From the LA Times, Anthem Blue Cross asked to justify controversial rate hikes :

The Obama administration called on Anthem Blue Cross on Monday to justify its controversial new rate hikes of as much as 39% for individual policyholders, saying the increases were alarming at a time when subscribers are facing skyrocketing healthcare costs.

In a letter to the company’s president, Health and Human Services Secretary Kathleen Sebelius voiced serious concern over the rates, which go into effect March 1 for many of the insurer’s estimated 800,000 individual policyholders.

The increases have triggered widespread criticism from Anthem members and brokers, who say the premium hikes will put health coverage out of reach for some and very costly for others.

“With so many families already affected by rising costs, I was very disturbed to learn through media accounts that Anthem Blue Cross plans to raise premiums for its California customers by as much as 39%,” Sebelius wrote to company President Leslie Margolin.

“These extraordinary increases are up to 15 times faster than inflation and threaten to make healthcare unaffordable for hundreds of thousands of Californians, many of whom are already struggling to make ends meet in a difficult economy.”

Let’s get one thing straight;  these increases are entirely due to inflation, and they are likely largely caused by the Obama administration’s stimulus plan. Anthem executives didn’t wake up one morning and say “Hey! Let’s jack up prices so that our customers can no longer afford our product!”  Rather they are increasing prices to deal with the increased costs they anticipate for the coverage they provide.  Now why would they do that?

It turns out that while California has been receiving large amounts of bailout and stimulus funds, the supply of medical service providers has stayed steady.  That new money has largely gone to the California State government’s payroll and to cover their administrative overhead costs.  One of the largest discretionary expense most government employees have is the cost of medical insurance, and the demand for the insurance is relatively inelastic.  This insurance is used to pay for a multitude of doctor’s visits etc.  Thus you have a large pool of people with freshly printed money in their pockets engaged in a bidding war trying to consume an essentially static supply.The winners pay higher prices for the scarce goods, and the losers are left out in the cold.

This phenomenon is precisely how prices increase when whoever controls the money supply engages in inflation.  It’s not mysterious.  It’s not greed.  It is merely a predictable outcome counterfeiting.

This is one favorite method used by totalitarians to justify their seizures of power.  They engage in reckless government spending financed using the printing press.  Then, when these newly printed funds lead to a bidding war between buyers that drives prices up, they use the price increases as a justification for even greater usurpations of power.

If Kathleen Sebelius is serious about reducing prices for health care in California, she should be penning angry letters to the head of the California Medical Licensing Board.  This bullying of a company trying to stay solvent despite an economic storm created by government intervention – while making for very nice populist theater – will contributed nothing positive to the problem.

This week’s column by Dr Steven Novella does not disappoint. The good doctor reviews the medical impact of modern sodium consumption and states:

As usual, the medical and regulatory communities are tasked with making sense out of chaos – with implementing bottom-line recommendations in the face of inconclusive evidence. While there remains legitimate dissent on the role of salt in vascular health, the current consensus is something like this:

• Most of the world, including Americans and those in industrialized nations, consume more salt than appears to be necessary.
• In the US most of that salt comes from processed or restaurant food (while in other countries, like Japan, most salt intake is added while cooking).
• There is a plausible connection between excess salt intake, hypertension, strokes and heart attacks.
• There is evidence to suggest that reducing overall salt intake will reduce the incidence of these health problems, but the evidence is not yet conclusive and longer term and sub-population data is needed.

Given all this it seems reasonable (from a scientific point of view – and ignoring the role of political ideology) to take steps to reduce the amount of salt in processed and restaurant food, while continuing to study the impact of such measures. But we also have to consider unintended consequences. Part of the reason salt is added to processed food is because it helps preserve it – give it a longer shelf life. People also develop a taste for salty food, and a sudden decrease in salt content may be unsatisfying, leading people to seek out higher salt foods. But these are technical problems that can be addressed.
It should also be noted that salt requirements and tolerance may vary considerably from individual to individual – based upon genetics, and certainly underlying diseases. Therefore recommendations from one’s doctor should supercede any general recommendations for the population.
In any case it seems that the War on Salt has begun. I only hope this is a war we choose to fight with science.

The last sentence left me gobsmacked. A war fought with science? Does he understand what exactly it means when a government wages war?

The essential feature of government is the enforcement of its decrees by beating, killing, and imprisoning. Those who are asking for more government interference are asking ultimately for more compulsion and less freedom.

Ludwig von Mises, Human Action

Let’s take, for example, the war on (some) drugs. 150 years ago, if I had described the government proscribing the growth of hemp, sowing poison on illicit fields in an attempt to kill marijuana smokers, sending paramilitary forces into homes with orders to shoot first and ask questions later, and setting up checkpoints where people with large amounts of cash would have it confiscated on the grounds it must be involved in this illicit trade, it would have beggared belief. Those who lobbied for its outlawing would have denied wanting to do those things, they merely wanted to protect white women from being seduced by black jazz musicians and to preserve the social order against uppity darkies.

And once the stuff was outlawed, once the law enforcement apparatus started to wage its low level guerrilla campaign, and faced resistance the government naturally escalated, flooding the media with propaganda to buttress its position, until the war became an end to itself, with otherwise sensible people saying things like “I am a fan of freedom but we must protect the citizenry against the scourge of drugs”

I am curious why the good Dr Novella thinks that a war on salt will turn out any better than the War on Gold, the War on Sucrose, the War on Opiates, the War on Miscegenation or any of the other social crusades little petit tyrants enlist the government to engage in?

Moreover, is he blind to the fact that these wars on inanimate substances and ideas are actually wars on people? It’s not the marijuana that’s getting its child’s hand shot off in a police raid, it’s a person. It’s not the marijuana who is having their life savings confiscated, it’s the retired couple who don’t trust banks. It’s not the marijuana who has his dogs shot in his home, its the hardworking mayor of a small town.

If I were to propose a War on the North Korean Government, I would imagine that Dr Novella might be a little reluctant to support it, given the large number of innocent people who would inevitably die having been propagandized into fanatically defending the state that looted and brutalized them so thoroughly.

But here, we get nary a peep of condemnation, only a pious desire to have “science” inform the strategy of the war on a common cooking ingredient, which will really be a war on people who use to much salt (according to the government) in their food preparation.

And, I should note, this war would have savage monsters like Mary Beth Buchanan deciding what was an appropriate amount of salt, just as she decided her judgment on how much pain medicine was appropriate for patients in chronic agony was better than that of the MD’s treating them, and used that rationale as justification on her war on doctors.

Dr Novella’s blindness it encoded in an assumption in the first sentence I quoted:

As usual, the medical and regulatory communities are tasked with making sense out of chaos – with implementing bottom-line recommendations in the face of inconclusive evidence.

Why are they tasked with this? Sure, doctors are asked to give advice on questions where there is no clear answer, much like any other profession. They have the power to say “I don’t know”, however. Moreover, there is nothing wrong with doctor’s giving advice. The act of making a suggestion does not actually harm anybody.

The regulatory apparatus, on the other hand, is dangerous. When it acts, people get hurt, they go to jail, they have their finances ruined. If we assume such an apparatus should exist, then we should use it only when the harm it does is worth the benefit. Otherwise, the regulatory apparatus need do nothing! Especially where there is no overwhelming evidence to justify regulation. It’s not as if salt causes an epidemic like cholera! The notion that people with vascular disease drives up health care costs requiring such regulation is laughable. Dr Novella has never, in all the essays he has authored that I am familiar with, shown much concern with the major reasons why health care costs are so high. If anything he supports the measures that are the primary drives of the high costs.

It is a shame that otherwise rational people fail to learn the lessons of history. Their blindness would not be so bothersome, if it weren’t for the fact that their hands are helping aim the guns pointed at us.

If you want to be free, you must become an adult, which is difficult in this age when society, the media, the state, your family are all suggesting that you continue behaving as a child.

What is it to be an adult?

Every philosophy tackles this question. While there are many nuanced disagreements over the precise description of what adulthood actually is, there is widespread agreement on certain fundamental elements of adulthood.

Quite simply, an adult is widely described as a person who is aware of the consequences of his or her actions, is capable of reason and holds himself accountable for the results of his or her choices. An adult is prepared to provide for his or her needs or to do without.

The modern state discourages adulthood for the simple reason that a person who is prepared to only consume that which they have earned will not accede to being plundered. If the state is to gather the vast riches its rulers desire, the state must place the producers in a state of dependence and fear – two conditions guaranteed to make men malleable.

Dr Stephen Covey has spent his life studying what made people and organization effective – capable of exerting influence over the people and organizations they come in contact with. He observed that the most effective organizations and people all first turn inward and master themselves. He observed that the rational and consistent application of their principles to their own conduct earned the respect of those who observed them.

Too many lovers of liberty fail at this. They talk the talk well, but when it comes to ordering their lives, they fail to walk the walk.

2009 was a bad year for lovers of liberty. The governments of the world continued increasing their stranglehold on humanity. here in the U.S. Barack Obama expanded and continued to socialist policies of George Bush, capitalizing on Bush’s successful efforts to increase government control of the capital markets. The U.S. congress passed laws that increase their control of the medical industry, laws intended to control the Earth’s climate that threaten to send humanity back to the dark ages. And many of our countrymen seem only too happy to submit to the yoke, with over 50% of Americans now consuming state aid in some form or another.

However, the states have also set the seeds of their own doom. They have lost control of mass media; the pyramid schemes of plundering and redistributing wealth are cracking; the unsustainable distortions to the capital structures of the world economy are failing . The governments of the world are doomed. The only question is how destructive their collapse will be.

So, we must now begin looking to laying the foundations for the next revolutions, and the most important foundations stones are the ones we lay in our own hearts, and in the example we set for others.

So how far should we go to end our sependence?  Shall we eschew government roads, pull our children from government schools?  Refuse to use Federal Reserve Notes in our business?

What steps you take are really up to your conscience.   In the areas where the government has monopolized a service, such as its road monopoly, I see nothing immoral in using that service, especially when one considers the impact refusing to use the service has.

But, there are certain principles you should strive for:

• Support yourself as much as possible.
• Get in the habit of planning for the future.
• Limit the services you consume from the state as much as practicable.
• Be honest in your dealings with your fellows.  Provide good value in your business dealings
• Enter a profession that is as far removed from state privilege as  possible.

These steps will help you better resist the usurpations of the state and allow you greater freedom, and make you a nucleus around which a free sociey willgrow.

The root of the conflict is very simple: curbing emissions produced in the territory of poverty-stricken nations would require them to regress to a poorer state of being.  The politicians ruling over these nations recognize that such attempts would probably inspire revolts that would topple them and earn them an appointment with a noose and a lampost.  In the meantime, the politicians ruling developed nations also recognize that if they allow people living in the developing nations to produce CO₂, that global economic production will simply be moved to those territories.  And the newly unemployed will come after the politicians who screwed them over with pitchforks.

By the time Obama landed in Denmark with his entrourage of bodyguards, the conference was doomed.  The failure lay in the groundwork;  having failed to prioritize effectively between his desire to take over the medical industry, the financial industry, the automotive industry and the manufacturing industries, and having spent money like a drunken sailor with a fist-full of Continentals, the Obama administration was in no position to offer a credible deal of any sort.

Most politicians outside the U.S. recognize that the days of U.S. hegemony are almost over.  The vast welfare state and creeping state takeover of industry have emptied the U.S. treasury, and the U.S. government is having an increasingly difficult time borrowing the money it needs to meet its current obligations.  Had Obama eschewed the “spend-your-way-into-prosperity” approach of George Bush, the U.S. government might have been in a position to make credible offers both to curb CO₂ production.  Instead, he showed up at the conference with a track record of leading a government that had no backbone, a reputation for rhetoric over substance, and a fiscal state that is laughably shaky.  Moreover, he also has been consistently lying through his teeth throughout his time in office. For these reasons, no promise or offer he could make would carry serious weight.

If the AGW alarmists are correct, the situation involving the production of CO₂is an externality; Those who produce CO₂ through economic activity gain the benefit of the wealth produced while the costs of warming are suffered by everyone.  Thus, those who decide not to produce CO₂ suffer, while those who engage in production gain  the benefit of of the wealth they create.

The proper way to handle an externality is to internalize it: to establish a regime where the people who cause ‘harm’ suffer a loss commensurate with the harm the do.  This is not simple with the atmosphere.  The plan favored by most alarmists, which essentially amount to requiring nearly every source of CO₂ to require government permission to operate, permission that in essence controls how much CO₂ is produced, are functionally equivalent to the centrally planned economies of the now defunct Soviet block.  In essence they recreate the crippling economic coordination problems that Ludwig von Mises identified in Socialism.

Obama seems to be oblivious to the economic collapse he is dicing with in his attempts to build a more fair world. For this reason, I am grateful for his incompetence.  The socialism that he and many of the delegates in Copenhagen were advancing has a demonstrated track record of creating incredible misery particularly for the masses that are not politically connected.  As a result, we are fortunate that Obama’s incompetence has postponed the AGW alarmist juggernaut.  By the time the next meeting is held, the temperature trend will likely give lie to the dire alarmist predictions that gave the alarmists much of their political momentum.

I think the educational and psychological studies I mentioned are examples of what I would like to call cargo cult science. In the South Seas there is a cargo cult of people. During the war they saw airplanes land with lots of good materials, and they want the same thing to happen now. So they’ve arranged to imitate things like runways, to put fires along the sides of the runways, to make a wooden hut for a man to sit in, with two wooden pieces on his head like headphones and bars of bamboo sticking out like antennas–he’s the controller–and they wait for the airplanes to land. They’re doing everything right. The form is perfect. It looks exactly the way it looked before. But it doesn’t work. No airplanes land. So I call these things cargo cult science, because they follow all the apparent precepts and forms of scientific investigation, but they’re missing something essential, because the planes don’t land.

Now it behooves me, of course, to tell you what they’re missing.But it would be just about as difficult to explain to the South Sea Islanders how they have to arrange things so that they get some wealth in their system. It is not something simple like telling them how to improve the shapes of the earphones. But there is one feature I notice that is generally missing in cargo cult science. That is the idea that we all hope you have learned in studying science in school–we never explicitly say what this is, but just hope that you catch on by all the examples of scientific investigation. It is interesting, therefore, to bring it out now and speak of it explicitly. It’s a kind of scientific integrity, a principle of scientific thought that corresponds to a kind of utter honesty–a kind of leaning over backwards. For example, if you’re doing an experiment, you should report everything that you think might make it invalid–not only what you think is right about it: other causes that could possibly explain your results; and things you thought of that you’ve eliminated by some other experiment, and how they worked–to make sure the other fellow can tell they have been eliminated.

Details that could throw doubt on your interpretation must be given, if you know them. You must do the best you can–if you know anything at all wrong, or possibly wrong–to explain it. If you make a theory, for example, and advertise it, or put it out, then you must also put down all the facts that disagree with it, as well as those that agree with it. There is also a more subtle problem. When you have put a lot of ideas together to make an elaborate theory, you want to make sure, when explaining what it fits, that those things it fits are not just the things that gave you the idea for the theory; but that the finished theory makes something else come out right, in addition.

In summary, the idea is to try to give all of the information to help others to judge the value of your contribution; not just the information that leads to judgment in one particular direction or another.

Richard Feynman Cargo Cult Science

Last Friday an explosive bit of news swept the Internet. Someone had posted a giant zip file containing hundreds of emails, several data-sets and some software code online that appeared to have been authored by the Climate Research Unit of East Anglia University.

The CRU is the organization that compiles much of the data and analysis used in modern-day climate research. It is, at this point, impossible to calculate how many papers used data compiled by the Climate Research Unit.

Unfortunately, it appears that much of the data and certainly much of the analysis is unreliable; there are numerous gaps in the sparse documentary trail between raw data and the final results of the analysis, while the computer programs used to produce many of the datasets are buggy and are poorly understood.

Many of the emails focus on the efforts of Michael Mann and his fellow researches to prevent auditors like Michael McIntyre and Willis Eschenbach from gaining access to their raw data, attempts to pervert the peer review process to deny “skeptical” papers and theories legitimacy and discussions as to how best to “spin” results in order to promote politicians and the general public to react in a manner that they thought would be appropriate to the threat they perceived as being posed by global climate change.

This was as textbook a case of the Cargo Cult Science that Richard Feynmann warned about as one can ever expect to see, and the fact that the CRU team was not doing real science was apparent to many scientists familiar to their work, based on the misgivings hinted at in the email dump.

That being said, the process of scientific analysis being rather well developed – having been designed to arrive at truth by overcoming the natural human instincts at self-deception – we have to ask how could the process have broken down so spectacularly?

The answer lies, as it often does, it the corrupting intersection of universities and the government. In short, researchers in universities are trying to behave anti-competitively and have unconsciously made a deal with the devil with regards to using the government to get funds.

To understand what happened, we must first review what science is. Science is the systematic application of techniques that test theories describing systems producing observable phenomena through the collection of empirical measurements. It is decentralized, rather than a single authority coming to conclusions, anyone is free to make observations, generate theories and to come to conclusions concerning their accuracy and applicability. Moreover, the process is based on skeptical inquiry, assertions and claims are scrutinized by people who try to find holes or errors constantly.

The people who carry out scientific inquiry, scientists, generate, gather observations and test theories. These activities are documented and communicated to other scientists formally thorugh formal publication of papers. The process of formal publication requires anonymous reviewers of papers to approve of the paper prior to publication (a process that is as complex as that in any court of law and whose details are beyond the scope of this post). Scientists can incorporate the work of other scientists by citing their published papers. This decentralization and lack of authority is supposed to ensure that ideas are judged on their merits and not based on who asserts them.

The primary judgment of the quality of a scientist is his or her reputation. This inherently politicizes science since reputation is based on the perceptions of others. The history of science is legion with instances where people gained that perception through fakery and were eventually caught. Moreover, science requires resources. Since a scientist is not taking part in a income producing venture, per se, he or she must acquire their funds either by taking part in some income producing activity such as teaching at a university, or acquire a patron. Acquiring patrons is often highly dependent on not only the reputation of the scientist, but on the patron’s perception that the scientist will satisfy the patron’s goals in deciding to fund a scientist – hence the numerous studies calling into questions the link between smoking and lung cancer published by epidemiologists employed by tobacco companies.

Wen the patron is the government, the patronage is dependent on how well one pleases the civil servants and politicians who make the funding decisions. For politicians, a scientist who supplies them with dire warnings of emergencies that require heroic and visionary action are a godsend: they can pund the table and appear to be visionaries. For civil servants, the benefits of encouraging alarmist publications is simply the expanded power as funds are appropriated to cope with the emergency.

Moreover when government officials control the lion’s share of the funding, they are able to behave monopolisticaly, letting them down can doom one to poverty of teaching lots of classes with little money and time for research.

We will probably never know precisely why the senior staff at the Climate Research Unit decided to quit being scientists in order to take up the profession of Cargo Cult Scientist. It could be the celebrity of being known as leading researchers. It could be a genuine fear that if they didn’t lie, humanity would make the “wrong” decision and render the Earth uninhabitable. It could be a totalitarian desire to rework society according to blue-prints that were pleasing to them. It could be because they wanted the lucrative grant money. It could be that they feared being viewed as has-been or never-were hacks.

What we can tell, though, is that their fraud was predicated on their inexhaustible supply of grants from governments, grants that transferred an uninterruptible stream of taxes into their coffers. The system was such that these Cargo Cult scientists were able to establish themselves as authorities, and suborn the skeptical review of and replication of their work, and, for a time, act in an environment that lacked negative consequences for their misconduct. That is, until someone blew the whistle.

But the special function of certain Newspeak words, of which oldthink was one, was not so much to express meanings as to destroy them. These words, necessarily few in number, had had their meanings extended until they contained within themselves whole batteries of words which, as they were sufficiently covered by a single comprehensive term, could now be scrapped and forgotten. The greatest difficulty facing the compilers of the Newspeak Dictionary was not to invent new words, but, having invented them, to make sure what they meant: to make sure, that is to say, what ranges of words they cancelled by their existence.

George Orwell 1984

Today an email landed in my inbox sent by the Peter Schiff campaign. Breathlessly and self-importantly, it declared:

One week ago today, our new website was repeatedly attacked by cyber terrorists bent on slowing the progress of our campaign.

Cyber-terrorists?!?

What the hell? Saboteurs, perhaps, but terrorists?

Are people who launch denial of service attacks on a politician they disapprove of to be lumped in with people who massacre innocents in order to paralyze a population with fear?

One of the greatest dangers to liberty is that the ideas of freedom will die out and be forgotten. The 19th century had a rich tradition of freedom, including a powerful vocabulary of ideas, a vocabulary that contained numerous words for similar or related concepts, with different words used to express nuance with specificity.

Let’s for example consider people who use violent means for political action. Consider the words we have to choose from:

• Activist,
• Agitator,
• Demonstrator,
• Dissenter,
• Dissident,
• Insurgent,
• Insurrectionist,
• Malcontent,
• Mutineer,
• Objector
• Protester,
• Rebel,
• Resister,
• Revolutionary,
• Saboteur,
• Striker,
• Terrorist,
• Traitor,
• Vandal,
• Wrecker

These words all are related to each other. Yet they describe a wide range of people engaged in political action. Some terms describe people engaged in reprehensible acts, other describe people whom we view as being honorable.

In choosing to use the word ‘terrorist’ to describe the people launching DOS attacks on his website, Peter Schiff is falling for the linguistic Newspeak-like trap laid by the United States Government, which describes its enemies as terrorists so that an honest farmer trying to protect his opium crop is lumped in with pacifists holding prayer meetings an with men who make “snuff porn” movies by sawing the heads of living people in front of a camera.

We must defend our language as seriously and consciously as we defend our homes. For our civilization is dependent on language, and when different concepts are all subsumed together under a single word, we thinking with clarity and precision becomes more difficult, and communication becomes far more difficult.

For shame Mr Schiff… For shame.

[The] soldier pays the biggest part of the bill.

And even now the families of the wounded men and of the mentally broken and those who never were able to readjust themselves are still suffering and still paying.

To the Members of the California State Assembly:

I am returning Assembly Bill 1176 without my signature.

For some time now I have lamented the fact that major issues are overlooked while many
unnecessary bills come to me for consideration. Water reform, prison reform, and health
care are major issues my Administration has brought to the table, but the Legislature just
kicks the can down the alley.

Yet another legislative year has come and gone without the major reforms Californians
overwhelmingly deserve. In light of this, and after careful consideration, I believe it is
unnecessary to sign this measure at this time.

Sincerely,

Arnold Schwarzenegger

Now that you’ve read the whole letter, read the first column of letters.

H/T The widely read libertarian culture site Urkobold.

Much of the problems with government supplied health care can be traced to this truth concerning incentives.  A hospital is not paid more if they treat people well.  They don’t lose money if they do a poor job.  They face no liability; any judgment the government permits to be levied against them is made up by taxes looted from the productive classes.

And, the goal of a medical care provider is to please his pay-masters rather than the patients he treats; and all to frequently when the interests of patients and the government clash, the patients will lose out.

This phenomenon is quite evident in the sad case of British Corporal Matthew Millington of the Queen’s Royal Lancers who died at the age of 31 from lung cancer, after receiving – in a transplant – the cancerous lungs of a smoker who averaged 30 – 50 cigarettes a day.

Why would a hospital implant the lungs of a person who smokes so many cigarettes a day into a patient?  Was it the result of an inexperienced surgical team making a ghastly mistake?  No.  The surgery was performed by Papworth Hospital in England,  which is the main transplant hospital in the United Kingdom, whose spokesmen claim that in fact everything was done properly!

A spokeswoman for Papworth, the UK’s leading cardiothoracic hospital, said that it was not unusual to use smokers’ lungs, adding that all organs are “screened rigorously” before a transplant. “We have a strong record of high quality outcomes and this is an extremely rare case.”

In the past year there were 146 lung transplants in the UK, and 84 people died while waiting on the transplant list, she added. “If we had a policy saying we did not use the lungs of those who smoked, then the number of lung transplants would have been significantly lower.”

Let us ignore the fact that the supply of organs is kept low by the superstitiously premised laws outlawing people from selling their own organs. Let us pass over the laughably implausible claim that transplanting smokers’ lungs results in acceptably good outcomes.

Let us, instead, focus on the question of how the hospital handled the case of Corporal Millington of the Queen’s Lancers and compare it to how a hospital that saw him as a customer would have treated him.

Often the detractors of free markets accuse it of being a dehumanizing system of cut-throat competition.  What they do not realize is that when two people engage in trade, they are cooperating.  The competition is between actors striving to be the best cooperators with prospective trading partners.  In a free market, the providers of health care services would be competing to see which one of them could better care for a prospective customer.

Thus, in a free market, Corporal Millington would have contracted with the hospital that sought to cooperate with him most effectively.  He would have chosen a hospital that committed to satisfy his need for undiseased, functional lungs at an affordable price.   In a free market, the availability of disease-free lungs would have been much higher; people would be far more likely to sign up to supply  their organs for transplant if their heirs or estate would be paid a fair market price for them, and the hospital would not have to worry about waiting lists.

However, had the new lungs developed cancer (and let’s not forget occasionally non-smokers get lung-cancer too), the hospital would have had a strong incentive to make it right, either out of a sense of obligation or out of fear of retribution; In a free market, there are two incentives to keep unscrupulous people treating their customers well.  The first is, of course, the fear of lawsuits.  the second, though, is their greed for future profits and their fear of losing these future profits should they ever develop a bad reputation.  The latter can particularly devastating.  The McDonald-Douglas Aircraft Company, for example, was nearly driven into bankruptcy by the perception that the DC-10 was an unsafe aircraft.  To this day, the Massengill corporation has never returned to the drug-making business after the debacle of 1938.  The yellow press would love nothing better to go after a hospital for transplanting diseased organs into a patient; the readership and viewership of such pieces would bring in a tidy sum in advertising dollars.

Thus the hospital, if nothing else to avoid the collapse of their business after a widespread accusation of incompetence/malpractice, would face a huge opportunity cost if they forewent transplanting in a new, second set of lungs.

But, unfortunately for Corporal Millington, he wasn’t the customer of Papworth.  Rather, some officials of the NHS were. The desire of the actual customers (NHS) were to keep costs down by a) cutting corners on the type of lungs transplanted into patients, b) concerning themselves with patient outcomes in the aggregate, and reducing seemingly unnecessary, redundant duplication of services by centralizing transplants as much as possible.

Thus they faced no economic loss for allowing him to die of cancer.  There was no profit to saving him; in fact, saving him would have been an expense.  They didn’t have to cooperate with Corporal Millington and so they didn’t.

The prize for Chemistry was awarded to some scientists who worked on questions regarding how ribosomes interact with DNA. Worthy work, yes, but was not the work of the American scientist not guided by our dear leader, his work funded by the Federal Government? How can they ignore the work on many fields that is being inspired by the magnificent all-encompassing vision of our dear leader as he directs the human race towards ever greater heights of prosperity and scientific achievements?

Similarly the prize in Physics honors people for a improving the use of semiconductors in fiber-optic design. Yet were not grants from the U.S. Federal Government used to fund this research? Did not the enlightened guiding hand of the father of the people not show them the way, not just in this area but in all the areas pf research into physics? Thousands of lifetimes’ worth of research is conducted by people following the guidance of the great Helmsman, yet he receives no credit? Do we award the plank of wood for the actions it carries out when directed by a man at the rudder?

The prize for medicine ignores the millions who will have their lives saved when our Great Helmsman reveals his plan to reform our medical industry to ensure maximum care for all with great justice.

How many millions more will owe their lives to our president than to the work of these few doctors?

Our leader deserves all the prizes; the economics prize for keeping unemployment below 8.4%; the mathematics prize for improving accounting theory to minimize budget deficits; the peace prize for his efforts to make the world a more peaceful place by increasing the vigor with which Afghanistan, Iraq and Pakistan are pacified, and his offers to pacify Iran as well.

It is time that the Nobel Prize Committee recognized that our Dear Leader is guiding our great nation to produce numerous scientific, technical and social innovations that improve the lives of not just the happy people living in America but throughout the world.  Anything less is an insult to the tireless efforts of our leader that benefit humanity.

Update:  As this was going to press, the Nobel Prize Committee announced that the peace prize had been given to our dear leader.  While I praise them for finally coming to their senses on this one matter, I warn them that it is not sufficient.  Again, if one looks at all the fields covered by the various prizes,our leader’s contributions are far in advance of those made by anyone else.  Only the transfer of the other prizes to our dear leader from the people they mistakenly gave them to will appropriately and justly remediate the situation.

Here’s what Obama had to say:

Ben approached a financial system on the verge of collapse with calm and wisdom; with bold action and outside-the-box thinking that has helped put the brakes on our economic freefall

I thought it might be useful to take a look at some highlights of this Solon, this central – planner whom George Bush put in charge of the money supply:

Of course, as usual, Obama is dead wrong: the Federal Reserve’s actions have actually prolonged the downturn, made it worse, and have laid the foundations for an even bigger crash down the road.

In the days before the election, I told many of my fellow Massachusetts residents that Obama was not so much a break from George Bush as a continuation of his worst policies. I am sorry to say that he has been proving me right since. And this is yet another nail in the coffin of an administration that is showing itself to be even more incompetent than the Bush presidency.

For decades the cost of medical care has risen relative to prices in general and relative to people’s incomes. Today [1994] a semi-private hospital room typically costs $1,000 to $1,500 per day, exclusive of all medical procedures, such as X-rays, surgery, or even a visit by one’s physician. Basic room charges of $500 per day or more are routinely tripled just by the inclusion of normal hospital pharmacy and supplies charges (the cost of a Tylenol tablet can be as much as $20). And typically the cost of the various medical procedures is commensurate. In such conditions, people who are not exceptionally wealthy, who lack extensive medical insurance, or who fear losing the insurance they do have if they become unemployed, must dread the financial consequences of any serious illness almost as much as the illness itself. At the same time, no end to the rise in medical costs is in sight. Thus it is no wonder that a great clamor has arisen in favor of reform – radical reform – that will put an end to a situation that bears the earmarks of financial lunacy.

Thus begins an essay that noted Objectivist economist George Reissman penned during Clinton’s efforts to ‘reform’ health care.

Given the current debate, it’s a good essay to reread, and the folks at the Mises Institute have obliged by posting it on their fine website.

Reisman argues against many of propositions that are assumed to be true by proponents of govenrment medicine, economic ideas that are based on primitive emotions and have no basis in actual economics:

For over a century, virtually all proposals for economic or social reform have been based on the thoroughly mistaken philosophical and theoretical foundations of Marxism, and have aimed at the ultimate achievement of a socialist society, in the belief that socialism represented the most rational and moral system of mankind’s social organization. On the basis of this conviction, individual freedom was progressively restricted and the power of the state progressively enlarged. Individual freedom – laissez faire capitalism – was assumed to be a system of chaos and of the exploitation of the masses by the capitalists. The onslaught of the socialists (who in this country call themselves “liberals”) – the step-by-step achievement of their political agenda – encountered virtually no philosophical resistance. Not surprisingly, again and again, the “liberals” defeated their ill-equipped conservative adversaries, who at most could only delay their advance. The victories of the “liberals” were inevitable because it was a battle of men with the seeming vision of a better world that could be achieved by means of intelligent human effort based on a body of ideas (however mistaken those ideas were), against men who, while they valued the relatively free world they saw around them, had no significant philosophical or theoretical knowledge of how to defend it.

In the last few years, some of the most profound and fundamental changes in the political and intellectual history of mankind have taken place. The philosophy of socialism and the economic theory of Marxism have been recognized as a blatant failure almost everywhere, and have been abandoned by tens of millions of former supporters. All over the world, the cry is heard “no more socialism!” One socialist regime after another has recognized the chaos and tyranny of socialism and has become dedicated to the achievement of a capitalist society. Thus, the intellectual base and the driving force of American “liberalism” has largely disintegrated.

Considered against this backdrop, the Clinton administration’s proposal for the government’s takeover of medical care in the United States appears as a ludicrous anachronism. It reads like the work of twentieth-century Rip Van Winkles who have been sleeping since the 1930s and who have not had a chance to read the newspapers. In effect, America’s politicians and intellectuals who support the proposal are still riding a train that more intelligent people the world over have recognized can take them nowhere but to hell and have therefore jumped off.

Now I know many skeptical readers will argue that while that may have seemed true then, that the current economic crisis is a sign of the failures of deregulation and laissez faire capitalism. Au contraire! One need look no further than Lew Rockwell’s 2005 essay on George Bush’s hybridizations of socialist and mercantilist economics, Bush’s 10 Economic Errors.

Then Reisman turns to the question of a right to medical care:

… no one has the right to such a thing as a house as such. What one has is the right to buy a house, or to buy the things necessary to build it. One’s right to a house is violated not when one cannot afford to buy or build a house, but when one could afford to buy or build a house if one were not forcibly prevented from doing so. … In exactly the same way, the right to medical care does not mean a right to medical care as such, but to the medical care one can buy from willing providers. One’s right to medical care is violated not when there is medical care that one cannot afford to buy, but when there is medical care that one could afford to buy if one were not prevented from doing so by the initiation of physical force. It is violated by medical licensing legislation and by every other form of legislation and regulation that artificially raises the cost of medical care and thereby prevents people from obtaining the medical care they otherwise could have obtained from willing providers. The precise nature of such legislation and regulation we shall see in detail, in due course.

I have said that the causes of the present crisis in medical care can all be subsumed under the heading of the government’s violation and/or perversion of the individual’s right to medical care. By this last, I mean its use of the alleged need-based right to medical care rather than the actual, rational right to medical care as the basis of various policies it has adopted over the years. Seen in this light, the origins of the present medical crisis go back all the way to the government’s establishment of various forms of medical licensing as early as the nineteenth century, and the subsequent increase in licensing requirements it has imposed in the course of this century.

…

Ironically, the main driving force behind medical licensing has always come from within the medical profession itself, many of whose members have sought the monopoly privileges that licensing bestows and thereby the artificial rise in their own incomes that it makes possible. There is nothing that should be surprising in this. It simply means that physicians have often acted in the same mean spirit as carpenters or plumbers who form coercive labor unions, farmers who seek government subsidies, or businessmen who seek protective tariffs. It is an expression of the mentality that underlies most government intervention into the economic system, namely, the mistaken belief that it is possible to serve one’s self-interest by means of the initiation of physical force against others, coupled with a willingness to serve it by such means. Such a policy is irrational and ultimately self-destructive. Indeed, its self-destructiveness is illustrated precisely by the plight of today’s physicians. For what is ironic in the fact that physicians have been the driving force behind medical licensing legislation is that, in effect, they first sent around to others precisely what has more recently been coming around to them, namely, the violation of individual rights in the field of medicine. The effects of medical licensing have played a major role in encouraging demands for socialized medicine and the threat to the rights of physicians that socialized medicine represents.

Medical licensing has played into the hands of the advocates of socialized medicine precisely by making medical care scarcer and more expensive, thereby reducing the amount of medical care obtained, particularly by the poor. Because the effect of medical licensing was greatly to increase the difficulties of poor people in obtaining medical care, socialized medicine was perceived as all the more necessary. It was a classic case of what von Mises describes as prior government intervention serving as the cause of problems used to justify later government intervention, this time against the beneficiaries of the prior intervention.

The essential goal of socialized medicine is that the individual should be relieved of financial responsibility for his and his family’s medical care. Medical care should be provided to him without charge by the government, paid for out of taxes. To this extent, allegedly, his life will be worry free, because the government will take care of him. Medical care will simply come to him according to his need, paid for by others, presumably according to their ability. It should be obvious that such an arrangement entails the utter perversion of the right to medical care. The right to medical care ceases to be the individual’s right to take the actions required to secure his medical care – namely, to buy it from willing providers. Instead it becomes an alleged right to the fruits of others’ labor and ability, with or without their consent, for that it is the only way it can be obtained if the individual himself is not to pay for it and yet is to have a right to it merely because he needs it. As I have shown, its existence is in direct contradiction of all actual rights, which center precisely on the individual’s freedom from involuntary servitude.

I will skip over the thorough description of how various government interventions have produced the broken system we have today (although everyone should read it). But I will share the following summary:

True, this system exists for the most part in an environment of privately owned business firms and is financed for the most part by those business firms. But when one recalls how the system was started and how it was spread, namely, by price-control officials and by coercive labor unions, and that throughout the years it has been deliberately supported by a discriminatory tax policy in its favor, one must characterize the system as imposed and maintained by the government, and not as a product of the competitive processes of a free market. Furthermore, as will become apparent later on, additional forms of government coercion serve to maintain the system by making it financially prohibitive for most people to step outside of it. Thus, the system is socialistic in the further essential respect that it is the product of government coercion, not of voluntary choice.

Now this collectivistic system of governmentally imposed “private” medical insurance is the leading cause of the continuous rise in medical costs that we have experienced. To help my students understand this point, I ask them to imagine that after class they all go out together for a meal somewhere, on the understanding that the check will be divided evenly, irrespective of what anyone orders. I explain how this will greatly affect what they order.

I point out, for example, that someone who might be thinking of choosing between, say, a $3 hamburger and a $15 steak, will now be much more inclined to order the steak. This is because instead of the additional cost to him being the full difference of $12, which it would be if each student had to pay his own check, the additional cost to him will now be perhaps just 50¢, that is, it will be the additional $12 divided by 24 (which happens to be the usual number of students in my class). I point out that to the extent that the students behave this way, the size of the total check must increase. Obviously, if what all 24 students ordered were affected in this way, the size of the check that each of them would have to pay would end up being $15 instead of $3, because each of them would experience the effect of 23 other students shifting 50¢ of their additional costs to him. In other words, it would be a situation of mutual plunder, in which all would lose.

He points out that the attempts by well meaning people to provide medical care as a matter of right have certain inevitable consequenses:

1. The potential for a limitless rise in the price of medical services

Insofar as medical services or facilities are limited in supply, the notion of the need-based right to medical care and the collectivization of medical costs to finance it create the potential for a limitless rise in the price of medical services. To understand this, imagine an auction. There are a large number of units of some good for sale. But there are not enough units for sale to satisfy all the bidders for all of their requirements. Thus some bidders must go away empty handed, or at least with fewer units than they would like. (As I indicated before, there could have been a larger number of units for sale, but the government does not let them on to the floor of the auction. It keeps them out by means of licensing legislation.) To the extent that the equivalent of the perverted notion of the need-based right to medical care prevails at this auction and the individual is relieved of financial responsibility by virtue of being able to charge his bids to a collective, there is simply nothing present to stop the rise in the bidding. No matter how high prices go, people still assert their alleged right to the item and go on meeting or exceeding ever higher bids, in the knowledge that their bid will be paid for by their collective. If this is an auction market for medical services, they go on bidding in the knowledge that their bids will be paid for by their insurance company or by the government. The only people who are eliminated from the bidding are those who lack medical insurance or the medical coverage of some government program. The rise in prices only stops if there are enough uninsured bidders who can be made to drop out of the bidding so that, for the moment at least, the insured ones can be satisfied. … Understanding these facts, incidentally, should make clear why the Clinton administration’s current proposal to force employers to provide medical insurance for the 37 million Americans who remain uninsured, leaves absolutely no alternative but price controls and rationing as the means of controlling costs. This is because if virtually everyone is now to have the need-based right to medical care and have his bills sent to the collective for payment, there will be absolutely no limit to the bidding and the rise in prices unless the government restricts the medical care he is allowed to have and determines the price that is to be paid for it. Try to imagine, for example, a situation in which there are 100 units of a supply available and 137 bidders, each of whom would like to have one unit of that supply and is in a position to send the bill for his bid to the government. The rise in cost to the government can only be controlled if the government imposes some kind of limitation on the amount anyone is allowed to bid for in this manner, such as 100/137 of a unit of the supply, and refuses to allow anyone to attempt to buy more by raising his bid even with his own money, because that too would increase the cost to the government.

2. The potential for a practically limitless increase in the quantity of medical care demanded

The notion of the need-based right to medical care and the collectivization of medical costs to finance it create the potential for a practically limitless increase in the quantity of medical care demanded. When visits to doctor’s offices are made free or almost free, the frequency of such visits increases. More importantly, physicians quickly come to realize that there is little or no financial cost to the patient as the result of the course of treatment they prescribe. The result is an enormous increase in the volume of medical tests, hospitalizations and the length of hospital stays, and of surgeries and other medical procedures. Usually, there is some genuine value to be gained from these things. They represent additional precautions or are objectively desirable in some other way. It is just that there is no longer any consideration of the costs involved. The situation is comparable to individuals who need to buy some kind of automobile, say, being relieved of the responsibility of having to pay for it, and so being placed in a position in which the automobile they choose is a very expensive top-of-the-line model. In such conditions, the patient does gain something additional, and so do the medical providers, who are placed, in effect, in the happy position of automobile salesmen dealing with customers for whom the sky is the limit. In such circumstances, the potential for medical cost increases is truly stupendous. It has no fixed limit. For example, there are some 2,000 different possible tests of a patient’s blood that can be performed without harm to the patient and from which useful information can be derived. If each of these tests had a cost of just $1, the total cost, if all 2,000 tests were applied to everyone in the United States, would be more than $250 billion per year. Under the system that has prevailed since World War II, it is only a question of time before such cost increases actually take place, unless they are deliberately prevented by outside action. There is nothing in the system itself to stop them, and everything to encourage them.

4. Perverting technological progress into a source of higher costs rather than lower costs

The notion of the need-based right to medical care and the collectivization of medical costs to finance it are responsible for the perverse effects caused by new technology in the field of medicine. In virtually every other field – automobiles, computers, farming, whatever – improvements in technology represent a combination of higher quality and lower real cost. Thanks to improvements in technology, we now obtain far better goods than we used to and have to devote much less of our working time to being able to earn the money to buy any of them. Today, for example, thanks to improvements in technology, the average worker works perhaps forty hours a week and is able to buy with the wages he earns the array of goods that quantitatively and qualitatively constitutes today’s average standard of living. A few generations ago, the average worker worked sixty hours a week and received much less in terms of the goods he could buy with the money he earned. Thus, calculated in terms of the amount of labor that must be expended to earn a unit of goods, the effect of improvements in technology has been progressively to reduce the price of everything. That is, because of improvements in technology, people have been able to obtain virtually everything for the expenditure of progressively fewer and fewer hours and minutes of their labor than in the past.

Medical care, in the last few decades, is the exception.

The only reason it is the exception is the existence of the notion of the need-based right to medical care and the collectivization of medical costs to finance it. If there were a notion of a need-based right to computers, say, and the collectivization of the costs individuals incurred to buy computers, then improvements in computer technology would have the same perverse effect. Then the development of every improved computer chip, hard drive, monitor or whatever would immediately be accompanied by an immense demand. Everyone who could benefit from such things would want them, in the knowledge that he could have them at little or no cost to himself, because the collective would pay.

Improvements in technology do not have such effects in the case of computers or any other good besides medical care for the simple reason that people must buy these goods with their own money. Thus they weigh the benefits against the costs. To the extent that new technologies are expensive, the initial buyers are confined to those who value them above their high price. In the case of consumers’ goods, this means both people with a relatively great, intense need or desire for the item rather than people with a relatively modest need or desire for the item, and richer people rather than poorer people. The buyers are those who have the greatest combination of need and desire and wealth and income. In the case of capital goods, the initial buyers are confined to those in a position to derive a monetary gain from the improvement that is substantial enough to justify paying its high cost.

As the item develops a market, and experience is gained in producing it, its cost of production tends to fall and its quality to improve. Competition, even the mere possibility of competition, also operates very powerfully to reduce costs and prices and improve quality. In this way, on the basis of falling prices accompanied by improving quality, the new technologies become more and more affordable and thus reach wider and wider markets. They enrich the growing number of individuals who can afford to buy them and thus “society as a whole,” which is comprised of nothing but its individual members. They certainly do not impoverish “society,” as people ignorant of economic principles frequently allege to be the case with regard to improvements in medical technology.

8. Bureaucratic interference with medicine and the rise in administrative costs

As we have seen repeatedly, the effect of the alleged need-based right to medical care and the collectivization of costs to finance it, is to make the cost of medical care rise beyond all bounds. But as the last two points of discussion indicate, sooner or later the continuous rise in medical costs encounters resistance – not from the great majority of individual citizens to whom everything still appears to be free, but from the officials of the collectives that must meet the ever rising charges. Thus, in an effort to limit the rise in costs, more and more bureaucratic controls are introduced by all the various collectives that must pay the costs. Under the controls, the insurance companies and the government agencies administering the Medicare and Medicaid programs must be kept advised of every step of the treatment of each of the patients insured or covered by them. A mountain of paperwork develops. The filing of all the various bureaucratic forms is inevitably accompanied by frequent haggling back and forth on a case by case basis between physicians and hospitals, on the one side, and the insurance companies and federal and state governments, on the other. The inevitable further result is another major source of higher medical costs, namely, a sharp rise in administrative costs. While the rise in administrative costs is less than the altogether boundless rise in costs that would otherwise take place, it is nonetheless very substantial in its own right, and represents a further loss to the general public that must be charged to the perverted notion of the need-based right to medical care. (A rather seamy, related aspect of the collectives’ attempt to control costs is the apparent practice of some private insurance companies of “losing” many of the insurance claims submitted to them or of suddenly finding the need for additional, often irrelevant information. These are ruses designed to postpone payment and thus reduce the pressure of cost increases outstripping rate increases. This, of course, adds further to administrative costs by making the physicians, hospitals, and clinics who are claimants, go to the trouble of repeatedly refiling or amending their claims.)

In addition to everything that can be traced specifically to the perversion of the right to medical care, there is the impact on the cost of medical care of government regulation in general. Alleged safety regulations, environmental regulations, labor regulations, and so on all add more or less substantially to the cost of medical care, just as to the cost of everything else. Probably, they have added more to the cost of medical care than to the cost of most other things, because of the lack of buyer resistance that the perverted notion of the need-based right to medical care engenders in the field. For example, the resistance to the employment of unnecessary workers in connection with union featherbedding practices is certain to be less in hospitals to the extent that the hospitals know they can pass the extra cost on to the insurance companies or to the government.
Thus, in all of these ways, the perverted notion of the need-based right to medical care, that is, an alleged right to medical care with or without the consent of those who are to pay for it or provide it – that is, an alleged right to medical care as entailing a right to steal and enslave – has progressively raised the cost of medical care. It and it alone is responsible for the crisis of the ever rising cost of medical care. At the same time, as the corollary of its destructiveness, this perverted notion of the right to medical care has systematically undermined the actual, rational right to medical care. This cannot be stressed too strongly. In each and every instance in which it has raised the cost of medical care, as explained under the eight points I have listed, it has represented a case in which individuals who could have afforded to buy medical care from willing providers have been prevented from doing so by the initiation of physical force. In other words, therefore, it is the government’s violation of the actual, rational right to medical care that is equally responsible for the crisis in medical care.

In view of all this, it is difficult to decide which is the more astonishing: the utter ignorance of all of the above facts Mrs. Clinton revealed in her declaration that “On psychological as well as economic grounds, some form of discipline [i.e., price controls] in a marketplace that, frankly, has had none, seems to us a feature that needs to be there as a backup,” or the fact that Mrs. Clinton has somehow managed to acquire the reputation of being an expert on the subject she has been spending so much time speaking about lately. It should be obvious to anyone who can understand even the barest essentials of economic theory, that the cause of the crisis in medical costs is precisely the philosophy of collectivism and government interference Mrs. Clinton advocates and now wants to extend further. (Mrs. Clinton’s statement appeared in the Orange County Register, Oct. 10, 1993, p. 2.)

He also proposes solutions:

The actual solution to the problem of runaway medical costs lies in the precise opposite of the direction chosen by the Clinton plan. It is not the final destruction of the individual’s rational right to medical care, which is what the Clinton plan would achieve, but the restoration and full implementation of that right – that is, the removal of all government interference that stands between buyers and sellers of medical care or in any way causes medical care to be more expensive than it otherwise would be.
In economic terms, the solution is the establishment of a market in medical care that is open to all comers and is dominated by buyers and sellers operating with their own money when acting in their individual self-interest. On the one hand, in such a market – provided that it is free from government interference – the cost of medical care is as low as the prevailing supply of human talent and state of capital accumulation, technology, and competition make it possible to be, and is headed still lower by virtue of further capital accumulation, technological progress, and competition. On the other hand, however, medical care always still has a cost, and the need to take into account costs that come out of one’s own pocket automatically eliminates wasteful, uneconomic medical care.

Thus, insofar as the market is free, individuals prepare themselves for and enter those particular occupations and industries in which, other things being equal, they can earn the most. In this way, the supply of human talent flows to where the buyers need and want it the most, as demonstrated by their willingness to pay for it the most. If all branches of the market are legally open to all comers, no field in which wages or profits are higher is deprived of talent by virtue of the necessary talent being confined to other fields where wages or profits are lower. Thus, in the case of medical care, everyone tends to enter the field if his talents are more valued in the provision of medical care than in the provision of other services he is capable of rendering. In other words, medical care attracts all the talent it is capable of attracting short of the point of asking individuals to give up more remunerative uses for their abilities in other occupations. This is true both of medical care in general and each of its specific occupations, from nurse’s aide to brain surgeon.

As a further matter of economic principle, the same freedom of occupation that enables each individual to maximize his income, simultaneously serves to minimize the price of all services requiring relatively scarce talents. This is precisely because of the presence in such occupations of the largest possible number of those capable of performing them consistent with their own self-interest. Thus, under the freedom of occupation, the prices of the relatively scarce special talents that are necessary to provide medical care would be as low as they could reasonably be rendered. For example, individuals who are presently compelled to remain as pharmacists but who have the ability to be physicians, would be attracted by the higher income of physicians and become physicians. The effect of the larger supply of physicians would be to reduce the fees of physicians.
As I have indicated, all this is in sharpest contrast to the conditions that exist under medical licensing. Under those conditions, a more or less considerable portion of the relatively scarce talents required to provide medical care is forcibly denied entry into the field and made to work at lower incomes in other lines. By the same token, the prices of medical services and the incomes derived from their rendition are kept artificially high. For example, the pharmacist with the ability to be a physician is forced to remain as a lower-paid pharmacist, with the result that the fees and incomes of physicians are kept artificially high.

I highly recommend it, especially for people who are struggling to understand why libertarians are opposing government provisioning of health. We’re not meanies. We’re not blinded by ideology.

We’ve seen this before and know it’s not going to end well.

I find it pretty depressing. There was a time when we condescendingly used the term “your papers, please” to distinguish ourselves from Eastern Block countries and other authoritarian states. Post-Hiibel, America has become a place where a harmless, 68-year-old man out on a stroll can be stopped, interrogated, detained, and forced to produce proof of identification to state authorities, despite having committed no crime.

Maybe what makes it comical rather than a tragedy is that it happened to a famous guy rather than some ordinary person.

Dear Olivia Jane:

You and many readers of Daily Kos are furious that Whole Foods CEO John Mackey expressed – in the pages of the Wall Street Journal – his opposition to greater government involvement in health care.

Exercising your rights and abilities as consumers, you are therefore boycotting Whole Foods.  You’re using your freedom to avoid paying for products offered by someone whose attitude toward government you disapprove of.
Isn’t freedom wonderful?!

But I must ask: do you endorse my freedom to boycott paying for products offered by those whose attitude toward government I disapprove of?  Like you, I have very strong opinions about the proper role of government, and also as in your case, a famous chief executive is now endorsing government policies that I find reprehensible.

Will you champion my freedom to stop supporting, with my money, President Barack Obama’s services?  Will you come to my defense if I stop paying taxes to support those policies of Mr. Obama with which I disagree – policies such as the economic ’stimulus,’ more vigorous antitrust regulation, and cap and trade?  Indeed, will you defend me if I boycott – if I choose not to pay taxes to support – Obamacare?

If you will support me in my boycott, then I applaud your principle and, although I disagree with you about Mr. Mackey’s political views, fully support your freedom to boycott Whole Foods.  But if you will not support me in my boycott, then can you tell me on what principle you would stand to defend your right to boycott supermarkets if someone (say, Mr. Mackey) managed to secure legislation that obliges you to shop at Whole Foods?

I await your reply.

Donald J. Boudreaux

I couldn’t put it better myself. One quibble, even if Olivia Jane was not willing to extend us the same courtesy and support our desire to boycott Obamacare, we should applaud her principle. Just because she has reprehensible political views does not mean we should ignore the opportunity to teach her the value of a right to exit/disassociate.

Here he is pointing out that while Fedex is required by law to charge higher prices than the Post Office for equivalent services, it is the Post Office which struggles and requires constant taxpayer bailout.

Like Amtrak, USPS, Fannie Mae and Freddie Mac, any publicly funded insurance company will struggle to contain costs as it encourages overconsumption.

I’ve long argued that the real reason that medical care is so expensive is that the government limits supply and subsidizes demand.

The Obama administration, in choosing to ignore the limits on supply placed by government, is embarking on a program that is doomed to fail to meet any of the publicly stated goals.

It’s too bad that Mr Obama is unwilling to follow the evidence to its inevitable, logical conclusion.