Sunday, February 28, 2010

Sure, Hayek is well and good for the easy stuff ...

Yglesias wrote a post short enough I'll just quote its entirety:
An offhand Twitter joke and some pushback I got led me to look up what Hayeks’ The Road to Serfdom says about universal health care. Some interesting stuff on Page 125 of the edition that’s in Google books:
Nor is there any reason why the state should not assist individuals in providing for those common hazards of life against which, because of their uncertainty, few individuals can make adequate provision. Where, as in the case of sickness and accident, neither the desire to avoid such calamities nor the efforts to overcome their consequences are as a rule weakened by the provision of assistance, where, in short, we deal with genuinely insurable risks, the case for the state helping to organise a comprehensive system of social insurance is very strong. There are many points of detail where those wishing to preserve the competitive system and those wishing to supersede it by something different will disagree on the details of such schemes; and it is possible under the name of social insurance to introduce measures which tend to make competition more or less ineffective. But there is no incompatibility in principle between the state providing greater security in this way and the preservation of individual freedom.
I take this as saying that Hayek would support a universal health care system but would prefer it to be financed with a flat or regressive tax base. One interesting issue here regards preventive care. Things like regular checkups, wellness advise, basic screening, etc. don’t meet the definition of “genuinely insurable risks.” At the same time, based on what we actually know about medicine an ounce of prevention really is worth a pound of cure and as long as you’re going to be having the state pick up the tab for illness it seems very practically sound to also have the state invest in prevention. But defining what does and does not count as “prevention” would entail a degree of non-Hayekian planning. My take would be that these medical issues are sufficiently technical to think that Hayek’s general point about the superiority of the market to technocracy in organizing knowledge almost certainly doesn’t hold. But either way, we could have a much more constructive debate about health care if the right-wing took more of a Hayekian view and less of a Randian one.
I agree with the main thrust of this post unreservedly. America would be a better place with a better health care system if conservatives thought more like Hayek and less like Ayn Rand, either actual or bizarro (conservatives conveniently forget such things as her militant atheism).

I quibble with Yglesias's apparent complete miss the point of Hayek's ideas. Hard or "sufficiently technical" problems are precisely the sorts that benefit from decentralization, as it allows actors with local information to coordinate their activities by responding to price signals. This is like saying, because determining exactly how much steel should be produced to satisfy the needs of a large, industrial society is a hard, technical problem, the superiority of the market to technocracy almost certainly doesn't hold. Note how one criticism of the health care status quo from the ranks of the more Hayekian-minded among the commentariat is that consumers are shielded from price signals of the sorts of routine, preventative items Yglesias mentions because they're paid for via third parties.

Friday, February 26, 2010

universal acid

Via the Twitter, Will Wilkinson linked to this 2004 TCS Daily essay of his on meritocracy and redistribution. Wilkinson cites progressive thinkers like Matt Yglesias who argue that the self-made man is a pernicious myth, that "Being born with the inclination and ability to become financially successful is no more morally praiseworthy than being born with the inclination and ability to inherit a large fortune. It's chance all the way down either way." That from Yglesias. "Those of us who won the genetic and social lottery will naturally try to rationalize our great good luck. We will turn up our calloused palms and tell of the blood and sweat on our every red cent." That from Wilkinson. 

I think this is true for what it's worth. If you are naturally talented (or limited), where did the natural talent (limit) come from and why do you deserve credit (blame) for it? If you are not naturally talented and had to work hard for your successes,  where did this inclination or ability to work hard come from and why do you deserve credit for it? This seems to reduce to the problem of free will versus determinism. For two identical twins, one ambitious and hard-working, the other indolent and free-riding, what accounted for the difference in behavior? They chose? What made one choose the one path and the other the alternative? Like free will, the idea of moral desert for position in society requires a bit of magical thinking. 

Like determinism, the idea that no one deserves anything, while neat, implies no course of action whatsoever. 
Material inequality is one kind of inequality among many. Political inequality is more troubling by far, for political power is the power to push people around. Coercion is wrong on its face, and so the existence of political inequality requires a specially strong and compelling justification. However, if the luck argument cuts against moral entitlement to material holdings, it cuts equally against any moral entitlement to political power. 

The justification for political power is generally sought in the "consent" of the people through free, fair and open elections. Yet the fact that someone has gained power by a democratic ballot can be no more or less relevant than the fact that Warren Buffet gained his billions through a series of fair, voluntary transactions. John Edwards (who, by the way, is a mill worker's son) didn't deserve his luxuriant tresses and blinding grin. Reagan didn't deserve movie-star name recognition. Bushes don't deserve to be Bushes. Kennedys don't deserve to be Kennedys. Kerry's war medals? Please. 

If the luck argument is any good, then democratic choice and the resulting distribution of coercive political power is also, as Yglesias says, "chance all the way down." And if luck negates the moral right to keep and dispose of one's stuff, it also negates the right to take and dispose of others' stuff.
This luck argument can consume whatever argument it might be harnessed by.

Tuesday, February 2, 2010

Venezuela: your friendly neighborhood Marxist dictatorship

I read this article in the Economist this morning.
In his annual address to Parliament, earlier this month, the president announced (to no one’s surprise) that he was now a Marxist. He no longer pays lip-service to the separation of powers, which in practice disappeared some time ago. The head of the Supreme Court, Luisa Estella Morales, said last month that such niceties merely “weaken the state”. A leading member of the ruling United Socialist Party, Aristóbulo Istúriz, called for the dismantling of local government, which Mr Chávez wants to replace with communes.
The 1999 constitution guarantees property rights and the existence of private enterprise. But the president now says that private profit is the root of all evil. Callers to the government’s consumer-protection body, Indepabis, find its hold-music is a jingle about evil capitalists. Insisting that his recent currency devaluation was no excuse for price rises, Mr Chávez had Indepabis close down hundreds of stores for “speculation”. He told Parliament to change the law on expropriations and seized a French-controlled supermarket chain to add to the government’s new retail conglomerate, Comerso.
I have always thought that Hugo Chavez really meant business. I even have a bottle of wine riding on him still being in power in 2013 (Intrade is no help here, at least that I could find). But now he's talking about replacing localities with communes? What's next, Five Year Plans? He blinked a large amount of private wealth out of existence with his recent currency devaluation; he nationalizes a new enterprise every week; and he's gagged independent media. The Economist makes much of the fact that public opinion polls have turned against him lately, but he clearly isn't the slightest bit interested in giving up power should he lose his election in 2012 (or the parliamentary elections in September), not that that could possibly happen because he's certain to rig the elections.

Things will turn nasty as the economy falters under weight of Soviet-style central planning and uncooperative oil prices. I strive above all things to not be histrionic or paranoid. Am I being histrionic and paranoid by predicting there will be violence in South America in the next ten years, either by civil war or an attempt by Chavez to plunder his way out of the hole he's dug himself?

UPDATE: On second thought, I guess a lot of dictatorships over the past few decades have avoided war. Hopefully Chavez won't have the longevity of a Castro.