Organization: Penn State University
Date: Tue, 15 Dec 1992 12:03:19 EST
From: <DGS4@psuvm.psu.edu>
Newsgroups: talk.politics.medicine
Subject: Re: HIAA and Reform
 <92349.194344DGS4@psuvm.psu.edu> <1992Dec15.094845.28910@genie.slhs.udel.edu>

In article <1992Dec15.094845.28910@genie.slhs.udel.edu>,
starr@genie.slhs.udel.edu (Tim Starr) says:
>
>In article <92349.194344DGS4@psuvm.psu.edu> DGS4@psuvm.psu.edu writes:
>
>}I think part of the problem is that you and other libertarians believe
>}that a free market, in the sense of no government involvement, could
>}exist.
>
>And you don't?  I've never heard that from an economist before.  Why not?

Public goods will always require government intervention.  The establishment
of a legal system without which tort is impossible will always require
government intervention.  I would argue that there is no such thing as
an economy devoid and independent of government, what I called above a
free market with no government involvement.  To me, then, the question
becomes how government is intertwined with the economy.  I would agree
with most economists that in most cases less government intervention is
better.  I happen to believe that health care is not one of those cases
The reasons why I believe that are numerous and include the importance of
externalities in health care, the widespread nature of asymmetric
information in health care markets,  the large amount of uncertainty about
the productivity of medical care among both consumers and producers, the
failure of the tort system to deter negligence in medical care....


>I look at the current system and see that many of the
>}problems result from elements (asymmetry of information, adverse selection,
>}decision-making under uncertainty) which would exist whether or not the
>}government intervened or not, even if the latter were possible in practice.
>
>None of which refutes the possibility of laissez-faire.  The libertarian
>economic argument I'm aware of doesn't deny these possibilities, but merely
>argues that the State only tends to make things worse.  Where have you
>known any utopian claims that everything would be perfect if only we
>smashed the State?

But in making the argument that the State only tends to make things worse,
libertarian economics often employ a model of the free-market economy that
doesn't (and couldn't, IMHO) really exist. Canadian economists Morris L. Barer
and Robert Evans accurately summarize this method of argumentation:

"But their grounds for this conclusion (i.e. that an efficient market system
could be created) seem only to be that they are able to imagine a hypothetical
system they believe would be superior to any presently in existence.  To
paraphrase...the relevant comparison for the national health insurance
debate in the U.S. is between a public monopoly system and a well-designed
but practical private insurance system.  Again faith triumphs over experience,
imagination over reality."



>
>}You, on the other hand, compare the current state to some idealized,
>}nonexistant free market can conclude that government is the problem.
>
>I haven't done this, nor has Tony.  We've never claimed that a libertaria
>would be a perfect utopia.  There's a good reason that "utopia is not an
>option" is a classic libertarian slogan.  Actually, this is the classic
>method of argument of socialists: compare "actually existing capitalism"
>to allegedly possibly socialist utopias; never "actually existing socialism"
>to "maximal capitalism."

Well, I compare our system with a large private component, our system
prior to Medicare with an even larger private component, and most systems
in Europe, and I conclude that their systems deliver more consumer
satisfaction.  Why do you believe that a move towards a more private
market system would improve things?  Try in making your argument to avoid
an appeal to a hypothetical but nonexistent free market for medical care.



Dennis G. Shea, Penn State
<<DISCLAIMER>>
Ain't nobody's bizness but my own. I'll be happy to accept all
the credit for anything I've written.  It's funny, however, how
employers only acknowledge the profitable ideas.
Newsgroups: talk.politics.medicine