First, kudos to both Bennett Haselton and Xan, each of whom nailed yesterday’s puzzle in comments. Bennett’s answer has the advantage of requiring no knowledge of algebra; Xan’s has the advantage of giving a (much) more precise bound on how long it takes for history to repeat itself.
Now on to something completely different:
During a belated conversation about health care policy, a colleague remarked that “of course, nobody would want to live in a world where rich people and poor people got the same kind of health care”. The economists around the table all nodded in agreement and moved on to matters that were actually controversial.
It occurs to me that had there been a few non-economists at the table, someone might have objected to my colleague’s matter-of-fact (and surely accurate) observation. And it occurs to me also that maybe there’s a general lesson here about how economists communicate—or fail to communicate—with the world at large.
“Nobody would want to live in a world where rich people and poor people get the same quality health care.” Having written about economics in popular media for over fifteen years now, I can pretty much guarantee that if you say that in print, some reader is going to interpret it as “poor people don’t deserve the same quality health care as rich people do”. But of course the statement says nothing of the kind. It’s not about what anyone deserves; it’s about the kind of world we want to live in.
Here’s what the economist means: The only way poor people can have the same kind of health care as rich people is if rich people (or at least non-poor people) pay for it. But if we’re going to spend that much money helping poor people, it’s wildly implausible that they’d want us to spend it all on health care. They’d probably prefer a bit less health care and a little more help buying groceries.
That’s what the economist is saying, but it’s rarely what the non-economist hears.
Why the communications failure? Largely, I think, it’s because economists, by instinct, make a rigorous distinction between two separate questions that non-economists tend to muddle together. The first question is: How much should we spend to help poor people? The second question is: How should we spend it? When economists say things like “it’s crazy to give top-quality health care to poor people”, we’re addressing the second question; non-economists frequently assume we’re addressing the first.
Another example: A few years ago, in the state of Washington, some apartment buildings were converted to public housing. The buildings were described as having “million dollar views”. I was a silent witness to a conversation that went like this:
Person A: They’re giving million-dollar views to people below the poverty line?!!!???!
Person B (in an aside to Person C): He’s got some problem with that?
Well of course he’s got a problem with that. Ask any poor person in America to choose between a million-dollar view and a million dollars cash, and I guarantee you he will take the cash. So how callous would you have to be to give that person a grand apartment instead of selling the apartment and giving him the cash?
That, I am certain, is what Person A (who had some economics training) meant. What Person B heard was something like: “Why would you want to do anything nice for poor people?”
There is, of course, lots of room for disagreement about how much we should spend to help the poor, and why. Sometimes that disagreement will be heated, and legitimately so. But often we’re talking about something else entirely. It would be a good thing if economists worked a little harder to make that clear, and a good thing if everyone listened a little more carefully.
Your link to my name points to
http://www.thebigquestions.com/2010/04/06/hearing-problems/peacefire.org/
rather than
http://www.peacefire.org/
Is that an invitation to move my site to a subdirectory on your blog, so you can pay the hosting expenses?
Bennett: Oops. This is fixed now.
“Nobody would want to live in a world where rich people and poor people got the same kind of health care” can be read in two ways. If it means that nobody would want to live in a world (or at least an economy) where there was NOT rich people and poor people; many people (egalitarians of a particular sort) have strong arguments to the contrary.
If it means that “if there are rich and poor people, nobody would want to live in world where these people get the same kind of health care,” I think that many people – including myself, and I suspect many other people who grew up in countries with public health care – might argue that health care is a good of a particular sort, such that differences in wealth ought not to influence its provision.
So if I understand correctly :
The reason why economists think that it is crazy to give top-quality health care to poor people, is that not all poor people will need top health-care and as a result, a lof of money will be lost, Money that could have been used for something else to help poor people ?
Is my understanding correct ?
blue-coat:
a lof of money will be lost, Money that could have been used for something else to help poor people ?
Is my understanding correct ?
Yes.
Meanwhile, there is a model under which you could be in favor of everyone receiving the same level of health care, if (1) you support social assistance for the poor, but (2) you know that the continued existence of such assistance programs, depends on voters’ support for those programs, and (3) voters are less likely to support assistance for the poor, if the poor are viewed as possessing too many things that they can “trade away”, which in the voters’ eyes, makes them seem less poor.
Peter Lawler summed this up in his argument against organ sales:
‘You can imagine a scenario where someone would say “Welfare? You’ve still got two kidneys!”‘ ( http://bioethics.georgetown.edu/pcbe/transcripts/june06/session3.html )
If everyone is provided with the same level of health care, then voters don’t view that as something that the poor can trade away, and so voters might be more amenable to continued assistance to the poor in other forms. On the other hand, if the poor were simply given the cash equivalent of the value of their health care, people might say, “Well you’re still spending money on annual checkups, so you can’t be *that* badly off. Why should I help you?”
It may be irrational for voters to think that a poor person who was given free health care, deserves more assistance than a poor person who was given money and spent it on health care. But, knowing that many voters do view things that way, it could make sense to support health care for everyone, rather than a plan that gives cash to the poor and gives them the option to spend it on health care.
In rigorous mathematical terms:
1) Health care for the poor costs X1
2) Voters will support providing some amount X2 of assistance to poor people who don’t have free health care.
3) Voters will support providing some amount X3 of assistance to poor people who DO have free health care.
It’s reasonable to assume that X2 – X3 [less than] X1 — that is, when you give health care to the poor, that decreases voters’ willingness to assist the poor by *some* amount, but not by the entire cost of the health care provided.
Then if you believe that the total social assistance to the poor should be greater than X2, the only political way to achieve that is by giving them free health care. If you give them cash instead, voters won’t support giving the poor any amount greater than X2. But if you give the poor free health care, the total assistance you give to the poor can go as high as X1 + X3, which by our assumptions is greater than X2.
I think the general view of pro-redistributionists is that there should be equal access to all in terms of certain goods (eg health care, shelter, food, education, police protection etc) and that right now the poorest in society do not have access to a whole slew of products and services that they supposedly have a right to. Politically, if they had the power, they would simply redistribute capital around society until everyone reached that minimum standard. But they don’t have that political power so they fight the fights that they think they are most likely to win.
Sure, the poor need food more than health care but right now health care is a winnable fight so let’s knock this one down and try for the next one as it comes. It’s a perfectly rational reaction given a set of political beliefs.
If they believe that there is no chance that they will win any other battles, the push for equal health care for all makes sense given the marginal benefit to the poor of (say) free kidney dialysis insurance is non-zero and positive even if the $100b or whatever required to provide it would have been better spent on them in other ways but the other ways are politically impossible.
Similarly with the million dollar views. Certainly this has some positive benefit to the poor and if it’s the only winnable fight, that’s better than fighting for a law providing them 2000 calories a day that’s never going to pass.
There is a difference between saying that there should be differentiation between the health care that the rich and poor receive, and saying that some people should receive no health care. There is a certain minimum level of care that should be made available to everyone, because we all benefit.
For example, everyone should have access to vaccinations, because vaccination limits the spread of disease – not just to those who receive free the free vaccinations, but to all who have contact with the people receiving the vaccinations. Similarly, it makes sense to provide sufficient care to avoid having people from die from easily preventable diseases, because the cost of raising their children is higher than the cost of keeping people alive.
So the question becomes, where do we draw the line? Everyone should be entitled to some level of care, but everyone shouldn’t get the same care.
why shouldn’t everyone get the same care? i submit that health care is a special type of good which ought to be provided on the basis of need. i exclude purely cosmetic procedures from this consideration.
matt: given we live in a world of finite resources, would you rather we pay for one poor person’s heart surgery, or a year’s supply of food for a poor family of 4?
we currently live in a world capable of supplying both, but our political/economics systems fail to provide such goods. ask me again when we reach the actual carrying capacity of the earth.
it’s midnight in australia (and so, bedtime), so i can’t get you a source, but suffice to say that i’m suggesting large-scale changes in diet and consumption patterns, driven at least in part by incorporating environmental concerns into prices.
So would I be correct to assume that your original question should be re-stated to:
“why shouldn’t everyone get the same health care, shelter, food supply, education, clothing, wages, leisure time, choice of sexual partners etc? i submit that these are special types of goods which ought to be provided on the basis of need. i exclude purely cosmetic services from these considerations.”
matt,
I, for one, object to being forcibly burdened by others. Health care isn’t a right, nor is food or shelter. I object to the government paying for bandages or aspirin with my money but aside from my disdain for being robbed, how have you concluded we can afford to pay for everyone’s health care?
I don’t know of any countries that have an unlimited supply of health care available. I just know of different ways of allocating the scarce resources each has. In my country, insurance companies and employers decide how much we get. In others, governments make the decisions. Does Australia really have such a supply of drugs, doctors, diagnostic equipment and hospital beds that people don’t need to limit there use?
Pete,
I think your assumption that healthcare is not a right is the very issue that is being debated here. We actually do have a limited right to healthcare in this country in that we cannot be denied care when we show up to the emergency room bleeding, we cannot be denied insurance for certain reasons, and most importantly, the poor and elderly are entitled to a full range of medical care in many circumstances. Medicare is just as much of a right as any other; you are entitled to it if you meet certain criteria (same thing for housing, food, and all types of entitlements).
Our rights are what we decide they are; in many countries people do not have rights to protected speech. Property rights are never absolute and are always subject to change. To argue that we should not have healthcare because it is not a right is circular.
To provide just one person with unlimited health care (or really unlimited anything), you need unlimited resources.
The United States Court of Appeals for the District of Columbia Circuit today ruled that the F.C.C. cannot unilaterally mandate “net neutrality”, which provides a similar issue. Whatever people’s opinions regarding there existing an unlimited supply of healthcare, hopefully everyone would agreed that Internet capacity is not unlimited.
From one perspective, I can argue that I don’t want my Internet provider restricting my access to youtube.com or hulu.com, but on the other my household doesn’t consume as much bandwidth as those that file share a lot. It seems unreasonable for the F.C.C. to mandate that an Internet provider can’t change a heavy BitTorrent user more than I am charged.
So again, where do we draw the line between access for all, and “fair” access? As a meta-ethical relativist, I don’t believe that it’s practical to define “moral” boundaries, and we need to define them based on practicality.
@Steve Landsburg, my last comment leads me to a question for you. Are you and other economists moral relativists or absolutists? Do you believe that there is such things as “right” and “wrong”, or are those terms that can only be applied in a given context?
I’m curious, because reading your books and the blog posts, I am guessing that you would fall somewhere in the range of meta-ethical relativists, but I can’t be sure.
“Nobody would want to live in a world where rich people and poor people get the same quality health care.”
The statement is simply empirically wrong. I am sure many poor people would prefer such a world, given the choice. Yes, it is true that they would prefer an equal value in cash, but failing that I am sure that they would like to have the health care of rich people.
This was a beautifully executed post, Steve, in that the comments it induced demonstrated the truth of your main point.
Daniel,
The United States of America has absolutely nothing to do with what are and are not my rights. I am grateful that we have been given a Constitution and the institutions that, for the most part, protect them, but my rights were endowed by my Creator and are unalienable.
It terrifies me that so many think that the government gives us rights or that rights can change. You are wrong. The Jews that were worked to death in Germany had their rights violated. Those born into slavery in 19th century America had there rights violated. It doesn’t matter that those societies deemed those rights to not exist.
Just the same, our government can’t grant someone a right to health care. They can decide that everyone who lives in this country will have their health insurance paid for by the state or something like that, but that isn’t the same as granting a right.
Having things done for you or given to you can’t be rights. I have a right to life and property. Everyone must honor these and is wrong if they injure me or my things. How does everyone preserve a fictional right to health care? If someone comes to me having a heart attack I can call 911. I could give them CPR. Am I required to carry around a defibrillator? What about a right to shelter? I have a couch that I don’t use at night. Do I have to let transients sleep on it who don’t have a place of there own?
I think it is wonderful to live under a regime that protects most of our rights and in a country so wealthy that it can afford to grant entitlements. I’d much rather, however give my money to a charity voluntarily – I could chose how much is appropriate and I could take my money somewhere else if I didn’t think they were using it correctly.
If a rich man wanted to give me $100 000, I’d be happy. If instead he bought me a $100 000, I’d thank him, but deep down I’d wish that he’d given me the money instead. Which I think is what the post is saying.
But what if the generous rich man had worked out a deal with the car company, and gotten lots of cars at a discount? Maybe he’s giving away lots of cars, and mine only cost him $50 000. In that case, I might be better off taking the car worth 100k over the 50k in cash.
Similarly with health insurance. Give poor the cash, and maybe alot of the healthy poor in their twenties will forgo the insurance. But give them the insurance, and rates should come down for everyone. Which might even make it worthwhile for the healthy to take the insurance over a cash substitute.
I don’t know think that’s enough to really contradict the original post. But it does, I think, push a bit in the direction of “insurance” over “cash”.
Steve,
Do economist think the same about, for instance, the Justice? Do they believe that it may be better to give poor people money instead of a good lawier?
One question:
Are these American economists or economists from anywhere else in the developed world?
These questions (and this blog, in fact) strike me as overtly wealthist and totalitarian. Whether you hear what non-economists hear or what economists hear, it’s still bigoted. That’s what I don’t think you understand. You think you’re being this authentic and reasonable person when you explain it, but in fact you sound just as unreasonable and bigoted as them even after your explanation. If not more. We should live in a world where rich people and poor people get the same quality health care. Of course that’s true. Even further, we shouldn’t live in a world in which the mechanics of our civilization creates rich people and poor people. We have to radically transform our understanding of ‘deserving’. Convincing someone to give something to you in exchange for something else doesn’t, in any way, mean that you deserve more access to goods and services than them. Having sole access to the means of production doesn’t, in any way, give you the right to deny access to anyone else. It just means you’re preventing others from using it.
Pete, I’m curious whether rights exist at all under your definition, and which ones. Because you object to being burdened by others, it seems like you believe this means that some right of yours is being violated, but I don’t understand what it is or where it comes from.
“…my rights were endowed by my Creator…”
One has to at least entertain the possibility that there is no creator. If one believes that rights are endowed by a creator, this seems to pose a problem. If there is no creator, when do our rights come from (assuming we have any)?
Neil – I don’t see why a religious person would want to entertain the possibility that there is no creator. My understanding is that entertaining such possibilities is not permitted.
@DystopiaResident,
“We should live in a world where rich people and poor people get the same quality health care. Of course that’s true.”
Huh. In the aftermath of the Haitian earthquake, many people gave money thinking that charitable organizations, or best of all Haitians themselves, would know best how to spend it. It never really occured to most us that maybe what Haitians needed most was the sort of cholestorol test that people in wealthy nations often get when visiting the doctor. Do you think such tests would have been a good way to spend donations, or do you think wealthy people shouldn’t get their cholesterol checked, or something else entirely?
Yes, I know you also mentioned wishing that there were no rich and poor. The obvious way to ensure that is to simply destroy all wealth. How that helps anyone is beyond me. Is there another way I’m missing?
I chose my words to reflect a certain founding document of this country, but o clarify for David, Neil, and anyone else, forget that there is a Creator, if that is a sticking point for you and let’s say nature gives me rights.
Life, liberty, and property are rights that I could have if I lived all by myself. The freedom to bear arms, from arbitrary searches and seizures, the right to speech, to name some more, can all exist without anyone else there to secure them for me.
Obviously now, my right to listen to loud music interferes with your right to peace and my right to pollution hurts your health and shortens your life. If we are to live with or near other people, someone’s rights are going to have to give. That is why we need governments.
The difference with education, health care, and shelter is that these don’t just appear in nature. You have to make them yourself or get someone else to do them for you. If everyone has a right to health care, what on earth does the word “right” mean to a secluded person? How is that right exercised? What does “health care” mean? Does it mean bandages, leaches, access to doctors?
I chose daily to ignore the coughs and sneezes of others? Am I depriving them of there rights by not offering them tissues? How about by not having a medical degree?
Well stated, Pete. Better than the words of that founding document. The phrase about “endowed by the creator” always gave me trouble, although I can accept that it was shorthand for what you said.
There is a pretty intense discussion over on reddit about this post: http://www.reddit.com/r/Economics/comments/bnli8/economists_agree_nobody_would_want_to_live_in_a/
I’m a little disappointed by the quality of the top rated comments – they all seem to have missed the point – but so it goes.
Who are these economists, I wish you’d be more specific than a roundtable of economists.