You are correct the speaker just wanted to say the truth but held himself to just the line that take home pay isn’t as high as other countries.

The second best part is that they brag about their union membership. I have never seen this before. Unions are a huge impediment to self improvement.

And reason they need outsiders is: Baby boomers are dying off. This is BS. They have stiffled their country so much that people are refusing to have children.

Stop it with the senseless libertarian ranting. At least everyone has health insurance that actually works. Why is it impossible for people to give some credit. People are not having children because it has been proved that the more educated the mother is, the less children they will have. In a world with increasing problems of overpopulation this is not a bad thing.

“At least everyone has health insurance that actually works.”

No they don’t.

Moises is correct- overpopulation is a problem. The European states have decided to solve it through cultural suicide. In a hundred years, our descendents will ask, “Finland? What country was that?”

Nick, you are forgetting Hanoi Rocks. How could you?

http://www.youtube.com/watch?v=wMe–kKuPyo

I think they left Finland for cultural reasons…and later arrived in London. Which is funny, because many successful rock bands left England to become tax exiles.

“At least everyone has health insurance that actually works.”

Six month lines to dental care, anyone? And no money for private dentist, because taxes have eaten it all up? And even if you can afford the private dentist, you still feel like a sucker, since you’re effectively paying twice for the service. That’s the Finnish way: you can either pay more money to get the service you need or spend an eternity waiting for the service that you’ve already paid for in the taxes.

Here is a case in point: My 67-year-old father-in-law had to wait for a year for a hip operation, during which time his discs collapsed partially, so now that the hip is fine, everything else from ankles to elbows is giving trouble. He partially lost sight from his right eye six months ago (intra-ocular hematoma and cataract), and he’s _still_ waiting for the urgent care that the hematoma would have required six months ago. I get the feeling that the people in the health care system are just waiting for him to keel over.

I asked him if he could afford private care, had he been paying even 20% less taxes over his working life, at which point the conversation turned a bit awkward and he left soon afterwards. The reason must be that I’m challenging the system in which he’s so invested in, and it makes him uncomfortable.

That is one strange video. It struck me as a propaganda film for a dystopian novel. Or maybe it looked like a Monty Python skit. Actually, reading between the lines, it could have been made by a free market group that is trying to point to the errors of socialism. That line about how everything works and how people get by just fine — wow, very odd. And the cradle-to-grave thing sounded like a mess. And then it ends up in the end that people are leaving and not reproducing and the whole thing is falling apart apparently. What a devastating indictment!

Sorry magnus I do know the calculation problem.

It is a pity you selectively quoted from my post because you would find if YOU actually learned to read that I advocated private health markets with minimal help for the poor to pay for their premiums.

I did not advocate government run healthcare at all.

You wasted 368 words for nothng.

Another 284 words with no apparent message.

It wasn’t a contradiction. You are a novice at rhetoric aren’t you? Read in it’s entirety my post presents the situation in NZ and a way for that government to solve it (under their current system) and then I go on to present my much different solution to that problem.

Only reading the start of peoples posts is not going to get you very far. I advocated government pitching in on peoples insurance premiums. This can be as simple as someone submitting an online form that can be cross-referenced to their taxable earnings.

Someone like you looking for problems will always find them. Oh! LOOK – the sky is falling!!! RRRuuuuuun hahaha

Another 284 words with no apparent message.

Do you have a reading comprehension problem, or something more serious?

Message No. 1 is that government funding of services leads to cost increases and inefficiency. These inefficiencies are on a smaller scale compared to situations where the government takes over the entire enterprise, but the problem of escalating costs still exists, for the same reason — the Calculation Problem.

Which brings us to Point No. 2 — when the funding-only approach produces these inefficiencies and cost increases, those problems are used as a basis to call for increased control (to supposedly clamp down on the problems that they caused). In this way, funding-only approaches tend toward more intense government involvement in the enterprise. See above re: Finland. See, e.g., Hillary Clinton’s health care agenda.

Funding these enterprises through government-paid insurance premiums rather than direct payments is certainly no solution. In fact, it only adds another layer of inefficiency and waste.

It operates within a pure free-market health environment. Government provides a small amount of aid to those who demonstrably cannot afford the premium. The method of doing so as I told you is quite simple.

So, we have to ignore the government-funded welfare payments that you advocate while also claiming that the free market is “pure.”

Right.

What’s the definition of “pure” in the dictionary you are using? Is it non-standard, or are you just in the habit of dissembling and equivocating?

People like you have been advocating for “small” programs like this for hundreds of years. They are always small. The income tax was small when it started. Farm subsidies start out as small.

Statists are seemingly incapable of understanding the dynamic nature of economics. Things change. When you set up a system to “top up” payments for something, you encourage people to use it. People gravitate toward it. People who make just slightly more than your arbitrary cut-off will want for the line to be redrawn so it includes them too. People who are in similar situations as to other types of goods will want to be included. Since you are paying for health care, why not also pay for other things? Since you are paying for medical services for conditions A, B and C, why not D? Why pay for emergency surgery only? Why not pay for non-emergency services, too? Why make people wait until they have an emergency?

Once you set up the government-run system, you invite political pressure to expand it, either in terms of the number of people included, the types of services covered, and/or the amount that the government will pay.

And the (self-interested) people who apply this political pressure will use the problems in the system, all of which are predicted by the Calculation Problem, as the excuse to achieve these results.

Judging by your flippant, off-hand comment that it would be sooooo easy to just drawn the line here or there, it appears that you do not understand any of this.

Tell us how the health market will be inefficient when it is mostly private and only the poor get assistance?

For your convenience, I’ll repeat what I said before:

“Even with your welfare-type funding-only arrangement, you still find that economic decisions have to be made, such as:

- who qualifies for these handouts?;
- what kinds of services the welfare fund will pay for and under what conditions?;
- how much will the fund pay for certain services?;
- how should the program administrators go about policing compliance and error-checking?

In the welfare-type system you are promoting, the foregoing decisions CANNOT be made according to economic criteria. As a result, they end up being made according to POLITICS and BUREAUCRATIC CONVENIENCE.”

The way that a government-funded welfare system answers every one of these questions will introduce waste and inefficiency, and the system will have no means of measuring that waste or correcting it.

Even at the beginning of your “small” program to service “only the poor,” you will immediately remove all of the pressure on the lower end of the service-provider market to reduce costs. All of the marginal service-providers who were figuring out various ways to deliver services cheaply vanish, and they all gravitate toward providing higher-priced government-sponsored services. As the line defining this margin moves, this process is repeated ad infinitum until the costs reach the limits of political respectability.

Also, whatever amount the government pays for health care, it will not replicate the market price. If the government price is higher than the market price, you will get an artificial surplus. If the government price is lower than the market price, then you will get an artificial shortage. Take a look at what happened with the provision of influenza vaccine in 2004. The government slowly took over that market, becoming the biggest buyer. It drove down prices by taking the market price and then cutting it by some arbitrary percentage. Marginal producers were driven out of business, leaving only 1 or 2 manufacturers in the entire industry. (Then there was a bad batch, and there was no vaccine to be had at any price that year.)

Wherever there is easy government money, there is fraud. It happens in private business, too, but private business knows how much it should spend on fraud detection and prevention. When recipients of this government welfare bilk the system, how much does the government spend on investigators and auditors? How much is too much? How much is too little? A government CANNOT answer these questions by reference to economic criteria. It has no economic information with which to calculate an answer.

These inefficiencies are all true, even before you consider the creeping expansion of the program to include people other than the “poor.” The elderly are the richest demographic block in the US, yet they get Medicare services and now drugs. The waste in that system is astronomical.

I think the only way to ensure that something close to a market rate in healthcare can be made possible is if all health insurance is 100% private, and income support as a fixed amount for people who are unemployed and leave it to them to purchase the appropriate health insurance. This is the system in Switzerland, and has shown to significantly lower the burden on the state for health care and also cultivate a sense of personal health responsibility.

Of course the ideal case is that the state stays completely out of welfare and only charities do this. But this won’t happen anytime soon as a lot of people are made too dependent and will take time to change.

Bryan.
United Kingdom

bryan1410@hotmail.com

M. Forss:

Your friends who’ve “studied economics” make a (very) serious mistake in expecting “scale” to pay off in benefits. Actually, it’s quite the other way ’round!

What it seems they’ve learned is not confined merely to those who’ve studied economics: it’s a widely pervasive misunderstanding stemming principally from the very general observation that large buyers, especially those extending the prospect of continuing purchases, are able to pay lower prices than some other types of buyers. From this is concluded that “bigness” carries those advantages recognized as “economies of scale” and entities with these characteristics are widely assumed to enjoy “market power” on account of size. The truth is not mysterious, though it is certainly somewhat complex.

The price advantage enjoyed by a large organization making large purchases is an illusion; a small organization can do quite as well–as long as their purchase size is commensurate–other factors being roughly equal (ceteris paribus). What frequently provides the benefit of scale to the larger buyer is a tendency (not automatic) toward greater specialization and efficiency in personnel and utilization of capital assets, most especially when these characteristics enable the other party to a transaction to similarly minimize unit costs associated with the sale. What actually increases with size is the number of facets at which the entity intersects with its physical and business environment. But we must bear in mind that each of these intersections is an opportunity to incur losses as well as to make gains: every opportunity for “economy” is, at the same time, an opportunity for “diseconomy.” I could provide numerous examples but, with a bit of reflection, you’ll be able to think of many of your own–they’re everywhere.

What I wanted, instead, was to focus on the set of economies/diseconomies characteristic of what we know as the “public sector” because, while seeming to offer benefits (economies) identical with those of the private sector, such is far more illusory than actual–to such an extent that the public entity can, in most cases, be considered a fraudulent version of the private.

The single most prevalent and obvious advantage or opportunity for economy afforded by size consists in the opportunity to use people differentiated by function (and usually by remuneration) for various performances. An entrepreneur (or his managerial representative, if big enough) hires as necessary and pays market price. If he doesn’t get what he wants or expects, he lets one go and hires anew. The unsatisfactory employee may have been slow and inefficient, wasteful of materials and time, an actual or potential thief, a substance abuser, a sexual harrasser, unqualified or unqualifiable for the position, socially misfit with other workforce, even a seeker of special information/training meant as a springboard to competition. It’s headaches for the boss but, over time, manageable: eventually you get a workforce reflective of the entrepreneur’s acumen and vigor. Every employee does his job because he wants his job (and its payoff); the customers get what they want and pay for, and everyone’s happy as clams. The principle on which the entirety is built and hums merrily along is what is known as the “profit motive.”

The public sector replicates the private. It, too, is arranged hierarchally, has an organizing product or service (usually the latter) raison de etre, and a workforce specialized by function. Missing are the undergirding principle of profit and means for determining whether an employee (or even a department or the entire outfit) is “worth” their pay, leaving as arbiters supervisors or established, printed rules. One sets a premium on connections and ass-kissing, the other on serving time and not “rocking the boat.” Customers and their opinions hardly count to such an organization. Indeed, there is hardly a greater testament to the widespread decency of people in general than the fact that the public-sector organizations do not function more abysmally than they already do. And, once through a “probationary” period to cull the most severely misfit or unqualified, every attempt to terminate or otherwise replace such public-sector employees is virtually guaranteed to wind up in expensive, time-consuming litigation, often as a “federal case.”

Private companies employ advertising specialists, often outside agencies, to tout their wares and “put their best foot forward.” Do they often mislead? I suppose so. But customers are free to buy elsewhere or not to buy at all: a case of “the proof
is in the pudding.” Once-prosperous firms lose sales (and go bust) with regularity: it ain’t perfect but it don’t seem broke, either. Public-sector entities spend large amounts on “public relations,” also. Why? Especially as many are faced with no competition for the available business–it’s them or no one! Some years ago, I read something critical of (pardon my forgetfulness) the National Institute for Health and/or the National Cancer Institute and the constant publicity and promotion for more and earlier mammograms. Essentially, the criticism boiled down to the accusation that one or the other (or both) of these organizations constantly touted a reduction in breast cancer mortality as a result of their campaign BUT, that, analyzed, the data showed merely that the greater life expectancy was entirely artefactual, based entirely on earlier diagnosis: the same gals were going to die at about the same time as previously (when the length of time of the earlier diagnosis was added in). Now, I don’t know of the truth of the assertion–simply that I read it in a seemingly credible source (and I haven’t read a single newspaper or newsmagazine in nearly 30 years, regarding them as “not credible”). But, if true, it’s an extraordinary indictment of a large chunk of the health industry. And I still see ads implying, urgently, that more and earlier tests are critical, underlying which is the implication that recent medical advances offer a great deal of hope to those who take the step of getting that mammogram (and getting it earlier). .

The “down” side of the freedom that is now more prevalent over the world is what seems the best system–democracy–cannot protect its members from pervasive economic ignorance: it actually works in most cases to entrench the idea that authority must necessarily provide whatever the political classes divine they are entitled to have. People can vote themselves both waste and servitude pursuing the idea of “common good” to be provided via authority.
.

I judge Owen to be the winner of the debate, and Magnus to be guilty of not understanding his opponent’s argument (and perhaps not even reading most of it).. and both guilty of ad hominem.

Public health care, public schools, etc… = inefficient (I assume we agree).

Government paying for private schools (vouchers, reimbursements, … based on inability to pay) instead of running/administering the schools themselves = less inefficient (but of course they don’t get to indoctrinate you.. which is why they don’t do this).

Government not running/administering hospitals/heath care but instead just paying free market rates for the end result based on a person’s inability to pay = less inefficient, less doctors moving to the US, while still preserving their stated goal of ‘universal’ health care.

Even less inefficient would be government helping people to pay for private health care insurance, instead of providing the ‘insurance’ themselves.

But of course their stated goal isn’t their entire goal, Canadians for example tend to be very against the idea of anyone ‘profiting’ from sick people (‘exploiting’ sick people – ha). Of course this is the widespread anti-market sentiment finding its expression at the _expense_ of universal health care (but I don’t think they actually care all that much about ‘universal’ health care – look up some of the horror stories about people dieing in the parking lot after being refused service at Canadian hospitals).

The spectrum is how much is private and how much is public (there was a show here called “Canada’s Next Great Prime Minister” – a ‘reality show’ where young people sent in videos and ideas, I remember seeing one where someone said that doctors should have to work in rural communities for a certain amount of time – and when someone argued that doctors are free people – they responded that members of the RCMP – Royal Canadian Mounted Police – get assigned to various locations.. and didn’t see the distinction between cops employed by the state, and doctors… obviously they thought doctors should all be employed by the state too, maybe they thought they already were).

The greatest gain that could be made towards ‘universal’ health care would be drive down the cost of health care by completely deregulating the medical field and post secondary education – why are there no ‘tiers’ of doctors (like tiers of tech support), why is an 8 years of med school doctor handling the common cold (and the lowest ‘tier’ should be a machine, where you answer questions before it passes you up to another tier.. or even just dispenses some pills and takes debt/credit card payment – seriously) – and why hasn’t the industrial revolution touched post-secondary education (it’s because government funds, regulates, and accredits it), there’s no interaction with the professors in science classes anymore, meaning that ‘classes’ can be replicated ad infinitum, 1 prof not for 40 students, 1 prof for 100,000 students. You could churn out doctors and engineers like McDonalds churns out happy meals (cheap and plentiful – I think I might have to move to India and setup ‘The Hard Core School of Engineering’). It saddens me to know that there are possibilities like this squandered because of the incompetence and villainy of humanity.

Amusing, the ‘people’ sought safety and security through heavy regulation, and instead priced safety and security out of their means… leading us to government health care (or maybe that was the goal). People say health care is ‘different’… no more so than food, no food = you die, but they trust the free market with food (in fact the absence of free market food = 100m people starved only under communism not to mention all of the pre-free market staving, so what’s the absence of _real_ free market health care cost).

btw, the only reason you don’t pay 100% income tax is because they (the mob that taxes you) figured out that a highest bracket of 40-50% and a common working bracket of 33% (interestingly, this is the Medieval serf ‘rate’) was more efficient for _them_ (check out the global tax rates from the 1970s for where they would have liked to go).

The parasite can’t eat too much of the host or both die (like under communism).

Scales of Justice:

A few corrections. You seem to think that helathcare and academic education can be commoditized. I am sorry to dissappoint you but 1 professor per 100,000 stuents is not every possible. It is the personal atention given to each student by the professor that keeps class sizes small. Likewise there is good reason for a fully qualified doctor to be the first port of call for a potentially sick individual, not a nurse because only they are able to recognise serious cases unlike nurses who have only basic training.

magnus:

Are you saying crime causes welfare or welfare causes crime or they simply co-exist with no causal link? I think you will find that poverty causes crime and welfare reduces poverty. Crime still exists because poverty still exists which is simply a result of too little welfare than too much.

But you got ‘cash’ and all manner of things given to you until you were able to work for yourself at age 16 or so. So why are you not a criminal for having received all these handouts? Could it be that children from poor families may not turn out as criminals either were they to be given ‘handouts’.

Your logic that handouts = crime doesn’t follow. Or you yourself would be a criminal.

I especially love how you accuse families of separating specifically so they can get increased government assistance. Next you will say that they had babies just to get extra money too!

Haha! Such claims ar regularly made by right wing politicians in NZ but the funny thing is such an argument is pointless because it can never be proved either way.

Families are families and they split and people have had children since the dawning of time. Now you wanna correlate a natural phenomenom that has existed as long as humans have to some thing which has just cropped up along with capitalism (redistribution).

You really need to provide some proof that these people are sinically ruining their own lives and those oftheir children for this money. Then you need to ask yourself why your capitalist system has put them in the position of potentially wanting to do that in the first place.

The answer you always come back to is that you yourself received handouts for the first 16 years of your life and yuo are not like those people so how then can you blame the handouts?

Magnus,

It strikes me that you did not respond to Owen’s valid assertion that you too received ‘handouts’ until you were 12 and you are neither on welfare now nor a beneficiary.

So you are living proof that handouts on their own DO NOT cause welfare dependency.

Neither have you proved that welfare causes crime. Because you know what? There was crime long before there was welfare, just like there were babies and separations.

You have obviously never taken any papers in research methods. (eyes roll)

Again you seem to accuse all people in the world on welfare of having babies and separating just to get that money. You have no valid basis for this assertion because every person has a unique background and circumstances and such generalisations only make you look silly.

It strikes me that you did not respond to Owen’s valid assertion that you too received ‘handouts’ until you were 12 and you are neither on welfare now nor a beneficiary.

I did answer it, but I will explain it again. Please pay attention this time.

The key to this conundrum you find yourself in lies in the phenomenon called “learned behavior” — children learn from their parents.

In other words, the reason the fact that I received “handouts” up until age 12 (and thereafter, until I left my parents house with $50 at age 18) did not cause me to become welfare-dependent is because I was TAUGHT from an early age to work for long-term benefits. I was TAUGHT, by my parents’ words and examples, that the means by which I would improve my situation is and always be some form of productive behavior designed to yield a long-term benefit of my choosing.

This education started out with small things, since younger children are incapable of fully supporting themselves economically. But, there are small, symbolic forms of LEARNING that children are capable of grasping.

Think of home life as a training center for the larger economic reality. Responsible parents who want their children to succeed in this larger economic reality (frequently called “the real world”) will TEACH their children through various forms of economic simulations.

One common form of this TEACHING is giving children an allowance for various household tasks. Another is teaching children the importance of saving for future purchases. Another is giving them areas of total responsibility, like their room, or the yard, or caring for a pet — something that requires long-term, consistent care and attention — so they learn to take action without being constantly reminded and managed.

What I have been explaining all along is that the crux of the Calculation Problem is this: the critical importance of the connection between costs and benefits. The connection between production and consumption. The connection between expenditures and revenue.

Behavior is a form of cost. Even when it doesn’t involved the outlay of cash, behavior that is difficult and time-consuming and unpleasant is a cost. If nothing else, there is always an opportunity cost.

Getting something you want is a benefit. In a modern economy, people often work for money, which is a universalized form of benefit, because it can be traded for a lot of different goods and services. (But benefits are ultimately evaluated subjectively, and are ordinally ranked.)

Genuine, sustained, permanent economic improvement is only possible when one’s costs are tied to one’s benefits — when one’s expenditures (whether in the form of behavior or cash) are directly connected to the revenue or benefit they create.

Why is this true? Because people have to make DECISIONS hundreds of times per day about which types of behavior are more productive and which are less productive. Now, multiply each of those decisions by hundreds of millions of people over the course of hundreds of years, and you have what we call “the economy.”

A person can ONLY know which behaviors are more or less productive when Cost X leads to Benefit A and Cost Y leads to Benefit B.

One does this by engaging in ECONOMIC CALCULATION — you compare costs and benefits. Is Cost X greater than Cost Y? Is Benefit X greater than Benefit B? If Cost Y is 3 times greater than Cost X, but Benefit B is less than or equal to 3 times the value of Benefit A, then clearly Cost Y is not economically optimal. It is a net loss, compared to Cost X. Now you have a guide to economically-productive behavior.

But when your benefits are SEVERED from your costs, you LOSE the ability to make these decisions. You lose the ESSENTIAL INFORMATION about which behaviors produce greater or lesser benefits.

ECONOMIC CALCULATION is a person’s behavior-guidance system. It is the decision-making process of any intelligent actor. It is the compass. And prices are the signals, the raw information on which such decisions are based.

Welfare contributes to multi-generational poverty. It exacerbates it. It extends it. It blinds the recipient to the changes that he needs to make to his LONG-TERM BEHAVIOR in order to improve his economic conditions.

How did I, at age 13, know that running my own lawn-mowing business was better economically than working as a part-time employee? I had been taught to engage in LONG-TERM ECONOMIC CALCULATION. There is no law of God or nature that says that mowing lawns is and will forever be more economically productive than working in a retail shop. But I figured that out at age 13 because I was TAUGHT to engage in LONG-TERM ECONOMIC CALCULATION.

Now, consider a child who grows up in a housing project, with no father, and a mother who gets money doled out to her by the State. What does that child learn? (You can talk to a child all day long, but most of what they learn is taught by the child’s own experiences and observations, not by talking to him.)

This child learns that having a father in the house is not a path to net economic gain, i.e., having a father out of the house is not a severe economic loss. If my father had moved out, the economic loss to the whole family would have been huge. But not to the poor child in the projects. Thus, the true economic cost of a broken family is hidden, masked by the steady stream of welfare payments. Under some, particularly cruel forms of welfare-qualification criteria, having no father at home is actually a marked economic detriment.

Let’s look at teen pregnancy. For middle-class people, a teen pregnancy would be economically devastating. It would interrupt LONG-TERM economic plans, such as schooling. But the situation is much different for a teen who has no long-term plans. The LONG-TERM loss of a teen pregnancy is hidden, masked by the steady stream of welfare payments.

Let’s look at substance abuse. It provides a short-term benefit (pleasure) with a much higher long-term cost (destruction of mental faculties, health deterioration). When one’s costs are connected to one’s benefits, there is a clear ECONOMIC SIGNAL that drug use is economically harmful in the long term — you miss out on promotions, lose your job, etc. But not the poor person on welfare, because the LONG-TERM cost of drug use is hidden, masked by the steady stream of welfare payments.

In case Bill or Owen hasn’t figured it out yet, the third or fourth or thirtieth GENERATION of children who grow up in this environment will LEARN very different economic lessons that I did.

Welfare payments foster a mode of thought that is much more geared to the SHORT-TERM than you will see with middle class people. Poor people still engage in economic calculation, of course. But the steady stream of welfare payments SEVERS THE CONNECTION between their behavior and their income. As a result, they lose the ability to know which behaviors are more economically productive and which are less productive. Long-term, multi-generational planning becomes virtually non-existent.

Giving people more money will not solve this problem. It will be yet another temporary solution that will, in the long-run, make problems worse.

I have and other have postulated whether welfare payments should go hand-in-hand with sterilisation?

It seems to me as though Bill was being sardonic with his “(eyes roll)”, and just making a mockery of Owen’s silly debating antics and inability to address any point thrown at him…

I’d like to think so, but I believe that Bill was being serious.

Look at this…