State rationing, social darwinism, and eugenics; market (price) rationing, productivity, and social darwinism

I have to ask, do other libertarians see social darwinism as clearly as I do in the market system?  I had this argument from a typical euro-centric american (...) about the U.S. health care system needing to be universal, one payer, blah blah.  Here is one of the many typically unthoughout "arguments" presented and my response.

The point: "Opponents of nationalized health always point to waiting lists.  A capitalist based system has those too: if you don't have money you can wait.  The question isn't "do you want to help everyone or not", since you can't.  The question is "how do you want to decide who has to wait".

I'll argue that the first question is arbitrary and that the second is inherently true for all situations involving scare resources, no matter the arbiter.

The price mechanism is the markets rationing system.  It is a reflection of how productive people who contribute to society can get medical procedures due to the fact that they are worth something to the community.  People who do not produce anything, as bad as it sounds, just aren't worth as much to society in this way.  But, the state uses the same reasoning for a different purpose.

The difference between "waiting in lines" (this is always due to scare resources) under a bureaucratically managed system and a market system is that in the market system the decision of a persons worth to society is made by that persons individual effort, labor, time, w/e, i.e. the decision is not arbitrary, as it is under a bureaucracy, it is within the person in question.

Let's hypothesize:

A retired person 77 years of age needs a quadruple bypass surgery, but does not have an adequate insurance plan to cover such a surgery.  A state bureaucracy will think things like, "What kind of tax revenue does this person generate?" and "If/How does this person vote?"

These are the rationing mechanisms of a state bureaucracy.  'Does the surgery cost more than the taxes generated by saving the person?'  If the answer is "No" then we move to the realm of eugenics.  It is state manipulated social darwinism; an appllication of eugenics.  If the answer is "Yes" then we might adduce that the point of keeping the person alive is to generate taxes for the state.  Both of which seem immoral to me.  And on a fundamental level.

You might say, "Well, that is virtually identical to a private company and their motive for profit."  Yes, that is why some people are "un-insurable."  This also means that you cannot wait until you get sick and then apply for insurance, which is to misunderstand the definition of the word 'insurance'. This behavior is likely exhibited out of an attempt at free coverage by not paying into the insurance plan before hand.

As I said in the first paragraph, the simple difference is 'under a market system the ability to afford health care is based on your productive value to society in that they have (or had) a job in the voluntary labor force'.  Under a state bureaucracy the ability to get medical treatments is based on your political value to the state.

In one you serve, voluntarily, your fellow man by producing wealth and earnings for yourself and in the other you serve a small group of faceless bureaucrats against your will or even knowledge for the benefit not of wealth in society, but for whatever the state says it's using tax money for.

Also, (when you are at work you are producing wealth directly and when you buy things you produce wealth indirectly through someone else's labor).  That is how the word was used above.

The follow up:  Your speculation about how it works in a nationalized system is pure fantasy.  Go look at actually running socialized medical systems and tell me which ones are doing this.  Places that have socialized medicare also have democracies that would throw out anyone who tried something like that.  I agree that the potential is there, but the alternative has some pretty nasty what-ifs as well.

"It is a reflection of how productive people who contribute to society can get medical procedures due to the fact that they are worth something to the community."

Please tell me you don't believe this dogma?  Seriously?  You seriously, truly believe people who have more money are more productive and contribute more?  If you do then it's pretty pointless talking about reality to you since you've ignored so much of it.

Larry Ellison is estimated to make about $800 MILLION per year.... what exactly is it that he's doing that's so valuable to society?  I don't know what your background is but I'm in IT and I can tell you that Oracle (his product) is generally considered a virus.  He provides negative value since his product is largely inferior and requires an army of expensive specialists to get working well.  There is no correlation between the value someone provides society and how much they compensated.  

Most of the fantasy that libertarians and free market ideologs in general talk about are based on efficient free markets.  There is no such thing, there has never been such a thing and likely can never be such a thing (see the proof that says an efficient market is an N = NP problem).

I would agree that more-or-less free markets are one of the better tools we've come up with, but they are not the solution to every possible problem, but lets not get religious about how good they work.

"Please tell me you don't believe this dogma?  Seriously?  You seriously, truly believe people who have more money are more productive and contribute more?  If you do then it's pretty pointless talking about reality to you since you've ignored so much of it."

"Larry Ellison is estimated to make about $800 MILLION per year.... what exactly is it that he's doing that's so valuable to society?"

You are only thinking of extremes and obviously jealous, first of all.  Second, I agree that there are people, _who harness state powers_ within the private market who make this look bad, but when tou think about it, yes rich people contribute greatly by facilitating vast amounts of capital into channels where _things are produced._

"I don't know what your background is but I'm in IT and I can tell you that Oracle (his product) is generally considered a virus."

Someone is buying it.  I think Electronic Art's Origin program is basically a cloud based data mining virus as well, but that didn't stop EA from selling 40 million dollars worth of them in two weeks.  You sound like your personal judgments cloud your vision of how society actually works.  You get mad about injustices and cannot objectively view how they operate.

"He provides negative value since his product is largely inferior and requires an army of expensive specialists to get working well.  There is no correlation between the value someone provides society and how much they compensated."

This is a joke.  No wonder you call market economics "dogma" you don't understand it at a fundamental level.  I find this a lot among people who have never studied it.  "Profit" is how you measure the value added to raw materials during the production process.  Each profit made by each actor during the different stages of production is a reflection of the value added during each stage.  If a logger cuts down a tree and sell the logs to a carpenter, what the carpenter pays for the _cut down_ tree is a reflection of what the carpenter views the loggers efforts were worth.  It is a direct reflection of this.  When the carpenter makes a table and chairs out of the wood and you buy it from him, what you pay for the table and chairs, and the profit the carpenter makes from it, is a reflection of what you think the labor to cut the trees down and make them into a table and chairs is worth. 

I suggest you read this: http://library.mises.org/books/Ludwig%20von%20Mises/Profit%20and%20Loss.pdf

"Most of the fantasy that libertarians and free market ideologs in general talk about are based on efficient free markets.  There is no such thing, there has never been such a thing and likely can never be such a thing (see the proof that says an efficient market is an N = NP problem)."

I never once used the word "efficiency."  Something else you have not read about is libertarianism.  I don't what libertarians claim to have efficiency as a virtue to strive for.  It is about freedom of choice in the market.  That doesn't correlate to efficiency.  Maybe, expediency, but not efficiency.  So, this is a red herring.

"I would agree that more-or-less free markets are one of the better tools we've come up with, but they are not the solution to every possible problem, but lets not get religious about how good they work."

How well they work.  And we didn't "come up with it,"  it took a few centuries of "observations" for us to figure out how to systematize the abstraction of an amoeba-like system of interactions.

I do not see the free market as a rationing system or a system of Social Darwinism nor do I see the free market as a system of compassion as only individuals can have compassion, empathy, sympathy, etc.  I do see the free market as a massive system or incentivised cooperation where entrepreneurs are in constant effort to cut costs and increase quality.  And in this process the poorest and most in need consumers benefit the most as entrepreneurs attempt to get the forever declining profits by reducing prices and increasing sales volumes.

In the areas of life where the market is most free the prices keep declining while the quality keeps increasing.  My favorite examples of this are in the areas of televisions and golf clubs.  My 720P 50in television costing $900 is no longer available and instead the 50in 1280P television has pushed it out of the marketplace and costs $599.  On the same note, I just purchased a Calloway 3wood LEFT handed for $45 from an internet supplier when this club costs at least 3 times this much when first released.

Conversely in those areas most regulated and supposedly most accessible to the poorest, I see forever increasing bureaucracy, increasing prices and decreasing quality.  Contrast golf equipment and televisions with educations and health care.  What would the world be like without government involvement in education and healthcare, I dare say that we would can not even conceive of the progress.

So it is the ares of life most controlled by govenrment that we see the most behavior associated with "Social Darwinism" and in the most free areas we see the most intense cooperation.

Aristophanes, I think you did a good job but, as Bogart noticed, you missed a very important point. The comparison is not between two different methods of dividing the cake, but between TWO different-sized cakes altogether. The cake (quality goods/services at low prices) provided by a free market through economic calculation is orders of magnitudes larger than the one provided and divided by a bureaucrat (the Socialist Calculation Problem). 

 

 

Also keep in mind that using the market system is the only moral way to distribute scarce resources.  And because it is the only moral way, the participants have compassion, sympathy and most importantly empathy for their fellow humans and are very willing to help their fellow humans out.  Look at the USA as an example where the people have been the most generous folks in the world.

+1 Bogart. Well put. 

Only the price system can enable every individual to make the decision for himself or herself which things he or she is willing to wait for and which things not in such a way that the demands of every individual for every good are constantly being weighed against the demands of all other individuals for all other goods. This is precisely the "calculation" that Mises was on about. Any substitution of central-planning for prices necessarily reduces the number of people who are evaluating relative demand - thus reducing the information available for making this assessment and reducing the amount of calculation being performed - and results in discoordination of production and consumption, thus hampering all the ends which men have, not just those in which the central planners have specifically meddled.

Clayton -