Arrow’s theorizing is fine; he may be right AFAIK. Obviously, there are other economists that disagree with him. But any such arguments are indeed theorizing. The actual historical facts are simple: There was no major health insurance market until the mid-20th century. Government actions (wage controls) created the incentive for employers to offer them, government actions (tax credits) locked the practice in place, and other government actions (medicare and medicaid) have gone a long way toward entrenching fee-for-service as the industry’s pricing model and eliminating the idea of competing on price.
It’s possible that even if there was a completely free health insurance market, there still wouldn’t be a market for much more tailored policies. It’s possible there would. We don’t know, and I imagine at this point we never will since the government is unlikely to stop intervening anytime soon. But that’s the point: the government wants to say the healthcare insurance market has failed (and possibly they’re right), but it is the government that has created the market as it exists. It’s a pretty common cycle: one regulatory scheme fails, but rather than eliminating the first scheme and starting over with a fresh approach, a new regulatory scheme is enacted with the aim of making the first scheme work better.
The history of free markets is full of interesting and strange products that nobody even knew there was a demand for. Not many people in 1978 saw a multibillion-dollar market for weird off-brand beers; microbrews only came into existence gradually, after the government stopped regulating the market. Obviously, the healthcare insurance market is much, much more complicated … which is all the more reason to be skeptical of confident predictions about how it works.
People are forced to buy health care the same way I am forced to have kids, forced to own a home, forced to put solar panels on that home, forced to eat corn products in that home, forced to buy American products for the home…
I think I would ask a different question. If the government can’t do what it is attempting to, how can it do these other things? If I would buy wheat normally, then I am taxed and that tax money is given to farming entities that grow corn, then corn drops in price and wheat raises, I am “forced” to buy corn—to buy corn or pay a penalty. I want to know that if we stop the government here, what is the limiting principle? Every time the government blinks markets move and someone, somewhere can cast this as “forcing” them to do something or else pay a penalty (and they’d be totally right). What does the commerce power actually mean, then? What does the commerce clause actually authorize?
We generally distinguish between events based on the nexus of the cause to the effect. We may not force you to execute condemned prisoners, but we may take your tax money to pay for a gurney, a needle, barbiturates, a chemical paralytic, and the salary of the guy to push the needle in – we don’t characterize that as forcing you to act.
This is a good distinction. Please let me consider it a bit.
Let me ask you: suppose this current law is found unconstitutional because it is equivalent to plenary power over all commerce. The day after the ruling, to pick a day, can the government impose tariffs on all vegetable imports impossibly high, and taxing non-broccoli or outright banning non-broccoli vegetables one by one, while subsidizing broccoli production by giving billions of dollars to individuals or corporations that produce broccoli? Does this kind of power already exist?
I’m trying to understand: if this current law crosses a line, was the line already crossed and we’ve got problems or is this law genuinely unique. So when I hear a concern about forcing people to buy broccoli, I think, “Hey, they already could, if they wanted. Doesn’t everyone know this?” So then I think: “Oh, they do, they just care about the mechanism. It’s really about two functionally equivalent actions merely called something else, or running around the tree three times before going in the house.” But sometimes I read a comment that indicates that it isn’t just arguing over words, there’s really something fundamental here, it isn’t about functional equivalence at all, there’s really something special here and I just don’t see it. Please help me see it, if so.
I am not sure how this nexus issue you raise fits in easily, whether it is a clear limitation or just running around the tree three times. But thank you, it is a start.
What, all of them? The wage controls that spurred employers to offer more fringe benefits were put in place as part of the war effort during WWII. All the rest had a variety of well-intentioned measures, which I’m sure you know as well as I.
If you have a point to make, please feel free.
If this is directed toward something I’ve said, I’m sorry but I don’t follow you. I read things like
as a good argument for dropping corn subsidies. and lines like this
as a good argument for being sure that everything the government done is indeed absolutely necessary.
As far as I can see, it authorizes Congress to set the rules by which commerce between the states is conducted, in much the way it set the rules by which commerce with foreign bodies is conducted (you’ll note that the plain text clearly puts the two on par). In my reading, it does not extend to trying to create commerce among the states, via mandates or anything else, any more than we’d think we can require the residents of some other country to buy and import American goods because it would stimulate our manufacturing sector.
Of course, previous courts have been much more expansive than I would, and it’s led to our current Pandora’s box.
I think we agree on that. No, the comment was just to “the board,” but it is very helpful to have the sort of root understanding of your position. We’re discussing something removed N times from basic principles and sometimes that doesn’t matter but here it was really hard for me to understand various objections without the basis for such objections.
I posted this in another thread a few weeks ago, and I think the numbers make it pretty clear that the administrative cost of our system alone makes it unsupportable (there are links in the original):
Total healthcare spending in the UK is 125 billion pounds. Correcting for population size (300 million versus 60 million) and currency (1 pound = $1.60) the UK spends a trillion dollars a year on healthcare.
Total healthcare spending in the US is $2.4 trillion.
Given the rough figures in my post above, approximately one third of the difference is the additional cost of administering our clusterfuck of a system.
Interestingly, the prevailing opinion on Raich cited Wickard v. Filburn, in which Roscoe Filburn, a farmer, was found liable for having exceeded a limit, then in effect, as to the amount of wheat a farmer was allowed to produce. Filburn argued that the excess wheat was intended only for his own animals rather than the market, but the gist of the Government’s case was more or less that by producing wheat which he’d otherwise have been obliged to buy on the market, Filburn was still engaging in interstate commerce. The argument in Raich was similar, although other factors also figured into the opinion, for example that it was impossible to distinguish between MJ grown within a state from that imported from other states.