John Mueller’s book on capitalism and democracy (and Ralph’s pretty good grocery) claims that the essence of democracy is found not so much in the things usually mentioned, like written constitutions or elections, but in the necessarily habitual responsiveness on the part of the government to its people.
I think of positive and negative examples of where this understanding of the essence of democracy might be illustrated. In Iran, for example, the government responds to the complaint that the last election was crooked with moral condemnation and violent repression. Iran has elections and probably a constitution, but very little democracy. So too Venezuela, North Korea, Cuba. But in the United States, despite really ugly counter-examples, I think for the most part we have a reasonably responsive, if reluctant government.
What to make of the dust up over health care reform here in the United States? Is this an example of Iranian-Venezuelan nominal democracy? There are some justifications for an affirmative answer, but I don’t really think our government has gone Iranian. Yet.
The ”send-fishy-disinformation-to-flag-at-whitehouse.gov” flap exhibits some ominous overtones. But the free flow of information makes things interesting. People can actually get a lot of information, including the text of the bill online. In its support of the Kennedy health care overall bill and the House health care bill, the Obama administration, for example, has argued the reforms would be “deficit-neutral”, but the Congressional Budget Office estimates it will add billions to government debt levels. Oops. Hard to “manage” news, even from the White House.
It may be that Senator Kennedy’s early endorsement of the Obama presidential bid was rewarded with a pledge to push the Kennedy Affordable Health Choices Act in the White House’s legislative agenda.
But the push-back the administration is getting now at the various town hall meetings from senior citizens and others, organized or not, is also interesting. It leaves both the government and the people with the same, rather healthy question. What are we going to do with these folks?
But the rather inept search for the moral high ground on the health care issue by the Roman Catholic speaker of the House (and several others) with her condemnation of the entire insurance industry as “immoral” is really outrageous. This is only the latest installment in a string of scandalous remarks on her part. And it is in line with other out of line and off the wall observations, such as that stimulus money for condoms would save the states and local governments lots of money ’cause they (governments) are really hurting now…’ , or that she and the Holy Father see eye to eye on the environment, family issues, and all sorts of matters; or how she’s studied Catholic teaching on life issues. What an embarrassment these remarks are. And now she is miffed that things are not going well for health care. Astroturf?
If you step back and look at the spectacle unfolding over health care, it is reassuring on one level. It suggests our republic is alive and well. For my part, I think the ideas contained in the health care bills are really bad ones, but I think the intense debate about them is really a good idea. May it continue, peacefully, for a long time.
There are two reasons I think the health care reforms being posed are bad ideas. The first is that the government option, or eventual single-payer plan, if some of the leaks and earlier campaign speeches may be taken at face value, seems to violate the principle of subsidiarity. While our health care system is not perfect, there is not convincing evidence that it is broken, or that the federal government offers the best fix. Polls indicate most, though certainly not all, are reasonably satisfied with their current health care. What is the political logic of proposing coverage to uninsured citizens by taking away what most citizens say they like? Aren’t there less dramatic solutions to the uninsured problem?
The second reason I’m against the proposed reform measure has to do with what economists call the knowledge or information problem. Can a government-run health care system, in part or in whole, plan and manage all the information required in order to make wise, efficient, and effective health care decisions for all Americans? Freidrich von Hayek in a 1937 article titled Economics and Knowledge in Economica argued no. I believe decentalized markets are more in line with the principle of subsidiarity in matters involving health care than the proposed federal Office of Comparative Effectiveness. If government runs my health care system will I still be able to get a second opinion? In other words, what choices would exist under government health care? What alternative channels? What options?
Hayek wrote: “[E]conomics has come nearer than any other social science to an answer to that central question of all social sciences, how the combination of fragments of knowledge existing in different minds can bring about results which, if they were to be brought about deliberately, would require a knowledge on the part of the directing mind which no single person can possess. To show that in this sense the spontaneous actions of individuals will under conditions which we can define bring about a distribution of resources which can be understood as if it were made according to a single plan, although nobody has planned it, seems to me indeed an answer to the problem which has sometimes been metaphorically described as that of the “social mind.”"
The way I interpret Hayek in this context is that the bureacrat-planner, even if armed with modern super computers, gets tired and goes home. But markets never sleep. They are made up of millions of buyers and sellers seeking better arrangements. Not all outcomes are optimal, but the millions of “experiments”, freely undertaken, get closer to optimal use of resources than, say, the Soviet Gosplan ever did or the Comparative Effectiveness panel ever will.
Fear about the rationing of health care is not warranted, but concern over selecting the proper rationing mechanism is. Would a government Office of Comparative Effectiveness ration more efficiently and effectively than decentralized markets and price rationing for health care services? I think not, but I fear many, inside and outside of government, believe it would.
Seems to me the critical question in the health care debate is who gets to make health care decisions, politicians and bureaucrats or patients and doctors? It may be too simplistic to pose the choice in terms of government agencies or market prices, but that is an important aspect behind the rhetoric on both sides now as they make their case for an up or down vote on the bills in Congress. Ultimately, I hope the reforms chosen will reflect some combination of both rationing mechanisms. Getting the proper mix, one that respects the principle of subsidiarity and preserves as wide an arrary of choices, options, and those crucial freely undertaken experiments as possible is important both politically and medically.
I take some solice when elected representatives are fretting that things are not going according to plan. I take it as a good sign. Makes them more responsive. Possibly.
Prof H,
The point you make about the information problem is really a good one. It does seem difficult for a group of people to be able to make a well-informed decision not for themselves but for the American individual. Though they may not always make the right decision as far as who gets what kind of coverage or goes to what doctor, they system overall could work fine. Other countries run under the single-payer healthcare system and seem to work fine. Taiwan, for example, uses single-payer healthcare, which they actually supposedly modeled after medicare (U.S.)! They searched the world to find the best type of healthcare system and that’s what they came up with… It can’t be too bad.
I do agree with your subsidiarity argument. The government seems like too high a power to be controlling who you or I go see for our annual checkups. In my opinion, the insurance companies are the perfect level of organization to deal with this stuff. That is what they were made for in the first place! Am I right? Let the government worry about more important things like keeping our people safe and planning more tax breaks or something like that. I like health insurance and I’m glad I have it!
Bucky