By DCGeek on October 23, 2009 9:35 AM
Hi Roger,
Although your appeals to compassion strike a chord with me, I think you're arguing this the wrong way. We don't need compassion in order to defend universal health care. The plain, simple, economic truth is that the selfish person should support health care reform. It's flatly in his best economic interest.
Here are a few arguments, based on bedrock economic principles, that should appeal to the rationally self-interested utility-maximizer:
1) Insurance pooling. A lot of people talk about insurance without ever thinking about what it really is. Insurance is simply a system whereby people pool their resources to protect against costly bad fortune. As long as there are more lucky people paying into the pool than unlucky people drawing from it, the system works, and everyone can go about their day without fearing the future. That enables people to take risks, which is a very good thing for the economy.
And here's the thing: the bigger the pool, the easier it is to maximize efficiency. Because bigger pools diversify risk. If three people are in an insurance scheme together and one of them gets sick, that's a pretty big burden for the other two to bear. But if 1,000 people are in the pool? No big deal, right? So it is categorically less efficient to have a dozen small insurance schemes than to have one big insurance scheme. Much to the chagrin of health-care opponents, government supplied health insurance would be an efficiency-maximizing intervention in the market, if it broadened the insurance pool. Everyone, from the people drawing on the policies to the people paying into the policies, would be less exposed to risk, and would bear less of a financial burden. This is part of what makes single-payer systems more cost-effective.
Are you listening to this you selfish bastards??
2) Maximizing public goods. The free market is generally the most efficient way of allocating resources, because it allows people to trade things they don't want for things they do, without any planning or oversight involved. It's the simplest possible utility-maximizing strategy. It is extremely powerful. This can't be denied.
However, the market is not always an efficiency maximizer. A "market failure" occurs when the market fails to promote what we call "public goods" - simply put, things everyone values. To solve market failures, we create institutions (like governments) that can coordinate people in ways the free market doesn't.
Consider education. The private market sets prices much higher than most people can afford (for good reason: that's the price at which they can maximize revenues). But society benefits as a whole when we have an educated population (we're more productive, more innovative, more wealthy, etc.). So the government quite rightly intervenes to subsidize your education. And this is positive sum, because after the governments done paying for you to go to school, you go out and earn better money than you would have. Thus, the government is able to earn its investment back from you several times over in higher taxes - and does the same for the next person. And everyone's a winner. Ta-da!
Also consider insurance pooling, as mentioned above. Theoretically, we don't need government to make this work - we just need everyone to realize the gains they can reap from a larger insurance pool, and then pour their smaller pools into one larger one. Then everyone wins. But there are two problems to doing this: first, not everyone realizes that they can maximize efficiency by pooling their policies (an "information problem"); second, no one is coordinating this activity, so people wouldn't know where to start (a "collective action problem"). So we need an institution (government) to coordinate this activity - to everyone's benefit.
(Yes, this comes at the price of some freedom: the freedom to pay more for less. Do you really care?)
In the case of health care, there are enormous public goods associated with a healthy society, but the free market is not producing as much of these goods as intervention could. To name a few:
a) Competition between health insurers is not presently controlling costs (for many, many reasons). Introducing a public option would introduce more competition and make prices lower. This means that billions of dollars currntly being allocated to health care costs could be re-allocated to other (more innovative?) areas of the economy.
b) Providing universal insurance would change people's behaviour: it would allow them to visit the doctor more often. This is a good thing - it would contribute to preventative medicine, catch illnesses early, and generally keep costs down (it's way more expensive to treat an illness than to prevent one). In other words, people will be drawing less from the pool. Again, everyone benefits.
c) Controlling costs will make it cheaper for businesses (who pay for insurance) to hire new people, and possibly pay higher wages to their workers. Thus contributing to a wealthier, more productive economy.
...And on and on and on.
Listen, I speak the language of the free market. I understand why people defend it. But I'm not so crazy as to suggest that it's infallible - no serious person could be. And when it fails to maximize efficiency, it's perfectly appropriate for the government to intervene, to your benefit, my benefit, that rich bastard's benefit - everyone's benefit! (We call this "pareto optimality".)
So there you have it, you selfish jerks. If you can't find it in yourself to care about others, at least think about yourself. You - yes you! - will be richer, healthier, and less exposed to risk by allowing the government to intervene in the health sector. So stop being so damn stupid. |