Saturday, September 13, 2008

Economics, the invisible hand, and the free rider problem

I've been reading The Contested Boundaries of American Public Health on my lunch breaks at work. Just finished an interesting chapter on the economics of public health -- basically who pays, who benefits, and why. Public health is full of examples of publicly funded activities that benefit everyone, some more than others, but no one thinks about a whole lot: restaurant inspections, for example, and sewage treatment. I think most people, if they think about "public health" at all, assume it's basically an occasional vaccination clinic on the local level or, at the other extreme, Centers for Disease Control doctors dressed in hazmat suits a la Dustin Hoffman in Outbreak. They only really notice public health in the broad sense when the system doesn't seem to be working, like when a warning comes out about killer jalapeno peppers but no one at FDA or CDC or USDA can say definitively where the peppers came from, how many are out there, or even how many people have gotten sick.

That's usually when one of my libertarian or right wing acquaintances (not necessarily the same group; some of the libertarians are actually pretty far left but just don't realize it -- they're fiscal conservatives but social liberals) will start bloviating about the problem is the government. No, people, in this case the problem is the private sector. The data collection and reporting system on the local level, the first place any disease is going to be noticed, is so fragmented, so broken up into thousands and thousands of individual and incompatible information collection systems, that a whole lot of people have to start getting sick before anyone notices there's an epidemic.

The only time a salmonella outbreak is going to be noticed fast is if you have lots of people eating the same contaminated food and getting sufficiently sick that they all end up going to the same Emergency Room or clinic at the same time. If I buy a contaminated pepper, use it in salsa shared by half a dozen co-workers and we all get sick, if we all go to different doctors or clinics it could take two months for the various lab reports to wend their way through the system and raise the proverbial red flag that triggers an investigation. That's if the doctors decide to order lab work at all. If you're an adult who comes in with a fever and a bad case of diarrhea but aren't sick enough to be hospitalized and you're the only patient the doctor's seen that week with that particular set of symptoms, she may simply prescribe antibiotics and anti-diarrheals and tell you to come back if it doesn't improve fast once you start taking the drugs.

Bottom line is that public health is one area where more government, not less, is the solution. The government is the only entity that's ever going to come up with a way to tie all those fragmented pieces together. Private industry does not have a reason to. In fact, fragmentation is in industry's best interest because that fragmentation creates more opportunities for making money.

Granted, I am not exactly a disinterested bystander on this issue (I do, after all, work for Large Nameless Agency), but the more I learn about the way the system does and does not work and just how huge some of the gaping holes are the more I recognize just how screwed up American health care in general, not just the public health aspect, truly is. The U.S. infant mortality rate is an embarrassment, so is life expectancy compared to other industrialized nations, as a nation we pay the highest per capita costs for health care in the world, . . . it's a mess. And instead of trying to fix some of the really broken parts, the private sector health care interest groups (like pharmaceutical companies) focus on the areas with the highest profit margins, like erectile dysfunction and a nonexistent obesity 'epidemic.' Public hospitals flounder while the boutique clinics doing boob jobs thrive. Everyone wants the trauma center to be there when they're in a car accident, but no one wants to pay for it until then. It's a classic free rider problem, wanting the benefits without having to pay any of the costs, kind of like the workers in right-to-work states who refuse to pay union dues but expect the shop steward to help them with grievances anyway.

I have a number of "libertarian" acquaintances who are convinced the private sector is the way to go for everything. They don't see a role for government anywhere -- they're totally convinced that if we'd just step back and let business do what it wanted, the invisible hand of the marketplace would solve all problems. In other words, they either want to time travel back to the 19th century or move to Somalia. I'm never quite sure which, although I have a hunch they think that if they could just live in the glory days of the Grant administration they'd be one of the plutocrats riding in the posh private rail cars and not one of the poor bastards working 14 hours a day to lay the rails, despite the fact there were a whole lot more of the latter than the former.

At the same time, of course, they bitch whenever prices go up on anything. Hello? Ever hear of market forces? You can't have it both ways. There is no such thing as a free lunch.

The same group of acquaintances does a lot of pissing and moaning about paying taxes. They complain about it being "their" money and how they shouldn't have to fork over a dime. Period. For anything. Grow up. Taxes are the membership fee you pay for getting to live in a country that allows you to piss and moan about how much you hate the government.

So, I repeat -- if you think the U.S. government is doing such a crap job, and you hate paying taxes so much, move to Somalia. No taxes, no government, literally a libertarian paradise. You'll love it there. Granted, you probably won't live long (life expectancy is only 47) but the freedom from an oppressive government should make up for dying 30 years sooner than the average U.S. citizen*.

(*We may not live as long as Europeans, but we've still got most African nations beat.)


  1. I just figure on getting dead and letting it go at that. I'm actually surprised that I've lived this long and seen very few doctors over the years considering much of my lifestyle of smoking and drinking and such.

    I guess that good genes just hold up well. But Einstein had me beat all to hell, he could dispatch a cigg in just three drags. He seemed calm on the outside, but he was very intense on the inside.

    I'm a lot like that, around me in person you just see someone that is calm and laid back and enjoyable to be around.

    You do see a lot of my intenseness (is that a word?) in my blogs though, gotta put it somewhere to share with others.


  2. I love this post. Is it Georgia or is it just me? There seem to be more libertarians here than there were in Illinois.

    I'm going to start suggesting to the No Taxes/No Gov't crowd a move to somewhere like Somalia.

    Love that! Thank you.

  3. most of our health protection laws are outdated and's surprising that more of us aren't dead from tainted meat, chicken, veggies, etc..

  4. What floors me is when I hear people in the Atlanta area complaining about "high" property taxes. They're some of the lowest I've ever seen anywhere (and we've lived all over the country). I was looking at real estate listings the other day because I was curious about a house the bus passes on my commute. The house is a lovely 4-bedroom 2-bath brick ranch listed at $289,900, is in a really nice neighborhood (although it is a fairly busy street), and annual property taxes were given as $639. Our little two-bedroom bungalow on a much smaller lot in Omaha was assessed as being worth $78,000 with annual property taxes close to $1500. But I guess anything at all is too much to pay when you're assuming you're never going to be the one who needs the fire department, the water and sewer lines obviously don't need maintenance, and who cares if kids get an education if you don't have any in school yourself? Some people are so extremely self-centered and willfully ignorant it's unreal.


My space, my rules: play nice and keep it on topic.