Continuing our debate on Medicare and death panels, Jonathan Darden responds to my last arguments. He makes two points of note.
First, he believes my comparison of healthcare to food is off-base, because food products are easily substitutable but, supposedly, healthcare treatments are not.
You may not be able to afford the aforementioned truffle oil, but you can acquire a substitute. If you cannot afford the turkey from behind the deli counter for your sandwich, you can buy peanut butter. While you may not find these options as enjoyable, these alternatives will all meet the “able to survive” test that serves as the comparison between health care and food. Most forms of medical treatment do not have good substitutes. The choice is between chemo and the tumor continuing to grown, not chemo and some slightly less ideal, but equally effective treatment.
For one thing, the claim that medical treatments are homogeneous is simply false. There are lots of different chemo and non-chemo treatments available, which, just like food, are of different qualities and address different problems. The choice of treatments is certainly not “take this particular treatment or allow the tumor to grow.” So, if this is his explanation, he will have to try again. Both medical treatments and food are actually quite heterogeneous.
But suppose, for the sake of argument, that Jon is actually right. In the most extreme case, where there was exactly one chemo treatment and no other options available, we could expect to see a temporary price increase. But if that were the case, then high prices would also serve as an incentive for competing chemo producers to enter the market—assuming, of course, that we actually have a free market in healthcare. The higher the regulatory obstacles are to getting new drugs and treatments approved, the costlier it will be to enter the market, and therefore the costlier healthcare can be expected to be. In a free market, competing drug manufacturers would be stupid to let a single seller extract high profits without entering the market themselves. That is especially so when, as in the healthcare market, prices have been skyrocketing for decades. So it is hard to see how, even if Jon’s argument were factually correct, it would create the situation we have today, absent government intervention.
Jon also claims that healthcare prices are high because people won’t “bargain” or comparison shop when looking for cancer treatments. But prices fall not because individual consumers are able to personally bargain with big companies, but because those companies will reduce prices vis-a-vis their competitors in order to attract consumers in the first place. I don’t know of anyone who bargains at grocery stores (and most people don’t check prices at several competing grocery stores before buying food, either), but that doesn’t prevent food prices from falling.
[Oh, and by the way, remember how Jon wrote that the poor would never be able to afford a "luxury" like truffle oil? Well, I should have looked this up earlier, but most bottles of truffle oil sell for between $15 and $20 on Amazon, though you can get one as low as $9.99. As F.A. Hayek noted, the free market makes available for the masses what were once only luxuries for the rich. (The Constitution of Liberty, Definitive Edition, p. 98).]
Second, Jon reiterates his belief that rationing economic goods based on “ability to pay” rather than on some higher principles of justice is somehow bad (that it shows “a deep state of [social] decay”).
This is an important point to discuss on this blog, because I see this argument repeated by Burkean traditionalists as much as or even more than modern liberals. In the Reflections, Burke famously lamented that the “age of chivalry” and the “unbought grace of life” had been replaced by a new age of “sophisters, economists, and calculators.” Regardless of the specific context in which he wrote that passage, his followers often invoke its spirit to attack the “cold-hearted” rationalists who believe that it is more important to focus on economics than it is to focus on chivalry or poetry.
But liberal concerns for “social justice” or Burkean concerns for “beauty” only come into play once people’s basic needs are already met. The caveman trying to build shelter or store food for the winter cannot be bothered to wonder whether the distribution of goods among his fellows can be justified according to the Rawlsian difference principle. Nor will he care about art, or poetry, or anything else that doesn’t keep him warm.
The only way for society to advance is to understand and follow the laws of nature, including laws that philosophers find undignified. Human digestion, for instance, might be crass, but you must obey its dictates if you want to survive. And liberals might not like basing an economy off of profit rather than justice, but the real question is whether goods can be effectively allocated based on some principle other than profit. I think they cannot—as my last post in this series attempted to show, government guarantees of “free” goods tend to make people much worse off than they would be under a free market.
Nor does it matter who is allocating the government-provided goods. Jon seems to think that if Congress does it (“which is clearly accountable to the popular will”), there should be no problems of rationing, because, apparently, everything will be rationed in the manner that the masses of people actually desire. The point, of course, is that any political—rather than free, economic—rationing will have to depend on murky criteria divorced from the price system. Absent price signals, even the most well-intentioned or electorally-cognizant group of people won’t be able to know how to put goods to their most-valued use.
To ignore this out of a concern for justice may satisfy some philosophical sensibilities, but it will also significantly lower most people’s standard of living. If that is what Jon considers “advancement,” I’ll stick with “decay.”
Update: On the off-chance that anyone wants to follow this debate, here are the relevant posts, from earliest to most recent:
Jonathan: Rationing Truffle Oil
Jonathan: Substitute Chemo