From: starr@genie.slhs.udel.edu (Tim Starr)
Subject: Re: HIAA and Reform
Organization: UDel, School of Life & Health Sciences
Date: Wed, 16 Dec 1992 11:26:43 GMT

In article <92350.120320DGS4@psuvm.psu.edu> DGS4@psuvm.psu.edu writes:
}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.

Possibly.  I haven't made up my mind about this yet.  I'm waiting at least
until I read Califano's book on externalities and welfare economics "in an
open-ended universe: An Austrian perspective."

The establishment
}of a legal system without which tort is impossible will always require
}government intervention.

False.  See Friedman's "Machinery of Freedom," and Benson's "Enterprise of
Law: Justice Without the State," the two canonical books on the subject.

}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....

All important concerns.

}>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."

I HIGHLY suspect that the crux here is the "efficient market" definition.  Care
to explicate this assumption?

}>
}>}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.

Pheh.  Suppose our positions were reversed: we all had free markets in this,
and you were challenged to support your claim that state intervention could
improve things without recourse to theory or "hypothetical but nonexistent"
states of affairs.  You couldn't do it, because it's impossible.  Isn't
this merely Institutionalist empiricism to the point of abandoning theory
for "data"?

Tim Starr - Renaissance Now! - Think Universally, Act Selfishly
starr@genie.slhs.udel.edu

"True greatness consists in the use of a powerful understanding to enlighten
oneself and others." - Francois Marie Arouet Voltaire
Newsgroups: talk.politics.medicine