I recently discussed a puzzling regulatory difference: our applying work hour limits less to high than low status jobs. Many took me to be advocating fewer limits for low status jobs, and were eager to point out good reasons for work hour limits. But our not having a good reason for putting more work hour limits on high vs. low status jobs can equally well support adding more limits to high status jobs, rather than fewer limits on low status jobs.
"I think there should be a gov't agency in charge of reviewing each person's budget, lifestyle, medical condition, etc, and choosing what food that person should be allowed/required to consume." What would happen to our brains if the government started thinking for us? What would happen to the government if what would happen to our brains if the government started thinking for us, happened? What would happen to us, if what would happen to the government if what would happen to our brains if the government started thinking for us, happened, happened? Did you happen to think about these things before typing "- overall I'm sure we'd be much happier!"?
The right way to think of it is that Blue Shield collects not two cents on the dollar but fifteen cents--and then sets thirteen of those fifteen cents on fire.Of course, that is only what the insurance company spends, by using excess paperwork to ration care they also increase the expenses that health care providers have to shuffle that paperwork around. What are the costs by the health care providers? Are they less? Kind of hard to figure out how they could be. The health care providers have to generate the paperwork they submit, the insurance company only needs to look at the bits of paper. If it is $0.13, then the total non-health care cost is 28%, more than a quarter of what is spent on health care.
Does 28% count as “much”?
There are some good comments at The Washington Post on how a 15% fee for administering a zero-sum fund is very expensive. That is what health insurance is, administering a zero-sum fund. Health Insurance companies take in premiums, pay out for health care and keep the difference. For that they need 15% in fees and profits?
a) We don't spend 17% of our GDP on car repair (0.2% of GDP or $30 billion) or house remodeling (2% of GDP or $300 billion).
b) Cochrane's comment about home rehab is laughably out of touch. We actually do regulate how you put your house together. State governments tell you how long the nails holding your roof on have to be. You have to get a building inspector to come over and take a look if you want to put new plywood up. There are probably 50 separate regulations that would benefit from a Federal take-over of housing regulation.
Pointing out these sorts of inconsistencies does seem to work (and there for come across) as an argument against regulation, among people who assume that more often than not, a relatively free market is better than a highly regulated one. It doesn't matter whether we assume that because of ideological appeal or because of a heuristic derived from an understanding of economic theory, or something else. If an inconsistency is pointed out in the justification for a regulation, we'll assume the argument is flawed and retreat to our prior.
One step up, if we think the author's prior favors the free market and expects ours should too, we'll infer that that's the direction they're trying to push us in.
This is a common theme here,logical inconsistency. The only explanation I can come up with is that people who worry about the hobgoblin of consistency are "Logic Chauvinists."
For example: "There seems to be only weak pressures to even notice much less reduce how they and their arguments treat similar things differently."
Where I come from the most important thing that controls the status of a working man is do you "know what you're doing." One time I caught a man putting a one way tread tire on backwards. That meant,even though the car would run,the car might spin out uncontrollably on a slick surface.That car belonged to my son. I told him to change it,and without a word or an apology he did.
Another guy was a doctor who put in knee replacements upside down because he didn't "know what he was doing." Then later someone had to replace them. He also did free doctoring for a local football team and when he died they had a big ceremony honoring him.
The situations are the same but merely pointing to the lack of logic along one syllogistic line is simplistic. Many other factors color the way the situation is perceived.
One factor that differentiates these situation is status and power which in each case serves to both protect and increase the exposure of the offenders. Of course since the doctor faces more regulation but is but perhaps this is logical since he has more power to wiggle out of his mistakes. The mechanic's mistakes more difficult to trace and he is more anonymous, thus there is less demand for regulation.
This is a very interesting point. I can understand a rationale for laws and regulations being inconsistent with each other. I can think of no reason why laws and regulations should be inconsistent with reality.
As a matter of fact, Saddam didn't bomb the WTC and Iraq didn't try to buy yellow cake in Africa. Iraq also didn't have WMD (the other false allegation usually used to justify the Iraq war). There were other false justifications, “the war would pay for itself”, “it will be over in x weeks”, “they will surrender when we hit them with 'shock and awe'”. I appreciate that many people falsely believed these things at the time, and some even believe they actually happened even when they did not.
In logic, false premises can be used to prove anything. In politics, false premises can be used to justify any action.
If you accept a political process based on false premises, what you are saying is that you accept a political process that can be used to justify anything. You are in effect saying that you want a fascist dictatorial tyranny. Maybe you are willing to quibble about who is in charge, but if you accept false premises, that only depends on who is willing to tell the most outrageous lies.
I'm surprised, but after all this discussion I don't think anybody on here has explained this properly. The reason it's extremely difficult for consumers to evaluate their doctors is because it's extremely difficult for doctors to evaluate themselves.
If you go to a good mechanic, he will fix your car. If you go to a good doctor, he will make you healthier less than 20% of the time. If all consumers follow the same method Ken uses, which is probably roughly accurate, then they will be making errors more than 80% of the time. And when the consumer finally chooses a doctor, it could be because the doctor made them better, or because they just happened to get better despite the doctor's many mistakes. That's a huge amount of inefficiency.
A similar problem currently faces evaluating teachers. But whereas we have a good idea of which best practices are likely to improve health outcomes, we have a much poorer understanding of which best practices improve education outcomes. A consistent position then would be to advocate more regulation of health than of education, but our current system regulates education more than it regulates health.
And if the highly intelligent people on this forum haven't even considered this line of reasoning, then you can just imagine where the average consumer is at in their thinking. I believe there's a need for more laws restricting doctors to best practices to improve health. A simple way would be for an insurance system which refuses to pay for useless treatments. HMO's had many similar systems which allowed them to control costs, but these were rejected by consumers. Many other countries have such systems in place too. Robin Hanson advocated something in the same vein here: http://www.overcomingbias.c...
It seems to me that regulation and law SHOULD be inconsistent.
Regulation or law is not the work of a single intelligence building a rational structure and codifying it. Rather it is a political compromise between a gigantic number of intelligences each with somewhat to wildly different rational structures.
We didn't invade Iraq because Saddam bombed the world trade centers or because Iraq had bought yellowcake from Africa or because if we could bring democracy to one Arab country the others would fall like dominoes or because Saddam had personally insulted W's father. Each of these reasons is cited by SOME people. But the REASON we invaded Iraq, if one reason that is sufficient can be cited, is because a sufficient political will existed to invade Iraq. That political will summed across many different people with many different motivations for putting their will in along with the rest.
Same with laws and regulations. Maybe medicine and auto repair have some interesting similarities which to the argumentative suggest they "should" be regulated similarly. But obviously they have a wealth of important differences, differences important to the many people who currently combine their political will to support a much higher level of interference in the health market than the automotive repair market.
By simulate, I mean what socialists have always meant when they've written about using the market as an administrative tool: you use an actual market economy, except the market serves only to provide data for the planners rather than having the dispositive say about resource allocation. I don't mean some computer simulation. (Sorry, I should have anticipated the misinterpretation; the theory of market socialism was developed before the advent of computers.)
This only confirms what you said in another posting: you can do anything in a planned economy that you can in a market economy. The planned economy gives you more degrees of freedom. But this extra freedom includes using a faux market to obtain planning data. For many things, the planners might seldom over-rule the "market." The only thing you can't simulate is the effect on people's motivation, since people in such a system can't accumulate productive property.
Why don’t parents insist that they choose their kids’ teachers?
Parents do all the time. Why do you think parents in rich neighborhoods don't want their taxes to go to pay for other neighborhood schools? Why do you think people move after having kids to get their kids into better schools? Of course, the educational system would be much better if schools were privatized, but since the government has taken over and monopolized schools, privatizing schooling will be difficult.
It’s clear that’s no way to run an efficient and effective educational system.
It's clear that you don't know what you are talking about. It's easy to imagine why schools should absolutely and without question not monopolize schools. Schools should be left to the free market precisely because you're wrong. Parents are in a much better situation to determine the quality schooling and to affect that quality through private transactions (like removing their child from one school and placing him in another) than any politician or bureaucrat.
Rick Santorum is not an imaginary Repubican straw man. He and the other guy are in a dead heat as GOP presidential candidate front runners.
You were implying that creeping nanny state government regulation like regulations on spinach hygiene and doctor choice will creep to a liberal socialist totalitarian state. Rick Santorum doesn't want to “creep” to a totalitarian state, he wants to go there directly, but it isn't socialism that Santorum is pushing, it is another -ism.
I disagree with you as to what is a “significant” choice. I put an ability to choose or not choose to use birth control as a much more “significant” choice than being assigned a doctor or having the “freedom” to eat tainted spinach. I am quite sure that most people agree with me, even if you do not.
I probably disagree with you as to what freedoms are most important. I believe that freedom of conscience, freedom of personal autonomy, freedom from physical assault, freedom from exploitation sort of the the freedoms laid out in the Universal Declaration of Human Rights are the ones that are the most important.
I appreciate that many self-proclaimed “freedom-loving” conservatives don't. Or rather they don't feel that such freedoms should be Universal, that only they and those they think are “more equal” than others should get to have them, and that some “freedoms” they want are even more important, such as the freedom to dump pollution into the atmosphere, in other words the “freedom” to externalize every cost and internalizing every profit.
People who want to use Medicare are already limited to choosing among health care providers who will accept payment from Medicare. That already does limit which doctors a patient can choose, doctors have to agree to be chosen and agree to be compensated at the rate that Medicare decides.
The same is true of all private health insurance companies. They also have “preferred” providers. Even if you have private health insurance you can always pick what ever doctor you want if you pay out of pocket. That is true with Medicare, it is true with every private insurance company, it is true for every payment plan that there is. Virtually all payment plans limit charges to what the payment plan considers reasonable, that includes only authorizing payment to providers considered competent.
An extended warrantee for a vehicle is like insurance and every provider of every warrantee also limits who can provide the paid-for service under that warrantee. When vehicles are repaired under auto insurance due to an accident, the insurance company always requires that repairs be done by a shop that they authorize. But if you want to pay out-of-pocket, you can have the work done by anyone you want.
I think your problem is that you are projecting and confusing what conservatives (like Santorum) would do if he got into power with what liberals would do. It is like Sarah Palin's pants-on-fire blood-libel of “death panels”.
You don't understand what liberals would do, so you project the most extreme and evil thing that you can imagine; a fantasy that is of your own making and projected onto liberals. No liberal is suggesting what Santorum would do if he had the power to do so.
It isn't liberals who are trying to interfere with doctor-patient communication. Florida tried to bar doctors from talking to patients about guns.
I don't think I value freedom and human dignity any less than you do. I may be more afraid of losing freedoms to a totalitarian government, but not by regulation creep from spinach safety and illusory doctor choice, more from police powers, surveillance, paramilitaries, and propaganda fueled starving mobs.
@Stephen R DiamondThis argues for using a *simulated* market as a planning tool.
You're going to "simulate" a global economy of millions of businesses and billions of consumers... and not just account for the interactions of buyers and sellers of currently-known goods and services, but also somehow "simulate" the innovations that constantly occur in a REAL market economy. That's a tall order; get your simulation working first and THEN we'll talk.
P.S. Is there ANY limit to the hubris of a central-planning advocate?
Doesn’t it seem awfully crude, once you clear your mind of economists’ conventional wisdom, that people seeking services in civilized countries still must seek out hearsay information to try to piece together who’s good?
Who says? There are any number of "rating" mechanisms available to consumers. For example, in the case of restaurants, there's everything from gov't-based health ratings (e.g. the "score-cards" that are posted in restaurants) to private tastiness/ambiance ratings (e.g. Zagat).
For nearly any industry, these sorts of ratings are available. Curious about a car-repair place? Check the Better Business Bureau! Or Angie's List! Curious about car features/quality? Check Consumers Reports! And there's this thing called the Internet; you may have heard of it.
Far from being deprived of information and forced to "seek out hearsay to try to piece things together", we're absolutely DROWNING in information in most industries. In some cases you could even make an argument that there are TOO MANY sources of information, leaving the hapless consumer unsure of which ones to utilize. Maybe I should start a rater-rating service, to tell people that Consumer Reports generally provides honest even-handed appraisals, whereas Car And Driver magazine is filled with nothing but glowing reviews designed to keep advertisers happy, not to inform consumers.
If there's a demand for a rating service, and it doesn't exist, odds are there's a law in place which (directly or indirectly) discourages that type of rating - generally passed at the request of the providers, who'd rather keep their customers in the dark. As usual, gov't is the problem, not the solution. Why people want to give corrupt systems like governments even more power is totally beyond me.
"In theory, a centrally-controlled system must be as good or better than a market-based system – because if the market happens to come up with the optimal solution, the centrally-controlled system can just do the same thing, and if the market has failed to come up with the optimal solution, the centrally-controlled system has an “axis of freedom” (no irony intended) to arrive at solutions that the market-based system cannot reach."
Exactly.
"HOWEVER, this assumes that the central decision makers have all the same information available to them as the entire market has (info which is normally communicated via price signals from one part of the market to another). AND it assumes that those decision makers have the “processing power” to fully integrate all those inputs and arrive at the best answer."
This argues for using a *simulated* market as a planning tool. What you lose is the high drive associated with real market competition. This high drive is extolled by capitalist ideologues, but it is part of he problem rather than the solution.
Those who argue that socialism takes a chance with totalitarianism have a point. But capitalism produces totalitarian phenomena too (e.g., Nazi Germany), and we'll be seeing that too as the capitalist jugernaut continues to bear down on society.
Kebko,The post office was fine until capitalism got its hooks into it and demanded it turn a profit. Public enterprises required to play to the market are almost as bad as private enterprises. Fortunately, the post office has a history of public-employees unions, so the burden of this reactionary mishap is dispersed to the purchasing public rather than falling in its entirety on the workers.
America is notorious in its implementation of civil service. Don't imagine government agencies in Europe share the bad reputation of the American institutions. America's love affair with capitalism is also responsible for the inferior functioning of its public agencies.
In theory, a centrally-controlled system must be as good or better than a market-based system - because if the market happens to come up with the optimal solution, the centrally-controlled system can just do the same thing, and if the market has failed to come up with the optimal solution, the centrally-controlled system has an "axis of freedom" (no irony intended) to arrive at solutions that the market-based system cannot reach.
HOWEVER, this assumes that the central decision makers have all the same information available to them as the entire market has (info which is normally communicated via price signals from one part of the market to another). AND it assumes that those decision makers have the "processing power" to fully integrate all those inputs and arrive at the best answer. These assumptions don't always pan out (in fact, they sometimes fail spectacularly), which limits the centrally-planned system to poorer solutions than the market-based system.
Communism and totalitarianism aren't bad approaches in principle - only in practice.
"I think there should be a gov't agency in charge of reviewing each person's budget, lifestyle, medical condition, etc, and choosing what food that person should be allowed/required to consume." What would happen to our brains if the government started thinking for us? What would happen to the government if what would happen to our brains if the government started thinking for us, happened? What would happen to us, if what would happen to the government if what would happen to our brains if the government started thinking for us, happened, happened? Did you happen to think about these things before typing "- overall I'm sure we'd be much happier!"?
How about 15%? Is that enough to count as “much”?
The right way to think of it is that Blue Shield collects not two cents on the dollar but fifteen cents--and then sets thirteen of those fifteen cents on fire.Of course, that is only what the insurance company spends, by using excess paperwork to ration care they also increase the expenses that health care providers have to shuffle that paperwork around. What are the costs by the health care providers? Are they less? Kind of hard to figure out how they could be. The health care providers have to generate the paperwork they submit, the insurance company only needs to look at the bits of paper. If it is $0.13, then the total non-health care cost is 28%, more than a quarter of what is spent on health care.
Does 28% count as “much”?
There are some good comments at The Washington Post on how a 15% fee for administering a zero-sum fund is very expensive. That is what health insurance is, administering a zero-sum fund. Health Insurance companies take in premiums, pay out for health care and keep the difference. For that they need 15% in fees and profits?
a) We don't spend 17% of our GDP on car repair (0.2% of GDP or $30 billion) or house remodeling (2% of GDP or $300 billion).
b) Cochrane's comment about home rehab is laughably out of touch. We actually do regulate how you put your house together. State governments tell you how long the nails holding your roof on have to be. You have to get a building inspector to come over and take a look if you want to put new plywood up. There are probably 50 separate regulations that would benefit from a Federal take-over of housing regulation.
Pointing out these sorts of inconsistencies does seem to work (and there for come across) as an argument against regulation, among people who assume that more often than not, a relatively free market is better than a highly regulated one. It doesn't matter whether we assume that because of ideological appeal or because of a heuristic derived from an understanding of economic theory, or something else. If an inconsistency is pointed out in the justification for a regulation, we'll assume the argument is flawed and retreat to our prior.
One step up, if we think the author's prior favors the free market and expects ours should too, we'll infer that that's the direction they're trying to push us in.
This is a common theme here,logical inconsistency. The only explanation I can come up with is that people who worry about the hobgoblin of consistency are "Logic Chauvinists."
For example: "There seems to be only weak pressures to even notice much less reduce how they and their arguments treat similar things differently."
Where I come from the most important thing that controls the status of a working man is do you "know what you're doing." One time I caught a man putting a one way tread tire on backwards. That meant,even though the car would run,the car might spin out uncontrollably on a slick surface.That car belonged to my son. I told him to change it,and without a word or an apology he did.
Another guy was a doctor who put in knee replacements upside down because he didn't "know what he was doing." Then later someone had to replace them. He also did free doctoring for a local football team and when he died they had a big ceremony honoring him.
The situations are the same but merely pointing to the lack of logic along one syllogistic line is simplistic. Many other factors color the way the situation is perceived.
One factor that differentiates these situation is status and power which in each case serves to both protect and increase the exposure of the offenders. Of course since the doctor faces more regulation but is but perhaps this is logical since he has more power to wiggle out of his mistakes. The mechanic's mistakes more difficult to trace and he is more anonymous, thus there is less demand for regulation.
This is a very interesting point. I can understand a rationale for laws and regulations being inconsistent with each other. I can think of no reason why laws and regulations should be inconsistent with reality.
As a matter of fact, Saddam didn't bomb the WTC and Iraq didn't try to buy yellow cake in Africa. Iraq also didn't have WMD (the other false allegation usually used to justify the Iraq war). There were other false justifications, “the war would pay for itself”, “it will be over in x weeks”, “they will surrender when we hit them with 'shock and awe'”. I appreciate that many people falsely believed these things at the time, and some even believe they actually happened even when they did not.
In logic, false premises can be used to prove anything. In politics, false premises can be used to justify any action.
If you accept a political process based on false premises, what you are saying is that you accept a political process that can be used to justify anything. You are in effect saying that you want a fascist dictatorial tyranny. Maybe you are willing to quibble about who is in charge, but if you accept false premises, that only depends on who is willing to tell the most outrageous lies.
I'm surprised, but after all this discussion I don't think anybody on here has explained this properly. The reason it's extremely difficult for consumers to evaluate their doctors is because it's extremely difficult for doctors to evaluate themselves.
If you go to a good mechanic, he will fix your car. If you go to a good doctor, he will make you healthier less than 20% of the time. If all consumers follow the same method Ken uses, which is probably roughly accurate, then they will be making errors more than 80% of the time. And when the consumer finally chooses a doctor, it could be because the doctor made them better, or because they just happened to get better despite the doctor's many mistakes. That's a huge amount of inefficiency.
A similar problem currently faces evaluating teachers. But whereas we have a good idea of which best practices are likely to improve health outcomes, we have a much poorer understanding of which best practices improve education outcomes. A consistent position then would be to advocate more regulation of health than of education, but our current system regulates education more than it regulates health.
And if the highly intelligent people on this forum haven't even considered this line of reasoning, then you can just imagine where the average consumer is at in their thinking. I believe there's a need for more laws restricting doctors to best practices to improve health. A simple way would be for an insurance system which refuses to pay for useless treatments. HMO's had many similar systems which allowed them to control costs, but these were rejected by consumers. Many other countries have such systems in place too. Robin Hanson advocated something in the same vein here: http://www.overcomingbias.c...
It seems to me that regulation and law SHOULD be inconsistent.
Regulation or law is not the work of a single intelligence building a rational structure and codifying it. Rather it is a political compromise between a gigantic number of intelligences each with somewhat to wildly different rational structures.
We didn't invade Iraq because Saddam bombed the world trade centers or because Iraq had bought yellowcake from Africa or because if we could bring democracy to one Arab country the others would fall like dominoes or because Saddam had personally insulted W's father. Each of these reasons is cited by SOME people. But the REASON we invaded Iraq, if one reason that is sufficient can be cited, is because a sufficient political will existed to invade Iraq. That political will summed across many different people with many different motivations for putting their will in along with the rest.
Same with laws and regulations. Maybe medicine and auto repair have some interesting similarities which to the argumentative suggest they "should" be regulated similarly. But obviously they have a wealth of important differences, differences important to the many people who currently combine their political will to support a much higher level of interference in the health market than the automotive repair market.
Captain Oblivious,
By simulate, I mean what socialists have always meant when they've written about using the market as an administrative tool: you use an actual market economy, except the market serves only to provide data for the planners rather than having the dispositive say about resource allocation. I don't mean some computer simulation. (Sorry, I should have anticipated the misinterpretation; the theory of market socialism was developed before the advent of computers.)
This only confirms what you said in another posting: you can do anything in a planned economy that you can in a market economy. The planned economy gives you more degrees of freedom. But this extra freedom includes using a faux market to obtain planning data. For many things, the planners might seldom over-rule the "market." The only thing you can't simulate is the effect on people's motivation, since people in such a system can't accumulate productive property.
Stephen,
Why don’t parents insist that they choose their kids’ teachers?
Parents do all the time. Why do you think parents in rich neighborhoods don't want their taxes to go to pay for other neighborhood schools? Why do you think people move after having kids to get their kids into better schools? Of course, the educational system would be much better if schools were privatized, but since the government has taken over and monopolized schools, privatizing schooling will be difficult.
It’s clear that’s no way to run an efficient and effective educational system.
It's clear that you don't know what you are talking about. It's easy to imagine why schools should absolutely and without question not monopolize schools. Schools should be left to the free market precisely because you're wrong. Parents are in a much better situation to determine the quality schooling and to affect that quality through private transactions (like removing their child from one school and placing him in another) than any politician or bureaucrat.
Regards,Ken
Rick Santorum is not an imaginary Repubican straw man. He and the other guy are in a dead heat as GOP presidential candidate front runners.
You were implying that creeping nanny state government regulation like regulations on spinach hygiene and doctor choice will creep to a liberal socialist totalitarian state. Rick Santorum doesn't want to “creep” to a totalitarian state, he wants to go there directly, but it isn't socialism that Santorum is pushing, it is another -ism.
I disagree with you as to what is a “significant” choice. I put an ability to choose or not choose to use birth control as a much more “significant” choice than being assigned a doctor or having the “freedom” to eat tainted spinach. I am quite sure that most people agree with me, even if you do not.
I probably disagree with you as to what freedoms are most important. I believe that freedom of conscience, freedom of personal autonomy, freedom from physical assault, freedom from exploitation sort of the the freedoms laid out in the Universal Declaration of Human Rights are the ones that are the most important.
http://www.un.org/en/docume...
I appreciate that many self-proclaimed “freedom-loving” conservatives don't. Or rather they don't feel that such freedoms should be Universal, that only they and those they think are “more equal” than others should get to have them, and that some “freedoms” they want are even more important, such as the freedom to dump pollution into the atmosphere, in other words the “freedom” to externalize every cost and internalizing every profit.
People who want to use Medicare are already limited to choosing among health care providers who will accept payment from Medicare. That already does limit which doctors a patient can choose, doctors have to agree to be chosen and agree to be compensated at the rate that Medicare decides.
The same is true of all private health insurance companies. They also have “preferred” providers. Even if you have private health insurance you can always pick what ever doctor you want if you pay out of pocket. That is true with Medicare, it is true with every private insurance company, it is true for every payment plan that there is. Virtually all payment plans limit charges to what the payment plan considers reasonable, that includes only authorizing payment to providers considered competent.
An extended warrantee for a vehicle is like insurance and every provider of every warrantee also limits who can provide the paid-for service under that warrantee. When vehicles are repaired under auto insurance due to an accident, the insurance company always requires that repairs be done by a shop that they authorize. But if you want to pay out-of-pocket, you can have the work done by anyone you want.
I think your problem is that you are projecting and confusing what conservatives (like Santorum) would do if he got into power with what liberals would do. It is like Sarah Palin's pants-on-fire blood-libel of “death panels”.
You don't understand what liberals would do, so you project the most extreme and evil thing that you can imagine; a fantasy that is of your own making and projected onto liberals. No liberal is suggesting what Santorum would do if he had the power to do so.
It isn't liberals who are trying to interfere with doctor-patient communication. Florida tried to bar doctors from talking to patients about guns.
http://www.courthousenews.c...
I don't think I value freedom and human dignity any less than you do. I may be more afraid of losing freedoms to a totalitarian government, but not by regulation creep from spinach safety and illusory doctor choice, more from police powers, surveillance, paramilitaries, and propaganda fueled starving mobs.
@Stephen R DiamondThis argues for using a *simulated* market as a planning tool.
You're going to "simulate" a global economy of millions of businesses and billions of consumers... and not just account for the interactions of buyers and sellers of currently-known goods and services, but also somehow "simulate" the innovations that constantly occur in a REAL market economy. That's a tall order; get your simulation working first and THEN we'll talk.
P.S. Is there ANY limit to the hubris of a central-planning advocate?
Doesn’t it seem awfully crude, once you clear your mind of economists’ conventional wisdom, that people seeking services in civilized countries still must seek out hearsay information to try to piece together who’s good?
Who says? There are any number of "rating" mechanisms available to consumers. For example, in the case of restaurants, there's everything from gov't-based health ratings (e.g. the "score-cards" that are posted in restaurants) to private tastiness/ambiance ratings (e.g. Zagat).
For nearly any industry, these sorts of ratings are available. Curious about a car-repair place? Check the Better Business Bureau! Or Angie's List! Curious about car features/quality? Check Consumers Reports! And there's this thing called the Internet; you may have heard of it.
Far from being deprived of information and forced to "seek out hearsay to try to piece things together", we're absolutely DROWNING in information in most industries. In some cases you could even make an argument that there are TOO MANY sources of information, leaving the hapless consumer unsure of which ones to utilize. Maybe I should start a rater-rating service, to tell people that Consumer Reports generally provides honest even-handed appraisals, whereas Car And Driver magazine is filled with nothing but glowing reviews designed to keep advertisers happy, not to inform consumers.
If there's a demand for a rating service, and it doesn't exist, odds are there's a law in place which (directly or indirectly) discourages that type of rating - generally passed at the request of the providers, who'd rather keep their customers in the dark. As usual, gov't is the problem, not the solution. Why people want to give corrupt systems like governments even more power is totally beyond me.
Captain Oblivious,
"In theory, a centrally-controlled system must be as good or better than a market-based system – because if the market happens to come up with the optimal solution, the centrally-controlled system can just do the same thing, and if the market has failed to come up with the optimal solution, the centrally-controlled system has an “axis of freedom” (no irony intended) to arrive at solutions that the market-based system cannot reach."
Exactly.
"HOWEVER, this assumes that the central decision makers have all the same information available to them as the entire market has (info which is normally communicated via price signals from one part of the market to another). AND it assumes that those decision makers have the “processing power” to fully integrate all those inputs and arrive at the best answer."
This argues for using a *simulated* market as a planning tool. What you lose is the high drive associated with real market competition. This high drive is extolled by capitalist ideologues, but it is part of he problem rather than the solution.
Those who argue that socialism takes a chance with totalitarianism have a point. But capitalism produces totalitarian phenomena too (e.g., Nazi Germany), and we'll be seeing that too as the capitalist jugernaut continues to bear down on society.
Kebko,The post office was fine until capitalism got its hooks into it and demanded it turn a profit. Public enterprises required to play to the market are almost as bad as private enterprises. Fortunately, the post office has a history of public-employees unions, so the burden of this reactionary mishap is dispersed to the purchasing public rather than falling in its entirety on the workers.
America is notorious in its implementation of civil service. Don't imagine government agencies in Europe share the bad reputation of the American institutions. America's love affair with capitalism is also responsible for the inferior functioning of its public agencies.
In theory, a centrally-controlled system must be as good or better than a market-based system - because if the market happens to come up with the optimal solution, the centrally-controlled system can just do the same thing, and if the market has failed to come up with the optimal solution, the centrally-controlled system has an "axis of freedom" (no irony intended) to arrive at solutions that the market-based system cannot reach.
HOWEVER, this assumes that the central decision makers have all the same information available to them as the entire market has (info which is normally communicated via price signals from one part of the market to another). AND it assumes that those decision makers have the "processing power" to fully integrate all those inputs and arrive at the best answer. These assumptions don't always pan out (in fact, they sometimes fail spectacularly), which limits the centrally-planned system to poorer solutions than the market-based system.
Communism and totalitarianism aren't bad approaches in principle - only in practice.