I still hold to a completely free market health care has existed in every western economy and if it was still around today would cost $64 a year (not subsided at all) for excellent healthcare. Saving Well over a trillion a year in the US. Lodge practice is what it was called if you are interested in what a completely free market healthcare system looks like.

I'm pretty conservative in my views, but what world are you living in?

Have you honestly not felt the recent tensions between the United States and Israel? Or how Obama is blowing off Netanyahu as "noise"?

 

I would think it is rather messed up that America is giving foreign aid to Muslim countries that are so anti-Americans, that protests with killing and flag burning is the norm whenever they find something to offend them. Or maybe it's the fact that they let US Embassies get attacked (Hint: Egypt). The United States needs to cut off all foreign aid to those countries. There is no negotiating or building friendly relations with those people.

Netanyahu is calling for a strike on Iran, Obama wants to avoid another costly war. I'd call him "noise", too, if I were him. Netanyahu's beliefs, while I find them to have certain merit, border fanaticism and desperation. Netanyahu is lucky he is still able to talk to the US after Pollard's conviction.

 

As for the extremists burning and spitting on the American flag: why widen the gap with them? Why cut off the entire country because of a few bad apples? Why create enemies?

 

There is no way to avoid an eventual war with Iran.

 

The US isn't creating enemies. The enemies are already there.

 

This is everything wrong with right wing foreign policy.

There is no clear cut regulation is good/bad. It is all about cost-benefit to society, and it is also a situational issue. Sometimes the best market setup occurs through co-operation, sometimes you need to levy a tax or give out a subsidy to prevent one side or the other from carrying the other sides costs (called an external benefit or external cost depending on who get's screwed). There is also such a thing as a cartel, with OPEC probably being the most famous, which is very illegal in Canada and the United States because of how unfair it is for the consumer (it prevents actual competition).

 

As a general point, a recession is not prime time for paying off your debt. Everyone has less money, and the government costs are higher than normal (social insurance and health care costs go up). Add to that, your also actively at war, which costs mind boggling amounts of money both to pay for the war itself, and all the R&D that has been going on during the wars. Pulling your troops back and not being at war anymore is a great way help counter the debt, because it's piles of money that can be used to help.

 

If the government had never done anything to help counter the economic collapse you were facing, it is possible that you might never have recovered. If things get bad enough, you create a feedback system where everyone just has less and less money. Your probably in a state now where you'll recover with or without help, though as I understand it, it's still very bad for a lot of people, and it could be that way for a lot longer, which means you risk creating life style of social insurance (where people get used to it, and grow up in that environment, and stop trying to do better, which is a lifestyle that can get passed on to your children).

 

The lodge system is certainly interesting, though I am not seeing exactly how that would work. Assuming you still want hospitals to be a thing, this would actually be the epitome of public health care (I just want to make sure we all see the irony here), with the government collecting last years medical bill evenly from every person in the country, and using it to pay all the hospitals. This would make things mildly cheaper by removing all the health insurance companies, but that's about it. To lower the prices even more, you need to reverse the change from the original system, which will require massive amounts of regulation, because this way is more profitable. You have to force the hospitals to run at cost, and you have to pay the doctors less (this would seem to be where the savings from a lodge system actually come from, is lower doctors wages). Now remember that job security for doctors is awesome, because everyone needs them, and realize that everyone else would be paying them more than you. You also have to deal with the pharmaceutical companies, which have also changed dramatically. Anything that can be done to make their process cheaper can lower the price of their dugs, and you also need to stop them from lobbying docotrs so that doctors stop pushing medications people don't need.

 

Also realize that because western doctors make so much, medical school is set up to cost about the same as a medium quality house, so you need to reconfigure the education system as well or you wont be able to create any new doctors.

Agreed with the foreign policy bit. War with Iran is not inevitable - and premature military action is exactly the kind of thing that makes countries enemies of the US.

 

As for free market healthcare, it's fairly well proven that having a profit factor in healthcare increases costs rather than shrinking them.

Have you honestly not felt the recent tensions between the United States and Israel? Or how Obama is blowing off Netanyahu as "noise"?

 

I would think it is rather messed up that America is giving foreign aid to Muslim countries that are so anti-Americans, that protests with killing and flag burning is the norm whenever they find something to offend them. Or maybe it's the fact that they let US Embassies get attacked (Hint: Egypt). The United States needs to cut off all foreign aid to those countries. There is no negotiating or building friendly relations with those people.

 

Of course I've witnesses the tensions. But that's far from dropping Israel as an ally and besides that it's good that he's trying to reign in Netanyahu. The awful policy regarding settlers has made negotiation with Palestineans harder. And regarding Iran, he's a warmonger. Not that I couldn't understand him - when a country that has several times stated how it loathes you almost has nukes, I'd try everything to stop them too. But that doesn't mean war is the right solution. It's the absolutely last thing they should do, only if really everything else fails. Another war would maybe keep them from developing nukes, but it would throw relations with muslim countries back a long time. The reason why so many people there are so Anti-American is because their initial bias (coming e.g. from islam, because they see western culture&style as unislamic etc) is so often confirmed in their eyes with how Americans have acted. I've read a biography/interview of Bin laden's first wife and fourth son. You could really understand how carelessness and acting without though, without regard to another culture has worsened the conflict.

 

If you ever want to change the situation, you need to take a step towards them. There IS negotiating and building friendly relations with those people. They're not different from you, just in another situation, in another culture. Of course it won't be easy. They won't suddenly be all nice and friendly just because you are. But the last few decades really should have shown how trying to meddle with them too much, trying to force something onto them, and retaliating just won't solve the problem. (One hint: The theocracy of Iran was established after the US-backed Shah was dethroned, because living conditions under him were awful. That's just one of several examples where short sighted policy has come back to damage the US)

 

 

 

There is no way to avoid an eventual war with Iran.

 

The US isn't creating enemies. The enemies are already there.

 

Of course there is. There isn't a sure way of acting that 100% will avoid it. But it's definitely not impossible, and until that changes, war shouldn't be thought of.

 

And yes, the US is creating enemies, see above. Or you could say they've made their enemies into worse enemies, if you prefer it that way.

Donnie, is it a bad idea to close the information gap in the market for food by imposing that nutrition facts be printed on them?

Donnie, is it a bad idea to close the information gap in the market for food by imposing that nutrition facts be printed on them?

That's usually an assumption in economics, everyone has perfect information.

 

 

Rush Limbaugh is saying that 3 million white evangelical republicans didn't vote. Like they were ticked off by Moderate Mitt, or Mormon Mitt, or something.

Usually, but for examples of market failures you obviously have to look for the assumptions that aren't always true. If my model assumes consumers choose the bundle which minimizes their utility, I can make all kinds of predictions, but they won't reflect reality and that's what we're interested in.

OK, OK, OK, this is way outta your heads now. Is your freaking memory so limited or haven't you guys heard about what happened in Georgia (the independent country in the Caucasus) in 2008? Russian army occupied and still occupies South-Ossetia, which is historically a Gerogian area.

And you say that Russia hasn't fought a battle since the Cold War...

And besides, any nuclear strikes would be quite unthinkable for Russia, China or anyone else. Noone wants MAD. Yet the USA still needs the army, since there are ways that army is used in civil service as well as in active warfare. The USA has taken the position of the "watchdog of the world", and now they can't just leave this position, without generating direct threats to themselves. And that's also, why the USA needs an army. The size is a different matter, though.

Donnie, is it a bad idea to close the information gap in the market for food by imposing that nutrition facts be printed on them?

 

No but companies only do the bare minimum governments require. On a free market if there is demand for nutritional information (kind of like the demand for organic food) people will fulfill it. Keep in mind most of the shit businesses can get away with is a result of lack of competition (barriers to entry).

 

You could actually go online and order stuff from china and sell it cheaper then walmart. When it gets to the shipyard, they tell you that because of the storage container it came in (or w.e) that you cant get it, unless your walmart.

 

Think about the immense struggle it would take to do the simplest thing, such as open a coffee shop. Which bureaucrat do you go to for your business license, health license, etc.

 

I still hold to a completely free market health care has existed in every western economy and if it was still around today would cost $64 a year (not subsided at all) for excellent healthcare. Saving Well over a trillion a year in the US. Lodge practice is what it was called if you are interested in what a completely free market healthcare system looks like.

I'm pretty conservative in my views, but what world are you living in?

 

The real world. That markets drive down prices and state controls create cartels. Please research lodge practice and how that system was able to keep medical insurance prices low in Australia, US, Britain among other industrialized countries.

 

What broke that in short is:

 

AMA controls on the amount of doctors allowed to get licensed each year. We have less doctors per 100 people now then we did in the 1920's. We have less doctors per 100 people then most second world countries including Mongolia. Non American doctors do not have significanly higher rates of medical negligence.

 

In the US the AMA was able to control licenses and block licenses for any doctor that signed lodge contracts. Creating a cartel of approved insurance. Outside the US such as in Britain they just took direct control over medical services and the doctors set their own wages

You're making unreasonable assumptions about a lot of things.

 

Collectively, people will visit their doctor for more than 1 hour per year. If you're suggesting that all doctors would be paid closer to or less than $100,000 a year, I think you're wrong.

This is a nice intro article on the subject. You are welcome to do more research if you have a problem with the factual claims I and this article have made.

 

Source: http://www.freenation.org/a/f12l3.html

^

lol that link looks totally unbiased ammirite? ;)

 

How the government Solved the healthcare crisis

 

Today, we are constantly being told, the United States faces a health care crisis. Medical costs are too high, and health insurance is out of reach of the poor. The cause of this crisis is never made very clear, but the cure is obvious to nearly everybody: government must step in to solve the problem.

Eighty years ago, Americans were also told that their nation was facing a health care crisis. Then, however, the complaint was that medical costs were too low, and that health insurance was too accessible. But in that era, too, government stepped forward to solve the problem. And boy, did it solve it!

In the late 19th and early 20th centuries, one of the primary sources of health care and health insurance for the working poor in Britain, Australia, and the United States was the fraternal society. Fraternal societies (called "friendly societies" in Britain and Australia) were voluntary mutual-aid associations. Their descendants survive among us today in the form of the Shriners, Elks, Masons, and similar organizations, but these no longer play the central role in American life they formerly did. As recently as 1920, over one-quarter of all adult Americans were members of fraternal societies. (The figure was still higher in Britain and Australia.) Fraternal societies were particularly popular among blacks and immigrants. (Indeed, Teddy Roosevelt's famous attack on "hyphenated Americans" was motivated in part by hostility to the immigrants' fraternal societies; he and other Progressives sought to "Americanize" immigrants by making them dependent for support on the democratic state, rather than on their own independent ethnic communities.)

The principle behind the fraternal societies was simple. A group of working-class people would form an association (or join a local branch, or "lodge," of an existing association) and pay monthly fees into the association's treasury; individual members would then be able to draw on the pooled resources in time of need. The fraternal societies thus operated as a form of self-help insurance company.

Turn-of-the-century America offered a dizzying array of fraternal societies to choose from. Some catered to a particular ethnic or religious group; others did not. Many offered entertainment and social life to their members, or engaged in community service. Some "fraternal" societies were run entirely by and for women. The kinds of services from which members could choose often varied as well, though the most commonly offered were life insurance, disability insurance, and "lodge practice."

"Lodge practice" refers to an arrangement, reminiscent of today's HMOs, whereby a particular society or lodge would contract with a doctor to provide medical care to its members. The doctor received a regular salary on a retainer basis, rather than charging per item; members would pay a yearly fee and then call on the doctor's services as needed. If medical services were found unsatisfactory, the doctor would be penalized, and the contract might not be renewed. Lodge members reportedly enjoyed the degree of customer control this system afforded them. And the tendency to overuse the physician's services was kept in check by the fraternal society's own "self-policing"; lodge members who wanted to avoid future increases in premiums were motivated to make sure that their fellow members were not abusing the system.

Most remarkable was the low cost at which these medical services were provided. At the turn of the century, the average cost of "lodge practice" to an individual member was between one and two dollars a year. A day's wage would pay for a year's worth of medical care. By contrast, the average cost of medical service on the regular market was between one and two dollars per visit. Yet licensed physicians, particularly those who did not come from "big name" medical schools, competed vigorously for lodge contracts, perhaps because of the security they offered; and this competition continued to keep costs low.

The response of the medical establishment, both in America and in Britain, was one of outrage; the institution of lodge practice was denounced in harsh language and apocalyptic tones. Such low fees, many doctors charged, were bankrupting the medical profession. Moreover, many saw it as a blow to the dignity of the profession that trained physicians should be eagerly bidding for the chance to serve as the hirelings of lower-class tradesmen. It was particularly detestable that such uneducated and socially inferior people should be permitted to set fees for the physicians' services, or to sit in judgment on professionals to determine whether their services had been satisfactory. The government, they demanded, must do something.

And so it did. In Britain, the state put an end to the "evil" of lodge practice by bringing health care under political control. Physicians' fees would now be determined by panels of trained professionals (i.e., the physicians themselves) rather than by ignorant patients. State-financed medical care edged out lodge practice; those who were being forced to pay taxes for "free" health care whether they wanted it or not had little incentive to pay extra for health care through the fraternal societies, rather than using the government care they had already paid for.

In America, it took longer for the nation's health care system to be socialized, so the medical establishment had to achieve its ends more indirectly; but the essential result was the same. Medical societies like the AMA imposed sanctions on doctors who dared to sign lodge practice contracts. This might have been less effective if such medical societies had not had access to government power; but in fact, thanks to governmental grants of privilege, they controlled the medical licensure procedure, thus ensuring that those in their disfavor would be denied the right to practice medicine.

Such licensure laws also offered the medical establishment a less overt way of combating lodge practice. It was during this period that the AMA made the requirements for medical licensure far more strict than they had previously been. Their reason, they claimed, was to raise the quality of medical care. But the result was that the number of physicians fell, competition dwindled, and medical fees rose; the vast pool of physicians bidding for lodge practice contracts had been abolished. As with any market good, artifical restrictions on supply created higher prices — a particular hardship for the working-class members of fraternal societies.

The final death blow to lodge practice was struck by the fraternal societies themselves. The National Fraternal Congress — attempting, like the AMA, to reap the benefits of cartelization — lobbied for laws decreeing a legal minimum on the rates fraternal societies could charge. Unfortunately for the lobbyists, the lobbying effort was successful; the unintended consequence was that the minimum rates laws made the services of fraternal societies no longer competitive. Thus the National Fraternal Congress' lobbying efforts, rather than creating a formidable mutual-aid cartel, simply destroyed the fraternal societies' market niche — and with it the opportunity for low-cost health care for the working poor.

Why do we have a crisis in health care costs today? Because government "solved" the last one. D

Bibliogaphy

David T. Beito. "The 'Lodge Practice Evil' Reconsidered: Medical Care Through Fraternal Societies, 1900-1930." (unpublished)

David T. Beito. "Mutual Aid for Social Welfare: The Case of American Fraternal Societies." Critical Review, Vol. 4, no. 4 (Fall 1990).

David Green. Reinventing Civil Society: The Rediscovery of Welfare Without Politics. Institute of Economic Affairs, London, 1993.

David Green. Working Class Patients and the Medical Establishment: Self-Help in Britain from the Mid-Nineteenth Century to 1948. St. Martin's Press, New York, 1985.

David Green & Lawrence Cromwell. Mutual Aid or Welfare State: Australia's Friendly Societies. Allen & Unwin, Sydney, 1984.

P. Gosden. The Friendly Societies in England, 1815-1875. Manchester University Press, Manchester, 1961.

P. Gosden. Self-Help: Voluntary Associations in the 19th Century. Batsford Press, London, 1973.

Albert Loan. "Institutional Bases of the Spontaneous Order: Surety and Assurance." Humane Studies Review, Vol. 7, no. 1, 1991/92.

Leslie Siddeley. "The Rise and Fall of Fraternal Insurance Organizations." Humane Studies Review, Vol. 7, no. 2, 1992.

S. David Young. The Rule of Experts: Occupational Licensing in America. Cato Institute, Washington, 1987.

Do markets which converge towards a natural monopoly count as barriers to entry, Donnie?

Im not sure which markets converge towards a natural monopoly so ill list a few i think you had in mind. The common theme with the ones I will list is they all require government made barriers to entry to actually have a control

 

geographic monopolies:

 

Ex 1: A limited supply of mountain passes

 

 

These dont naturally form monoplies because of the extreme cost to get total control of the market. The last guy to own the mountain pass will sell it for the cost of the monopoly itself. Cartels can form if every mountain pass owner bands together to double the rate of entry. However they are naturally unstable because if 1 guy undercuts the cartel he is significantly better off and they are significantly worse off. This works out to the same set of rules as the prisoners dilemma. Unless you had state sanctioned land grants, like the United States did with railroad companies.

 

Ex 2: Gas station in the middle of nowhere charging $10 a gallon for gas

 

If there is no competition it is because its unprofitable or barely profitable for this business anyways. High profits lead to more gas stations opening nearby. Only way a monopoly or cartel can be sustained in this case too is with state intervention.

 

Technology Monopolies:

 

Ex 1: The secret ingredient in krabby patties is [bleep].

 

These monopolies are brand loyalty ones mainly. You can find the coca-cola recipe online and it will taste like coke. Assuming its not illegal and you tried to sell it as your own product called, "Awesome Drink" people would still prefer coca-cola. This is a natural monopoly or at least substantial control of a market that isn't government driven. However if coca-cola decided to charge $500 per 2 liter bottle people would choose awesome drink. With a state they can appeal to the government to outlaw any drink that has their recipe.

 

Ex 2: So i just made this car that runs on hydrogen, is 100% safe and never needs to recharge/refule

 

These monopolies are temporary. It costs 70% of the production cost to reverse engineer a device. In that time hydrocar has a total monopoly on the market and is building brand loyalty. when elementcar reverse engineers hydrocar and puts themselves on the market they would have to lower prices to get their foot in the door. The natural result is the innovater makes bank and the consumer gets an affordable product in the end. Patent laws prevent this and create a monopoly only through state intervention.

I'm talking about markets where great economies of scale are possible. High initial production cost, marginal cost becoming smaller as production (q) increases. Say it costs a trillion dollars to start a phone company, and the marginal production cost is 10000/q. After a number of subscriptions, the first phone company can provide service for much cheaper than a new competitor, and this competitor will be unable to penetrate the market.

That article doesn't explain how you came to $64 / year.

That article doesn't explain how you came to $64 / year.

 

I made that number up that with no artificial barriers you should be able to get full coverage on health care for 1 days wage. Doctors cost, medical machinery costs which are bid up by insurance cartel/medicare much like college tuitions are bid up by subsidies to student loans, patent trolls, artificial profit margins. With the average cost of insurance per year today is $5k+ (i dont remember the national average cost). I make the guess that it would be as low as $64 a year, but certainly lower then the cartel rates we have now and much more accessible then Obamacare.

 

 

I'm talking about markets where great economies of scale are possible. High initial production cost, marginal cost becoming smaller as production (q) increases. Say it costs a trillion dollars to start a phone company, and the marginal production cost is 10000/q. After a number of subscriptions, the first phone company can provide service for much cheaper than a new competitor, and this competitor will be unable to penetrate the market.

 

economies of scale aren't a problem because of the corporation. Not corporate personhood USA but the ability for a group of investors to gather capital to launch a new business. If there is enough profit being made from the monopoly company then people would flock to the opportunity to compete.

 

Phone lines are a lot like railroads in the 1870's and high start up's are not a big barrier.

Given that a stay in an american hospital is more like $64 a half hour I think that number is completely ridiculous.

MAD isn't a deterrent to martyrs, which is why unstable regions can't have nukes or stable regions with nukes can't become unstable. Hence, the need for foreign policy.

 

Correct, but foreign policy only works with proper leverage, which Nukes provide (for the best example, see how much time have passed between WWI and WWII, and how much time have passed since then. Also, UN's predecessor.). The only reason why Cold War haven't been blown out into a full scale war between Soviets and US was because the presence of Nukes on both sides.

 

Also, I dont think very many Martyrs will invoke MAD as one of their goals, unless they either is pushed into a situation where MAD won't affect their own outcome, or if they care more about the destruction of their intended target more than the survival of their own. A martyr isn't a martyr if no one is left afterwards to benefit from his death.

I made that number up that with no artificial barriers you should be able to get full coverage on health care for 1 days wage. Doctors cost, medical machinery costs which are bid up by insurance cartel/medicare much like college tuitions are bid up by subsidies to student loans, patent trolls, artificial profit margins. With the average cost of insurance per year today is $5k+ (i dont remember the national average cost). I make the guess that it would be as low as $64 a year, but certainly lower then the cartel rates we have now and much more accessible then Obamacare.

1 days wage buys 1 year's care in 1920. The nature of care is different. When people got cancer in 1920, they died. When people get cancer today, they stay in the hospital for a month. When people broke their arm in 1920, they'd either set it or amputate it. When people break their arm today, they x-ray it, figure out if they need surgery (set it with pins), then go through physical therapy.

 

Your model is flawed even if you make grand (wrong) assumptions. Like everyone in America gets to visit a doctor for 1 hour a year (which is completely wrong), and that there are no such things as nurses, administration fees, etc. Oh, and people don't need to buy medication.

 

So with those assumptions, health care costs X amount per year means that doctors get paid X amount per hour. Guess what? Even if X was $64, that isn't enough for a doctor!

If you equated a doctor with an engineer (which requires less schooling), the engineer is already making more than $64 / hour! Engineers aren't regulated by the government like you're claiming doctors are, so where's the incentive? That means that X needs to be much higher (especially considering differences between the two professions, what it takes to be a doctor).

Donnie:

http://www.economicshelp.org/dictionary/n/natural-monopoly.html

Also, how do we deal with climate change and other such tragedies of the commons or prisonner's dilemmas without top-down rules?

I admire your guy's patience. I cannot take someone who says nuclear weapons are a first defense strategy seriously.

Yeah his military argument was ridiculous but he has a pretty decent grasp on economics. You know, there *are* economists who believe a free market is best.

We're moving off in all sorts of different tangents here. A lot of these issues could quite easily have their own space for discussion.

 

I don't think Obama will go down as a great President though, just to bring it back to the election and the presidency. He will probably go down as a President who did an alright job with a very weakened economy, but he'll also be remembered for the near total paralysis of Congress under his leadership. Maybe he'll be more assertive now he has no re-election to think about, it'll be interesting to see how that fact changes the dynamics of this stand-off.

Made a new thread on government intervention, Donnie. Everyone who was discussing that is invited. Ginger is not.