Conservative contradictions on immigration

My position on immigration is simple, and in line with classical liberal tradition: anyone who wants to immigrate into the United States for the purpose of pursuing a legitimate line of work and making a living should be welcome. In a free society, the immigration process would simply involve passing through a checkpoint, verifying your id, and allowing the government to keep some documentation of your presence here. (Probably there should be some fee to be paid for these government services.) There would be no restrictions on the number of immigrants allowed to come into the country.

Current law is very different, of course. We have restrictions on the number of immigrants allowed to enter legally on any given year. Conservatives applaud this, and in debates I've heard the likes of Mitt Romney say that would-be immigrants ought to "get in line" and wait their turn.

Whatever their arguments may be (they are probably based on myths) I think it's fair to simply point out the bold contradictions between the conservative position on immigration and other supposedly "conservative" ideas. Here are two big ones.

First, restricting the number of immigrants is an inherently socialist idea, in the true, original sense of the word. "Socialism" in its classical sense means allowing the government to have control of the means of production in a society. Very few people believe in this anymore as a consistent political philosophy, yet on particular issues we sometimes allow ourselves to move in a socialist direction almost without realizing it.

Such is the case on immigration. I hope it does not seem crass to think of people as a "means of production," but in fact people are the most essential means of production. We usually think of production being driven by technology, but the study of economics shows that even with technological advancement, we simply could not achieve the kind of market efficiency we now have without the proper division of labor among people. The most important kind of capital is human capital: the various skills, ideas, and ambitions that are dispersed throughout members of the global population.

So when conservatives argue that the government should be allowed to restrict the number of people who come into our country, they are in fact saying the same thing as a socialist who argues that the government should have control over capital investment.

(On the other hand, for all conservatives' talk about "free markets," conservative opposition to real free market policies is nothing new. See e.g. their historic opposition to ending corn subsidies, their support for trade barriers, and so on.)

Second, moving away from the economics, I propose to compare immigration with no less a controversial topic as abortion.

Just imagine if the government declared that it would set an annual limit on the number of children allowed to be born in America each year. Anyone, therefore, who failed to get a license to bear children would be forbidden to have children, and any woman who got pregnant without a license would be forced to abort.


Does that sound extreme? I don't see how it's any more extreme than a Republican saying that we should put up an electric fence on the Mexican border, or that we should be "shooting these immigrants like feral hogs."

But fine, let's say that these ideas really are too extreme for the average conservative. Let's consider instead the policy of deporting all illegal immigrants. To what may we compare this policy? It is like demanding that every woman who gets pregnant without a license be forced to send her child to be adopted in another country. Is this policy any more acceptable?

Consider the following arguments and try to tell whether they apply to immigration or to abortion: "What if we can't afford them? Shouldn't we take care of people who are already here? They're a lot different from us, after all." We cannot possibly expect people to take seriously the humanity of a child in the womb, when we are unwilling to take seriously the humanity of a person seeking a new life in this country.

(Let me add here a remark regarding those who are in favor of abortion rights. I hope none of what I said will be taken as saying that proponents of abortion rights are akin to monsters who want to slaughter immigrants. I am simply offering a comparison which I think should be particularly unnerving to conservatives, given their usual alignments. That said, I am pro-life, and I do think abortion is disturbing, even when left to a woman's "choice." But I think we can all agree that forced abortion would be a monstrous policy, and I think that many conservative proposals on immigration are similarly monstrous.)

Conservatives stress that this issue is about the rule of law, and that legal immigration should be applauded while illegal immigration is denounced. But the rule of law is not simply about people following laws. "An unjust law is no law at all." No, the rule of law is about treating all people equally according to the same moral standard. There is no moral reason to deny any individual access to a new life in this great country, provided they agree to live peaceably with their neighbors.

If conservatives care about preserving the traditions that have made us great, they ought to consider that the greatest of all such traditions is that of freedom and justice for all people. This tradition, sadly, is always in danger of being opposed by the very people who say they love it the most.

The Tea Party prosperity gospel

Here's how I see recent political events. The "Tea Party" Republicans, reinforced by the media support of Fox News, are kind of like "health-and-wealth" prosperity gospel Christians, who proclaim that if you just have enough faith, God will reward you with material well-being. You can hear it in the Republican debates when candidates confidently proclaim that they can "create" more jobs by keeping taxes low and reducing spending. One would think that this gospel would fall apart if economic growth stagnated under austerity measures; but as with the actual prosperity gospel, this message is backed by a religious fervor that doesn't die easily. That's why conservative politicians are being encouraged to "stand their ground" and not compromise on spending cuts and tax breaks. (Of course, cutting any part of the half trillion dollars per year we spend on foreign wars is out of the question.)

It is not surprising that some people would react against this by advocating a more scientific approach. The Keynesian economists come along with a way we can steer our way out of this economic meltdown, equipped with mathematical formulas and everything. They insist we have to "do something" in order to get out of this mess. Free markets left on their own will always result in this kind of disaster. Faith is worthless. We have to take control ourselves. More spending. More deficit. More incentives. We can't wait for private investment to start up again. After all, in the long run, we're all dead.

In such circumstances the honest advocates of free market institutions must come across as austere old clerics who insist that nothing good comes without suffering. The true defense of free trade has unfortunately very little to do with its short term success; there is absolutely no reason to believe that a free market must cause growth whenever we want it to. There is, on the other hand, enormous evidence from a broad historical perspective that the institutions vital to a free market cause, in the long run, the greatest prosperity. If we live only for the short run, we are bound to turn either to blind faith or to scientific rationalism: our short term fears can only be alleviated, it seems, either by the prosperity gospel or by atheism. (I am being metaphorical here, of course; but I sometimes wonder how much this has to do with actual theology.)

The only way to convince the public that we must not succumb to our short term fears is by demonstrating that the costs of alleviating our short term pain is just too high. An alcoholic may beg you for more liquor to alleviate his hangover, yet even though he is truly in pain, you will not give it to him. You know the booze will ultimately kill him.

If we're going to get out of this stagnation, we're going to have to feel some pain. There is no way government can decrease spending without causing a temporary contraction. Our markets and financial institutions have simply been depending for too long on government backing for cutting loose to have zero effect. We have to be willing to accept these temporary negative effects in favor of long term gains. We cannot live only for the short term.

One final remark. There is no reason why the poor should have to suffer most during this crisis. If we really want the rich to pay their fair share, maybe we should start by liquidating their failed assets (e.g. General Motors) and giving some of that money to the poor. This, after all, would increase consumption, and isn't that what Keynesians want, anyway?

What about the minimum wage?

Nothing says "I'm a cold-hearted capitalist" like saying the minimum wage should be abolished.

...But it really should.

There is a simple, sound economic argument against the minimum wage, and those who reject the argument, no matter how intelligent they might be, are really being quite irrational. That is because we let our instincts get the best of us. We ask ourselves, isn't a worker better off if he is paid enough to live on? The answer to this question is obviously "yes." But that isn't the question. The question is, how does a higher wage for some workers affect others?

The clear, irrefutable wisdom of the economists is this: a minimum wage will cause overall low-wage employment to go down. This hurts unskilled workers--not the workers who actually are working, mind you, but only the workers who can't find work because it isn't available to them.

The video below is from Milton Friedman's "Free to Choose" series (the link is here), and it is primarily about labor unions, but it also features a vigorous debate (second half of the video) about the minimum wage:

As Walter Williams points out in the video, the minimum wage law is really a law that says, "If you are unable to produce labor worth $X an hour, you are not allowed to work." It is difficult for the average person to see a minimum wage law as a violation of workers' rights, but in fact it is. It is, unfortunately, a belief in the mythical power of words that leads us to think that declaring a minimum wage actually improves the lot of poor people. As Milton Friedman points out, why wouldn't we just declare the minimum wage to be $200 an hour?

However, before you conclude that I really am, after all, a cold-hearted capitalist, consider my alternative. Instead of a minimum wage, why not simply subsidize wages using a moderate wealth redistribution plan? If the wages of a laborer really are too low to be considered living wages, the best plan is to subsidize those laborers until they can find better work.

Under this plan, instead of a minimum wage, there would be a "target wage." If workers happened to have wages below the target wage, the government would pay a certain proportion of the difference. For instance, the federal minimum wage is currently $7.25 an hour. We would need to make the target wage a little higher for my scheme to work, so let's make the target wage about $10 an hour, and have the government pay 50% of the difference between a person's actual wage and this target wage. So if a person got hired at, say, $4 an hour, he would in fact be paid $7 an hour once the subsidy is included. Even a person whose wages were desperately low would still get at least $5 an hour with the subsidy.

This scheme would mean two things: (1) workers would probably have more opportunities to find a job, any job, and begin acquiring skills, and (2) workers would have greater freedom to choose between employers based on factors other than wages--perhaps someone would rather start working at a small business for lower wages than work at Wal-Mart. There is a third benefit which goes to us as a society: the taxpayers would be subsidizing productivity. Given that you usually get more of anything you subsidize, isn't it a positive thing to subsidize employment rather than unemployment?

Overall, this plan would be moderately progressive, taking a little bit from the rich to give to the poor; but it would also be a little more consistent with Econ 101 and with the principle of freedom of contract between employer and employee.

Consumer expectations

Here is episode 7 of Milton Friedman's series "Free to Choose." In it Friedman argues for ending the power of government institutions to control which products we are allowed to buy. He argues the consumer self-regulation is a more powerful, non-coercive way to provide goods in such a way that properly balances safety with value.

Fast forward to the discussion at the end of the video. One of the problems that I think is really worth thinking about is mentioned at the end by a representative of automobile safety regulators. She says that now that cars have been subject to certain regulations for so long, consumers have a certain standard, anything less than which would not be tolerated. That is, if government were to suspend these regulations, producers would probably not depart from them, anyway, because customers would still demand them.

I'm inclined to agree with this analysis. Indeed I hesitate to take either her side or Friedman's in the debate, because I'm not sure we're really working with the right principles. Friedman wants to make the point that no one has the right to tell consumers what to buy. But he also seems to want to make empirical claims about the results of a free market. Can he have both? It appears to me that if you use a certain preset target as an empirical measure of market effectiveness, then you've implicitly rejected the normative principle about personal rights.

Indeed, the fundamental argument for a free market is that it allows society as a whole to unconsciously calculate the relative value of infinitely numerous objectives. Safety and the preservation of life are only two objectives out of thousands that a person has. The free market is supposed to coordinate the thousands of interests of every individual with one another, allowing them all to flourish simultaneously to the maximum possible extent. Obviously not all objectives can be reached equally well, or even at all.

But if there are certain objectives embedded into the public consciousness, especially regarding the preservation of human life, what is the possible response? It seems entirely possible that coercive power will often be taken not as coercive, but as a breath of fresh air, if you will, or a sort of wake up call reminding us of something we wish we had thought of all along. Regulations on automobiles will cause consumers to realize, yes, we really do want seat belts and air bags in all of our vehicles. We really were so foolish not to have demanded this earlier. Once the idea is implanted into the public consciousness, it completely changes the market.

It would be interest to run a sort of experiment on the public at large. Introduce a regulation on some business, say on automobiles, but don't let anyone in the public know about it. Then see how many consumers object to it: for instance, how many would demand the car company sell them a cheaper vehicle with less gas mileage? Now then, wait a few years until the regulation becomes totally standard. Then get rid of the regulation, and just see what happens. It would be fascinating to see whether consumer expectations could be so altered by coercive power that their "individual preferences" would actually conform to a forced standard.

If that were the case, and I suspect in many ways this is undeniably the case, it would make the case for a free enterprise system much more difficult on empirical grounds. If the system is designed to coordinate the various interests of individuals, it becomes much harder to recognize success when in fact it is so easy to change the interests of individuals using subtly coercive means.

I conclude, then, with a frank admission: I simply do not know how to defend liberty. I am actually rather sure that personal autonomy is, to a greater extent than we will admit, an illusion. But I am even more certain that we are arrogant and foolish to think that there is any fully justified basis on which "we as a society" can cause greater prosperity through comprehensive schemes, such as regulations on industry. In general, I suppose I am just a pessimist with respect to human reason. The more we learn, the more we ought to realize we don't know.

Why shouldn't government be big?

Conservatives and libertarians often complain that government is "too big." Part of what they mean by this is that the government is involved in too many things, and this is detrimental to society because the government is less efficient in doing these things than the private sector.

Stated in this way, this mantra is actually an empirical claim which may be false. How do we know the government is less efficient than the private sector in everything that it does? Very often I suspect it is, but sometimes perhaps it isn't. And even if it is less efficient, the underlying principle really has not been addressed: why does the government turn out to be inefficient?

More importantly the real question is, can the solution really be for the government to simply stop doing the things it is doing? This seems like a regressive step, an admission of defeat, a blithe acceptance that maybe some problems just can't be solved. This is the kind of thinking that makes progressives' blood boil.

And rightfully so. The most aggravating thing I've found about conservatives is that often they are in fact conservative in the negative sense: they often want to call "not problems" things that are problems, and rather than optimistically seeking solutions they simply wish to be left alone. I'll be the first to complain about Obama's health care plan, but where were the conservative Republicans when they had a chance to address the problems of health care themselves? Why did they not address immigration reform? And why is it that under their watch no one spotted any of the systemic economic problems that led to the current recession? If the Left has recently had many bad ideas, the Right has simply had no ideas, which is in fact worse during times of crisis, when some idea, even a bad one, will move to fill the vacuum.

So if we're to avoid this kind of "do nothing" attitude, what are we to do about big government? Is it a problem? What exactly is the reason we are so upset by it? How do we fix that?

Joel Salatin on innovation

From Chapter 9, "Best Management Practices," in Everything I Want to Do Is Illegal:

"You see, the government can never be creative, because by definition it must satisfy 51 percent of the population. And the majority is never on the cutting edge of innovation. Any study of innovation reveals a common thread: it's really lonely out there at the breakthrough point. The early discoverers do not have majority backing; they receive sneers and catcalls from the majority."

I wish I had time to discuss this whole chapter tonight, but it cannot be.

Every chapter in this book seems to leave me with that feeling. So I'll just give a quick recommendation: read this book.

I mean it. Read this book.

Markets, Immigration, and Education

A friend pointed me to this story about foreign teachers being forced to leave the country, which really ties together well three very important issues.

Gelmer Suganob has been teaching special education classes for four years in Prince Georges County, a suburban district near Washington, DC. The Filipino teacher started an autism program in a local middle school and received glowing job reports.

He’s one of thousands of foreign teachers who have been filling the ranks of US classrooms for the past few years, spurred by a shortage of American teachers and new testing requirements for math, science and special education. Like Suganob, many of these teachers come from the Philippines. They’re hired by recruiting companies in their home country and pay big fees to land lucrative jobs in the US.

But despite his stellar reviews, Suganob recently got a double dose of bad news. He received a call telling him that he had overstayed his visa, and that he no longer had a job.

Some of the comments on this story were amusing. "Teaching shortage?" people ask. How can there be a teaching shortage with some teachers losing their jobs? Note the specializations mentioned: "math, science and special education." Surely Americans aren't naive enough to think we have plenty of those to go around. Seriously, do people even know why our public education is so notoriously bad?

Let me break this down. There are three key issues at stake here:

1. A man who's done nothing wrong is now being forced to leave our country and work somewhere else because of an ineffective system of paperwork. In short, a man's right to his own labor is being violated.
2. Our irrational fear of immigration, based almost entirely on issues which have absolutely nothing to do with teachers arriving from the Philippines, has created an environment in which our laws prohibit the market from working to resolve important issues, such as the education of our children (particularly disadvantaged ones). In short, immigration policy is economic policy.
3. Did I mention this hurts our school system?

And this is why, whenever I hear some ridiculous conservative speech designed to arouse anti-immigrant sentiment, I just cringe and wonder how people who profess faith in the "free market" can be so profoundly ignorant about these important issues. I can't say it any clearer than this: belief in the free market demands belief in an open immigration system. I'm not saying have no borders. I'm simply saying, in general our tendency should be to let people in and do what they want. Everyone benefits from this. No one is "stealing jobs." Quite the opposite, if you look at the whole. Greater efficiency in one area of the market means greater efficiency for everyone.

This is why, when we think about the issue of immigration, these are the types of cases we need to keep in mind, not some fear-mongering about drug dealers on the Mexican border.

Bottom-up development: a case study from India

Via Alex Tabarrok: there is an interesting story at the NYT about India's city of Gurgaon, a city with more or less no local government.

Gurgaon was widely regarded as an economic wasteland. In 1979, the state of Haryana created Gurgaon by dividing a longstanding political district on the outskirts of New Delhi. One half would revolve around the city of Faridabad, which had an active municipal government, direct rail access to the capital, fertile farmland and a strong industrial base. The other half, Gurgaon, had rocky soil, no local government, no railway link and almost no industrial base.

As an economic competition, it seemed an unfair fight. And it has been: Gurgaon has won, easily. Faridabad has struggled to catch India’s modernization wave, while Gurgaon’s disadvantages turned out to be advantages, none more important, initially, than the absence of a districtwide government, which meant less red tape capable of choking development.

Gurgaon has no publicly provided “functioning citywide sewer or drainage system; reliable electricity or water; public sidewalks, adequate parking, decent roads or any citywide system of public transportation.” Yet Gurgaon is a magnet for “India’s best-educated, English-speaking young professionals,” it has 26 shopping malls, seven golf courses, apartment towers, a sports stadium, five-star hotels and “a futuristic commercial hub called Cyber City [that] houses many of the world’s most respected corporations.” According to one survey, Gurgaon is India’s best city to work and live. So how does Gurgaon thrive? It thrives because in the absence of government the private sector has stepped in to provide transportation, utilities, security and more:

Read the rest of Tabarrok's post here. Read the NYT article here. Whatever your assessment, this makes a great modern day case study in unplanned economic development.

Planning and competition

Kevin Drum makes what in my mind is a very basic error regarding economics. In critiquing David Brooks' assessment of health care, he says the following:

Top-down control has never worked in all of human history? Seriously? Is the Catholic Church a successful endeavor? How about the U.S. Army? Or the interstate highway system? Or every corporation in America?

Even as large as the U. S. Army or any major corporation may be, each comprises a relatively small group of people relative to the society at large. As many different objectives as a large corporation may have, it doesn't even come close to the vast number of goals and desires distributed among a whole country. In terms of economic theory, is a very basic distinction. A large corporation may be structured in a top-down manner--and it probably should be--but it is a gross non sequitur to infer that an entire industry, e.g. health care, should be forced into a single top-down enterprise.

What about the interstate highway system? Or the Catholic Church? In both of these cases, all we can say is that a top-down approach has resulted in something massive; I think it's far from evident that the result in either case has been optimal. And if Drum wants to use a religious example like the authority of the pope, I dare him to apply his principles equally and recommend we have a State-sponsored Church. Those who recommend we nationalize health care (or even health insurance) are saying nothing less presumptuous than those who advocate a State-sponsored religion (which would, I wager, be too European even for liberals).

Planning plus competition equals unfair competition. As long as the government has certain arbitrary powers over the allotment of resources, those who have the ear of government will be able to secure their own well-being without playing according to the rules. It might sound reasonable to suggest that "somewhere in between" is the wisest approach. But when we strip the word "planning" of its outward form and call it what it is--arbitrary power--we see that no amount of it is justified.

Free Market Cynicism

Kevin Drum over at Mother Jones writes about "The Free Market and the Culture of Victimization," saying,

I'd peg the number of genuine believers in free market capitalism at about 1% of the population. Maybe. The rest of us just want whatever policies benefit us the most. And the richer you are, the more money you make from policies that benefit you. Among the rich and the corporate elite, true believers in the free market probably number about 0%.

For all I know, this could be absolutely right. With all the political rhetoric that gets batted around, you'd think that our country is constantly battling between socialism and capitalism. But when I look at the reality of the situation, it seems that what we really have is a parasitic/apathetic system, in which people mooch as much as they can off the government, and if they can't get anything, they stop caring. Guess which ones vote.

Another Keynes vs. Hayek video

Here's a sequel to the first Keynes vs. Hayek rap anthem.



(Here's the link: http://www.youtube.com/watch?v=GTQnarzmTOc&feature=player_embedded)

These guys are good; I don't care what this guy says.

More on health care and bureaucracy

Dr. Donald P. Condit writes in The Detroit News:

The sugar-coated rhetoric from HHS cannot disguise the bad medicine in this part of the Affordable Care Act, which intends to bureaucratically cut as much as $960 million in Medicare spending over three years. This Obamacare prescription threatens patients, the physicians who care for them, and the common good.

The only clear winners are the consultants and lawyers busy trying to decipher this 429-page tome.

Medicare beneficiaries will be "assigned" to 5,000 patient-minimum organizations to coordinate their care. While HHS Secretary Kathleen Sebelius talks about improvement in care, the politically poisonous truth is that Medicare is going broke and ACOs are designed to save money.

The words "rationing" or "treatment denial" or "withholding care" are not part of her press release, but reading the regulations reveals intentions to "share savings" with those who fulfill, or "penalize" others who fall short of, the administration's objectives. The administration's talking points include politically palatable words that emphasize quality improvement and care enhancement when the real objective is cost control by a utilitarian calculus.

Read the rest here.

Markets and Rationing

I just can't accept Andrew Sullivan's argument concerning rationing: "At some point, then, we have to ration." Rationing is something done by an arbitrator of some kind. This means the arbitrator himself apportions the resources; the amount you get depends finally on the arbitrator.

Markets simply don't ration. To speak that way is nothing other than a modern form of animism, attributing personality to something which is impersonal and abstract. Metaphors like "hidden death panels" are particularly insidious, since they to make equivalent two things which are decidedly opposite one another: markets governed by the rule of law and rationing governed by a bureaucracy. Perhaps Hayek was right when, particularly in The Fatal Conceit, he argued that the human tendency toward animism is an ever-present obstacle to perfecting the free society. This tendency, it seems, is as vibrant among the intelligentsia as it is among the average person.

As rationalists we tend to act as if the choice is between smart, benevolent people doing their best to give everyone a fair share and a cold, impersonal system which amounts to nothing more than "survival of the fittest." This dichotomy is built on the presumption that our reason is sufficient to solve the economic problem of scarcity. Completely ignored is the problem of information. We tend to think that all the knowledge needed to run things is theoretical. In the health care debate, people talk as if the only thing we need to do is more research in laboratories to try to make health care technology even better. This is not the case. The health care problem is the same as any other economic problem: trying to match the needs of consumers with the resources available. This problem is what I call a higher-order problem, in that no one human mind or even team of minds can solve it (not even in theory, I would argue). This is a consequence of the fact that there does not exist a complete list of values by which to match resources to individuals.

Thus we would like to have a mechanism by which to allow some spontaneous order, which tends to match consumers to their needs while overcoming the problem of information. This is what a free market does. It is a decentralized solution; no arbitrator need make any decisions about who gets what. The only need for government is to make sure everyone follows the rules of the game (which is certainly not always the case today!) and perhaps to provide a uniform base level of insurance to all participants (provided the resources exist). A base level insurance, in the case of health care, could be some sort of catastrophe insurance, or perhaps a certain dollar amount which may be spent on medical treatment. Nothing like the plan which exists today, which gives the government ever more increasing power over which kinds of health insurance options we have, could possibly be called a free market solution.

I don't know whether free markets are the best at solving problems the way we wish them to be solved. However, I also understand that the way we wish a certain problem to be solved now is necessarily based on the knowledge which we currently possess, and there is no reason to suppose that this knowledge is really sufficient to make long-term decisions about how the economic problem of health care will be solved. What we need, rather, is a solution which is itself dynamic, which can grow and adjust to coming changes, which will naturally adapt itself to changing and perhaps unknown needs. This is something only free markets can do.

It isn't a matter of "trusting" free markets, to return to my original theme. It is a matter of understanding them. Any talk about "market rationing" is simply a philosophical and/or scientific misunderstanding, and it obscures right thinking about economics. True, we may prefer to trust governments to ration rather than allowing markets to provide spontaneous order. And true, we may after all believe that governments have enough information to properly distribute health care to individuals. But that is a choice based on a remarkable amount of faith, of which I for one am skeptical.

Privatizing health care

I've been reading Tyler Cowen on Medicare, as well as some of the responses to him. Ezra Klein's recent response is especially effective:

Tyler Cowen and Matt Yglesias are going back and forth on the appeal of converting Medicare into a straight cash grant. This isn’t the Ryan plan they’re talking about. They mean handing seniors cash. As Matt writes, “If grandma wants to spend that money at the hospital, good for her. If she wants to spend it on heroin or a television, then that’s good for her, too.” Cowen concurs. “What would terrify the left,” he says, “is the likelihood that genuine privatized cash would actually win that competition.”

This has a lot of wonkish allure, particularly if you think, as I do and Matt does and Tyler does, that medical care is overvalued. But it misses the problem that leads to universal health-insurance systems: As a society, we are not willing to let people die painfully in the street, even if they have previously made decisions that would lead to that outcome. In reality, what terrifies all of us is what happens after someone takes the cash and then gets sick.

That's really it. And it's why I really waver on this issue. I believe in the absolute value of human life--one human life is not more valuable than another. But reality doesn't give us the option to put that into practice: preserving lives always comes at a cost, some lives more than others. Discerning the most life-affirming health care system (or economic system more generally) is tricky precisely because we don't know what it means to affirm the value of life in a world that generally isn't conducive to immortality.

But I still hesitate to accept Klein's conclusion, because I think there is a legitimate slippery slope argument to be made. If we're unwilling to hold individuals responsible for their decisions about health care, why are we willing to hold them responsible for other economic choices, like what food to buy or what career path to take? Since both of these choices really do affect long-run health, it seems only natural that a society determined to guarantee a certain quality of health care would eventually force its will in these common affairs, as well. After all, this may be the only way we know to lower health care costs while preserving health care entitlements.

To me the argument isn't solely about individual liberty, nor is it just about compassion. It's also about how we learn as a society. A society that respects free individual behavior doesn't necessarily do so because it thinks all people are entitled to be left alone, but rather because it favors experimentation and spontaneous innovation. Personal responsibility creates that sense of necessity which is the mother of invention. Who knows what kind of creative health care solutions people will come up with if they're free to use their money however they wish?

Such freedom comes at a cost, of course, but it is a cost we can measure. The problem with the alternative--individual mandates in health care--is that we can't measure the cost. We simply don't know what new ideas might have been discovered in a free system. In the long run, I would argue, what we don't know yet is more valuable than what we do know. This, to me, is the best argument for a free, privatized health care system.

On the other hand, I don't mind if we continue to waffle on the issue; being "too compassionate" is not such a heinous crime, after all.

A new word for capitalism?

In The Fatal Conceit, Hayek tries to explain how the "extended order" came into being, i.e. the global civilization in which we now live. It is fair to say that, according to Hayek, capitalism is what has allowed the extended order to come into being and continue to exist. Without the spontaneous processes of cultural evolution (see my previous blog post on the matter) human life would never be able to thrive in such large groups.

However, Hayek had trouble with the word "capitalism."

Life needs no justification

The Fatal Conceit is Hayek's final manifesto in defense of capitalism and against socialism. In a fascinating sense, however, it is not a political but a scientific argument. Hayek's thesis is that our moral traditions, which have enabled the survival of as many humans as now exist, have evolved through a process of "cultural evolution" and are not, and never could be, the product of deliberate human reason. This requires some explanation.

Ken Cuccinelli's lawsuit against Obamacare

Ken Cuccinelli, the attorney general of Virginia, just won his case before a federal judge in Richmond on Monday. On Thursday he published an editorial insisting that the case go quickly to the Supreme Court. I think he makes an appropriate argument against the health care bill. Regardless of anything else Cuccinelli might say or do, I have to support him, at least in principle, in this argument:

The health-care law sacrifices the liberty of Americans and abandons the Constitution that protects that liberty. The power Congress claims it has to create the mandate and penalty has no principled limits: If the federal government can order a citizen to purchase a private product such as health insurance in the name of public policy, it can order us to buy anything.

On traffic lights and economics

Suppose you are sitting behind a long line of cars at a traffic light, and the light turns green. Despite the light turning green, the car in front of you does not move for half a minute. Finally, you are free to drive, yet you are hardly able to move forward before the light is red once more. The light changes again, and you go through the same cycle. By now you'll be late for your appointment. You want to scream at all the cars who were in front of you and wouldn't move.

You think to yourself, "Why is it that when the light turns green, we don't move?" You decide that it would be much more logical if as soon as the light turned green, everyone at the light started moving simultaneously. This would make getting cars through the light much more efficient. Then you wouldn't be late. Driving would be so much better if everyone followed this simple rule that you are convinced they should pass a law requiring it. After all, it would help everyone, in the long run.

How "capitalism" works around here

The Freeman tipped me off to a story this week that has stirred in me an even deeper moral outrage against government interventionism. The headline reads:

McDonald's, 29 other firms get health care coverage waivers

Nearly a million workers won't get a consumer protection in the U.S. health reform law meant to cap insurance costs because the government exempted their employers.

Thirty companies and organizations, including McDonald's (MCD) and Jack in the Box (JACK), won't be required to raise the minimum annual benefit included in low-cost health plans, which are often used to cover part-time or low-wage employees.

The Department of Health and Human Services, which provided a list of exemptions, said it granted waivers in late September so workers with such plans wouldn't lose coverage from employers who might choose instead to drop health insurance altogether.

Without waivers, companies would have had to provide a minimum of $750,000 in coverage next year, increasing to $1.25 million in 2012, $2 million in 2013 and unlimited in 2014.

Adam Smith on the role of government

Sometimes people wonder, what do libertarians believe government should do? It always sounds as if they don't want the government to get involved at all!

Well, I don't know about libertarians, but Adam Smith had a pretty clear vision of what government should, and should not, do. From Wealth of Nations, the end of Book IV:

It is thus that every system which endeavours, either, by extraordinary encouragements, to draw towards a particular species of industry a greater share of the capital of the society than what would naturally go to it; or, by extraordinary restraints, to force from a particular species of industry some share of the capital which would otherwise be employed in it; is in reality subversive of the great purpose which it means to promote. It retards, instead of accelerating, the progress of the society towards real wealth and greatness: and diminishes, instead of increasing, the real value of the annual produce of its land and labour.

All systems either of preference or of restraint, therefore, being thus completely taken away, the obvious and simple system of natural liberty establishes itself of its own accord. Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest his own way, and to bring both his industry and capital into competition with those of any other man, or order of men. The sovereign is completely discharged from a duty, in the attempting to perform which he must always be exposed to innumerable delusions, and for the proper performance of which no human wisdom or knowledge could ever be sufficient; the duty of superintending the industry of private people, and of directing it towards the employments most suitable to the interest of the society. According to the system of natural liberty, the sovereign has only three duties to attend to; three duties of great importance, indeed, but plain and intelligible to common understandings; first, the duty of protecting the society from the violence and invasion of other independent societies; secondly, the duty of protecting, as far as possible, every member of the society from the injustice or oppression of every other member of it, or the duty of establishing an exact administration of justice; and, thirdly, the duty of erecting and maintaining certain public works and certain public institutions, which it can never be for the interest of any individual, or small number of individuals, to erect and maintain; because the profit could never repay the expence to any individual or small number of individuals, though it may frequently do much more than repay it to a great society.

A remarkably concise yet robust statement of political philosophy, if you ask me.