Wednesday, June 24, 2009

Government Failure

I was browsing Amazon and came across a book, Government Failure,which seems tailor made for current economic and political conditions.

So, how about some reviews? This one gives the book 5 stars.

The general thrust of the text is that, however well-intentioned, no government can sustain a vibrant and diverse welfare-state over the long-term. Entrenched bureaucracies simply can't cope with the vagaries and varieties of human desires. Only the free market can hope to provide for the panoply of individuals' interests.

Part I: A concise, lucid, introduction to the theory of public choice. Professor Tullock has a definitely "small-government" mentality (which I share), but his discussion is still even-handed. The sole problem I have is that the few tables and graphs he employs are completely unitelligible to me. Fortunately, they're not essential, as his writing should be clear enough. The most important topics are rent-seeking and log-rolling, the former of which is the topic most treated by the co-authors. Also of interest is the discussion about bureaucracies.

Part II: A far ranging, perhaps wandering, discussion of the application of rent-seeking to American regulatory policy. Brady writes with a slightly more fervent tone than does Tullock, with a clear but tempered opinion of the roles lawyers, regulators, etc. Generally interesting, but the chapters somewhat lack coherence with each other beyond the theory.

Part III: Sheldon here presents the most entertaining and forcefully written section of the book. Full of vigor, he brings ip several issues that are of critical interest to proponents of small government: the Fabian fallacy, the growth of addiction to the welfare-state, and the welfare-state's role in the collapse of the family.

A great introduction for the interested student of politics or economics.
and for balance a 1 star review:
Not terribly useful, though a good introductory review of log-rolling and rent-seeking. Might perhaps do as a book for an introductory Political Science course if backed up with significant amounts of other material.
The problem I see with government is not the corruption (bad enough) but the freezing of the rules to conform to current realities. When the realities change the rules still hold us back.

We are starting to see that in the medical care debate. Since everyone can't afford the latest treatments they should be outlawed. i.e. if progress can't be instantaneous then progress needs to be outlawed.

Megan Mcardle looks at healthcare and sees it differently.
It is true that I cannot afford to spend 40% of my income on healthcare. It was equally true that my great-great grandparents could not afford to spend a third of their income on housing, and another half on clothing, manufactured good, transportation, and services--Land o' Mercy, everyone in the future is going to starve to death!!!

Obviously this is ridiculous. I am not consuming less food than my ancestors; I am consuming more. (Too much more, according to the waistband of my favorite pants.) But my income is vastly higher than theirs in real terms, so that the food I consume is 10% of my household budget, rather than 50%. Similarly, our descendents in 2100 giving over 40% of their income to health care (if indeed they do), will not be skimping on housing, transportation, clothing, entertainment, or what have you. In all probability, they will be consuming more of everything than I do, except maybe energy and housing. It's just that they'll be devoting a large share of their extra income to health care. This prospect doesn't worry me. And it probably won't worry them, other than the way it (mostly) worries us: because we'd always like everything we consume to cost less, and be more equally distributed.
The best use of increased wealth is what? I guess it depends on who you ask.

A commenter to Megan's article had this to say:
I attended a CLE in January put on by Professor M. Gregg Bloche who was one of Obama’s health care reform advisors during the 2008 campaign. He made pretty much the same argument that health care costs were going to eventually consume nearly half of GDP and advocated controlling costs by slowing down the rate of innovation. His logic was that if new (and initially expensive) treatments, drugs, devices and tests don’t exist then patients can’t demand them and no one has to pay for them and technically we won’t have reduced the quality of care since people would still be able to get the treatments that are available today.
Translation: "We can save a lot of money (to pass out to our friends) by killing a lot of people and the best thing is they will never know who did it to them."

It is a good thing our President shaves off his upper lip hair.

Cross Posted at Classical Values

1 comment:

simentt said...

Translation: "We can save a lot of money (to pass out to our friends) by killing a lot of people and the best thing is they will never know who did it to them."

This is actually semi-official Norwegian health-care policy.

The Norwegian health-ministry is skeptical to purchasing x-ray and MRI-capacity from private vendors, as that would increase availability (and thus cost). The preferred solution is to have waiting-lists so that doctors try to avoid these tools for diagnosing patients.

Obviously, some patients will move out of the queue by themselves if they are not diagnosed and treated in time, which would show that delaying supply also reduces demand.

I imagine how small and efficient our state health-care system would have been if these policies had been stated and effectuated before the advent of antibiotics. We'd have the worlds best school system with the resources that this would make available.