The Morality of Self Interest
I am a huge fan of Adam Smith. In his first important work titled, “The Theory of Moral Sentiments“, he discusses the nature of morality, including Propriety, Prudence, and Benevolence. He discusses motives for morality, including Self-love, Reason, and Sentiment. This quote relates Adam Smith’s hypothesis about the nature of man, based on his observation and his research:
How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortunes of others, and render their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing it. Of this kind is pity or compassion, the emotion we feel for the misery of others, when we either see it, or are made to conceive it in a very lively manner. That we often derive sorrow from the sorrows of others, is a matter of fact too obvious to require any instances to prove it; for this sentiment, like all the other original passions of human nature, is by no means confined to the virtuous or the humane, though they perhaps may feel it with the most exquisite sensibility. The greatest ruffian, the most hardened violator of the laws of society, is not altogether without it.
We all must take care of ourselves, our families and our communities. While that make seem selfish to some, it has proven to be the best way to allocate the scarce resources we always seem to want more of.
bh
Intellectuals and Economics
Thomas Sowell has just written his third book in a year, Intellectuals and Society, and America’s foremost economist and contemporary philosopher has again given IBD permission to publish excerpts.
The new book is a study of what intellectuals do, why they do it the way they do and — most important —their effects on society.
Below is the first installment of a seven-part series that focuses on the third chapter, “Intellectuals and Economics.”
Other chapters in the 398-page volume released last week by Basic Books cover “Intellectuals and Social Visions,” “Intellectuals and the Law,” “Intellectuals and War” and “Optional Reality in the Media and Academicia,” among other topics.
In October, IBD excerpted the chapter on The Economics of Medical Care from Sowell’s Applied Economics — one of six books he has written on economics. Others include Basic Economics, a classic text that’s been translated into six languages.
In November, IBD excerpted the chapter on politics from Sowell’s The Housing Boom and Bust.
How Data On Income Distribution Are Misunderstood And Misapplied
Posted 01/08/2010 07:13 PM ET
Healthcare’s Economic Reality
If you are interested in the facts, I strongly encourage you to read Thomas Sowell’s “Applied Economics”. Dr. Sowell shows how today’s arguments in support of nationalized healthcare suffer from what he terms, “level 1 thinking”, where people only see the first stage of an issue and do not take into account what happens following the implementation of certain public policies.
Read “Applied Economics” by Thomas Sowell.
Copyright © 2009.
The ‘Costs’ of Medical Care, Part I
We are incessantly being told that the cost of medical care is “too high” — either absolutely or as a growing percentage of our incomes. But nothing that is being proposed by the government is likely to lower those costs, and much that is being proposed is almost certain to increase the costs.
There is a fundamental difference between reducing costs and simply shifting costs around, like a pea in a shell game at a carnival. Costs are not reduced simply because you pay less at a doctor’s office and more in taxes — or more in insurance premiums, or more in higher prices for other goods and services that you buy, because the government has put the costs on businesses that pass those costs on to you.
Costs are not reduced simply because you don’t pay them. It would undoubtedly be cheaper for me to do without the medications that keep me alive and more vigorous in my old age than people of a similar age were in generations past.
Letting old people die would undoubtedly be cheaper than keeping them alive — but that does not mean that the costs have gone down. It just means that we refuse to pay the costs. Instead, we pay the consequences. There is no free lunch. continue reading…
The ‘Costs’ of Medical Care, Part II
Although it is cheaper to buy a pint of milk than to buy a quart of milk, nobody considers that to be lowering the price of milk. Although it is cheaper to buy a lower quality of all sorts of goods than to buy a higher quality, nobody thinks of that as lowering the price of either lower or higher quality goods.
Yet, when it comes to medical care, there seems to be remarkably little attention paid to questions of both quantity and quality, in the rush to “bring down the cost of medical care.”
There is no question that you can reduce the payments for medical care by having either a lower quantity or a lower quality of medical care. That has already been done in countries with government-run medical systems.
In the United States, the government has already reduced payments for patients on Medicare and Medicaid, with the result that some doctors no longer accept new patients with Medicare or Medicaid. That has not reduced the cost of medical care. It has reduced the availability of medical care, just as buying a pint of milk reduces the payment below what a quart of milk would cost.
Letting old people die instead of saving their lives will undoubtedly reduce medical payments considerably. But old people have that option already — and seldom choose to exercise it, despite clever people who talk about a “duty to die.”
A government-run system will take that decision out of the hands of the elderly or their families, and thereby “bring down the cost of medical care.” A stranger’s death is much easier to take, especially if you are a bureaucrat making that decision in Washington. continue reading…
The ‘Costs’ of Medical Care, Part III
One of the strongest talking points of those who want a government-run medical care system is that we simply cannot afford the high and rising costs of medical care under the current system.
First of all, what we can afford has absolutely nothing to do with the cost of producing anything. We will either pay those costs or not get the benefits. Moreover, if we cannot afford the quantity and quality of medical care that we want now, the government has no miraculous way of enabling us to afford it in the future.
If you think the government can lower medical costs by eliminating “waste, fraud and abuse,” as some Washington politicians claim, the logical question is: Why haven’t they done that already?
Over the years, scandal after scandal has shown waste, fraud and abuse to be rampant in Medicare and Medicaid. Why would anyone imagine that a new government medical program will do what existing government medical programs have clearly failed to do?
If we cannot afford to pay for doctors, hospitals and pharmaceutical drugs now, how can we afford to pay for doctors, hospitals and pharmaceutical drugs, in addition to a new federal bureaucracy to administer a government-run medical system? continue reading…
The ‘Costs’ of Medical Care, Part IV
What is so wrong with the current medical system in the United States that we are being urged to rush headlong into a new government system that we are not even supposed to understand, because this legislation is to be rushed through Congress before even the Senators and Representatives have a chance to read it?
Among the things that people complain about under the present medical care system are the costs, insurance company bureaucrats’ denials of reimbursements for some treatments and the free loaders at hospital emergency rooms whose costs have to be paid by others.
Will a government-run medical system make these things better or worse? This very basic question seldom seems to get asked, much less answered.
If the government has some magic way of reducing costs — rather than shifting them around, including shifting them to the next generation — they have certainly not revealed that secret. The actual track record of government when it comes to costs — of anything — is more alarming than reassuring.
What about insurance companies denying reimbursements for treatments? Does anyone imagine that a government bureaucracy will not do that? continue reading…
What stops population growth?
This global health visionary has discovered a powerful new way to communicate complex data about the world. He co-founded Gapminder, whose remarkable interactive graphs help deliver profound insights about global trends and dispel myths about the “developing world”. With the drama and urgency of a sportscaster, he debunks a few of those myths in this presentation delivered at the 2006 Technology, Entertainment, Design (TED) Conference.
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Taking out the Trash
Monday, November 02, 2009
Paul Krugman says I should be ashamed of myself for calling into question Obama administration estimates of how many jobs have been “created or saved.” Here is what Paul says,
The Obama administration’s “jobs created or saved” is just a way of saying “other things equal” in non-economese. Of course it makes sense to ask how many more people are working than would have been the case without a given policy — and every administration makes assertions along those lines. During the 2001 recession and its aftermath, how many times did the Bush administration claim that the recession would have been worse without its tax cuts? And while many of us quarreled with that claim, I don’t think I ever argued that other-things-equal arguments are nonsense on their face.
Yet Paul is rebutting claims I did not make, and he is giving Team Obama more credit on this question than it is due. Here is what I wrote on the topic last February:
The 4 million job number is a counterfactual policy simulation of what the stimulus will do based on a particular model of the economy. As such, I have no objection to someone citing it in a policy discussion. In fact, macroeconomists use models to generate figures like this all the time. I have even done it myself.But as an answer to the question “how can the American people gauge whether or not your programs are working?… What metric should they use?”, citing the 4 million job figure is a non sequitur, or more likely a diversion. A metric has to be measurable, and the actual number of jobs “created or saved” by the policy will never be measurable from any data source.
That is, I do not object to claims such as,
A: “Based on our models of the economy, we believe there would be X million fewer jobs today without the stimulus.”
But it is absurd to suggest that you can say,
B: “We have measured how many jobs the stimulus has saved or created, and the number is X.”
Economists are capable of making statements such as A, but it is beyond our ken to make statements such as B. Statement B is,of course, much stronger than statement A, as it purports to be based on data rather than on models. Unfortunately, we are hearing statements like B much too often from administration officials. A good example is here, where can you “learn” that 110,185.36 jobs have been created or saved in California alone.
The Bigger Hoax: Green Jobs or Balloon Boy?
http://www.AmericanSolution… Breaking news: The cap and trade balloon, which had promised to deliver 1.7 million new green jobs, lands with no jobs inside. In fact, cap and trade will actuall…
Bob Hubbard
