Thursday 29 November 2007

Libertarianism & pragmatism (5)

OK, time for the pragmatic answers to the last six of David Bergland's questions:

What should the government do about the rising cost of health care?
Pragmatic: Starting from where we are, the least-bad way forward must be to offer a choice of NHS treatment OR taxpayer-funded vouchers, equivalent to cost of having that operation on the NHS (or maybe a bit less?) which patients can redeem at competing providers, topping up with their own money (or out of private insurance) if they want better/faster treatment, single room/better catering, whatever.

What should government policy be toward abortion?
Pragmatic: Provided a woman can look a doctor straight in the eye and tell him that she really doesn't want the child, then she should be allowed to have an abortion, as easily and early as possible to minimise distress and to enable her to get on with her life.

What should government policy be toward nuclear power?
Pragmatic: The government should not favour any form of energy over another, whether by subsidies, tax breaks or the planning system. The subsidies that the nuclear industry gets are very well hidden and/or difficult to quantify: there are far too many unknowns, such as the remaining life of power stations; the eventual clean-up costs; the very small risk that even a minor accident could cause billions of pounds worth of damage, a risk which is borne by society at large, not the nuclear industry via insurance. There is also the angle, that nuclear power is used as a front for nuclear weapons programs (in the UK in the 1950s as much as in Iran today).

Do we need the Food and Drug Administration to ensure that medicines are safe and effective?
Pragmatic: Nope. Provided patients are told how well the drug has been tested (subject to peer review), how long the drug has been on the market and what its side effects have been so far, it is up to the patient to decide.

Do we need zoning laws to protect our communities?
Pragmatic: The local council owns parks and municipal buildings, so it is only fair that the local electorate has a say over what happens with these. Houses on estates built as a whole can be bound in to restrictive covenants that benefit the estate as a whole while restricting what individual owners can do.

By the same token, the idea must be the most efficient use of land/locations. If that means that bungalows with large gardens near train stations, businesses and other amenities are replaced with blocks of flats, then so be it. There is also the point that birds of a feather flock together, a developer would be mad to build houses on an industrial estate, or to buy expensive residential land and build a factory on it, so our strict planning laws (which are far far stricter than the concept of Zoning in the USA) are probably a Bad Thing, all-in-all.

Do we need the government to provide loans to entrepreneurs and small business?
Pragmatic: Nope. It is up to entrepreneurs to convince their families, their bank manager, stockbrokers and professional investors. These people are far better able to make a judgment and are risking their own money, not the taxpayers'.

9 comments:

Simon Fawthrop said...

Mark,

I'm not sure about your solution to the rising costs of heath care. By allowing patients to choose either, the NHS will get fewer patients and lose economies of scale, pushing up the price of individual procedures. This in turn will give more money than is needed to get their procedure done privately.

Ideally I would like to see health care provision paid for by the state with private companies bidding for the work. I don't care if private companies make a profit, its good for market discpline as it encourage others to enter, but this would be the big objection and make it impractical to implement.

Pragmatically I would like to see the Tory's internal market started again. This put the funds in the hands of GP's and was starting to work, before Labour came in and killed it off in a fit of political spite

Simon Fawthrop said...

Mark,

Whilst I agree in principle with your position on nuclear power as we do need to take in to account the total life time cost of any method of generation, the same needs to be applied to other methods as well.

When looking at coal, for example, we should consider the total cost of transport (I was reading about China's coal coming from South America and the impact on other shipping) as well as carbon capture. I say carbon capture because whether you agree with the claims about CO2 or not it looks like Governments will assist on carbon capture in new plants.

Pragmatically we need to let the market decide and make it pay the full lifetime costs of the chosen method. However this is very difficult because of the long term nature of the problem and the inability of politicians to keep their noses out of past contracts and decisions and puts off investors.

Mark Wadsworth said...

GS, the NHS has long passed the point where there are DIS-economices of scale. My model is based on German system (where I used to live) which functions pretty much along those lines.

But your version is fine, there is no reason why a large hospital should not sub-contract e.g. the maternity ward, the A&E ward and so on to competing providers.

Mark Wadsworth said...

GS, sure, we need a level playing field and no subsidies for anything in particular.

But the UK has loads of coal, it is now becoming profitable again because the price has rocketed. So we could have energy self-suffiency and jobs.

The Sage of Muswell Hill said...

One advantage of nuclear power to the UK - and by no means the only one - is the very small chance of it being run in the interests of its producers. From 1945 until the mid-80s the coal industry was run solely in the interests of the miners: if domestic coal becomes the major source of energy in the UK then the chances are that the producer-interest will again become paramount.

This might, of course, be preferable to being in hock to Putin or - as the greens would prefer - reverting to a Stone Age economy with expensive, heavily subsidised and grossly inefficient windmills littering the countryside. If it's down to a bet (and it probably is) mine would be to depend substantially on nuclear power. Unfortunately this isn't really an economic argument or one genuinely open to economic analysis since IMHO security of supply probably outweighs almost every other consideration (and the economic variables are too uncertain). The French (without much realistic alternative) have opted for security of supply provided by nuclear power and, funnily enough, there's not much argument about it there.

On another point: the last time I looked we still had nuclear weapons so the "nuclear power means atomic bombs" argument doesn't apply to the UK. Also, as I recall the 50s, we never pretended about our ambition to have nuclear weapons. The nuclear energy industry was not a "front", it was crucial (and admitted at the time) to our wish to be a nuclear power. There is no "angle", except the CND one, in conflating the British atomic bomb with Iran's nuclear ambitions.

Scott Freeman said...

"By allowing patients to choose either, the NHS will get fewer patients and lose economies of scale"

If the NHS benefits from massive economies of scale then it will be the cheapest option and consumers will favour it. If it doesn't, or if it is acting like the monopolist it is, they will favour other, cheaper and more efficient sources of healthcare.

Mark,

Not to disagree with any of the points you've made during this series of posts (I have on some, but I've always said in comments if it's significant and, with the exception of gun control, they've never been huge) but I'm not so sure about the whole pragmatic thing. The reason I say that is that it really depends on what you believe. A left winger is going to say that he is pragmatic and that the pragmatic thing to do is to use government to create an equitable society etc because that makes everyone happier and richer etc. A libertarian is going to say he is pragmatic and that the pragmatic thing to do is to keep government out of the economy because it will make everyone happier and richer etc. I don't think there's really a significant number of areas where people do not believe they are pragmatic. I admit that there's a couple where I'm not, but on the whole I'd describe myself as pragmatic if pressed, but then I'm sure most people would. Few people would say they are driven by an illogical ideology that will make everyone worse off but is still right because of their moral beliefs. Right wingers don't just say ban porn because it's immoral, they say ban it because it corrupts people and makes them rape each other and spread diseases etc. They reckon that's pragmatic but I think it's bullshit, but they think the opposite!

Just sayin' :P

Mark Wadsworth said...

U, re coal, what went wrong was it was a nationalised industry, with falling prices and intransigent trade unions. If we ensure that coal mines are owned by three or four competing providers, and keep the unions at bay, then there is no fundamental reason why coal should be any less competitive/efficient that our oil industry.

SC, what is truly pragmatic thinking? Taking a simple example, aid to Africa, in theory this is a Good Thing (and we'd all be delighted if they pulled themselves out of poverty), BUT in practice aid payments have achieved nothing (and quite possibly made things worse). Pragmatism is about learning from real life examples, and not about throwing good money after bad.

Re porn, if somebody can show that there is more rape etc in 'liberal' countries like Denmark, Holland, then fine, this is maybe reason to restrict it. Else not.

Pragmatism is, basically, a complete absence of beliefs, apart from a) the fact that you can't change human nature and b) you CAN learn from real life.

The Sage of Muswell Hill said...

MW

Alright then nuclear power and coal plus as many realistic alternative energy sources (eg tidal and hydro-electric) as we can scrape together. But please no greenie crap (eg windmills and biomass) and an end to using valuable natural gas to fire up power stations.

Mark Wadsworth said...

U, spot on, esp. re gas.

I don't actaully mind 'greenie crap' per se, as long as it's not subsidised 'greenie crap'. If something makes economic sense AND reduces pollution, then so much the better AFAICS.