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.

1 comment:

  1. Economics is a discredited field and so is Hayek by extension (along with all the rest of them).

    Also, the conservative movement is completely feckless and isn't responsible for much of anything outside of electing Republicans. Those losers certainly aren't holding back America's health care system.