1. P.J. O’Rourke on “fairness, idealism and other atrocities”: All politics stink. Even democracy stinks. Imagine if our clothes were selected by the majority of shoppers, which would be teenage girls. I’d be standing here with my bellybutton exposed. …

So? People feel like it helps; it boosts their utility. Faith healing is proof that ignorance is bliss. And what’s wrong with having blissful idiots? That’s certainly better than depressed idiots. And who’s to say that they won’t blow their money some other way?

It’s true though that not many people are open to unbiased information about health care, as Robin has pointed out in his other papers. It is a remarkably resistant bias. I find that seeing that graphically illustrated in the comments here has been quite interesting and informative.

I wish I could ban churches, but the consequences of doing so tend to be worse than the churches.

Mike (and, to an extent, Paul), that’s a bit needlessly negative isn’t it? Are you saying there’s no chance that people actually want their loved ones to get better, and are prepared to expend whatever’s necessary, even to the point of irrationality?

The desire to consume a certain amount of ‘treatment’ is not difficult to explain, and most likely has little to do with the efficacy of the treatment in question. To put it one way, people look for treatment to feel better, not to get better. Hence all those well-documented placebo studies.

If my nearest and dearest fell seriously ill, I would probably not be at my most rational. I’d spend every penny I had on treatment in order of how likely it was to succeed. Throwing money away as a signal would not be a useful thought.

Fraud addendum: if you’re banning people that sell ‘irrational utility’, after the faith healers, you should start on the palm readers, lottery organisers, churches, breweries….

Assume someone has a fixed health care budget. They can allocate this budget to medicine or faith healing. Each dollar allocated to either source, assume, has a positive probability of producing some health benefit. That need not be very much — there’s likely to be a lot of waste in medicine. Let the respective probabilities be P and Q for a dollar on medicine or a dollar on faith healing. Let the proportion of the budget allocated to medicine be X. Then the patient’s health utility (assuming constant units of health benefit) h(x)=PX+Q(1-X). Simple calculus will verify that so long as P>Q, the health benefit is strictly increasing in X.

And whatever else it’s reasonable to think about the comparative benefits of medicine vs. faith healing, surely P>Q!

So I suppose the assumption that makes this really easy is the fixed budget. So let’s drop it. We can assume that medicine is more expensive than faith healing for the same amount of “treatment” (measured somehow), perhaps because of moral hazards from insurance, etc. But then we have to ask why consumers can’t be encouraged to drop ineffective medicine without replacing it with (more ineffective) faith healing. If we don’t think consumers will reduce medicine use without a substitute in the form of faith healing, we must think consumers are hell-bent on consuming some fixed amount of “treatment” regardless of its efficacy. Why do we think that? Is it possible to correct for this tendency with some other social policy?

(Incidentally, on prayer as fraud, *charging* for prayer perhaps should be criminalized as fraud. We criminalize fortune-telling on much the same grounds. Free prayer doesn’t defraud anyone. Perhaps only bad-faith prayer should be criminalized though — there are good reasons not to criminalize people for things they genuinely believe — although this would be hard to enforce by picking out the real from the false beliefs. The practical problems might be insurmountable. But in principle, sure, under some circumstances.)