Tag Archives: Medicine

Can Combined Agents Limit Drugs?

Using pre-covid stats, a new J. Law & Econ paper tries to account for all U.S. crime costs, i.e., costs due to not everyone fully obeying all laws. These costs include prevention efforts, opportunity costs, and risks to life and health. The annual social loss is estimated at $2.9T, comparable to the $2.7T we spend on food and shelter, the $3.8T on medicine, and a significant fraction of our $21T GDP. One of the biggest contributions is $1.1T from 104K lives lost in 2018 at $10.6M each, including $0.7T from 67K drug overdoses deaths.

But such drug deaths have been roughly doubling every decade since 1980, and in the year up to April 2021, there were 100K US drug overdose deaths, making that loss by itself $1T, at least if you accepted a $10M per life estimate, which I do think is too high. Even so, drug overdose deaths are clearly a huge problem, worth thinking about. What can we do?

Reading up on the topic, I see a lot of conflicting theories on what would work best. But a big part of the problem seems to me to be that it isn’t clear who exactly owns this problem. We might see it as a family problem, an employer problem, a medical problem, or a legal problem. Yet each of those groups resists taking responsibility, and we don’t fully empower any of them to deal well with the problem.

Now I’m no expert on drug overdosing, bit I do fancy myself a bit of an expert on getting organizations to own problems. So let me try my hand at that.

I’ve previously suggested that people choose health agents, who pay for and choose medicine but who lose lots of money if their clients become disabled, in pain, or die. I’ve also suggested that people choose crime vouchers, who must pay for cash fines when their clients are found guilty of crimes, but who have client-voucher contracts able to set client co-liability and to choose punishments and freedoms of association, movement, and privacy. I’ve also suggested having agents who insure you against hard times, career agents who get some fraction of your future income, and that parents get such a fraction to compensate for raising you.

So as a man with all these hammers staring at this tough nail of drug overdoses, I’m tempted to merge them into one big hammer and take a swing. That is, how would a merged agent who had all these incentives try to deal with a potential drug problem?

Imagine a for-profit experienced expert org approved by the client’s parents when they are a kid, or by the client when they are adult. In a world with with few legal constraints on the contracts that this agent can agree to with clients. An org who probably also represents many of this client’s friends and family. An org who gains from client income, but who must pay when a client is found guilty of a crime, or suffers hard times, pain, disability, or death. An org able to limit client freedoms of privacy, movement, and association, And able to set client punishments for verified events, and to make associated clients co-liable, so that they are all punished together re events involving any one of them.

Such an agent might make sure to get addicts a reliable drug supply, or to have overdose drugs readily available. Or they might forbid clients from mixing with drug types. Or they might test clients regularly, or encourage althetics that conflict with drug use. Or any of a thousand other possible approaches. The whole point is that I don’t have to figure that out; it would be their job to figure out what works.

Now if an org with incentives and powers like that can’t find a way to get clients to avoid becoming drug addicts, or to not overdose if they do, then that would probably either be due to some larger social context that they couldn’t change, or because many individuals just like drugs so much that they are willing to take substantial chances of overdosing.

What if a larger social policy related to drugs or users was a key problem? For example, maybe drug laws are too strict, or too lax. If so, I’d expect these orgs to figure out which and lobby for changes. And given their expertise and incentives, I’d be tempted to listen to them. If you didn’t trust them so much, well then you might consider using futarchy to choose. But honestly I expect such combined agents could handle the problem regardless of larger policies.

In sum, I suggest that the key underlying problem with drug overdoses is that no expert org owns the problem, by being approved by clients yet given clear abilities and incentives to solve the problem. Yes this is a big ask, and this is my generic solution to many problems. Doesn’t mean it won’t work.

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Medical Doubts OpEd

An editor asked me to write this OpEd, but then he never responded when I gave it to hm. So I submitted it to several other editors, but now I’m out of contacts to try. So I’m giving up and posting this here: Continue reading "Medical Doubts OpEd" »

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Karnataka Hospital Insurance Experiment

In 2008 I posted on the famous RAND Health Insurance Experiment:

1974 to 1982 the US government spent $50 million to randomly assign 7700 people in six US cities to three to five years each of either free or not free medicine, provided by the same set of doctors. … people randomly given free medicine in the late 1970s consumed 30-40% more medical services, paid one more “restricted activity day” per year to deal with the medical system, but were not noticeably healthier! (More, see also)

I got 60 signatures on a petition then for the “US to publicly conduct a similar experiment again soon, this time with at least ten thousand subjects treated for at least ten years”.

In 2011 I posted on the Oregon Health Insurance Experiment:

Oregon assigned a limited number of available Medicaid slots by lottery. … 8,704 (~30%) [very sick and poor US adults] were enrolled in Medicaid medical insurance. … at most see two years worth of data. … had substantially and significantly better self-reported health. … over two thirds of the health gains … appeared on the very first survey, done before lottery winners got additional medical treatment. (More)

No statistically significant effect on measures of blood pressure, cholesterol, or blood sugar. … did not reduce the predicted risk of a cardiovascular event within ten years and did not significantly change the probability that a person was a smoker or obese. … it reduced observed rates of depression by 30 percent. (More)

Today I report on the new Karnataka Hospital Insurance Experiment:

This study … is amongst the largest health insurance experiments ever conducted … in Karnataka, which spans south to central India. The sample included 10,879 households (comprising 52,292 members) in 435 villages. Sample households were above the poverty line … and lacked other [hospital] insurance. … randomized to one of 4 treatments: free RSBY [= govt hospital] insurance, the opportunity to buy RSBY insurance, the opportunity to buy plus an unconditional cash transfer equal to the RSBY premium, and no intervention. … intervention lasted from May 2015 to August 2018. …

Opportunity to purchase insurance led to 59.91% uptake and access to free insurance to 78.71% uptake. … Across a range of health measures, we estimate no significant impacts on health. … We conducted a baseline survey involving multiple members of each household 18 months before the intervention. We measured outcomes two times, at 18 months and at 3.5 years post intervention. … only 3 (0.46% of all estimated coefficients concerning health outcomes) were significant after multiple-testing adjustments. We cannot reject the hypothesis that the distribution of p-values from these estimates is consistent with no differences (P=0.31). (more)

So a new randomized experiment on ordinary health residents of India had 6.8x as many subjects as the RAND experiment, and also found no net effect on health. It only looked at the effects of hospital treatment, but to many that is the crown jewel of medicine.

Bottom line: we now have more stronger data that on average, more medicine doesn’t improve health. Though of course for people committed to buying useless medicine insurance can cut financial stress. Update your beliefs accordingly.

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We Don’t Have To Die

You are mostly the mind (software) that runs on the brain (hardware) in your head; your brain and body are tools supporting your mind. If our civilization doesn’t collapse but instead advances, we will eventually be able to move your mind into artificial hardware, making a “brain emulation”. With an artificial brain and body, you could live an immortal life, a life as vivid and meaningful as your life today, where you never need feel pain, disease, grime, and your body always looks and feels young and beautiful. That person might not be exactly you, but they could (at first) be as similar to you as the 2001 version of you was to you today. I describe this future world of brain emulations in great detail in my book The Age of Em.

Alas, this scenario can’t work if your brain is burned or eaten by worms soon. But the info that specifies you is now only a tiny fraction of all the info in your brain and is redundantly encoded. So if we freeze all the chemical processes in your brain, either via plastination or liquid nitrogen, quite likely enough info can be found there to make a brain emulation of you. So “all” that stands between you and this future immortality is freezing your brain and then storing it until future tech improves.

If you are with me so far, you now get the appeal of “cryonics”, which over the last 54 years has frozen ~500 people when the usual medical tech gave up on them. ~3000 are now signed up for this service, and the [2nd] most popular provider charges $28K, though you should budget twice that for total expenses. (The 1st most popular charges $80K.) If you value such a life at a standard $7M, this price is worth it even if this process has only a 0.8% chance of working. Its worth more if an immortal life is worth more, and more if your loved ones come along with you.

So is this chance of working over 0.8%? Some failure modes seem to me unlikely: civilization collapses, frozen brains don’t save enough info, or you die in way that prevents freezing. And if billions of people used this service, there’d be a question of if the future is willing, able, and allowed to revive you. But with only a few thousand others frozen, that’s just not a big issue. All these risks together have well below a 50% chance, in my opinion.

The biggest risk you face then is organizational failure. And since you don’t have to pay them if they aren’t actually able to freeze you at the right time, your main risk re your payment is re storage. Instead of storing you until future tech can revive you, they might instead mismanage you, or go bankrupt, allowing you to thaw. This already happened at one cryonics org.

If frozen today, I judge your chance of successful revival to be at least 5%, making this service worth the cost even if you value such an immortal future life at only 1/6 of a standard life. And life insurance makes it easier to arrange the payment. But more important, this is a service where the reliability and costs greatly improve with more customers. With a million customers, instead of a thousand, I estimate cost would fall, and reliability would increase, each by a factor of ten.

Also, with more customers cryonics providers could afford to develop plastination, already demonstrated in research, into a practical service. This lets people be stored at room temperature, and thus ends most storage risk. Yes, with more customers, each might need to also pay to have future folks revive them, and to have something to live on once revived. But long time delays make that cheap, and so with enough customers total costs could fall to less than that of a typical funeral today. Making this a good bet for most everyone.

When the choice is between a nice funeral for Aunt Sally or having Aunt Sally not actually die, who will choose the funeral? And by buying cryonics for yourself, you also help move us toward the low cost cryonics world that would be much better for everyone. Most people prefer to extend existing lives over creating new ones.

Thus we reach the title claim of this post: if we coordinated to have many customers, it would be cheap for most everyone to not die. That is: most everyone who dies today doesn’t actually need to die! This is possible now. Ancient Egypt, relative rationalists among the ancients, paid to mummify millions, a substantial fraction of their population, and also a similar number of animals, in hope of later revival. But we now actually can mummify to allow revival, yet we have only done that to 500 people, over a period when over 4 billion people have died.

Why so few cryonics customers? When I’ve taught health economics, over 10% of students judge the chances of cryonics working to be high enough to justify a purchase. Yet none ever buy. In a recent poll, 31.5% of my followers said they planned to sign up, but few have. So the obstacle isn’t supporting beliefs, it is the courage to act on such beliefs. It looks quite weird to act on a belief in cryonics. So weird that spouses often divorce those who do. (But not spouses who spend a similar amounts to send their ashes into space, which looks much less weird.) We like to think we tolerate diversity, and we do for unimportant stuff, but for important stuff we in fact impose strongly penalize diversity.

Sure it would help if our official medical experts endorsed the idea, but they are just as scared of non-conformity, and also stuck on a broken concept of “science” which demands someone actually be revived before they can declare cryonics feasible. Non-medical scientists like that would insist we can’t say our sun will burn out until it actually does, or that rockets could take humans to Mars until a human actually stands on Mars. The fact that their main job is to prevent death and they could in fact prevent most death doesn’t weigh much on them relative to showing allegiance to a broken science concept.

Severe conformity pressures also seem the best explanation for the bizarre range of objections offered to cryonics, objections that are not offered re other ways to cut death rates. The most common objection offered is just that it seems “unnatural”. My beloved colleague Tyler said reducing your death rate this way is selfish, you might be tortured if you stay alive, and in an infinite multiverse you can never die. Others suggest that freezing destroys your soul, that it would hurt the environment, that living longer would slows innovation, that you might be sad to live in a world different from that of your childhood, or that it is immoral to buy products that not absolutely everyone can afford.

While I wrote a pretty similar post a year ago, I wrote this as my Christmas present to Alex Tabarrok, who requested this topic.

Added 17Dec: The chance the future would torture a revived you is related to the chance we would torture an ancient revived today:

Answers were similar re a random older person alive today. And people today are actually tortured far less often than this suggests, as we organize society to restrain random individual torture inclinations. We should expect the future to also organize to prevent random torture, including of revived cryonics patients.

Also, if their were millions of such revived people, they could coordinate to revive each other and to protect each other from torture. Torture really does seem a pretty minor issue here.

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Separate-To-Make-Equal Vaccine Queues?

“Among the 23 states that report those details, Black and Latino people received far smaller shares of the vaccine than their share of cases and deaths, and compared to their share of the states’ populations.” (more)

In other areas of life, such as jobs and schools, critics call it unfair to insist on exact race or class proportionality, as other important yet blameless factors are correlated with race and class. But with a pandemic, cases and deaths are in fact good proxies for the main outcomes of interest, as they indicate not just who is more likely to be harmed if infected, but also who has more risky contacts, and so is both more likely to catch the disease and to pass it on to others. So it makes more sense to try to make vaccine access more proportional to the cases and deaths of particular demographic groups.

Some say that race/class equity is just not possible in vaccine distribution, as poor folks and people of color have fewer cars, fewer computers, more language obstacles, less time flexibility, and worse abilities to navigate complex public health systems. But that’s all assuming that the system doesn’t explicitly consider race and class.

It would be completely possible to just have different queues for different races and classes. (And I can’t believe queue-designers were unaware of this option.) Give each person a rank within their different queue, presumably according to various risk and priority indicators. Call them to come get the vaccine when everyone below their within-queue rank has been given the chance to get it.

Under this system, if poor folk and people of color are less able to find out when they are called, or less willing or able to come in when called, then other people further down in their queue would get it. This system could insure race and class equal vaccine distribution up until the point where so few in a particular queue come for a vaccine when called that vaccines end up wasted.

This is just one example of a type of queue not tried. There is a vast space of possible queues, and many problems attributed to queues are actually only problems with particular versions of queues.

For example, many think it obvious that while queues might work to allocate vaccines of predictable availability, unpredictably available vaccines, such as leftovers at day end, must be allocated via who has the connections and time flexibility to be at the right place at the right time. But even unpredictably available vaccines could still be allocated via the same basic queues. Once you give everyone their rank in a queue, you could use those ranks to pick who gets any vaccines, from among those who are at the right place and time. And of course we should try harder to tell everyone what those places and times are, and to standardize them more.

In general, I think the covid vaccine distribution would have been more efficient if we had just let a private markets allocate them by price, perhaps giving out (and paying for) price discount vouchers to those we thought extra deserving. Not only would this have cut much of the waste and inequality of people trying to “work” the system to jump queues, but it would have allocated vaccines better by customer-perceived value. Yes, people with more money would tend to get vaccines sooner, but that money they paid could be spent on encouraging a larger and earlier supply. (And allowing early challenge trials would have helped even more.)

When choosing whether or not to intervene in markets, policy makers usually focus on the constraints that competition and uncoordinated actions impose on markets, while assuming that governments can do anything they want. Yet this case of pandemic vaccines reminds us that while governments may be able to set aside some of the constraints that bedevil markets, governments come with whole other sets of constraints of their own.

We do not have the best government allocation mechanisms that are abstractly possible, but instead have whatever seemed easy and familiar to existing government agencies. Markets tend to create much stronger incentives to search and innovate within its sphere of constraints. And just because advocates say government intervention is needed to ensure racial or class equity, that doesn’t mean that is what government intervention actually produce or promote.

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The Real Problem

Some think that if only we could teach more history to screenwriters, we’d get more realistic historical movies. Or if only we could teach rationality to journalists, we’d get less fake news. Or if only we could teach ad writers more about products features and prices, we’d get more informative ads. Or teach charity workers about effectiveness. Or teach statistics to scientists. 

But in these cases, and many more, expert incentives are usually not sufficiently aligned with such objectives for these experts to listen well to such teaching. They often have long been well aware of such issues. 

Some see the fix in teaching about these incentive problems to the leaders of movie studios, newspapers, and ad firms, or to the patrons of charity and science. As then they’d know to create better incentives for the experts they lead. But their incentives are also usually not sufficiently aligned with these objectives for them to change their ways. They also have often long been well aware of such issues. 

Every expert has ultimate customers, though the chain between them is longer in some cases, with many intermediaries. You can’t change expert behavior without convincing some intermediary, or the ultimate customer, that it is in their interest to promote such change. Either they have misjudged their interests and incentives, or you can somehow change their environment to change their incentives. 

For example, imagine that doctors pretend to be effective at improving health, but mainly give customers the affiliation with prestige that they crave, to let them show they care about each other via paying much for prestige. But perhaps customers don’t want to admit this fact, and instead want to pretend to be buying health improvements. Then there’s a chance you could create data showing that their choices are not effective, and also create widespread common knowledge about which other choices would be more effective, at least at that moment.

In this case you might shame customers into demanding that intermediaries (e.g., insurers, regulators, NHS, Medicare) demand that doctors actually do the health-effective things. But you will likely be opposed by inertia and by doctors, intermediaries, and customers who are not eager to expose their prior incompetence and hypocrisy. They might even relent now and do what your data suggest, but then coordinate vigorously to crush you and any who might try later to emulate your approach, to make sure this never happens again.

This is the world you live in, and the problem we face.

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Why Does Govt Do Stuff?

Looking across the many different activities and sectors of society, how well can we predict where governments get more vs. less involved?

Though this is an oft discussed topic, I can’t recall seeing an overall theory summary. So I thought I’d write one up. Here are some big relevant factors, and areas they may explain. Most are tentative; you may well convince me to move/change/add them.

Control – Whomever runs the government prefers to control areas that can be used to prevent and resist opposition and rivals.
Predicts more: religion, military, police, law, news, schools, disaster response, electricity, energy, banking.

Scale – If supplying a product or service has strong economies of scale, network, or coordination, it can be cheaper to use one integrated organization, who if private may demand excessive prices and thereby threaten control.
Predicts more: military, “roads” (including air, boat travel support), social media, money, language, electricity, telecom, water, sewer, trash, parks, fire, software, fashion, prestige
Predicts less: housing, food, medicine, art, entertainment, news, police, jail.

Innovation – As governments seem less able to encourage or accommodate effective innovation, governments tend to be less involved in rapidly evolving sectors.
Predicts more: roads, water, sewer, track, parks.
Predicts less: military hardware, vehicles, tech/computers, entertainment, social networks.

Variety – Governments tend to encourage and be better at relatively standardized products and services, done with fewer versions, more the same for everyone everywhere at all times.
Predicts more: war, medicine, schools, disaster response, roads.
Predicts less: housing, food, entertainment, romance, parenting, friendship, humor.

Norms – Norms are shared, and we like to enforce them together, officially.
Predicts more: religion, law, war, romance, parenting, medicine, drugs, gambling, slavery, language, manners, sports.

Show Unity – As we want to show that we are together, and care about each other, we like to do the things we to do to show such care together in a unified way.
Predicts more: religion, poverty/unemployment/health insurance, school, medicine, fire, parks, housing, food, disaster response, trash/sewer, coverage expansion subsidies.

Show Off – We want to impress outsiders with our tastes, abilities.
Predicts more: research, schools, high art, high sport, roads, parks, shared space architecture, trash/sewer.
Predicts less: low art/entertainment, low sport, gossip.

Hypocrisy – When we profess some motives, but others are stronger, the opacity and slack of government agencies, and better ability to suppress critiques, makes them better able to hide such differences.
Predicts more: medicine, drugs, gambling, schools, police, jail, courts, romance, zoning, building codes, war, banking.
Predicts less: water, sewers, electricity.

If we could collect even crude stats on how often or far govt is involved in each area, and crudely rate each area-factor combo for how strongly that factor applies to that area, we could do a more formal analysis of which of factors predict better where.

Note that scale is the strongest factor suggesting that govt does more when more govt helps more. Innovation and variety suggest that also when those factors are the cause of govt involvement, but much less so if those features are the result. While norms are on average valuable, it is much less clear when govt support improves them. Most signaling likely helps each society that does it, but is done too much for the good of the world overall.

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Vouching Fights Pandemics

As I’ve pitched vouching as a general solution to both law and medicine, the looming coronavirus pandemic offers a good and challenging concrete test; how well could vouching handle that?

If you recall, under a law vouching system, each person is required to get a voucher who stands ready to cover them for any large legal liability, including fines as punishment for crimes. Under a medical vouching system, each person gets a voucher to pay for all their medical treatments, and also to pay large amounts to a third party when that person becomes disabled, in pain, or dead. Voucher-client contracts can specific physical punishments like torture or jail, co-liability with associates, and limits on freedoms, such as re travel, privacy, or risky behaviors. 

Regarding a looming pandemic, your voucher would know that it must pay for your medical treatment, your lost salary if you stop working, and large fines if you die or get hurt. So it would offer large premium discounts to gain powers to limit your travel and contacts, and to penetrate your privacy enough to see what contagion risks you might incur. And it would have good incentives to make risky medical choices expertly, such as if to try an experimental treatment, or to accept early deliberate exposure. 

When you live with others who you might infect, or who might infect you, you’d probably also be offered premium discounts to let the same voucher cover all of you together. But there would remain key externalities, i.e., risks of infecting or being infected by others who are not covered by the same voucher.

The straightforward legal remedy for such externalities is to let people sue others for infecting them. In the past this remedy has seemed inadequate for two reasons: 

  1. It has often been expensive and hard to learn and prove who infected who, and
  2. Ever since we stopped holding family members liable for each other, and selling debtors into slavery, most folks just can’t pay large legal debts.

The vouching system directly solves (2), as everyone has a voucher who can pay lots. And the key to (1) is ensuring that the right info is collected and saved.

First, consider some new rules that would limit people’s freedoms in some ways. Imagine people were required to keep an RFID tag (or visible QR code) on their person when not at home, and also to save a sample of their spit or skin once a week? Then phones could remember a history of the tags of people near that phone, and lawsuits could subpoena to get surveillance records of possible infection events, and to see if spit/skin samples on nearby dates contain a particular pathogen, and its genetic code if present. We might also adopt a gambled lawsuit system to make it easier to sue for small harms.

Together these changes could make it feasible to, when you discovered you had been infected, sue those who likely infected you. First, your voucher could collaborate with vouchers of others who were infected nearby in space and time, by a pathogen with a similar code. By combining their tag records and local surveillance records, this group of vouchers could collect a set of candidates of who might plausibly have infected you when and where. 

(Yes, collaboration gains from voucher groups might give vouchers more market power, but not too much, as this can work okay even when there are many competing voucher groups.)

You could then sue all these possible infectors via gambled lawsuits. For the winning lawsuits, your voucher could subpoena their split/skin to see if their pathogen codes match the code of the pathogen that infected you. When a match was found, a lawsuit could proceed, unless they settled out of court. Sharing verdict and settlement info with collaborating vouchers could make it easier for them to figure out who to sue.  

Okay, yes, there is the issue of who would agree to keep RFID tags and sufficient spit/skin samples, if this weren’t required by law. I’ve proposed that the amount awarded in a lawsuit be corrected for how the chances of catching someone varies with the freedoms they keep. Such chances would be estimated by prediction markets. The lower the estimated chance of catching a particular harm for a given set of freedoms, then the higher would be the award amount if they are caught. 

So if, given the choice, some people choose not to use RFID tags or keep spit/skin samples, they may be harder to catch, but they would pay more when they do. (Which is part of why most might choose less privacy.) As a result, clients and their vouchers will know that on average they will pay for the full cost of infecting others. Which could be huge amounts if they infect many others with deadly pathogens. Which would push vouchers to work to ensure that their clients take sufficient care to avoid that. 

And that’s my concept. During the early stages of a pandemic, a system of law/med vouchers would have incentives to try the sort of aggressive case tracing that public health professionals now try. And if such professionals existed, they could collaborate with vouchers. Once the pandemic escaped containment, this vouching system would encourage people to isolate themselves to avoid infecting others, and to avoid being infected. Their freedoms of travel and privacy would become more limited, more like the limits that an aggressive government might impose. 

But exceptions would be allowed when other costs loomed larger, just as economic efficiency demands. Compared to a centralized aggressive government, a voucher system could much more easily and flexibly take into account individual differences in inclinations, vulnerability, and preferences. The choice of freedoms would be made more practical and local, and less symbol.

With vouchers and lawsuits for infections working well to get people to internalize the infection externalities, pandemics might be limited and contained at nearly the level that a cost-benefit analysis would suggest. 

Added 07Mar: Early in a pandemic it is easier to trace who infected you, and it would make sense to let you sue someone who infected you not only for the damages you suffered, but also for the damages you had to pay others who you infected. This could create very large incentives to contain pandemics early.

Later in a pandemic people sued might reasonably argue that they should only have to pay for the harm from someone being infected earlier than they would otherwise have been, which might be no harm at all during a period before the peak when medical resources are becoming spread increasingly thin.

Added 10Mar: If later in an infection it becomes too hard to trace who infected who, even with the above reforms, then it might make sense to have more general crime-law-based rules limiting social contact. Vouching can also do well at enforcing such rules.

Added 20Apr: See my more flexible and general approach to requiring that info be collected and saved. Also, if cases are common where you can narrow an infection down to 1 of 5 sources, but can’t prove which one, it makes sense to make them each pay 20% of the damages. This way we don’t need to be >50% confident of each particular infection link.

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Our Prestige Obsession

Long ago our distant ancestors lived through both good times and bad. In bad times, they did their best to survive, while in good times they asked themselves, “What can I invest in now to help me in coming bad times?” The obvious answer was: good relations and reputations. So they had kids, worked to raise their personal status, and worked to collect and maintain good allies.

This has long been my favored explanation for why we now invest so much in medicine and education, and why those investment have risen so much over the last century. We subconsciously treat medicine as a way to show that we care about others, and to let others show they care about us. As we get richer, we devote a larger fraction of our resources to this plan, and to other ways of showing off.

I’d never thought about it until yesterday, but this theory also predicts that, as we get rich, we put an increasing priority on associating with prestigious doctors and teachers. In better times, we focus more on gaining prestige via closer associations with more prestigious people. So as we get rich, we not only spend more on medicine, we more want that spending to connect us to especially prestigious medical professionals.

This increasing-focus-on-prestige effect can also help us to understand some larger economic patterns. Over the last half century, rising wage inequality has been driven to a large extent by a limited number of unusual services, such as medicine, education, law, firm management, management consulting, and investment management. And these services tend to share a common pattern.

As a fraction of the economy, spending on these services has increased greatly over the last half century or so. The public face of each service tends to be key high status individuals, e.g., doctors, teachers, lawyers, managers, who are seen as driving key service choices for customers. Customers often interact directly with these faces, and develop personal relations with them. There are an increasing number of these key face individuals, their pay is high, and it has been rising faster than has average pay, contributing to rising wage inequality.

For each of these services, we see customers knowing and caring more about the prestige of key service faces, relative to their service track records. Customers seem surprisingly disinterested in big ways in which these services are inefficient and could be greatly improved, such as via tech. And these services tend to be more highly regulated.

For example, since 1960, the US has roughly doubled its number of doctors and nurses, and their pay has roughly tripled, a far larger increase than seen in median pay. As a result, the fraction of total income spent on medicine has risen greatly. Randomized trials comparing paramedics and nurse practitioners to general practice doctors find that they all produce similar results, even though doctors cost far more. While student health centers often save by having one doctor supervise many nurses who do most of the care, most people dislike this and insist on direct doctor care.

We see very little correlation between having more medicine and more health, suggesting that there is much excess care and inefficiency. Patients prefer expensive complex treatments, and are suspicious of simple cheap treatments. Patients tend to be more aware of and interested in their doctor’s prestigious schools and jobs than of their treatment track record. While medicine is highly regulated overall, the much less regulated world of animal medicine has seen spending rise a similar rate.

In education, since 1960 we’ve seen big rises in the number of students, the number of teachers and other workers per student, and in the wages of teachers relative to worker elsewhere. Teachers make relatively high wages. While most schools are government run, spending at private schools has risen at a similar rate to public schools. We see a strong push for more highly educated teachers, even though teachers with less schooling seem adequate for learning. Students don’t actually remember much of what they are taught, and most of what they do learn isn’t actually useful. Students seem to know and care more about the prestige of their teachers than about their track records at teaching. College students prefer worse teachers who have done more prestigious research.

In law, since 1960 we’ve similarly seen big increases in the number of court cases, the number of lawyers employed, and in lawyer incomes. While two centuries ago most people could go to court without a lawyer, law is now far more complex. Yet it is far from clear whether we are better off with our more complex and expensive legal system. Most customers know far more about the school and job prestige of the lawyers they consider than they do about such lawyers’ court track records.

Management consultants have greatly increased in number and wages. While it is often possible to predict what they would recommend at a lower cost, such consultants are often hired because their prestige can cow internal opponents to not resist proposed changes. Management consultants tend to hire new graduates from top schools to impress clients with their prestige.

People who manage investment funds have greatly increased in number and pay. Once their management fees are taken into account, they tend to give lower returns than simple index funds. Investors seem willing to accept such lower expected returns in trade for a chance to brag about their association should returns happen to be high. They enjoy associating with prestigious fund managers, and tend to insist that such managers take their phone calls, which credibly shows a closer than arms-length relation.

Managers in general have also increased in number and also in pay, relative to median pay. And a key function of managers may be to make firms seem more prestigious, not only to customers and investors, but also to employees. Employees are generally wary of submitting to the dominance of bosses, as such submission violates an ancient forager norm. But as admiring and following prestigious people is okay, prestigious bosses can induce more cooperative employees.

Taken together, these cases suggest that increasing wage inequality may be caused in part by an increased demand for associating with prestigious service faces. As we get rich, we become willing to spend a larger fraction of our income on showing off via medicine and schooling, and we put higher priority on connecting to more prestigious doctors, teachers, lawyers, managers, etc. This increasing demand is what pushes their wages high.

This demand for more prestigious service faces seems to not be driven by a higher productivity that more prestigious workers may be able to provide. Customers seem to pay far less attention to productivity than to prestige; they don’t ask for track records, and they seem to tolerate a great deal of inefficiency. This all suggests that it is prestige more directly that customers seek.

Note that my story is somewhat in conflict with the usual “skill-biased technical change” story, which says that tech changed to make higher-skilled workers more productive relative to lower-skilled workers.

Added 10June: Note that the so-called Baumol “cost disease”, wherein doing some tasks just takes a certain number of hours unaided by tech gains, can only explain spending increases proportional to overall wage increases, and that only if demand is very inelastic. It can’t explain how some wages rise faster than the average, nor big increases in quantity demanded even as prices increases.

Added 12Jun: This post inspired by reading & discussing Why Are the Prices So Damn High?

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Freedom Isn’t Free

The concept of a right to health has been enumerated in international agreements which include the Universal Declaration of Human Rights, International Covenant on Economic, Social and Cultural Rights, and the Convention on the Rights of Persons with Disabilities. … equitable dissemination of medical knowledge and its benefits; and government-provided social measures to ensure adequate health. …

Everyone has the right to … food, clothing, housing and medical care and necessary social services. … “responsibility [that] extends beyond the provision of essential health services to tackling the determinants of health such as, provision of adequate education, housing, food, and favourable working conditions” … right of everyone to the enjoyment of the highest attainable standard of physical and mental health … each individual holds an inherent right to the best feasible standard of health. (more)

We might want to say that people have a right to food. And in a place like the Soviet Union, where food was centrality produced and distributed, a right to food might be defined in terms of fixed numbers of particular items. So many loaves of bread, kilos of meat, and bottles of milk per week, for example. Such “rights” would be complex, vary by time and place, and result mostly from complex and changing tradeoffs, as well as politics.

While basic ethical principles might influence such rights, that influence may be hard to discern among so many other influences. If a right to food were enshrined in the text of a constitution, it would be hard for courts to have that text and a few abstract principles strongly determine if any given action is taken to violate that right or not. They might accumulate case law on how to make such decisions, but that would mostly be the court defining the right, not the constitution or abstract principles. The court might delegate many details to government agencies, in which case it would be those agencies deciding most details, not the constitution or abstract principles.

In contrast, in a market economy like ours, where individuals can more easily choose the particular foods that they want, it makes less sense to talk having about having rights to particular baskets of bread, meat, milk, etc. One could instead talk about a right to so many calories or grams of protein, but that might be hard to enforce. It could make more sense to talk about a right to a minimum food budget, and to having foods available to purchase at their real costs. (Such a budget might be set by market prices to get min calories, etc.) And it might be work even better to just focus on general redistribution systems expressed in terms of money, allowing each person to choose their own food priorities.

In a market-based economy where rights are implemented via food budgets or overall redistribution policies, outcomes would be influenced more by the constitution text and abstract principles, and by many individual choices, and less by the courts or government agencies.

Similarly, in a centrally-administered medical system, one could make a long list of the particular medical treatments to which each patient is entitled, if they were diagnosed with particular conditions. This long list of medical rights would be context-dependent and change frequently, and it wouldn’t have any clear relation to basic ethical principles or a constitutional text about a right to medicine. Such a list would mostly reflect many practical tradeoffs as well as politics. It seems quite hard to formally define and enforce any simple general “right to medicine” given all this complex variation and context dependence.

When medicine is allocated more by a competitive market, it can make more sense to try to ensure that people are free to buy medicine, medical insurance, and info on medical quality, all at prices that reflect the real costs of such things. One might try to define medical rights in terms of a minimum budget that each person has to buy medicine or medical insurance or info. Or one might focus on a more general system of redistribution expressed in terms of money, and let each person choose their medical priorities. In either of these last two scenarios, abstract principles and a constitutional text, together with individual choices, could have more influence on outcomes, relative to decisions by courts and government agencies.

In this last scenario, if you saw a case where you felt bad that someone who knew about a particular medical treatment didn’t buy that treatment, you might consider pushing to increase the priority of similar people in your more general system of redistribution. So that they could have more money to buy such treatments. If you gave such people more money, but they chose instead to spend that money on other things, you might accept that they have differing medical priorities from you, or you might try to push them to share your priorities. Either way, that dispute doesn’t really seem to be about a right to medicine.

If you are with me so far regarding food and medicine, then in the rest of this post I want to convince you to think similarly about many formal civil rights and liberties. At least regarding rights and liberties whose limits are set mainly by criminal law enforcement considerations. Today our constitutions and courts try to specify many complex related rights and liberties. I will argue that this complexity is to a large degree due to having a centralized government-run system of criminal law enforcement. This is analogous to the complexity we would have if the government ran the food system or the medical system, wherein rights to food or medicine would consist of long lists of the food you could get each week, or the medical treatments to which you were entitled.

I will suggest that we could instead switch to a much more private, open, and competitive system of criminal law enforcement. In such a system, individuals could buy the particular civil rights and liberties that they wanted. We could then work to ensure that people are free to buy these rights and liberties at prices that reflect their real costs, and that people have a minimum budget to purchase such things. Or we might just focus on a more general system of redistribution expressed in terms of money, and let each person use money to express their priorities for rights and liberties re criminal law enforcement. Let me explain.

Today, we have explicitly declared a great many rather specific rights and liberties on how we are to be treated by our systems of law enforcement. Of course your actual rights and liberties vary according to your exact legal jurisdiction, the legal text there, court interpretations in that jurisdiction, and how local law enforcement agencies actually implement court rulings in their actual policies.

You may have have rights to be silent, and to not talk to police, and exceptions to those rights, such as when you must identify yourself. You may have rights and obligations regarding when you may be detained or arrested, and who must give testimony regarding which kinds things about which kinds of associates, including themself. There are rules on when one must be allowed to consult a lawyer, and rules that require lawyers to be available free of charge. You may have have rights to keep some things private, to be safe from unreasonable searches and seizures, and there may be exceptions to these based on warrants and on which things are in “plain view” or result from “hot pursuit”. Other exceptions are based on extra powers given to police in certain situations.

You may have rights to assemble with others of your choice, and to travel freely, but these rights may have exceptions limiting where you can go where when, such as curfews and orders to stay away from some places or to stay close enough to other places. You may have a right to speedy trials. Regarding punishment, you may have rights to avoid disproportionate punishment, and cruel and unusual punishments. In prison, you may have rights to minimum qualities of food and medicine, to a lack of racial segregation, to accommodation of your disabilities, to a lack of crowding, and to some kinds of speech, contact with outsiders, and religious activities.

For all of these rights and liberties, you may have complex rights regarding who must monitor to check that they are actually being upheld, and who may sue whom claiming that they are not, and what they would win if they won. Many have claimed that in fact many important groups in our societies don’t actually have many of the rights and liberties that they are supposedly granted on paper. I’m inclined to believe many such claims, which is a big part of why I seek other approaches.

Much of this complexity results from the fact that, in order to enforce criminal law, officials sometimes need to detain, punish, and watch people, and they sometimes need to limit their travel, assemblies, and other activities. Officials sometimes need to collect info about some people from their things and from other people. These many complex rules about rights and liberties are often claimed to be designed to give everyone as many rights and liberties as feasible, while still allowing criminal law officials to do what needs doing to enforce criminal law in a reasonably cost-effective manner. Because the world is complex, these rules must be complex.

But imagine that we replaced our centralized government run system of criminal law enforcement with this:

Consider a fine-insured-bounty (FIB) crime law system. … All (but one) crime is punished officially by fines, everyone is fully insured to pay large fines, and bounty hunters detect and prosecute each crime. In a FIB system, we collectively decide the fine and bounty level for each crime, and manage a judicial system which decides individual cases.

If we set the fine level for each crime to be our best estimate of the social harm produced by one more crime event of that type (divided by the chance that it will be caught, plus enforcement costs), then the insurer-client pair would internalize that social harm, in which case we could leave that pair free to choose punishment types, costs, and levels, as well as (many aspects of) police and prosecutor monitoring and investigative powers. (more)

Within a FIB system, insurer-client pairs choose most details of punishment, including type, size, duration, etc. So within such a system, there’s little need to give people rights to avoid disproportionate, cruel, or unusual punishment. Anyone can choose to avoid any type of punishment, if they are willing to pay associated insurance premiums.

Similarly for monitoring to prevent crime. Insurers will want to promote and enable such monitoring, to avoid having to pay on behalf of clients. So insurers will offer lower premiums to clients who allow more monitoring. No need to guarantee any minimum or maximum monitoring; such levels are chosen by contract. For rights re how one interacts with police, it is possible to not give bounty hunters any more rights than ordinary people have. In which case we’d need no extra rights relative to police interactions.

Now it does seem plausible that the more rights that bounty hunters have to collect evidence, such as by searching places and compelling testimony, the higher the chance that any given crime could be caught, with the criminal’s insurer forced to pay a fine. But what if lowering this chance were the main external cost that resulted from letting a potential criminal choose to make it harder to collect evidence about them? In this case we could correct for this effect via fine amounts. The fine for each crime should depend on an estimate of the chance that crime would have been detected and successfully prosecuted. With decent (and perhaps conservative) estimates of how the chance of catching a crime depends on how open a criminal is to evidence collection, we could adjust fines for this effect, and thus allow insurer-client pairs to choose how open to be to bounty hunters seeking evidence. In which case we don’t need a right against “unreasonable” police searches.

So far I’ve argued that, in a FIB system, we don’t need formal rights and liberties regarding issues where we can just let insurer-client pairs choose, because they internalize the social harm of such choices. I’m not claiming that all civil rights and liberties are of this type, but many are. Creating a more private, open, competitive criminal law system could allow us to greatly simplify civil rights and liberties, and have the results depend a long more on constitutional text and general principles, and on individual choices, and depend less on courts and government agencies. Just as when we have private, open, competitive systems for food or medicine.

What if you felt bad when you saw someone choose fewer civil rights and liberties than you thought right or wise? You might try to persuade them to change their priorities, or you might try to increase the priority that you give to such people in your redistribution system that ensures minimum budgets to buy rights and liberties, or within your more general redistribution system. So that they could more easily afford to buy more rights and liberties if they wanted them. I think this would work better than trying to centrally legislate who exactly should have which particular rights and liberties, as that wouldn’t well take into account individual tastes, costs, and context.

Added 1June: Here’s a way to estimate “how the chance of catching a crime depends on how open a criminal is to evidence collection”. Have the statute of limitations be no shorter than N (=10?) years, and require everyone to keep good private electronic records of their activities for at least that long. Allow L (=4?) different privacy levels that everyone can choose among. Divide the polity into M (=1000?) regions, and every N years force one random region to have the lowest privacy level regarding its last N years of crimes. For each region and privacy level combination, have a prediction market estimating its crime rate (number of crimes weighted by fine level, divided by average-over-period fraction of residents at privacy level) conditional both on being randomly picked, and on not being so picked. That’s 2*L*M/N prices per year. The fine increase factor for each region and privacy level combination is given by a smoothed ratio of the estimated crime rates between the two conditions. Smoothing can take the whole set of prices and find a simpler model that fits them.

Added 5Aug: Here is pdf of slides for talk I gave.

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