Monday, September 28, 2009

Rational, schmational

My biggest problem with the free market is that humans are not rational creatures. We are influenced at least as much by emotion and impulse as we are by logic. The free market might work great on Vulcan, but here on Earth, people do irrational, self-damaging things like get addicted to drugs, pollute the air they breathe, and listen to Ashlee Simpson’s music.

Caligula’s Horse is right that our health care is rationed. Right now, the general way we ration is by providing more and better health care to wealthier individuals. I think it’s somewhat legitimate for conservatives to argue that opening up access to health care to the poor would put a strain on our already-limited medical resources. Doctors and hospitals would have to treat people who currently don’t get treatment. I disagree with the people who contend that the solution is to continue denying treatment to the poor.

A better solution would be to open more medical schools, nursing schools and hospitals. Law schools and lawyers are a dime a dozen (more law schools are opening every day and we need more lawyers like we need a hole in the head), and yet medical schools are still relatively few and far between. This is not because we don’t need more doctors. Rather, law and business schools tend to be cash cows for universities and are relatively low-cost institutions, whereas medical schools are very, very expensive.

Anyway, I digress. My point is that the free market has been tested as a means for supplying health care, and it has failed. Let's see if government can help.

Wherefore art thou, free market?

Our Elder Statesman rightly asked last week what government is good for (absolutely nothing! uhn-huh!), if not to provide the basics to those who can't provide for themselves. I think it's worth questioning not just the government's role in our society, but the free market's, too. Just as the government can't solve all our problems, neither can capitalism.

The mainstream position in America is that the free market is always the most efficient way to allocate resources, if not the most egalitarian — the latter point being where most people bring the government into the picture. This is true in most sectors, but not all.

Environmental policy is a good illustration of the free market's shortcomings. Pollution affects everybody, but the burden of reducing it falls solely on each polluter; nor are all of its affects financial, which makes it hard to factor them into ROI. The end result is that early adopters essentially subsidize everyone else's gains, and they get few benefits for their troubles. Everyone has a disincentive to be first in line, and little gets done; this is the exact opposite of standard free market conditions, where the race to be first is what spurs innovation. In areas where games of chicken threaten to leave everyone bleeding by the side of the road, the government is in a unique position to unilaterally devise a solution.

With health care, the problem isn't that people try to avoid being the first to get treatment; instead, it's that one of the fundamental assumptions of capitalist theory, that of the rational actor, doesn't apply. When people buy a car, they're more or less rational: advertising blitzes aside, they know what they want and what they're willing to pay for it. That BMW might roar somethin' pretty, but if it's not worth the money, I might get a Civic instead. And if my car is making weird sounds, I can put off fixing it if I don't have the money now; it might cost me more later if the car breaks down completely, but that's a risk I might be willing to take. When people learn that they might die in two years, on the other hand, they'll demand any and every treatment that might help. That 1% chance is everything when the alternative is death.

But it's a cold, hard fact is that people get sick, they get injured, and they die. The other cold fact is that we can't expend infinite resources on health care. Somebody needs to allocate — okay, I'll say it: ration — our resources. Right now, our system of rationing is the free market, a system built on assumptions that just don't apply. That's not the only reason the US spends so much money on health care and has so little to show for it, but it's part of the reason.

I can't say with certainty if government involvement is the best way to solve this rationing problem. But it's a way that other countries have shown works better than our attempt to force health care into the free market.

Friday, September 25, 2009

Binding badly behaving banks

At the G20 summit today, leaders from around the world will loudly promise to reform banking in ways they know will never be implemented. Sounds fun to me. I think I'll give it a whirl.

The biggest problem with regulations is that they always leave loopholes. Wall Street may be reckless, but it's also clever, and governments will always lag behind. That's practically by definition, really: nobody notices a loophole until after it's exploited.

In programming, there are two basic approaches to security — that is, to closing off loopholes. The first approach, called blacklisting, is to figure out all of the ways a hacker can sneak into your program, and block them. This is analogous to the government's approach, and it suffers the same disadvantages: you're always playing catch-up.

The second approach, whitelisting, takes the opposite approach: define only the inputs you want to accept, and block the rest. This concept is important enough that one of the Web's early languages has it built in, and more modern languages have add-ons that mimic or extend this behavior.

And that's my proposal for regulating the banking industry: instead of defining the thousands of things that banks, credit card companies, investment banks and the like can't do, define the few things they can do. Not only will there be fewer loopholes, but nearly all of those loopholes will be traceable back to the members of Congress who consciously and explicitly wrote them into law.

Granted, this would put a big damper on fiscal innovation. Is that a bad thing? Banking isn't exactly a new industry; at this point, "innovations" are more likely to be smoke and mirrors than real, fundamental improvements. And if someone does think of a brand new, useful way of doing things, they can petition Congress to allow it. Given the financial industry's power to take down the world's economies, I don't think that's an unjustified burden.

Thursday, September 24, 2009

Healthy, Wealthy, or Wise? Pick one.

I have a cold. It's been getting progressively worse for the last few days. I've been having trouble focusing on work, and instead I've been spending most of my time marveling at how much mucus I can produce. I've also been hoping that I won't need to see a doctor...the health insurance I get through my job doesn't kick in until next week.

Health care and health insurance seem to be on everyone's mind these days. A couple of weeks ago I saw the protesters on the National Mall expressing their outrage at the prospect of government-sponsored health care. I saw some interesting protest signs, including the following:
  • "Spread my work ethic, not my wealth!"
  • "Hitler: 6,000,000 Jews, Obama: 300,000,000 Americans."
  • "I'll keep my guns, religion, and keep the change."
Each of those is troubling in its own way. The first one implies that only lazy people would need help from the government. The second one somehow compares mass extermination with the provision of health care. The third one is just ignorant (although I've always liked the "keep the change" line).

I think it's okay to worry about the government becoming too large and unwieldy, and about taxes being too high. However, when I think about things that the government *should* provide, health care is always near the top of the list. In fact, for me, the top 5 most important functions of government are:
  1. Safety and law enforcement (military, police, courts, etc.)
  2. Education
  3. Health care
  4. Infrastructure (roads, plumbing, electricity)
  5. Environmental protection
(Number 6, by the way, would probably be social security.)

Providing all of those things, and doing it well, is no easy task. Sometimes governments fail at effectively delivering needed services. But if it's a choice between getting those services from government or not getting them at all, I'd choose the former. There are people out there who have absolutely nowhere to turn for medical care. Are some of them in that predicament because they're lazy? Probably. But some of them aren't lazy, and are going to suffer (or worse) because nobody will help them. I can't have that on my conscience...I'm still feeling super guilty over the cutting board I accidentally stole from Ikea a few weeks ago (long story).

I guess my point is, if government doesn't exist to provide for the most basic needs of its citizens, why does it exist at all? What need is more basic than the need to survive?

Wednesday, September 23, 2009

My Two Cents on the Constitution

I didn’t know we had a resident legal expert. I too am looking forward to hearing what he or she has to say. However, since I went to law school, I figured I’d chime in on this topic in the meantime.

First and foremost, I frequently have an internal debate with myself over the normative question of whether we should still care about the Constitution. It is true that the people who framed the Constitution were innovative, smart men. I also think that the Constitution remains indispensible in dictating the structure and function of the various parts of our government and in preserving the separation of powers.

But I often ask myself why we look to the Constitution to see if, say, abortion should be legal. I think it’s very correct of you, CH, to say that there is a cumbersomely voluminous body of law surrounding the Constitution, to the point where many of the doctrinal underpinnings of modern constitutional law seem almost silly. You mentioned a good example of this: the “right to privacy” that has been read into the Fourteenth Amendment. Although I am quite pro-choice, I am unhappy that the legality of abortion in this country rests on those shaky grounds. Why can’t we base our jurisprudence on more contemporary considerations?

It also bears mentioning that the reason you haven’t heard any grumblings over federal involvement in education is because of the very expansive reading of the Commerce Clause. (By the way, there are people -- collectively known as "crazies" -- who argue that the federal government should not be involved in education and various other activities.) Today, the Commerce Clause is the basis for the vast majority of federal legislation, and up until a few years ago it was seen as virtually limitless in its reach (the Supreme Court has recently reined it in a bit). For that reason, the Tenth Amendment (and the Ninth Amendment, for that matter) is a lot less powerful than you suggest it should be.

There is, however, one upside to having such a complex body of law surrounding our Constitution: it generates quite a lot of business for lawyers. :-)

The Con Constitution

Hello, readers! Welcome to the inaugural post of poliglut. We'll perhaps post a manifesto in a bit; for now, suffice to say that we plan to use this blog to foster a discussion among people who don't always agree, but do always think carefully.

I'm going to dive right in and start the posting with a bold claim: America does not have a written Constitution; at least, not a binding one. (A disclaimer: this post is a part re-post, part clarification of a claim I made on The Economist's Democracy in America blog.)

The US Constitution has been so broadly interpreted, and carries with it so much precedent and case law, that its actual words are nearly meaningless. We have a relatively firm understanding of what's constitutional and what isn't, but that understanding is informed more by unwritten social values and written case law than by the Constitution itself. I think I'll jokingly refer to this as the Dead Constitution theory.

Some examples are in order. There are some cases that could be argued both ways (does confessional privilege run counter to or in agreement with the First Amendment?), but other cases seem clearer.
  • The federal government is involved in education; I haven't heard any grumblings that it shouldn't be (and I wouldn't put forth those grumblings, myself). But I don't know of any text in the Constitution that allows this, and the Tenth Amendment would therefore seem to disallow it.
  • Roe v Wade famously hinges on a Constitutional right to privacy. That right isn't in the written Constitution, though I'd argue it's firmly in our unwritten one.
  • The secret trials and "indefinite detention" of Guantanamo prisoners seem to go against the Sixth Amendment, given the Supreme Court's ruling that Guantanamo prisoners fall under the Constitution's jurisdiction.
  • The text "In God We Trust" on coins — to say nothing of the many benedictions I had to endure as part of my public high school's marching band on public holidays — are an establishment of religion, even if they're not an establishment of a specific religion.
To be clear: I'm not arguing that America is a lawless country devoid of a Constitution. I'm just arguing that it has an unwritten one, as the UK does.

When the written and unwritten constitutions are in agreement, we refer to the written document by way of convenience (i.e., "that's protected by the First Amendment"). Where they differ, the unwritten one trumps.

I especially welcome our resident legal expert's input.