Does That Make Gordon Gecko Linux or Windows?
Posted by
Kevin
Music City Bloggers has a post up highlighting a comment thread discussing Sicko and markets in health care. One of the commentators, Hammock, says this:
I’m glad that there is greater public discussion of the flaws in the U.S. health care system. What bothers me is that Moore and everyone else seems not to carry the argument beyond “we should get better care” and “health insurance companies are greedy”. Greed produced my clothes, my house, and the computer I’m using right now.
Even if it were an unregulated market, there are options other than single-payer or nationalization. There are policies that can guarantee care while encouraging competition to control costs and promote innovation. No one seems to be willing to discuss them, possibly because these ideas are complicated.
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Just to make the argument clear: Greed is not a sufficient condition for an undesirable outcome. Greed is not even incompatible with desirable outcomes. In the right institutional arrangement, greed is a necessary condition for desirable results. So why denounce greed, rather than the institutional environment?
I will indeed state that making categorical statements like “Greed is always bad” are overly simplistic (libertarians run into the same problem when they invoke simple principles such as “non-initiation of force”). It is almost always possible to construct an example in which any hard-and-fast, black-and-white moral rule does not hold.
…Economics might be able to tell us something about the true nature of the problem–why does this market work poorly, whereas others work well? But that would require a careful and thoughtful discussion that would probably bore most people, so no one–not CNN, not Michael Moore–has the discussion. Instead we get grandstanding and entertainment.”
This reminds me of the Windows vs. Linux flame wars or the various “my favorite programming language is obviously superior to your favorite programming language” that infest the internet. I am a programmer and have been a sys admin and network security engineer. I have worked on, literally, almost every single operating system and programmed in most programming languages. I have networked computers in Appletalk and written code to run on Os/2. I have written programs in C for Unix and Perl for Windows. I have written fat clients, smart clients, and web based clients. I have done applets and ajax and, God help me, active x. I have written Windows services and Unix daemons. Yesterday I wrote code in three different languages on two different operating systems. And you know what? I wouldn’t hesitate to use any technology I have used in my career again (Well, okay — maybe not VB). Whatever the Linux fanboys and Windows geeks may say, whatever the Perl partisans and Python propagandists might claim, programming languages and operating systems and design methodologies are just tools. Nothing more, nothing less. The trick is to use the right tool for the right task.
Greed, or, more accurately, markets, are the same way. They are a tool, not a revelation from the burning bush. Greed is not the only tool in our possession and it must be judged the same way all other tools are: by how well it does it job. You cannot look at a situation and think to yourself “how can I make markets work better here”. That is like looking at a nail and thinking, “hmm, how could I get that nail into this piece of wood using this hacksaw”. The appropriate question is whether or not greed is the right tool for the job. And I think it is pretty clear that if the job is designing a decent health care system in thsi country, the answer is “no”.
Markets create incentives for insurance companies to behave atrociously. The simplest way for an insurance company to become profitable is to never pay out any claims. Thus, insurance companies go to great lengths to not enroll people who can be expected to have high medical costs down the line and to find reasons to deny people the benefits for which they have paid their premiums. Assuming that doctors are driven by the same greed first considerations (most aren’t; but that is a complication for another day) they too have incentives to act in something other than the patient’s best interest. If they are paid by the insurance company per patient, they have every incentive to stack the patients high and push them through fast. If they are paid by the insurance company per procedure, then they have every incentive to order up as mush work as possible. The former leads to missed diagnosis and incomplete treatment; the latter leads to over exposure to antibiotics, unnecessary pain anddiscomfort for the patient, and longer waiting times for needed treatments and equipment for everyone else. Greed, in other words, is bad for your health.
This is obvious once you step back and look at the problem without the need to make it fit into a market based solution. But you must take that first step of not picking your tool before you diagnose the problem. Markets and greed are not required in every aspect of our lives. They are not revealed wisdom or the secret to everlasting success and happiness. They are just tools, the functional equivalent of a hammer. And not every problem in the world is shaped like a nail.
