In Praise of Inefficiency: A Manifesto(online.wsj.com)
online.wsj.com
In Praise of Inefficiency: A Manifesto
http://online.wsj.com/article/SB10001424052748704479404575087241182091582.html?mod=WSJ_Opinion_LEFTTopOpinion
21 comments
> "In 50 years, only a minority will be able to earn a living on a free labor market."
Marxist communism was predicated on this assumption, based on the increasing efficiency of industrialism. It's an interesting idea, but historically the trend has been that increased efficiency leads to increased production and increased consumption, not static production and reduced labor. I see no reason why this would cease to be the case.
Marxist communism was predicated on this assumption, based on the increasing efficiency of industrialism. It's an interesting idea, but historically the trend has been that increased efficiency leads to increased production and increased consumption, not static production and reduced labor. I see no reason why this would cease to be the case.
The "automation" that occurred in the Industrial Revolution was the standardization of process-- especially in regard to the use of capital-intensive machines that required a skilled workforce-- but those processes still required humans as the main actors, since robots and computers hadn't been invented yet.
This led to a Jevons Paradox-- increased efficiency in the use of X, where X is human labor, led to the increased use of X. In 1944, full human employment was possible in the United States, for pretty much the last time.
We're in the midst of another Jevons "paradox", but in this case, X is abstract computational (and mechanical, in the form of robots) power. So computers are becoming more powerful and prolific, replacing human labor. The result is that only people who are smart enough to understand the new regime can contribute in a sustainably economically valuable way; the rest will see the market value of their labor approach zero.
This led to a Jevons Paradox-- increased efficiency in the use of X, where X is human labor, led to the increased use of X. In 1944, full human employment was possible in the United States, for pretty much the last time.
We're in the midst of another Jevons "paradox", but in this case, X is abstract computational (and mechanical, in the form of robots) power. So computers are becoming more powerful and prolific, replacing human labor. The result is that only people who are smart enough to understand the new regime can contribute in a sustainably economically valuable way; the rest will see the market value of their labor approach zero.
> Lobbyists for those companies are fighting to the death against efficiency and progress (nationalized health coverage)
In what universe is nationalized health coverage efficient?
Govts don't do efficient. Disagree? Provide three examples. Bonus points if more than one involves the US govt.
Note - valuable and effective (such as the US military) are not the same as efficient.
In what universe is nationalized health coverage efficient?
Govts don't do efficient. Disagree? Provide three examples. Bonus points if more than one involves the US govt.
Note - valuable and effective (such as the US military) are not the same as efficient.
In what universe is privatised health coverage humane?
> In what universe is privatised health coverage humane?
I expected at least some defense of "efficent govt".
What definition of "humane" are we using? (Be careful - the US has universal govt-provided healthcare. Most people opt out.) Are you claiming that govt healthcare is necessarily "humane"?
I expected at least some defense of "efficent govt".
What definition of "humane" are we using? (Be careful - the US has universal govt-provided healthcare. Most people opt out.) Are you claiming that govt healthcare is necessarily "humane"?
Uh, that would be the definition where you don't screw people out of tens of thousands of dollars when they're most vulnerable.
I'm not sure why you're picking out "Efficiency" in a health care system, and deliberately ignoring "Effective and valuable". While efficiency is commendable, you're missing the point of a health care system somewhat...
I'm not sure why you're picking out "Efficiency" in a health care system, and deliberately ignoring "Effective and valuable". While efficiency is commendable, you're missing the point of a health care system somewhat...
> Uh, that would be the definition where you don't screw people out of tens of thousands of dollars when they're most vulnerable.
Yes, it's much better to simply deny them care.
As I pointed out the US has a tax-payer supported medical system with universal coverage. Most people opt out. In that, it's exactly like every other "free" system - anyone who can afford to go outside the "free" system does.
Given that, why would you want to expand the scope of free?
> I'm not sure why you're picking out "Efficiency" in a health care system, and deliberately ignoring "Effective and valuable". While efficiency is commendable, you're missing the point of a health care system somewhat...
It's almost impossible to be effective without being somewhat efficient. We don't have infinite resources to spend on medical care and expanding public won't change that. What it will change is reduce efficiency, which leads to more total spending and/or less medical care. (It's likely to be both.)
Which reminds me - "public option" advocates don't want to talk too much about "effective and valuable" as some of their key research support is based on lower cost per death, not cost per life. Unless, of course, the goal is effective deaths.
Yes, it's much better to simply deny them care.
As I pointed out the US has a tax-payer supported medical system with universal coverage. Most people opt out. In that, it's exactly like every other "free" system - anyone who can afford to go outside the "free" system does.
Given that, why would you want to expand the scope of free?
> I'm not sure why you're picking out "Efficiency" in a health care system, and deliberately ignoring "Effective and valuable". While efficiency is commendable, you're missing the point of a health care system somewhat...
It's almost impossible to be effective without being somewhat efficient. We don't have infinite resources to spend on medical care and expanding public won't change that. What it will change is reduce efficiency, which leads to more total spending and/or less medical care. (It's likely to be both.)
Which reminds me - "public option" advocates don't want to talk too much about "effective and valuable" as some of their key research support is based on lower cost per death, not cost per life. Unless, of course, the goal is effective deaths.
> As I pointed out the US has a tax-payer supported medical system with universal coverage.
Really? From what I know, the US has Medicaid (means-tested), Medicare (>65), and other ones like Veterans, but nothing that covers the bulk of the population. A lot of people are either uninsured, or underinsured, and so unable to get decent healthcare.
I'm not in the US, so I'm not 100% on the various programs, but perhaps you can explain the discrepancy between your comment (US has universal health care) vs. the opening of http://en.wikipedia.org/wiki/Health_care_in_the_United_State... and http://www.whitehouse.gov/the_press_office/Remarks-by-the-Pr...
Also from that article, the US seems to have one of the least efficient health care systems in the world, yet has poorer health care in real terms than other countries with public health (eg. most of Europe):
"More money per person is spent on health care in the United States than in any other nation in the world,[6][7] and a greater percentage of total income in the nation is spent on health care in the U.S. than in any United Nations member state except for East Timor."
Really? From what I know, the US has Medicaid (means-tested), Medicare (>65), and other ones like Veterans, but nothing that covers the bulk of the population. A lot of people are either uninsured, or underinsured, and so unable to get decent healthcare.
I'm not in the US, so I'm not 100% on the various programs, but perhaps you can explain the discrepancy between your comment (US has universal health care) vs. the opening of http://en.wikipedia.org/wiki/Health_care_in_the_United_State... and http://www.whitehouse.gov/the_press_office/Remarks-by-the-Pr...
Also from that article, the US seems to have one of the least efficient health care systems in the world, yet has poorer health care in real terms than other countries with public health (eg. most of Europe):
"More money per person is spent on health care in the United States than in any other nation in the world,[6][7] and a greater percentage of total income in the nation is spent on health care in the U.S. than in any United Nations member state except for East Timor."
> From what I know, the US has Medicaid (means-tested), Medicare (>65), and other ones like Veterans, but nothing that covers the bulk of the population.
"means tested" means "poor people are eligible". A huge fraction of the supposedly uninsured are eligible for Medicaid, Medicare, and/or other programs but don't bother to sign up until they seek care. In other words, they look like they're uninsured but they're not.
In addition, everyone is eligible for free care at the local county or city medical center. They often try to send bills, but you're free to ignore them. That's the free program to which I referred. I mention it because most folks "forget it", concentrating only on the big federal programs. (It's a federal mandate but paid for by local govts.)
What? Your sources didn't mention those things? Oops. (Do you always believe politicians or only the ones that say things consistent with your world view?)
The US' health care problems come from lifestyle choices. Medical care can't address smoking or obesity, for example. (Yes, US doctors tell folks "don't smoke and lose weight".)
Here's are some questions for you. Why do Canadian politicans come to the US for health care? (Often paid for by Canadian tax payers....) Do US politicans go out of the country for health care? If your favorite national health care system didn't provide a treatment that you needed, where would you go?
As to the money - we have it. What would you have us spend it on instead? (It doesn't much matter to us if others couldn't afford it.)
Also, there's no reason to believe that the US govt can do better. It already provides health care to a huge fraction of the population yet doesn't do so more efficiently.
That said, I've always been willing to let the US govt experiment wrt health care for the folks it already covers. (Including govt employees, this is roughly half the US population.) Yes, free rein to try anything. All that I ask is that the per-person budget get cut by 5% per year for years 2-6. For some reason, govt healthcare advocates are unwilling to take this deal even though they claim that they can get 30% from the whole population.
"means tested" means "poor people are eligible". A huge fraction of the supposedly uninsured are eligible for Medicaid, Medicare, and/or other programs but don't bother to sign up until they seek care. In other words, they look like they're uninsured but they're not.
In addition, everyone is eligible for free care at the local county or city medical center. They often try to send bills, but you're free to ignore them. That's the free program to which I referred. I mention it because most folks "forget it", concentrating only on the big federal programs. (It's a federal mandate but paid for by local govts.)
What? Your sources didn't mention those things? Oops. (Do you always believe politicians or only the ones that say things consistent with your world view?)
The US' health care problems come from lifestyle choices. Medical care can't address smoking or obesity, for example. (Yes, US doctors tell folks "don't smoke and lose weight".)
Here's are some questions for you. Why do Canadian politicans come to the US for health care? (Often paid for by Canadian tax payers....) Do US politicans go out of the country for health care? If your favorite national health care system didn't provide a treatment that you needed, where would you go?
As to the money - we have it. What would you have us spend it on instead? (It doesn't much matter to us if others couldn't afford it.)
Also, there's no reason to believe that the US govt can do better. It already provides health care to a huge fraction of the population yet doesn't do so more efficiently.
That said, I've always been willing to let the US govt experiment wrt health care for the folks it already covers. (Including govt employees, this is roughly half the US population.) Yes, free rein to try anything. All that I ask is that the per-person budget get cut by 5% per year for years 2-6. For some reason, govt healthcare advocates are unwilling to take this deal even though they claim that they can get 30% from the whole population.
If everything that you say above is true, then why is the US health care system so fucked? Huge amounts of spending, very little return, much poorer outcomes for most people than other countries, etc, etc.
You're not making much sense, and I can't help but notice that you're not providing any sources for your opinions either. If you're not going to comment on the sources I've mentioned above, or provide some that support your opinions, then there's not much point in continuing the discussion.
You're not making much sense, and I can't help but notice that you're not providing any sources for your opinions either. If you're not going to comment on the sources I've mentioned above, or provide some that support your opinions, then there's not much point in continuing the discussion.
In what universe is nationalized health coverage efficient?
The one where Medicare's overhead costs are in the single-digit percentages (like 3%), while private insurers have overhead rates well into the double digits.
You can measure the efficiency of an insurance company by dividing the claims paid out by the premiums (e.g. what's the expected payout of taking the policy?). In most insurance industries, it's common to score above 100 (because the premiums are invested and accrue interest, this does not contradict profit for the insurer). Health insurers are closer to 70-85.
Insurance companies, not because they're evil (although they are), have to cherry-pick and screen if they want to stay alive. It's the nature of the business-- adverse selection happens otherwise. However, this is a time-consuming process. Government, which is not driven by the profit motive, doesn't have to cherry pick and can insure all citizens (at a cost).
Also, government-run health care and the elimination of the fee-for-service model will reduce the amount of unnecessary testing and make health care cheaper in the long run.
The one where Medicare's overhead costs are in the single-digit percentages (like 3%), while private insurers have overhead rates well into the double digits.
You can measure the efficiency of an insurance company by dividing the claims paid out by the premiums (e.g. what's the expected payout of taking the policy?). In most insurance industries, it's common to score above 100 (because the premiums are invested and accrue interest, this does not contradict profit for the insurer). Health insurers are closer to 70-85.
Insurance companies, not because they're evil (although they are), have to cherry-pick and screen if they want to stay alive. It's the nature of the business-- adverse selection happens otherwise. However, this is a time-consuming process. Government, which is not driven by the profit motive, doesn't have to cherry pick and can insure all citizens (at a cost).
Also, government-run health care and the elimination of the fee-for-service model will reduce the amount of unnecessary testing and make health care cheaper in the long run.
> The one where Medicare's overhead costs are in the single-digit percentages (like 3%), while private insurers have overhead rates well into the double digits.
They're not defining overhead the same way.
Note also that medicare doesn't count its fraud costs while private insurers do.
> Insurance companies, not because they're evil (although they are), have to cherry-pick and screen if they want to stay alive.
Actually, they don't. They merely have to keep payouts plus expenses lower than revenues plus investment gains.
> Government, which is not driven by the profit motive, doesn't have to cherry pick and can insure all citizens (at a cost).
Govt is definitely driven by a profit motive.
Govt doesn't have infinite resources, so there will be limits. You won't like the ones applied to you, and you won't have the money to do anything about it because it will be taken from you and spent on someone else.
Oh, and certain folks will have very different limits. That's how govt works.
> Also, government-run health care and the elimination of the fee-for-service model will reduce the amount of unnecessary testing and make health care cheaper in the long run.
There's nothing stopping a private organization from doing something other than fee for service today. In fact, Kaiser doesn't, and I'll bet that they're not the only one.
"Unnecessary testing" is in the eye of the beholder. When are mamograms unnecessary?
Of course, there are defensive tests, for liability reasons. If you're arguing that govt healthcare shouldn't be liable for mistakes....
They're not defining overhead the same way.
Note also that medicare doesn't count its fraud costs while private insurers do.
> Insurance companies, not because they're evil (although they are), have to cherry-pick and screen if they want to stay alive.
Actually, they don't. They merely have to keep payouts plus expenses lower than revenues plus investment gains.
> Government, which is not driven by the profit motive, doesn't have to cherry pick and can insure all citizens (at a cost).
Govt is definitely driven by a profit motive.
Govt doesn't have infinite resources, so there will be limits. You won't like the ones applied to you, and you won't have the money to do anything about it because it will be taken from you and spent on someone else.
Oh, and certain folks will have very different limits. That's how govt works.
> Also, government-run health care and the elimination of the fee-for-service model will reduce the amount of unnecessary testing and make health care cheaper in the long run.
There's nothing stopping a private organization from doing something other than fee for service today. In fact, Kaiser doesn't, and I'll bet that they're not the only one.
"Unnecessary testing" is in the eye of the beholder. When are mamograms unnecessary?
Of course, there are defensive tests, for liability reasons. If you're arguing that govt healthcare shouldn't be liable for mistakes....
Which reminds me. Would you rather raise a dispute over coverage with a govt agency or with a private insurer?
You can fire a security company that fails to protect you. You can't fire the police for failure to protect. Do you think that health care will be any different?
You can fire a security company that fails to protect you. You can't fire the police for failure to protect. Do you think that health care will be any different?
> "In 50 years, only a minority will be able to earn a living on a free labor market."
what is the outcome of this? does that mean the majority will be provided for free of cost?
what is the outcome of this? does that mean the majority will be provided for free of cost?
Most likely outcome: governments take the following eugenic approach. The smartest get government-provided education and an encouragement to reproduce. Available to all will be basic income and public services. It will be engineered in such a way that those whose children are not likely to succeed economically are somewhat discouraged (e.g. a basic income that declines as they have more kids), but it won't look that way. Essentially, it will look like this: basic income that brings everyone out of poverty (so those who currently reproduce whilst in poverty as they have nothing to lose lifestyle-wise, now have a relatively nice lifestyle and an incentive not to have kids that society can't afford) and social services directed at intelligent children-- educational grants and resources. Thus, having children is an economic negative if your kids are not smart and positive if they are.
Eugenics by carrots, not sticks. Which is good IMO. I have no problem with eugenics so long as (1) no one is forcibly sterilized or killed, and (2) no racism is involved.
Basic income is necessary. There will be a large set of people who won't be able to compete with automation on the free market-- the work they've traditionally done will be done by robots. What remains is the work that requires intelligence and creativity. Our demand for this kind of work is (as far as I can see) unbounded. However, our process for rewarding this type of work is extremely "noisy", because creative work has a lot of variance in terms both of its success and in its ability to capture the (often intangible and indirect) value it adds. So we'll need a basic/guaranteed income for smart people because the work we'll want them to be doing is work that doesn't always pay off immediately and the problems they'll be solving will not always be soluble.
Eugenics by carrots, not sticks. Which is good IMO. I have no problem with eugenics so long as (1) no one is forcibly sterilized or killed, and (2) no racism is involved.
Basic income is necessary. There will be a large set of people who won't be able to compete with automation on the free market-- the work they've traditionally done will be done by robots. What remains is the work that requires intelligence and creativity. Our demand for this kind of work is (as far as I can see) unbounded. However, our process for rewarding this type of work is extremely "noisy", because creative work has a lot of variance in terms both of its success and in its ability to capture the (often intangible and indirect) value it adds. So we'll need a basic/guaranteed income for smart people because the work we'll want them to be doing is work that doesn't always pay off immediately and the problems they'll be solving will not always be soluble.
"a basic income that declines as they have more kids" ?
The people who this hurts the most are the kids themselves - the ones who aren't at fault and who, given different circumstances, are perfectly likely to make it into the "productive" class. And since the incentive is applied after the kid is born, it hasn't really helped anything.
Plus, there are already pretty strong economic disincentives for having lots of children, and it doesn't seem to be stopping anyone. People (particularly low income people) are not rational when it comes to children.
The people who this hurts the most are the kids themselves - the ones who aren't at fault and who, given different circumstances, are perfectly likely to make it into the "productive" class. And since the incentive is applied after the kid is born, it hasn't really helped anything.
Plus, there are already pretty strong economic disincentives for having lots of children, and it doesn't seem to be stopping anyone. People (particularly low income people) are not rational when it comes to children.
In 50 years, only a minority will be able to earn a living on a free labor market. The current economic model (no basic income; minimum wage on which it's impossible to live, but that can't be raised to a liveable level without exacerbating the unemployment problem) cannot survive this change.