no third solution

Blogging about liberty, anarchy, economics and politics

Is For-Profit Healthcare as Immoral as ‘Death Panels’?

August 16th, 2016

Stethoscope on a printed sheet of paper

My friend Matt notes that while this “isn’t exactly the ‘death panel’ that Fox News was trying to scare you with, [it] most certainly falls in to the category of fallout associated with nationalizing medical treatment”, in response to this Scientific American piece :

Hospitals across the United States are throwing away less-than-perfect organs and denying the sickest people lifesaving transplants out of fear that poor surgical outcomes will result in a federal crackdown.

One reply says:

I don’t disagree with some of your logic here, but I also feel that you would have to agree that healthcare based on profit is equally immoral

No, I don’t and you’re wrong.

In its current state, for-profit health care is not without problems — many of them — but this specific act is active and deliberate evil due fundamentally to the nationalization and which supplants even a person’s ability or willingness to pay, or to take on risk. It is a medical equivalent of cash-for-clunkers, of plowing under the fields even while millions starved during the great depression, or the oft-lambasted regulations which prevent grocery stores from donating produce, etc.

In these cases, there are some quantity of goods which people want and would be willing to take, but which are being deliberately withheld from them (and destroyed).

Now, you may counter that under the price system, some people may suffer or die as well because they can’t afford the service (why it costs as much as it does, and whether it ought to cost that much is a different topic). While you may prefer a different distribution of kidneys than the price system provides, it is absolutely without question that if there are fewer kidneys to go around because the hospitals are literally throwing them in the trash, fewer people’s needs will be met as a result.

I don’t see how death from “I can’t afford a transplant” is any worse, objectively, than death from “some panel at the hospital decided that even though I’d been on the wait list for 18 months, and was ‘next in line’ for a kidney, that someone else’s need was more urgent, so I didn’t get my transplant”. Especially when there will necessarily be more deaths arising from the latter than from the former.

The “Race to the Bottom” is Only a Symptom

August 30th, 2010

Last week the NYT highlighted an ongoing labor struggle between Dr. Pepper Snapple and a local labor union, which Dissent Magazine characterizes as the latest installment in an ongoing “race to the bottom“, something like Marx’s iron law of wages. Per the Times,

The strike has become so important because of the prominence of the brands and because of its unusual nature: a highly profitable company is taking the rare and bold step of demanding large-scale concessions.

Dissent notes that the productivity gains of the last several decades have simply not “trickled down” in to the pockets of the American worker, instead they’ve been pocketed by the corporate elite. If this sounds somewhat familiar, it should.

Mike LeBerth, president of the local union echoes a familiar, but mistaken refrain:

“This whole economy is driven by consumer spending, so how are we supposed to keep the economy going when they take away money from the people who are doing the spending?”

Mistaken, because economies aren’t driven by consumption, they’re driven by production. The standard GDP-economy puts the cart before the proverbial horse. Per J.B. Say, Production must precede consumption; prosperity increases where production is permitted.

In fairness, I have to admit I’d be hard-pressed to find a better example of corporate greed, than a company which showed a $555M profit on $5.5B revenue in FY2009. What LeBerth describes, is not the problem. The real problem, or problems, are much greater.

The case of Dr. Pepper Snapple illustrates nicely that the “race to the bottom” is but a symptom* of monopoly rents.

In this instance, a substantial portion (approaching 100%) of their profits are attributable to intellectual property, a considerable barrier to market-entry enforced by the government under penalty of law. Make no mistake: this is not a “right” in any sense of the word, it is a privilege granted by government, to corporations X, Y and Z, protecting them from A, B and C and anyone else who might otherwise be tempted to start their own competing business. The effects of such privilege are obvious: where a lucrative market exists, profits are concentrated among those who benefit thereby.

Insofar as this case embodies a “race to the bottom”, it is the monopoly privilege of intellectual property which drives a wedge between workers of various classes: those inside the protected industry may enjoy leverage over those outside. To a probably substantial degree, the wages taken by the union are a derivative economic rent, extracted from the rest of the economy (i.e., the non-union employees in other industries in the local market), but coming first and foremost from the privilege granted the corporation. And it is precisely this privilege which enables a corporation like Dr. Pepper Snapple to exercise such a degree of economic power over its own workers, as to demand considerable concessions even when posting record profits.


* For brevity’s sake I will limit discussion to this one problem, although I do not doubt that you could point out several more, each of which would merit examination of its own.

Proof You Are Being Exploited

July 16th, 2010

Ever wonder why we’re still working 40 hours per week? As if that’s some sort of magic equilibrium between labor/leisure that has just organically emerged over the centuries? It’s insanity, really. And evidence that we aren’t free to choose. I touched on this before, commenting that all of our productivity is wasted:

The average worker is several orders of magnitude more productive than he might’ve been a half-century hence… We’ve got more more people doing more jobs, producing more things and still we’re working 40 or 50 or 60 hours a week.

And this doesn’t strike anybody as being just a little bit insane?

In a free market where you aren’t being exploited there is a continuum, a trade-off between labor and remuneration. Let’s say you figure out some way to do your job in a quantifiably better/faster/more efficient manner. Assume for this thought experiment that you are able to double your productivity.

In a free market there is a real tradeoff between labor, leisure, and pay

What would happen in a free market? You could cut your work-week in half and achieve the same output for which you would expect the same remuneration. You could keep your work-week the same, in which case you would expect greater remuneration (perhaps as much as double your current pay). Or any combination along that continuum which would result in some amount of less work, and some amount of relatively (but often absolutely) greater remuneration.

What happens in practice? If you develop some brand new process which, compared to the old process, requires half as much labor, the odds are practically zero that your employer will offer you to begin working a 20-hour work week for the same rate of pay, despite the fact that by working 20 hours you produce the same quality and quantity of output. And it is equally unlikely that they will double your salary, which would justify a 40-hour week because you now produce twice as much and as good of output as before.

Probably what will happen is that some other sap will get canned. You’ll have to absorb at least part of his workload but you will not absorb any of his salary. The corporation will absorb his salary as profit. If you’re fortunate, you’ll get a small raise or spot bonus.

Generally speaking, for a job well-done, under budget, ahead-of-schedule, and to quality, the only reward is more work. We don’t get to enjoy more leisure if we produce more and better and faster, we just have to work even more. For the most part, productivity is severely penalized.

What is the alternative? I do not believe for a second, that given all of the technological advances in the last 200 years, a majority of people in the developed world would continue to work 40 hours a week, if they had any say in the matter whatsoever.  Imagine a 20-hour work week.  Imagine creativity unleashed. Imagine what would happen to progress and productivity, if only people were actually rewarded for the work that they do.

no third solution

Blogging about liberty, anarchy, economics and politics