[ExI] The Circle of Coercion

Stathis Papaioannou stathisp at gmail.com
Tue May 12 10:57:54 UTC 2009

2009/5/12 Dan <dan_ust at yahoo.com>:

> I disagree, but what's your evidence for this?  From my readings, it seems to me that government involvement has made healthcare much more costly -- especially since 1960 in the US -- and slowed down the pace of innovation.  Of course, the latter is based on counterfactuals partly -- what might've happened had healthcare reform been in the direction of a free market (as in, in the US, abolishing the FDA, getting rid of the AMA's monopoly powers, and removing government completely from provisioning and mandating healthcare).

Health care in the US costs about twice as much as it does in
comparable countries and overall health outcomes in the US, by
measures such as longevity and infant mortality rates (less prone to
lifestyle factors), are at the lower end of the OECD range. Now it's
true that the US has a mixed system, but it has a much higher
weighting in private health care than most other countries.

>> You
>> speculate that if the mostly private health system in the
>> US were
>> completely deregulated, health care would become both
>> cheaper and better.
> I think this is evidence.  In the US, the costs of healthcare, for the most part, have been only loosely linked to actual service, so there's a tendency for overpricing -- as actual customers are not cost-sensitive.  For example, as was pointed out many years ago, in one area of the country (I think it was in Houston, Texas), a simple blood test of the same quality (I forget what for) ranged in price from, IIRC, $20 to $100.  But people getting the blood test were almost always paying via their employer's mandated health insurance.  I.e., if they got the cheaper test, they didn't save any money for themselves, but merely for the health insurers.  That removes one incentive to compete on price.  (It also led insurance companies to lobby for cost controls.  The market reform would've been to remove mandated health insurance.*)

In the Australian system the government health insurer will pay the
pathology lab a fixed amount for a particular test. The lab can then
charge whatever it wants for the test, which might leave the patient
out of pocket. In practice, most labs charge only the minimal amount,
or they risk losing business.

>> But there is no evidence for this, anywhere in the
>> world. Your
>> position reminds me of apologists for the Soviet Union
>> arguing that it
>> failed because it wasn't communist *enough*.
> What's meant by "communist" here?  If it's the defining economic feature of the Soviet system -- central economic planning -- then those apologists are completely, unequivocally wrong.  Central economic planning failed (and continues to fail; in the US, e.g., the central bank is central economic planning for the money system and the recent bust is merely its latest flop) as can be seen by how poorly it compared with the output and dynamism of even the highly regulated economies of the West.**  (Also, another features of the Soviet system made it hard to spot this: the lack of an open society where the success or failure of the system could be openly considered and debated.)

see: http://en.wikipedia.org/wiki/State_capitalism

"Within Marxist literature, state capitalism is usually defined in
this sense: as a social system combining capitalism — the wage system
of producing and appropriating surplus value — with ownership or
control by a state apparatus. By that definition, a state capitalist
country is one where the government controls the economy and
essentially acts like a single giant corporation."

Stathis Papaioannou

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