One last point about Economics 101 may be the most important, is likely to be overlooked or even denied in the U.S. today. Economists claim they can show that if all their assumptions are true – perfect information, willing sellers and willing buyers, perfect competition, no externalities – the hypothetical free market will create what is called a Pareto optimum. That is a situation in which no person can be made better off without making someone else worse off. This is the basis of the claim that the free market allocates resources “efficiently.” But there can be a Pareto optimum in which everybody has an equal or close to equal share; and one in which one person has 90% of the wealth and the remaining million people have 10%. The latter is actually much closer to the situation we’re in right now.
But there is nothing in the theory of the market to support a claim that whatever distribution results is just, or fair, or desirable. If you don’t think it’s fair that one person has 90% of the wealth, there is no reason in the theory of the market why you shouldn’t tax 99% of that wealth away and share it with everybody else. Maybe you can think of arguments against doing this, but they aren’t to be found in introductory economics. The question is simply ignored.
Liberalism, in the modern sense, can be thought of as favoring government policy to repair the defects of the market, and make it more like the theoretical ideal. Environmental and workplace safety regulations limit some externalities. Food labeling requirements and protections against fraud limit information asymmetry. Generous investment in public goods fills important gaps left by market forces. Provision of basic income support and social services reduces inequality. Regulations prevent the formation of monopolies or break them up when they occur. The irony is that conservative libertarians who oppose most liberal policies are actually rejecting attempts to make the world more like their theory claims it should be.
Let me just add that the problems with the UK National Health Service are the result of decades of conservative governments starving it for resources. Once the Tories get smashed in the next election, the problems will be fixed. Meanwhile, the British are free to buy private insurance or pay out of pocket for private health care if they can afford it, so nobody is losing anything by having the NHS available. Try using logic.
2 comments:
I see a problem that has not been addressed in your promotion of single-payer government universal healthcare and that is there is no pressure for quality, timeliness of service or for efficiency.
What check and balances would there be?
And if it gets out of hand, just blame congress for not coughing up more and more money as you have the politicians in the UK? Why would anyone subject themselves to those issues already realized in most other developed countries that have that system?
The only check I can see is to force the members of congress and the rest of the federal government employees to be subject to the exact same healthcare services that they dictate for the rest of us. To date, they have vehemently resisted that.
Goose...Gander
Duck,
I heartily approve of your proposal; it's sort of a corollary to the Golden Rule.
We're a rich country. We could just split the difference between what they pay and what we are currently paying. For that kind of money those problems could be addressed and we'd still save a bundle.
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