killed their neighbor through gross negligence obviously did not obey the commandment to love their neighbor. So really, it would fit in well with a broadly Christian view of social obligations.

Well, no, that's not what offends me. What offends me is that class of arguments which would defend middle class professionals who would privilege their lifestyle choices over legitimate human needs, as though they are entitled to a house in a swanky suburb, and a Mercedes or two in the driveway, while a poor person is not entitled to health care.

Maximos, what about the vast, vast numbers of not "privileged" but still middle class people, who drive Fords and Chrysler minivans, and whose house in the suburbs is neither swanky nor especially well kept-up because of college tuition and so on, and whose idea of vacation is 4 days camping rather than 2 weeks at Club Med?

But anyway, a poor person is not "entitled" to health care, if by "entitlement" is meant he has a right to receive that care altogether independently of market forces. That's simple physics: the amount of health care is a limited quantity. But aside from that new-speak meaning of entitlement (of which I do not accuse you), I agree with you that the impact of the distribution of health care is a human concern, and cannot be left to simply market forces alone, that would be a denigration of humans in comparison to the market, whereas the market should exist for humans, and therefore for human good. And in speaking of human goods, the most important ones are spiritual and moral goods, while physical and material ones are understood in the context of the superior goods.

I'm sure you'd say the same thing about middle class families like mine who privilege the ability to have a single income, traditional family over the "legitimate human needs" of others.

No, I wouldn't, not without a lot more information, to which I'm not entitled, and for which I'd not ask.

I will say this - because our esteemed editor knows a bit about where I live, the neighbourhood, and how much value my property has lost in the Great Recession: People such as myself, and those better-off than myself, have no ethical grounds whatsoever for complaining about little increases in taxes or insurance premiums, so as to provide coverage for the less fortunate, be they poor or chronically ill. I mean that: no grounds whatsoever. We're much less entitled to spend our earnings, however justly gained, on large houses, for example, than the unfortunate are entitled to health, or a shot at it. Besides, if my budgetary margins are so thin that a modest increase in taxes, or insurance premiums, will push me into a financial crisis, then I've been living beyond my means, period.

I've noticed that you never seem to acknowledge specific duties from the poor to the rest of society to not behave in ways that are burdensome like creating a small brood out of wedlock or getting into drugs.

Huh? Whenever have I denied such an obligation? My only argument has been that applying social darwinism to such poor family units will not accomplish its intended purposes, and that the nexus of mutual obligations has been violated by all parties.

Well, once again, the news here is that we're going in the _exact opposite direction_ with greater socialization of healthcare.

Well, once again, I observe that I opposed Obamacare as a 'bureaucratic kludge' (my words) intended to prop up an unsustainable, dubiously ethical, and inefficient insurance industry (or series of monopolies and cartels). There is no deep theoretical or structural reason preventing the combination of guaranteed public minimums, catastrophic insurance, and flexible pricing that I'd favour; the obstacles are wholly contingent, related to the organization of the present system.

Mike, I cannot see how that would work. Suppose a power co. executive says: "I consulted with the physical experts, and we came up with a program of safety that they assured me was 98% safe and solid, that's not negligent homicide, (when the plant blows and kills 300,000 people) that's just an accident." How are you going to "prove" that the moral/legal obligation to push the safety margin up from 98% to 99.99% is one that ought to be subject to legal sanction of negligent homicide? I don't think you can, in the absence of a pre-existing social mandate that says a 98% safety margin is not sufficient, you must seek a 99.99% safety margin. The meaning of "negligent" cannot be determined simply by after-the-fact results (otherwise nothing can be classed as an accident); and if determined by prospective rational tests of likely outcomes, given that no real-world situation is 100% safe, a certain margin of error must be socially acceptable. All I am saying is that it makes more sense to set that margin explicitly beforehand by legislative and regulatory decree, rather than somewhat haphazardly and implicitly by (a) market forces; and then retrospectively (b) by the whims of each individual judge's preference for risk levels.

But anyway, a poor person is not "entitled" to health care, if by "entitlement" is meant he has a right to receive that care altogether independently of market forces.

It seems to me that this is matter of semantics. If we are discussing entitlement on this level of abstraction, no one is entitled to much of anything, since we are far from any sort of original appropriation, as when a farmer first turned a plow in virgin, uncultivated, unowned earth, and made it bring forth produce. All economic outcomes are the products of market forces, themselves contingently organized by law and custom, and other cultural factors; as such, no one can be entitled to anything independent of such forces, since no outcomes obtain without them; similarly, no one can be entitled, in any absolute, trans-historical sense, to the outcomes of such forces, precisely because all such outcomes are mediated by contingent historical factors. Absent the artifactual, there is nothing at all; no absolute, unconditioned claim can arise from contingent history, other than the value of human life itself. The poor are thus not entitled, and neither is anyone else, for that matter.

If, however, we are talking about an actually-existing system of law and custom, that system ought, ideally, to be informed by the natural law, which teaches that health is of higher value than luxury; given that market forces are going to exist regardless of our deliberations, and regardless of the positive law, it seems to me that the reconciliation is found in a guaranteed public minimum, which could supplement market forces, and even function in conjunction with them (law could define the contents of a minimum standard of care, and provide subsidies to those falling below an income threshold, which subsidies would be applied to the routine/catastrophic/end-of-life schema). But it's just absurd for some conservatives to cry, "market forces!" in defense of upper-class lifestyle choices, implying an entitlement to those lifestyles, while denying the entitlement of, say, a poor child to cancer therapy. Perhaps it is better to jettison the language of entitlement, a derivative of rights-talk, in favour of the language of duty and obligation: families have certain obligations towards their members; families towards communities, and vice versa, and so on; and a society, in its collective organization, has an obligation to pursue the flourishing of its members.

I will say this - because our esteemed editor knows a bit about where I live, the neighbourhood, and how much value my property has lost in the Great Recession: People such as myself, and those better-off than myself, have no ethical grounds whatsoever for complaining about little increases in taxes or insurance premiums, so as to provide coverage for the less fortunate, be they poor or chronically ill. I mean that: no grounds whatsoever. We're much less entitled to spend our earnings, however justly gained, on large houses, for example, than the unfortunate are entitled to health, or a shot at it. Besides, if my budgetary margins are so thin that a modest increase in taxes, or insurance premiums, will push me into a financial crisis, then I've been living beyond my means, period.

You're assuming that the increases will be modest, despite no evidence to back that up. Most of the projections for rate increases are significant.

Huh? Whenever have I denied such an obligation? My only argument has been that applying social darwinism to such poor family units will not accomplish its intended purposes, and that the nexus of mutual obligations has been violated by all parties.

I never said you denied, so much as you are so obsessed with the duties of those with a little money that you neglect to give serious time to the duties of those who need it.

Everyone talks about the duty of the rich to the poor these days. It's everywhere on TV, online, etc. It's hardly an underground discussion, even among Randians.

What you don't see very often are the people who call for social welfare (insurance, or whatever you want to call it) acknowledging that the poor have a moral duty to not burden society unnecessarily.

Lydia @ 10:04 p.m. last night: very good point about the HMO/socialist/resentment-at-end-of-life-care nexus.

Kristor @ 1:43 a.m.: totally agreed. HSA's are a brilliant idea. But lefty elites will fight against them to the last breath in their bodies, because they deny them the level of *control* that is their be-all & end-all.

btw - I fixed the link problem, and deleted your & Lydia's posts referring to it.

Jeff Singer - thanks for the suggestions. Clearly, we're on the same page, here.

I am, indeed, kind of overwhelmed, at the moment. I've never taught Aquinas before, and made a perfect fool of myself in class, Tuesday morning, with my hesitations and uncertainties. Teaching is a performing art, and I wouldn't have blamed anybody watching if they'd banged the gong and cried: "next!"

And tomorrow morning I have to put two & four & six together, and explain the first of the Five Ways! Wish me luck.

What you don't see very often are the people who call for social welfare (insurance, or whatever you want to call it) acknowledging that the poor have a moral duty to not burden society unnecessarily.

This obligation is not specific to, or unique to, the poorer classes; all socio-economic classes are under the obligation not to burden society unduly, whether by dissolute behaviour, or by rent-seeking, or by the manipulation of the law for private subventions.

HSA's are a brilliant idea.

They have potential, though I'm not going to say that they're the be-all and end-all of health reform. I think Obamacare narrows the scope for them, which is another mark against it.

Most of the projections for rate increases are significant.

For taxes, not really. For health insurance premiums, yes; but that was the case before the enactment of the 'reforms', and the 'reforms' are not the factor prompting the largest share of the increases.

Maximos @ 12:13:

I entirely agree that I would not be warranted to conclude from the relative silence attending my original post that there exist no counterarguments. That's part of why I'm trying again: *are* there, in fact, any serious counterarguments against Goldhill's overall view?

And please note that this repost was 90% aimed at Al (tick-tock, tick-tock) - hence the title.

Since you say that "depending upon the details...I could perfectly well endorse this general schema," I think I'll now up that to *99%* aimed at Al (tick-tock, tick-tock).

Maximos, again: your distinction between "goods of human flourishing" and "pure market goods," where the latter may appropriately be wholly regulated by "supply and demand," while the former may not be, seems central to your thinking.

First question: how are we to define the difference between a "good of human flourishing" and a "pure market good?"

Second question: if it is morally impermissible for "goods of human flourishing" to be regulated by the market, then by what means, and on whose authority, *should* they be regulated, *ideally, in your opinion?*

I.e., what's the system that you really want, all considerations of political practicality aside?

Maximos, I agree with this: But it's just absurd for some conservatives to cry, "market forces!" in defense of upper-class lifestyle choices, implying an entitlement to those lifestyles, while denying the entitlement of, say, a poor child to cancer therapy. Perhaps it is better to jettison the language of entitlement, a derivative of rights-talk, in favour of the language of duty and obligation:

I could also agree with guaranteed public minimum, which could supplement market forces, very easily, if the minimum comprises a quite modest percentage share for standard household expense. The more you guarantee, the more you encourage stupid behavior, which is NOT to promote human flourishing.

I cannot agree with this: Besides, if my budgetary margins are so thin that a modest increase in taxes, or insurance premiums, will push me into a financial crisis, then I've been living beyond my means, period.

But there HAS to be a number of households that have chosen to live without a significant margin of flexibility precisely in order to welcome a new baby into the family - choosing to put a high human good on new life rather than on pre-insuring against all of the unknown future costs (and changes thereof). I know of families like that, for sure. The fact that they have chosen to live with a smaller margin than I live with, a margin that does not permit of an increase of 2% of their income on subsidies for poor people's health over what they already pay does not automatically imply that they are making prudentially wrongful choices.

In any case, your comment could be applied no matter WHAT the current level of subsidized spending is. If it had been 5%, and it gets increased by 1% more, that's insignificant and nobody should be put out by it. If it then is 6% and it gets increased by 1%, that's insignificant and nobody should be put out by it. But: what about the person who retired in 1990 and has had this argument applied to her fixed income 10 separate times? She may have allowed for 1 or 2 such increases, but not 10.

We're much less entitled to spend our earnings, however justly gained, on large houses, for example, than the unfortunate are entitled to health,

Prudentially speaking, you cannot be certain of this. Take my house: it is MUCH larger than the average family's of 30 years ago. But then, it houses a MUCH larger household than the average family of 30 years ago. Further, it was planned both with that large household, and with homeschooling and work-at-home in mind, so the actual hours per person usage of the house (per square foot) is probably much higher than it would have been for an average family 30 years ago. Given the state of public education, my planning a large house to manage a large family and placing the home education needs of those children before the health needs of strangers cannot, prudentially, be known definitively as disordered.

Maximos also seems to me to neglect the following possibility: Perhaps goods of human flourishing should be regulated by market forces precisely _because_ they are so important and _because_ market forces will prevent things like shortages of those goods. It always makes me shake my head a bit to find that people who are unsympathetic to free market reasoning assume that one must not really think something is _important_ or a "good of human flourishing" or what-not if one wants it to be exchanged in a free market fashion.

On the contrary: I would prefer that the government would lavish its attention on making trivial junk available to all (resulting in shortages of said trivial junk) while leaving the really important stuff to the market.

Maybe we should have Bratz doll subsidies instead of increasing government provision of health care.

Thought experiment: What would happen to the healthcare industry if suddenly health insurance became illegal and everyone was forced to pay for healthcare?

The obvious answer is that only the rich would have healthcare, but would that really be the case? Could the healthcare industry survive by only serving the rich? Or would prices suddenly be negotiable? Would healthcare financing become an industry? Would hospitals become big charitable foundations with the rich giving tax-deductible donations so that the poor could get healthcare?

What would happen?

Lydia; @ yours of October 13, 2010 8:46 AM:

HSA's are available as employer paid insurance. My firm offers them. The way they work is that the claims are all adjusted automatically to reflect the price negotiated with the provider by the PPO sponsored by the Blues, even when the payor is the insured (as would be the case while he was chipping away at his deductible). So the insured still enjoys the bargaining power of the PPO.

We have indeed found that our employees who are older and less healthy choose a more traditional form of coverage, but the younger, healthier ones often go for an HSA. That's the wedge that could change the economics of the healthcare industry. Those younger employees are likely to see their account balances rise as the years go by, so that they can afford a higher and higher deductible, and a lower and lower premium.

The choice is not between a low deductible plan that guarantees to charge you an immense premium, and a high deductible plan that guarantees a much lower premium, in exchange for your retention of the first couple thousand dollars per year of risk. If you know you are spending less than the retention each year, the high deductible plan wins. If not, not.

I meant to say:

The choice _is_ between a low deductible plan that guarantees to charge you an immense premium, and a high deductible plan that guarantees a much lower premium, in exchange for your retention of the first couple thousand dollars per year of risk. If you know you are spending less than the retention each year, the high deductible plan wins. If not, not.

how are we to define the difference between a "good of human flourishing" and a "pure market good?"

A good of human flourishing is something integrally associated with the development and manifestation of human capacities, both those that are species traits belonging to the human person qua human person - for example, rationality, as regards the human person as the 'rational animal' - and those that may be differentiated by individuals - for example, degrees of rationality, or proficiency in rational endeavours. A good of human flourishing realizes natural capacities and teleologies, or, secondarily, affords the preconditions of such realization, thus enabling a human person to become what he is, by nature. Some such goods are more closely associated with the individual, and the realization of capacities closely associated with the individual endowment; a person could, hypothetically, develop his capacity for ratiocination by studying philosophy in comparative isolation, or cultivate his literary faculty by absorbing the works of great writers in his study; in such cases, the communal aspect of this development would be largely implicit. In other cases, the development and expression of such goods and capacities is indissolubly linked with other persons, not merely implicitly, but directly and personally, as we find in marriage and family life, or friendship. The communal element is inescapable, I would think, at some level; even though one might hypothetically acquire a profound grasp of philosophy by studying in isolation, one's pursuit will be aided by companionship in the enterprise, by the instruction of the advanced, and by membership in a community and tradition of inquiry. Similarly, proficiency in the arts of friendship and family life will be aided by adherence to inherited norms and traditions, which express, for a given time and place, a given culture, the nature of these things.

A pure market good is not so much a contrast to this notion as simply orthogonal; it has no intrinsic relationship to goods of human flourishing. I am not so bold as to assert the existence, in times past, of societies untouched by markets, but goods of human flourishing may be expressed, and expressed well, in societies largely bereft of market relations as we understand them. Friendship can exist, and has existed, in societies without much in the way of market relations as we understand them - say, in the ancient Near Eastern customs of hospitality and reciprocity. Pure market goods, therefore, are more on the order of commodities, things which may be bought and sold primarily with regard for the subjective valuations of the parties to the exchange. In this sense, a car is a market good simply; one might need a car to experience the full panoply of conveniences afforded by modern society, but one needn't own one in order to cultivate one's human capacities, to become more completely what one is. One could always walk more, or live near a city.

By contrast, health is a good of human flourishing both intrinsically and instrumentally; health realizes the purposiveness of human physiology, of all the systems of the organism functioning optimally, affording the person optimal vitality; health also facilitates other goods of human flourishing, as it is surely difficult to cultivate one's rational capacities if one is continually wracked by pain, debility, or illness.

It is dubious that great wealth is truly integral to human flourishing; even assuming the validity of the old Aristotelian "time for leisured reflection" standard, it is scarcely clear that one must be a trust-fund kid, for example, in order to develop one's human capacities. Even apart from the dissolution and uselessness of so many such people, one may develop many human excellences while pursuing a rather ordinary career and life-path: family relations, friendships, hobbies, some intellectual avocations, etc. If anything, great wealth is often an impediment to such flourishing, because the 'imperative' of acquiring and maintaining such wealth may overwhelm the opportunities for simple humanity. This is not to condemn wealth per se, merely to suggest that many wealthy people exhibit imbalances in life, sacrificing weighty human goods for transient material ones. Conversely, many people suffering material deprivation must sacrifice weightier human goods in order to 'get by' from day to day. The vulgar rich may choose such personal stunting; the poor more or less have it thrust upon them.

The notion of 'goods of human flourishing' is related to, but not identical with, the notion of fictitious commodities, such as land, labour, and health, things which, by virtue of close association with the human person and his goods, cannot be subjected to a pure market calculus, lest those goods, and society with them, be obliterated. There would be little human flourishing if, under a system of market exchange, land became increasingly concentrated in fewer and fewer hands, such that most men would never have a taste of ownership, its responsibilities, and its benefits. Given the historical contingency of market relations, their determination by law and custom, this is not only possible, but has occurred, as I have occasionally mentioned. Similarly, there is little human flourishing when wage-labour is afforded wages barely sufficient to maintain the labourer, let alone his family. Likewise, a pure market approach to health care, bereft of any sort of burden-sharing or risk-socialization, in which one could either afford the care or go without, there would be much less human flourishing, since most people would go without, and many would suffer chronic debilitation, and even early death. Such 'commodities' are said to be fictitious because, being embedded in cultural, religious, even philosophical traditions and expectations, they cannot be wholly assimilate to The Market without obliterating all of the goods, primary, secondary, and implied, embodied in those traditions. Whatever the excesses of pre-Thatcher trade unions in the UK - and there were excesses - the decent living standards afforded miners and ship-builders sustained their family lives, as well as rich communal customs; now, there are only the chavs.

if it is morally impermissible for "goods of human flourishing" to be regulated by the market, then by what means, and on whose authority, *should* they be regulated, *ideally, in your opinion?*

Well, it is impossible, in one sense, for such goods to be wholly regulated by the market, inasmuch as the market is an artifact of law, custom, and deliberation, whether explicit or tacit; the marker is either acknowledged to be embedded in culture and non-market norms, or we are engaged in ideological fantasy play, truncating and deforming culture, and disavowing the contingency of the market - which is to say, favouring the culture of some faction of our society, as opposed to a more broadly-based culture. In our case, all of the jabber about The Market really instantiates the cultural norms of the meritocracy, which is to say, their notions of placelessness, mastery of standardized and abstract testing, impermanence, entitlement, self-dealing, and "networking".

Such goods should be regulated by the deliberate sense of the people, balancing, as best they can, via their representative institutions - not all of them political - the diverse and sometimes competing goods at stake.

But there HAS to be a number of households that have chosen to live without a significant margin of flexibility precisely in order to welcome a new baby into the family

Well, sure, but when you're talking about folks like me - remember, I used myself as an illustration - this really not an issue. I know a family who have twelve children, all of whom have been sheltered, educated, and fed on an income not greater than mine, probably less. If one insists on the ability to do this, and to have a house in a swankier suburb, and fancy cars - which I do not have, for the record - then difficulties will assuredly arise. Were I to desire this, on my present finances, I could always, you know, move into a less expensive house; and that's what I'm saying: for people in my position complaining about a little extra taxation or insurance expense is simply preposterous, as though the 4000 sq. ft. house is non-negotiable, along with the expensive vacations (I haven't actually taken one this year, for the record; we bought my brother-in-law a truck so that he could start a moving business in Sevestopol). My point is that I've been pretty fortunate, as have all the other folks where I am. We have no grounds for claiming that our lifestyles are non-negotiable floors beneath which we cannot possible descend, for any reason. I understand that middle-class families are often strapped, and often strapped because they have made the decisions to forgo the second income, and to have more than 2 children; but I'm also the guy telling conservatives to either a) opt for some form of neo-distributism, b) make peace with some form of social democracy, or c) learn a couple things from reformist conservatives like Ross Douthat. The unifying feature of such positions is an emphasis on strengthening the middle class, as opposed to letting the globalized, free-market capitalism rip, and hoping for the best, this time around. We've done that for nearly 40 years, and the middle classes are increasingly beset. We all know the old quip about insanity, I trust.

Kristor, thanks for the explanation. I had indeed thought of it as a stronger either-or, but I must say that even the PPO negotiated amounts can look pretty high. One would have to run the calculations to see whether it would come out as an advantage. Another thing I have to admit, on the pro-HSA side, is that since the health insurance premiums come out of the check before we ever see it, I sometimes forget just how high _they_ are! It would be really good if more employers offered the HSA option.

Lydia: if you and Esteemed Husband are on a .edu plan through his employer, the real premium they are paying for you is almost certainly WAY higher than you think. .Edu plans are generally massively subsidized. If you were given the option of taking their premium contribution as comp or as HSA contribution, you might find the decision much more of a tossup.

This problem - that no one knows what or how they are really paying for healthcare - prevents market forces from even getting offf the ground.

Max,

I have to admit, when you are in full "I'm explaining the world and how it ought to be run" to your more libertarian leaning friends, you are at your best. I like this:

A good of human flourishing realizes natural capacities and teleologies, or, secondarily, affords the preconditions of such realization, thus enabling a human person to become what he is, by nature. Some such goods are more closely associated with the individual, and the realization of capacities closely associated with the individual endowment; a person could, hypothetically, develop his capacity for ratiocination by studying philosophy in comparative isolation, or cultivate his literary faculty by absorbing the works of great writers in his study; in such cases, the communal aspect of this development would be largely implicit. In other cases, the development and expression of such goods and capacities is indissolubly linked with other persons, not merely implicitly, but directly and personally, as we find in marriage and family life, or friendship.

I think the problem with your thoughtful analysis is when you argue that a "pure market good is not so much a contrast to this notion [as detailed above] as simply orthogonal; it has no intrinsic relationship to goods of human flourishing."

No intrinsic relationship? This is where you lose me -- for most of human history man has had to spend a lot of time figuring out how to feed, clothe, and shelter his family. Then along comes the Industrial Revolution, capitalism, and suddenly we are arguing over how much health care poor people should have! Surely you realize the irony -- without capitalism and markets as they grew up in the West -- no one would have the time to worry about much more than providing for the basics and living past the next nasty outbreak of disease. Yes, folks in the past had philosophy, friendship, family, and God -- but look at how much easier it has become for the average man to enjoy all of these "goods of human flourishing" thanks to the comforts provided by the market.

Comforts of the market, scoffs Max, these are only distractions from true human flourishing! And so we come full circle as Jeff Singer and Max are off to the races arguing about whether or not market goods are somehow related to goods of human flourishing. For me, human history and what markets have achieved w/r/t making life easier (in the sense of easier to provide the basics) suggest that there is an in fact a link between those markets and "goods of human flourishing".

This comment is getting long, so I'll wrap it up, but I also think you are ignoring another elephant in the room -- the one called liberty. To the extent that you would include liberty (or maybe God-given liberty, which entails certain duties related to our freedom) as a good of human flourishing, then you can't ignore the intrinsic relationship between markets and liberty. Simply put, the freer we are to "truck and barter" the more liberty we have over our lives -- including our ability to find a meaningful vocation, pursue our intellectual and cultural interests, etc. If I had the energy and didn't have to put the girls to bed, I'd go look up a quote that speaks to this idea from one of my favorite, lesser known books by Charles Murray called In Pursuit: Of Happiness and Good Government. For now, you'll just have to settle for my wooden prose.

Two more quick comments:

1) I got a chuckle out of this: "Whatever the excesses of pre-Thatcher trade unions in the UK - and there were excesses - the decent living standards afforded miners and ship-builders sustained their family lives, as well as rich communal customs; now, there are only the chavs."

First of all, there are more than_just_"chavs", and yes, I read plenty of Dalrymple so I know how bad it has gotten in Britain. Seconly, it is strange to suggest that the end of union jobs (unfortunately, the unions are still around) is all that it took to create chavs. Again, if history is a guide, something else must have been going on in the 90s and 00s to create the chavs as Britain's working men and women have faced worse hardships in the past.

2) This seems sort of crazy:

"for people in my position complaining about a little extra taxation or insurance expense is simply preposterous, as though the 4000 sq. ft. house is non-negotiable, along with the expensive vacations"

as if the only reason you would object to "a little extra taxation" is how it will impact you personally. What about objecting to what the government is doing with your tax dollars? If you are someone like me, who believes that government programs are already too big and bloated, then it is not a question of an extra 1-10% of income tax impacting my lifestyle. It is a philosophical issue of what the heck the government is doing with my money (and all my neighbors' money). If I don't think the government is making good decisions (including decisions about how to help the poor) then I want the governement reformed and/or taking less money until reforms are implemented.

"And please note that this repost was 90% aimed at Al (tick-tock, tick-tock) - hence the title."

Patience please, just starting to catch up, bit of a perfect storm here. I had a flu and pneumonia shot and an apparent reaction there to. Couple that with having to deal with the seasonal deer invasion - an Einstein/Newton deer figured how to evade the deer fence and taught the others - mucho tsouris.

al, outwitted by a deer. What party did you say you support ?

"The unifying feature of such positions is an emphasis on strengthening the middle class, as opposed to letting the globalized, free-market capitalism rip"

It is difficult to get the average mainstream GOP-type conservative to realize that his party doesn't have any more of an interest in strengthening the middle class than the Dems do. Both parties pay a lot of lip service to the idea but are short on results. The Dems sacrifice middle class interests to those of the lower classes, which have become a permanent voting block for them, even though the Dems fail to deliver to them either, and often push policies which make things worse.

A lot of mainstream American conservatives, on the other hand, believe in what might be called a naive version of supply-side economics -- that's what good for the wealthy and for the corporations is automatically good for them by a sort of osmosis. The rising tide raises all boats, etc., as if the economic "law" which posits this is equivalent to the corresponding law of physics.

The GOP, however, doesn't have the middle class in mind either, except as far as getting it to show up on election day and pull the 'R' levers.

No intrinsic relationship? This is where you lose me...

Perhaps you have not read carefully enough, or perhaps I have not explained myself with sufficient clarity. The contrast invoked was between goods of human flourishing and pure market goods, where the latter are defined primarily as commodities having no intrinsic relationship to the development of human capacities. The distinction is important, inasmuch as it be would anachronistic to argue that human flourishing, the development and expression of native human capacities, was impossible until the advent of modern consumer capitalism, with its welter of conveniences and benefactions. It would be absurd to maintain such a position. No member of any civilization prior to our own flourished, lived a truly fulfilled, truly human life, in communion with God and his fellows? Rubbish. It is not instrinsically necessary for any of these things to be present if human beings are to experience flourishing; given cultures prescribe the manner in which material circumstances contribute to flourishing, and the expression of human capacities. A Mongolian nomad, dwelling on the steppes, may be considered flourishing and fulfilled if he possesses a good yurt, his family, some healthy animals, and so forth. In any society, some level of material prosperity is requisite to flourishing, within the cultural terms established by that society; these are the secondary goods of human flourishing, the preconditions of the realization of primary goods of human flourishing: a man who falls below that material threshold will find it difficult to realize primary goods, owing to the physical and psychological stress of the situation, and the imperative of sheer survival. These material preconditions, therefore, are culturally conditioned; were I to be provocative, I'd suggest they were culturally relative.

But here's the thing, beyond a certain level, in any culture one would care to name, there is only pleonexia, the acquisitive state of more-having-ness, of continually grasping for more, ever more, though one cannot make use of such excess, and though the excess cannot add to one's flourishing, the expression of one's native capacities. The wisdom literatures of the world, above all the Christian Scriptures, are replete with warnings against such avarice, and caution the man enslaved to pleonexia that his material wealth will not, ultimately, add to his fulfillment, but burden him, and may even lead to his damnation. The wisdom literature is thus at one with old Aristotle on the question of wealth, its acquisition and management: wealth is to be gotten so as to manage a household well, and to provide for one's family, and perhaps those beyond: that is, wealth is instrumental towards the realization of primary goods, beyond which it is often gratuitous and destructive. This is not to advocate the existence of some "wealth management bureaucracy", sitting in constant tribunal over the workings of the economy, adjudging this man's material estate just, and that man's unjust. No, it is simply to state that any society, through its sovereign, deliberative institutions, not only does establish the framework within which men strive to acquire wealth, but may alter that framework, pursuant to the common good of the society. The pursuit of wealth and well-being must be subordinate to the good of the society as a whole, lest destructive fevers be loosed upon it. Hence, a society may licitly determine that some enterprise has established itself as a monopoly or cartel, distorting economic processes, and impairing the ability of other parties to participate in the economy, derogating their claims to flourishing. So, also, may a society determine that taxes must rise, for this or that reason.

So, yes, in our society as presently constituted, some level of material well-being afforded by markets is integral to human flourishing. It does not follow that any old deliverance of the markets is thus integral to human flourishing, or that some particular configuration of the market is indispensable to human flourishing, still less that the maximal degree of economic liberty imaginable or achievable is thus integral, or that the maximal degree of wealth attainable at any moment is thus integral. If there exists some minimum level of material well being, requisite for flourishing in a given society, a basic level of satisfaction, that is to say, there must also be a condition of satiety, beyond which there is gratuity, even excess; the two are linked because, while human desires may be potentially infinite, human needs are not, and cannot be infinite.

Again, if history is a guide, something else must have been going on in the 90s and 00s to create the chavs as Britain's working men and women have faced worse hardships in the past.

The history of the UK teaches us that there often have been men like Dalrymple, bemoaning the dissolution and wretchedness of the lower classes; there were such men in eighteenth-century England, during the times of "Gin Lane and Beer Street"; there were such men in Victorian times. These episodes have always occurred during times of simultaneous economic transformation/privation - enclosures, industrialization, post-industrialization - and cultural declension - retreats of religion, sexual licentiousness.

as if the only reason you would object to "a little extra taxation" is how it will impact you personally.

If government is squandering our money, then it is doing so regardless of the marginal rate of taxation, whether it be 30, 36, or 39.6%. Squanderage is unrelated to the rate of taxation, as it would be irrational to state that the squanderage is tolerable if only 28% of one's marginal dollar is taxed away, but insufferable if 39.6% of that marginal dollar is taxed away. In other words, bad policy is bad policy, regardless of what it costs any of us.

A lot of mainstream American conservatives, on the other hand, believe in what might be called a naive version of supply-side economics -- that's what good for the wealthy and for the corporations is automatically good for them by a sort of osmosis.

This belief is utterly impervious to empirical refutation, as witness the economic failure of the Bush administration: the policies came straight out of the accepted economic playbook, and yet few jobs were created during the Bush years, and median income was lower, even before the recession, than it was at the outset of the Bush years.

"The wisdom literatures of the world, above all the Christian Scriptures, are replete with warnings against such avarice"

Indeed. I heard a report on a talk by Edward Skidelsky called "The Emancipation of Avarice," in which he argues that Enlightenment economic thought freed that sin from its classical/Christian negative connotations by arguing that it could, in fact, be a good since it often produced good results. Yet, he argues, consequentialism is consequentialism, and the fact that acquisition for its own sake has positive results does not make it any less hazardous both to society and to the individual soul.

"the two are linked because, while human desires may be potentially infinite, human needs are not, and cannot be infinite."

Yet this observation, which should be fairly obvious, comes as a surprise to many in our society, where commercialism, advertising, etc., has trained people of all economic strata in the inability to distinguish between wants and needs. The affluent suburban soccer mom who "needs" a $60,000 SUV is no different at bottom than the ghetto dweller who "needs" that big screen TV.

Max,

You and I (and Steve) are no longer talking about health care, but I do appreciate your thoughtful response to me. Once again, I find myself in basic agreement with this:

A Mongolian nomad, dwelling on the steppes, may be considered flourishing and fulfilled if he possesses a good yurt, his family, some healthy animals, and so forth. In any society, some level of material prosperity is requisite to flourishing, within the cultural terms established by that society; these are the secondary goods of human flourishing, the preconditions of the realization of primary goods of human flourishing: a man who falls below that material threshold will find it difficult to realize primary goods, owing to the physical and psychological stress of the situation, and the imperative of sheer survival. These material preconditions, therefore, are culturally conditioned; were I to be provocative, I'd suggest they were culturally relative.

But here is where I get to be provocative -- I think that capitalism, and free markets, as they grew up in the West, do a better job in an absolute sense of providing the material prosperity "requisite to flourishing" than our previous hunter/gatherer, nomadic, and agricultural societies have known. Over time I think that if given a choice, the Mongolian nomads will abandon their traditional ways of life and enter into the capitalist, global economy because those traditional ways of life didn't do a very good job of providing basic material prosperity for most people in their society. That is not to say that these folks didn't live a "truly fulfilled, truly human life" before capitalism and markets -- but it is to say that their lives are necessarily constrained (as all of human life was constrained before 1800 or so) by economic hardship and material deprivation. I just think that a world in which we can now save a newborn's life thanks to advances in technology and medicine (even on the Mongolian steppe) is a world in which we should thank God for such wonders and a world that allows for more human flourishing than ever before. Yes, folks flourished in the 14th Century -- they also had to deal with the Black Death. There is something inherently good about a world with no more Black Death.

Finally you say "bad policy is bad policy, regardless of what it costs any of us." I think it is very difficult to separate the cost to the taxpayer from the cost of bad policy. In other words, part of the reason we have high tax rates is to pay for an ever expanding government that is not doing what it is supposed to be doing (from my standpoint). So if we fix the bad policy, tax rates will obviously come down. You are obviously correct to say that the government could be squandering our money at a 15% flat rate of taxation, but such a rate would obviously be bringing in less revenue to the government and therefore by definition the government could only do less. It is my contention that if the government is doing less, it might start to do a better job at what I want the government to focus on in the first place (e.g. defending the border, improve our national defense, provide help to the neediest, etc.) Size matters.

But here is where I get to be provocative -- I think that capitalism, and free markets, as they grew up in the West, do a better job in an absolute sense of providing the material prosperity "requisite to flourishing" than our previous hunter/gatherer, nomadic, and agricultural societies have known.

Better, perhaps, relative to certain cultural aspirations, and certain material criteria, such as decreased mortality. In other respects, we are less contented, and experience countless unintended consequences of material prosperity. The classic illustration of this principle is probably the alterations in family life, subsequent to the introduction of labour-saving technologies in the home; this is not a claim of exclusive causality, merely an observation that other factors had much less influence when domesticity required a great expenditure of labour. There are always trade-offs; and there are few instances of unqualified progress.

Over time I think that if given a choice, the Mongolian nomads will abandon their traditional ways of life and enter into the capitalist, global economy because those traditional ways of life didn't do a very good job of providing basic material prosperity for most people in their society.

It would be more correct to state that many people, inclusive of some Mongolian nomads, will strive to enter the global capitalist nexus, because, as sages from ancient philosophers to Christian ascetic masters have taught, men flee from pain, discomfort, and inconvenience, and rush to attain pleasure, amenity, and ease. This may or may not be a virtuous process, and it is certainly fraught with spiritual and ethical perils, as those same sages have recognized from time immemorial. Moreover, it is impossible that even half of the world's population should live as opulently as Americans, let alone that the entirety of that population should do so. There is but one Earth, and not four.

In other words, part of the reason we have high tax rates is to pay for an ever expanding government that is not doing what it is supposed to be doing (from my standpoint).

We have low tax rates relative to the services we require and/or demand from government, hence the existence of that pesky deficit; most complaints about taxation, are really proxy complaints about the composition of government programmes, spending, and so forth. Perhaps we ought to determine what it is we require of government, what programmes are requisite to a first-world nation, and which are optional luxuries, and then determine how to pay for such a government.

It is my contention that if the government is doing less, it might start to do a better job at what I want the government to focus on in the first place (e.g. defending the border, improve our national defense, provide help to the neediest, etc.) Size matters.

There really is no correlation between the size of the government - provided we are discussing contemporary Western states, and not communist autocracies - and the quality of the services it renders to the public. Scandinavian social democracies have ratios of government expenditures to GDP that are immense by American standards, yet are well-governed; American public services, by comparison, are both mediocre and niggardly. In other words, it's something in the culture. My hypothesis is that it has much to do with the American belief in "getting mine"; this anti-solidaristic posture underlies the refusal to pay for demanded services (California, I'm looking at you.), and the tendency to administer those services inefficiently, so as to afford opportunities for peculation and pelf-taking.

Maximos @ 9:12 last night - many thanks for your generosity in writing up such a detailed response to my earlier questions. I'd be sorry to see this stuck in the combox. Maybe this should be reposted in its own right?

Now for the following comments...

Kristor - thanks for your further explication of HSA's.

I'm now working as an adjunct professor. The advantage, for universities, of hiring adjunct professors consists largely in this:

(a) you can get rid of them whenever you want.
(b) you don't have to offer them conventional healthcare benefits.

I suspect that, were HSA's to become better understood, they might be available even to marginally employed people like adjunct professors.

I'd go for it, in a minute.

As it is, I've been without any sort of health insurance for all but two or three of the last twenty years.

Max,

Let me echo Steve's comment -- your answers are perhaps worthy of their own post when you can find the right 'hook' for the occassion. We are (again!) in total agreement on this:

Perhaps we ought to determine what it is we require of government, what programmes are requisite to a first-world nation, and which are optional luxuries, and then determine how to pay for such a government.

As Richard John Neuhaus might say, first things are key! I can only quibble with this:

"Scandinavian social democracies have ratios of government expenditures to GDP that are immense by American standards, yet are well-governed; American public services, by comparison, are both mediocre and niggardly."

It depends on what you mean by "well-governed" -- I think it is largely a myth that public sector workers in the Scandinavian social democracies are somehow better_across the board_than their American counterparts. Better than the folks running Detroit? Yes. Better than the folks who responded to 9/11 in New York? I doubt it.

Mr. Goldhill wrote this,

"Some of the ideas now on the table may well be sensible in the context of our current system. But fundamentally, the “comprehensive” reform being contemplated merely cements in place the current system—insurance-based, employment-centered, administratively complex. It addresses the underlying causes of our health-care crisis only obliquely, if at all; indeed, by extending the current system to more people, it will likely increase the ultimate cost of true reform."

Brad DeLong on another topic wrote this,

"In this fight, you will find me on the Democratic side—because a permanent extension of most of the tax cuts is bad but a permanent extension of all of the tax cuts, including the high-bracket tax cuts, is worse. The Democrats' proposal offers a low bang-for-buck as short-term therapy for unemployment and underemployment. But it is still better than a poke in the eye with a sharp macroeconomic stick that allowing all income tax rates to immediately and completely revert to their Year 2000 levels would be."

Steve, I'm not sure what your point is. We pass legislation with the system we have, not the one we would like to have. We have evolved a totally dysfunctional political system; It is unlikely to be fixed in our lifetimes and if you and I are lucky we will not be here when it crashes.

That having been said, life goes on. As the graph I posted indicates, the cost of health care in the U,S. is unsustainable. As the graph also shows, costs are considerably less in other developed nations all of whom have some form of national health delivery. We currently have socialized medicine for eligible veterans, single payer for geezers and some poor, some form of private insurance for most of the rest and nothing for a sizable minority. Private insurance outside of large employers is a mess.

We lost the chance for a bipartisan health care system in the Nixon Administration (thanks, Teddy!). Republicans will never co-operate in a meaningful plan and initiation is ideologically and structurally impossible. The Democratic Party has corporate tools like Nelson and Lincoln. Our system allows self-serving prima donnas (Snowe, Liberman for example) to crash the process.

We have a media that is about process not policy and can't get beyond he said/she said (an honest media that was interested in truly informing the public would have pointed out that Senator Grassley was lying with his "killing Granny" remark).

We have the bill our system is designed to produce. There are some good points - mandates, recissions, pre-existing conditions. etc. You don't want something that tilts towards insurance companies? Take corporations out of the political process.

Steve, attempting to discuss woulda, coulda, shoulda is pointless. Conservatives were, by and large, unserious political hacks during the process. We now have a law that has the potential to do some good and is capable of improvement. Time will tell.

"A more consumer-centered health-care system would not rely on a single form of financing for health-care purchases; it would make use of different sorts of financing for different elements of care - with routine care funded largely out of our incomes; major, predictable expenses (including much end-of-life care) funded by savings and credit; and massive, unpredictable expenses funded by insurance."

Sounds great until you think about it.

"with routine care funded largely out of our incomes" - works for those with some combination of young, healthy, and well paid.

"major, predictable expenses (including much end-of-life care) funded by savings and credit;"

Wow, you mean I get to start paying off my parents end of life health care about the time I've finished paying off my student loans? Suicide, anyone? This is merely aother plan to transfer middle class wealth upwards now that a large chunk of home equity has been grabbed.

"massive, unpredictable expenses funded by insurance" Which folks for that sub-set of the population for whom HSA's make sense.

al, that's just pathetic.

Your first first eleven paragraphs are pure filler. Non-responsive partisan maunderings. And then we get this:

"'with routine care funded largely out of our incomes' - works for those with some combination of young, healthy, and well paid."

What, exactly, do you think counts as "routine care?" What proportion of the American population do you think would be incapable of paying for "routine care" out of their incomes? You do understand the qualifier "largely," don't you? And the problems that result from using insurance to cover routine care?

"'major, predictable expenses (including much end-of-life care) funded by savings and credit;'

"Wow, you mean I get to start paying off my parents end of life health care about the time I've finished paying off my student loans? Suicide, anyone? This is merely aother plan to transfer middle class wealth upwards now that a large chunk of home equity has been grabbed."

Wha-huh? What on Earth are you on about? Goldhill suggests that people ought to save up to look after "major, predictable expenses," and you interpret this as suggesting that they foist such things off on their children? And that this would constitute some sort of wealth transfer from the middle to the upper classes?

Sheer gibberish. Shame on you.

"'massive, unpredictable expenses funded by insurance' Which folks for that sub-set of the population for whom HSA's make sense."

Let's be charitable, and assume that by "folks" you meant "works," since otherwise your comment isn't even grammatical. Even assuming that, you're still being silly. Pooling risk so as to fund massive, unpredictable expenses is the sole justification for the very existence of "insurance." And it "works" for anybody who's at risk for such "massive, unpredictable expenses" - not just those for whom HSA's make sense.

I think it's pretty obvious that you didn't bother to read Goldhill's article, and that you're ideologically committed to a socialized system that centralizes all decision-making power in the hands of the state, to a degree that precludes your taking any real interest in criticisms of that model or in alternative suggestions that don't lead in that direction.

I mean, after all - it works so well in France!

Steve, understanding how our system works isn't filler, it's sorta basic. We got the type of bill our system has evolved to produce. I don't see a path to what Goldhill proposes; if you do, fill us in. We have a bill that will do some good things but not enough which is what every other bill of this type has done.

If we tried Goldhill's approach what we would get by the time the hacks and prima donnas in the Congress got done with it would be a bill that still favored existing interests. We know from Medicare D what we would get from a Republican president and Congress. The present bill looks quite good in comparison.

HSA's are best if one is young, single, well paid, and in good health. If one hits the lottery and makes it to Medicare with few medical issues, one will have a tidy sum that will be taxed at retirement rates. They aren't necessarily practical for everyone.

"...savings and credit".

Credit means eventual debt for someone, no? Help me out.

Your last sentence is merely an incoherent rant. The U.K. has a socialized system. Canada has a single payer system. As I recall all the others have some combination of state and private insurance. The bill in question is kind of like Switzerland's and is real close to what Romney got in Mass. Many of the provisions were once Republican and Heritage ideas until that became politically and ideologically inconvenient. I know its easier to pass on talking points then to actually read legislation but it seems you don't understand socialism and don't understand what's in the bill that passed and was signed.

We pass legislation with the system we have, not the one we would like to have. We have evolved a totally dysfunctional political system; It is unlikely to be fixed in our lifetimes and if you and I are lucky we will not be here when it crashes.

We got the type of bill our system has evolved to produce.

This notion of Evolution to Dysfunction is an intriguing one; I wonder how you reconcile the tensions inherent in it. If our system is truly dysfunctional, rather that it merely being convenient for you to say so, wouldn't reform of that system take priority over trying to make it do what it definitionally cannot?

Even at a higher level of sophistication and wonkishness you cannot hide the very attitude that is sinking Obama and the Dems right now: "Don't you rubes get it? This is the best we could do in this damnably ungovernable country!"

Basically, at root this is about wishing the experts could just run the whole thing so we could leave this confounded mess of democracy and self-government out of it.

"If our system is truly dysfunctional, rather that it merely being convenient for you to say so..."

A fair question. The Senate, our political parties, and the media are all broken at the same time. First we should recall that viewing the Senate as problematic is hardly new. After all "The Treason of the Senate" was written over a hundred years ago.

Sandy Levinson recently wrote,

"It is idiotic, pure and simple, to continue with a system of representation that was rightly denounced in Philadelphia as "vicious" (by Rufus King of Massachusetts) and "evidently unjust" (by James Madison of Virginia). I strongly recommend that everyone read the debates as collected in the marvelous The Founder's Constitution, edited by Philip Kurland and Ralph Lerner, Volume 2, 182-239, available online thanks to the Liberty Fund, which has also reprinted it in a marvelously produced (and affordable) five-volume version. Madison described equal representation in the Senate in Federalist 62 as a "lesser evil" against the greater evil of no Constituion at all, given Delaware's (and other small states') extortionate threats to walk out and torpedo the whole project of constituitonal reformation."

We have one party that has gone insane and the other has been unable to recognize and deal with that fact.

The media, under its current conventions, can't inform as to facts and truth. One major outlet has become an arm of one of the parties. The rest are too often stenographers instead of reporters.

Of course it's a judgment call. Now seems different than before in a different and ominous way.

"...wouldn't reform of that system take priority over trying to make it do what it definitionally cannot?"

Perhaps it would if we could call time out and the rest of the world retired to their sides. It doesn't work that way. Life goes on, bills need to be paid, etc.

Reflect for a moment on what we need at minimum:

A reformed Senate (better an eliminated Senate).

Parties not captured by ideology.

A better media.

It's easy to talk of reform. Once again I will ask, "how do we get from here to there"? My pessimism results from what I see as the lack of a path.

We are on course to have a very difficult decade or so. Our system has been unable to respond effectively due to structural problems. That seems to define dysfunctional to me.

Bruce Ackerman has a new book out, The Decline and Fall of the American Republic that is being discussed over at Balkin's blog. One can scroll up from here. Quite interesting.

http://balkin.blogspot.com/2010/10/symposium-on-bruce-ackermans-decline.html

My spidy sense still tells me that the hinge turned on the timing of the current financial crisis.

I really need to buy that Founders' Constitution. No doubt it fairly teems with wisdom and insight. As it happens, it was several other collections from Liberty Fund [ http://www.libertyfund.org/details.aspx?id=1847 and http://www.libertyfund.org/details.aspx?id=1589 ] that helped me with my American Exceptionalism series in May: http://newledger.com/2010/05/in-pursuit-of-true-exceptionalism/. Another great resource is The Second Federalist, edited by Charles S. Hyneman and George W. Carey.

As that series of mine suggests, I think it is a grave error to study the American political tradition with the notion that it begins with the Revolution and Framing of the Constitution. It is much older than that.

Now, with that perspective in mind, has the American political tradition been derailed? That is a very interesting question. Very interesting indeed.

As I read your view, al, the derailing has been a fairly recent thing. But what if it was not recent at all? What if it is now several generations old?

Another question, perhaps even more interesting: if the tradition has indeed derailed, what are our obligations in light of that?

Respectfully, there is a puzzle here which you are far too insouciant about. One clear response to a derailed political tradition is to put it back on the rails. Perhaps in the caricature this is what futile conservatives are always trying and failing to accomplish.

I tend to follow Oakeshott on this. A political system is a human and organic thing, always in flux, fixed not so much by permanent ironbound principles as by habits of behavior, prescription, the mystic chords of memory, etc. Statesmanship consists in the "pursuit of intimations" of a living tradition of thought and action.

Still, though a tradition is never fully fixed, neither is it infinitely malleable. Thus the pursuit of intimations (a phrase and an idea that deserves to be ranked much higher in the literature of political science, in my view) becomes a refinement on the Burkean view of politics. Democracy of the dead. Our ancestors still have votes, whether we like it or not. Their work and teaching still frames our thought; institutions sometimes change easier than patterns of thought.

So, to wrap this up provocatively, the reformer of today is obliged to work within the American political tradition, even if it so happens that he labors under the burden of a derailed tradition; and a major part of our crisis and discord today lies in the readiness with which certain factions (concentrated on, but not exclusive to, the Left) propose and attempt to despotically effect innovations alien to our tradition.

(And no, I am emphatically not only talking about the last two years.)