A Libertarian View of Airline Security

In light of the recent avalanche of media coverage targeting airline security, I thought it would be worthwhile to briefly outline a libertarian approach. Here is what we know:

1. Terrorism is not the product of one single group under the direction of one single leader, but a conglomeration of loosely organized, decentralized organizations from the Middle East. They overwhelmingly profess allegiance to Islamic religious beliefs. However, Islam is not only factionalized (Shiite Sunni etc.) but also highly decentralized, and therefore there is no one-single Islamic leader that has control over other groups. The vast majority of these “Islamic Extremists” live in poor Middle Eastern and African countries: Afghanistan, Pakistan, Yemen, Somalia etc. The vast majority of them are poor, male, illiterate, and unemployed. The majority of these potential terrorists have never flown in a plane.

2. All governments thrive on fear, and gain power over citizens by promising protection from threats. Invariably, the illusion of security is achieved at the expense of personal liberty and efficiency. The modern world is rife with both real and imagined threats. Americans have become increasingly risk-averse and therefore expect our government to protect us from an ever-expanding list of potential threats: influenza, balloon mortgages, unemployment, hunger, stupidity, rising gasoline prices, urban violence, sexual predators, contaminated food, and suicide bombers.

3. In the modern world perfect security is impossible because there is an infinite number of potential threats and an infinite number of ways to incite fear through the media. Threat-mongering enjoys a bull market. Therefore, if you watch CNN, or follow Internet news sources, you would think that we live our lives on the brink of disaster, when in fact most of us lead extraordinarily safe lives.

So what would a libertarian conclude about all of this? First of all, most of us would argue that we cannot afford to protect ourselves from an infinite number of potential threats, therefore security-rationing is inevitable. Most of us libertarians believe that the terrorist airline threat is greatly overblown. Moreover, our ongoing wars against local, regional, national, and international "Radical Islamic Groups" tend to manufacture more terrorists. Every time a drone missile kills an innocent (or guilty) woman or child, friends and family members seek revenge. However, they are not likely to buy an airline ticket to the United States. Given what we know about the efficiency of airline security, if terrorists were really interested in (or capable of) blowing up airplanes at will, there would have been many more air disasters. The fact of the matter is that you are safer on an airplane than in a car or a hospital. And finally, I think all libertarians agree that the airline industry is much more likely to be able to make rational assessments of the terrorism threat, and develop reasonable airline security policies than a governmental agency.

So what do we do? End the various instantiations of the “War on Terror” (along with the “Drug War”), let the free market sort out the degree of threat, develop useful technologies such as scanners, and biotechnical identification cards. Then, turn those “no-fly lists” over to the real experts: Federal Express, Wal-Mart, and Disney Corporation. Check out my recent APLS Blog Entry.

Tragedy of the Commons, Part 2: Over-Extraction of Resources

One manifestation of the “tragedy of the commons” is that human beings tend to over extract resources. Resource depletion can often be blamed on the fact that we often have imperfect information, as to the exact quantities of available resources at our disposal and the natural capacity for replenishment. How many salmon can be extracted before the species is no longer able to sustain itself? I wish imperfect information was the only source of unsustainable resource depletion. Unfortunately, we all over-extract in order to reap known short-term benefits at the expense of the unknown long-term costs. As evidenced by the universality of this kind of behavior, I’m afraid that human beings (individually and collectively) are naturally predisposed to unsustainable over-extraction.

In a free market, one would expect that the extraction of increasingly scarce resources would become prohibitively expensive and, therefore, extractors would be incentivized to pursue less-expensive substitutes. However, technology extends the ability of extractors to find increasingly scarce resources, while other technologies make it possible to efficiently over-extract those remaining resources. Hence, technology also plays a role in over-extraction. Governments encourage investment in these technologies by offering tax write-offs and other less visible incentives.

But then again, we might question whether the long-term extinction of any one resource is necessarily tragic. Although the over-extraction of oil would be tragic to the oil industry and its stockholders, over the long-run, it would be a godsend to the coal industry and other alternative energy industries. If those alternatives turn out to be onerously expensive, we can always alter out consumption patterns. Unfortunately, this natural process is often short-circuited by governmental tax policies, subsidies, and licensing that provide perverse incentives that lower the cost of continuing to extract increasingly scarce resources at the expense of other potentially viable substitutes. Libertarians argue that viable substitutes must be discovered via free market competition. But welfare liberals cling to the false belief that government experts possess perfect information, and therefore can choose the best substitutes. When governments choose the wrong substitutes, we invariably end up with resource shortages, higher prices, and/ or higher taxes. F.A. Hayek called this governmental tendency to over-estimate its ability to manage markets, “The Fatal Conceit.”

In the United States, the over-extraction of natural resources is also fueled by public ownership of resources, coupled with the government charging favored extractors ridiculously low license fees to extract publically-owned oil, coal, and timber. Sometimes these “sweetheart deals” can be attributed to outright corruption of public officials, but most often it’s a matter of legislators trying to protect extraction jobs in their districts by artificially lowering the cost of extraction and thereby fighting off viable competing substitutes offered by other districts. Hence, onerously expensive off-shore drilling for increasingly scarce oil is incentivized by government by lowering extraction fees, water pollution standards, and taxes etc. Despite years of tragic over-extraction, environmentalists continue to express unbridled faith in governmental stewardship over resource extraction, while in reality they are more likely to end up with “corporate welfare,” which is how governments make the “tragedy of the commons” even more tragic.

Environmental Policy and the "Tragedy of the Commons" Part I

Any libertarian-based environmental policy begins with a foundational principle called the “Tragedy of the Commons.” Let’s break it down into its basic components: “commons” and “tragedy.” In the Western world, the cultural origin of the concept of collective environmental ownership can be traced to the Biblically-based tenet that God gave the earth to mankind. Over the centuries this has been interpreted to mean that caring for the earth is our collective responsibility: call it “stewardship.” Unfortunately, the problem with collective responsibility is that we have repeatedly proven to be irresponsible stewards. That’s why when human beings assert collective dominion over the environment the consequences are inevitably tragic. Hence, the familiar libertarian mantra, “When everyone owns it, nobody owns it.”

Human beings utilize our common earthly environment in two different ways. We extract resources and expel waste. Throughout human history, environmental tragedy has resulted from our over-extraction and over-expulsion. In recent years, the over-extraction and over-pollution have become more problematic than in the past because we’ve become much more efficient extractors and polluters. The root of the problem is that, when given the option, we humans would rather reap benefits than pay costs. In the case of over-extraction and over-pollution the costs are usually transferred (shifted) to other humans, and most often to future generations. Most libertarians argue that the only way to avoid “tragedy of the commons” is to abandon collective ownership and stewardship in favor of private ownership. I’m not sure about that. Private ownership alone will not necessarily lead to non-tragic environmental policy. After all, individual owners are also prone to over-extraction and over-pollution of their own property, as they willingly risk less-certain long-term tragedy in pursuit of certain short-term benefits.

So the real problem arises when opportunistic owners over-extract and over-expel at the expense of other adjacent property owners. Therefore, other libertarians argue that private ownership must be accompanied by the empowerment of adjacent property owners to exact retribution. When my neighbor builds a dam upstream to divert water for his private fishing pond, why can’t I sue him for over-extraction? When the coal-fired utility plants along the Ohio River pollute the air over my property why can’t I sue Duke Energy Corporation for polluting my air? But it's not that simple. The two manifestations of the “tragedy of the commons” are so different that they require more detailed, separate analyses. Therefore, my next two blog entries will cover over-extraction and over-pollution, respectively.

The Quality of Health Care

The most idealistic health care reformers tend to focus upon expanding access to products and services without reference to the quality, or costs associated with providing that access. In the real world, when we make a purchase we do so based on quality and cost and providers are forced to compete based on the basis of either quality or cost. Unfortunately, this mechanism has been disabled by the U.S. government and the health care industry.

Let’s agree that no one wants universal access to low quality health care. While this sounds reasonable enough, the quality of health care is notoriously difficult to measure. The word “quality” raises the question of value and is expressed as “good” or “bad.” A necessary condition for the determination of quality is the capacity of the buyer to judge between good and bad: call it quality- sensitivity. Access to reliable qualitative information is a necessary condition for quality-sensitivity. In health care the quality-sensitivity of individual buyers is shaped by many factors. However, patients actually have notoriously imperfect information about the quality of their insurance, products, services, and providers.

As stated in my previous blog, the quality of health insurance is usually measured in terms of comprehensiveness, and most Americans have very little reliable information at their disposal in respect to the quality of their health insurance policies. In other words, you usually become quality-sensitive to the comprehensiveness of your insurance AFTER your providers file a claim, it’s rejected by your insurance company, and you get a bill from a provider. Although in recent years insurance language has become a bit more penetrable, it is still notoriously difficult for buyers to make informed decisions about the quality of the insurance products they purchase. The ability of the insurance industry to disguise the quality of its products behind a wall of impenetrable jargon has produced an epidemic of quality insensitivity within that industry. Unfortunately, we do eventually become quality- sensitive after we discover that out health insurance lacks comprehensiveness.

If we lack sufficient information in regard to the quality of our health insurance, we are equally ignorant of the quality of the products and services offered by its providers. The quality of the products and services is based on “safety and effectiveness,” which are determined by scientific investigations supervised by an understaffed and under-funded Food and Drug Administration. We also lack reliable qualitative information in regard to the providers of health care; especially the quality of physicians, allied health professionals, and hospitals. Information in regard to malpractice lawsuits and infection rates of hospitals are systemically well hidden. Given the elusive nature of the quality of health insurance, products and services, providers, and institutions the quality of our national health care system is ultimately inscrutable.

National reformers typically cite statistical data indicating that the U.S. system lags behind other industrialized nations in certain qualitative measures such as: infant mortality and life expectancy. But the basic problem is that national statistics mask local and regional variation: especially in large populous nations. Obviously, the United States has a much larger and has a more diverse population than Canada and European countries, and therefore, we would naturally expect to find a lot more local and regional variation in terms of infant mortality and life expectancy.

As stated in my earlier blog, national statistics also mask variation in access to health care between rural and urban areas. Based on commonly cited statistics, the United States (as a whole) ranks 32nd in infant mortality: with rate of about 6.3 per thousand births. Iceland ranks first with a rate of 2.9, followed by Japan at 3.2. However, this less than flattering statistic masks local and regional variation. For example, despite having one of the best neonatal intensive care units in the world (Children’s Hospital) Hamilton County, Ohio has an infant mortality rate of 13.9, or about twice the national average. Another problem with these rankings is the reliability of the reporting. In Cincinnati, the infant mortality rate says more about the lifestyles of mothers than it does about access to high quality of health care products and services.

As for life expectancy, the U.S. ranks 38th with Japan and Hong Kong ranked first at 82.6. Again, life expectancy in the United States is almost certainly influenced more by culture than the quality of health care. Highly variable infant mortality rates, murder rates, and cancer rates also tend to drag down life expectancy rates in the United States.

Certainly one indication of quality in any national health care system is its comprehensiveness; that is, the sheer number of products and services can be accessed in any geographical location. If sheer comprehensiveness were the only measure of quality, the United States would lead the world. However, comprehensiveness alone may not be the most enlightening measure of quality. Much of the comprehensiveness of the U.S. health care system includes both medical therapies that cure diseases (cancer drugs), but also medical enhancements that improve the quality of our lives (erectile dysfunction drugs, motorized wheel chairs, in vitro fertilization). Although this distinction between therapy and enhancement seems to be fairly objective, it is far from crystal-clear.

Another often-cited indication of low quality of health care is the incidence of medical mistakes, malpractice lawsuits, and the corresponding rise in the cost of malpractice insurance. However, the incidence of medical mistakes is highly variable. It is certainly true that some medical specialties are more susceptible to catastrophic error than others. Obstetrics, for example is especially prone to error, not because of professional incompetence, but because of cultural forces that encourage high risk pregnancies such as: postponed parenthood, poor prenatal care, and religious beliefs that expound the infinite value of fetuses. Our perception of medical mistakes also has a lot to do our overly idealistic expectations, coupled with a staggering number of predatory lawyers that stalk the deep pockets of health care providers. While it is certainly true that many medical mistakes are avoidable to the extent that practitioners can be better trained and facilities can be more fully staffed, these reforms are not costless. Not every mid-sized city can afford high quality neonatal intensive care units, cardiac units, or state-of-the- art trauma centers served by a fleet of helicopters.

Finally, there has been very little discourse concerning the relationship between the quality of health care products and services and the scientific research and development that generates those products and services. Characteristically, most qualitative appraisals of the health care system in the United States discount what we do best. To the extent that it makes sense to talk about nation states in a global scientific and economic environment, research laboratories in the United States still account for most of the comprehensiveness of health care worldwide. For better or worse, governmental agencies such as the National Science Foundation and the National Institutes of Health provide funding for most of that research. Moreover, many of the best medical schools and research universities laboratories are located in the United States. In short, if we bracket issues of “access” and “cost,” the U.S. has the most comprehensive health care system in the world. Indeed, that’s why desperate patients from all over the come to the United States for “state-of-the-art” medical treatment.

Much of the comprehensiveness of the “medical model” of health care in the United States is rooted in “heroic medicine.” But the quality of state-of-the-art heroic therapies is difficult to measure, especially in light of the variable quality of the Food and Drug Administration’s efforts to regulate the research and development of new drugs. As health care in the United States becomes increasingly “heroic,” we can expect a higher research and development costs and a higher incidence of treatment failure and more malpractice lawsuits.

In the United States, quality sensitivity has also been undermined by cultural forces that allow low quality providers (physicians, hospitals, pharmaceutical corporations, insurance companies etc.) to control the flow of qualitative information. Although, much of this machinery has been undermined by mass media, especially Internet sites (WebMd.com), it is still very difficult to access useful qualitative information on physicians, hospitals, and pharmaceutical products.

A Libertarian Perspective on "Too Big to Fail"

As the government continues to “bailout” failing corporations such as General Motors, Chrysler, American Investment Group (AIG), and a host of other financial institutions, the “too big to fail principle” has been cited as the primary justification for these rescue packages. This is a utilitarian principle that implies that the costs of “allowing” these corporations to fail outweigh the benefits; that is, if they fail others will fail and unemployment will rise. Although most economists seem to accept this utilitarian justification, no one has offered any explanation of how these corporations got “too big to fail.” Let’s explore two alternative explanations. The free market explanation is that corporations get “big” because they offer higher quality products and/or services at a lower cost than their rivals. These natural monopolies get “big” because they defeat their competition. In the absence of competition these monopolies raise prices and earn windfall profits. But natural monopolies are usually short-lived because other corporations can see their success, copy their strategies and/or improve upon those strategies. This process of weeding out the “unfit” (inefficient) competitors and inspiring competitors that are more “fit” (efficient) is called “creative destruction.” Unfortunately, there are other ways for corporations to “destroy” their competition. The second way to “get big” is to raise the cost of competing in a market by artificially raising the cost of others entering the competition. The easiest way for “big” corporations to stifle competition from smaller, more innovative companies is by lobbying government officials to raise the cost of competing by imposing costly regulations. These artificial monopolies can maintain their stature, regardless of their actual “fitness.” In fact, most artificial monopolies are downright inept: U.S. Postal Service, Public Schools, Public Utilities, etc. Now, how did AIG (American International Group) get “too big to fail?” Did it “take-over” its competitors because it was more “fit” or because it was more adept at lobbying government? The basic problem with the “too big to fail principle," is that if a corporation is “too big to fail” in the eyes of the government, it can take risks that other smaller, risk-sensitive corporations cannot. This leads to the proliferation of large, inefficient corporations that are protected from failure. Then, these maladapted corporations proceed to takeover over smaller, more efficient corporations. In short, the “too big to fail principle” tends to undermine “creative destruction.” Libertarians argue that when governments artificially prop up obviously inefficient corporations that take irrational risks, and reward incompetent executives with bonus pay, they also drive good corporations out of business. Would you rather invest in, work for, or buy from an inefficient corporation that is “too big to fail;” or invest in, work for, or buy from an efficient corporation that will probably be driven out of business by an inefficient corporation that is “too big to fail?” If you owned a smaller, more innovative, and more efficient competitor would you rather continue to compete with a corporation that is “too big to fail,” or agree to a lucrative takeover offer? The libertarian view on the “too big to fail principle” is that it undermines “creative destruction,” and leads to endless cycles of future government bailouts. But more than that it gives rise to an enormously destructive corollary the “too small to succeed principle.”

Nadya Suleman's Octuplets: An Exercise in Moral Hazard

We libertarians rely heavily on the linkage between the concepts of “liberty” and “personal responsibility.” The underlying assumption is that our lives are the product of risk-management. Sometimes our lives are shaped by our own decisions and sometimes by others. Libertarians argue that within the bounds of legality, individuals must be allowed to reap the benefits of “good risk-taking decisions” and/or pay the costs for “bad risk-taking decisions.” But in the real world, we often rescue one another from the painful consequences of our bad decisions under the guidance of morality. Unfortunately, when we exercise beneficence under these circumstances, we encourage future risk-taking on the part of the beneficiary and other aspiring future risk-takers. Economists call this predictable incentive pattern “moral hazard.” Nadya Suleman’s Octuplets provide a valuable case study on how government programs, charitable organizations, and a doting mother can lead to an unfathonable degree of morally hazardous behavior. Because of confidentiality laws, we don’t know all of the details, but here’s what I’ve been able to gather. Nadya is a 33 year-old, unemployed single mother. Before the octuplets were born she already had six children via two separate vitro fertilization procedures. On average IVF yields live births about 30% of the time and costs about $15,000 per cycle. Most “live births” require more than one cycle. In order to increase the odds of having a “live birth,” clinics often insert multiple embryos into the uterus, which can lead to multiple pre-mature births. Premature births require the services of neonatal intensive care units (NICUs), which cost on average about $475,000 per child. Although clinics do not pay NICU costs, the American Fertility Society recommends the insertion of no more than 2-3 embryos at a time. However, desperate mothers with limited financial resources often request more than two embryos to avoid multiple IVF cycles. Inefficient clinics often insert multiple embryos to cover up their inefficiency and/or increase their published “live birth rate” Nadya’s doctor apparently inserted 6 embryos for those two initial multiple birth pregnancies, and for the cycle that yielded the octuplets (which allegedly included 2 sets of twins). So who paid for the IVF and NICU costs of the first two pregnancies, and who will pay for the octuplets? Private insurance companies rarely cover IVF treatments but are required by law to cover NICU costs. They usually limit that exposure to $1 million. Nadya is unemployed so forget about that! If uninsured, Medicaid (and a raft of other state assistance programs) usually covers most of these costs. Again, we don’t know who paid the medical costs for those first two IVF and NICU services, but we do know that she now receives Social Security Disability Payments for three of those children (one is autistic) and that she collects $480 in food stamps. We also know that Nadya also owes $50,000 in student loans. Her mother Angela has been trying to financially support Nadya and her six children. But Nadya’s home, which is owned by Angela, is currently $23,000 behind in mortgage payments and under foreclosure by the bank. The family has filed for bankruptcy. Given the uncertainties surrounding the Nadya’s ability to care for these 14 children, it is not clear if or when Child Protective Services will allow the octuplets to leave the NICU, or where they will live. “Angels in Waiting” a charitable group of nurses offered free 24 hour-a-day assistance (worth $130,000. a month) for all 14 kids, which would have avoided action by Child Protective Services. But self-reliant Nadya refused that offer. So how will she pay for all of this? Back in 1999, Nadya apparently suffered a back injury at work and has filed for permanent disability. She is also planning to take out more student loans so she can return to graduate school at Cal State Fullerton to finish her degree in counseling, while her mother continues to provide free care for her 14 children under six years old. Nadya also hopes land a lucrative T.V. offer and/or book deal. So what can a lifelong libertarian say about all of this? Absolutely nothing!

Positive and Negative Rights

In the United States there is a strong moral tradition that favors rights-based discourse over public policy. Given that this tradition is usually invoked without much philosophical clarity, let’s take a closer look. First of all, rights-based claims imply duties imposed upon others. There are no rights without corresponding duties. Failure to fulfill one’s duty constitutes a rights violation. Libertarians differentiate between two classes of right-based claims. If you claim a positive right, you are implying that another individual or community has a duty to expend time, energy, and/or resources on your behalf. For example, if you have an unqualified positive right to vote, but are unable to get to the polling place, then someone else must have a duty to pick you up at your house, bring you to the polling place, and then bring you home. Positive rights raise a number of puzzles. Suppose you are “able” to get to the polls, but are “unwilling” to expend your own time, energy, and/or resources to get to there. How might that affect the duties of others? Hence, if you invoke positive rights, you must specify how much of your own, time, effort and resources will be expended before a duty upon others is imposed. In short, there is always a grayish area between “able” and “willing.” If you live a half-mile away and are “physically able” to walk to the polling place, but are unwilling to do it, does the duty on the part of others automatically kick in? If so, then how does one decide exactly whose duty it is to drive you to the polling place, and how much of their time, effort, and/or resources are morally required to fulfill that duty. If you claim a negative right, then you are merely imposing a duty on the part of others to not interfere with your own efforts to act on your own behalf. If you have a negative right to vote, it implies a duty on the part of others to not interfere with your quest to get yourself to the polling place. Obviously, if I tried to forcefully prevent you from voting by either physically restraining you or by threatening you, then that would clearly invade your negative right to vote. That’s why poll taxes are widely regarded as rights violations. (Interestingly, no one questions whether the U.S government’s failure to declare Election Day a national holiday constitutes a voting rights violation.) Generally speaking, we are more likely to claim a positive right when we believe that we really need something than when we merely want something. Most of us are willing to accept the fact that the distribution of at least some of the good things in life are best left to the free market, while at least some things ought to made available to us through the good will of others, as a matter of duty. Americans do not have a positive right to own a Mercedes, ocean front property in Florida, or a Harvard education. But they do have a negative right to pursue those things without outside governmental interference. Finally, there is one more dimension to rights-based claims; namely, “How will that positive or negative right be monitored and enforced? If you have a positive or negative legal right, then that right is monitored and enforced by government. If you have a moral right, then compliance will be enforced by a moral community alone. Sometimes the duties that support rights are sufficiently supported by morality and sometimes legality is necessary. That’s why our most important rights are legally enforced. Libertarians argue that there are no positive rights, only negative rights.

Is There a "Positive Right" to Health Care?

The “Right to Health Care” will be one of the mantras of the forthcoming debate over health care reform. Let’s explore that mantra in light of my previous blog. Obviously, we must address several issues. Do we have a right to health care? If so, who has a duty to fulfill that right? Is the right to health care a positive or a negative right? If it is a positive right, then who has the duty to provide it, and at what cost? And, is this positive right a legal right or a moral right? There are several options. Many argue based on the Hippocratic Oath that under “certain circumstances” health care providers have a duty to provide health care to others. But what are those “certain circumstances?” Well, one might argue that the "duty to provide" kicks in when a patient “needs” medical treatment but is “unable” to afford it. However, recall that the line between “unable” and “unwilling” is murky at best. Many young healthy Americans are “able” to purchase health insurance, but are “unwilling” make the economic sacrifices necessary to pay the premiums. (Forego buying that new car or new house while still in college!) If a health care provider has a duty to provide health care, does fulfilling that duty imply providing it for free or at a discount rate? If providers of health care do not have a duty to provide health care, then what about other third parties such as relatives, friends, employers, private insurance companies, and/or government? If it is a third party, which party and how much are they obligated to pay those second party providers? My mother-in-law is a cancer survivor. Hoping to prevent the return of cancer, her physician prescribed a drug called Aromasin. The drug costs about $10. per day. Interestingly, this drug is usually (if not always) prescribed to elderly female cancer-surviving patients. The safety and effectiveness of all drugs is expressed in terms of a cost/benefit ratio. Although the drug's stated purpose is to prevent her cancer from recurring, the statistical evidence in support of this claim was impossible for to decipher and act upon. Now, if she has a positive right to this drug then who has a duty to provide it? Here are some of her options: Medicare, her co-insurance company (the private insurance that covers the Medicare gaps), my father-in-law, my wife and I, or a charitable organization? She is almost certainly “able” to pay that $10 a day, if she and my father-in-law were “willing” to cut back on other things such as: their other prescription drugs, food, clothing, shelter, or transportation. Given the obscure cost/benefit ratios presented, she decided that the benefits did not justify the costs. Fortunately, a non-governmental organization the Susan G. Komen Foundation decided to pay for it. Although, everyone is thankful for that charitable intervention, one might reasonably question the price of that drug. Given that almost all of the patients likely to “need” this drug will be about in approximately the same economic situation as my mother-in-law, one might accuse the providers of monopolistic price-gouging. But libertarians are more inclined to blame the government for those overly-generous twenty-year drug patents and prescription drug laws that protect them from competition. There is something disingenuous about arguing that someone has a positive right to health care, and that third-parties have a duty to provide that care, when the providers are do not have a duty to moderate their prices. So what’s the lesson here? Well, maybe that whole eighteenth-century moral framework based on interlocking rights and duties is not a very illuminating in the area for twenty-first century health care.

Teenage Pregnancy

I read in the paper the other day that the birth rate among teens (15-19) is on the rise in 26 states. So what? Let’s start with some rather hard facts. First, Mother Nature has programmed us to reproduce, whether we like it or not. And as a species, we’re pretty good it; as evidenced by our absence on the “endangered species” list. Maybe we’re too good! Second, Mother Nature discourages procreative efforts that are both “too early” and “too late.” Biologically, “too early” might refer to prepubescent pregnancy, which is pretty much impossible apart from biotechnology (ova retrieval, IVF etc). It might also mean that “too early” might threaten the life (or health) of mother or child. “Too late,” biologically speaking, might relate to the age of the ova and possibly the sperm. We know that late procreators run a higher risk for genetic malformations, especially, Down syndrome. Human children require a certain amount of “care” in order to survive long enough to sustain the procreative cycle. Culturally speaking, procreating “too early” might mean that young couples or young single mothers that have children might not be able to “care” for the child. “Too late,” might refer to the probability that the old couple or single mother might be too old (or sick) to care for the child; or they might be so old that they may die before the child can survive his/her own. The key work here is “care.” In our current cultural environment, “care” implies more than the provision of basic food, clothing, and shelter. Today, parents are also expected to prepare their children to participate in our complex socioeconomic environment. In other words, “care” requires the provision of an education. In this regard, many “old couples” are much more financially secure than “young couples,” and therefore might be more likely to be able to afford to provide that education. Now, for a libertarian, the basic question is who is responsible for providing all of this “care” when the teenage procreative couple (or single mother) are unable to do it? Here are the possibilities: the male (or sperm donor); the female (or egg donor); the couple together; the immediate family of either the procreating male and/or female (grandparents, older brothers or sisters etc); or some third party (government or a charitable organization); or all of the above. Many (if not most) libertarians lay the onus of responsibility on the young couple, their parents, and/or other blood relatives. Unfortunately, our culture has evolved (or devolved) to the point where many families are now dysfunctional. At least some of that dysfunctionality can be blamed on perverse incentives wrought by government: welfare programs (which discourage work), public schools (which discourage learning), tax policies (which discourage marriage), minimum wage laws (which discourage low wage jobs), child labor laws (which discourage child labor and/or education), and health care policies (which discourage low wage jobs and maternal and neonatal health). So until we address the root causes of what makes teen pregnancies problematic, I really don’t know what to say!

The Concept of Health Care

What is health care? Well, let’s start with the basics. First, it involves the exchange of a products and services between buyers and sellers. Second, the health care industry employs an imponderable number of sellers including research scientists, physicians, insurance professionals, malpractice lawyers, allied health professionals, product manufacturers, educational institutions, hospitals etc. For those that are willing (or able) to invest in the requisite education, these are all good paying jobs. Third, our understanding of health care has been masked by a longstanding cultural tradition that obscures its economic basis. Much of the obfuscation takes place within our language: "buyers" become "patients," "sellers" become "providers," and "health care" becomes "whatever health care providers are willing to sell you." Thus, most of us believe that “health” is something that is provided by others and that we cannot be healthy apart from a "health care system." Similarly, the concept of “disease” has become synonymous with “needing” the products and services offered by the health care industry. So a state of disease is anything that attracts buyers to sellers. Modern medicine is based upon the ever-increasing malleability of the concepts of health and disease. Even if you believe that you are presently “healthy” you still might have an undiagnosed disease, a predisposition for a disease, an early stage of a disease, or a previously “cured” disease might be coming back. Therefore, in order to remain healthy you must maintain an ongoing relationship with a health care system and its legion of well-paid providers. One of the more striking features of the American health care has been the exponential expansion in the number of actual and potential “diseases” and “providers.” Today we routinely consult with “licensed” health care providers to lose weight, fight depression, quit smoking, break an addiction (drug, alcohol or gambling), have a child, not have a child, eliminate a potential child, or die peacefully. Critics of the American health care system argue that it provides too much and that it must be refocused on providing “basic health care,” which is even more malleable than the concept of “health care.” Basic health care is whatever politicians say it is. This means that in order to keep their good-paying jobs, providers must lobby congress and persuade legislators to officially decree that their products and services are “basic.” Fortunately, if we wait long enough, every health care product and service currently on the market will eventually become “basic.” But in a free market, the concept of “basic health care” is vacuous. It is a blunt political instrument that governments use to deny some individuals direct access to specific products and services. So what can we conclude about the concepts of “health” and “disease?” Libertarians prefer to let the free market sort that all that out. The first thing that the free market will do is help us sort out what actually works and how much we’ll have to pay for it. Viva Viagra!

The War on Terrorism

The so-called “War on Terrorism,” raises serious problems for the Non-Aggression Axiom. The most obvious is that the concept of “terrorism” connotes specific war strategies (e.g. suicide bombing) that many nations regard as immoral. Secondly, most acts of “terrorism” are executed by individuals and small groups (terrorist cells) and are not directly state-sponsored. These terrorist are usually members of decentralized, loosely- knit, (often) religious organizations that seek to upend established governments. Although many of these organizations are international they do not have “international leaders” that are comparable to presidents, prime ministers etc. As far as we know, Bin Laden encourages terrorist activity, finances a lot of it, and might even suggest targets. But he probably exercises very little control over his followers. As we fight the war on terrorism we mistakenly believe that if we kill or capture Bin Laden, the “War on Terrorism” will end and that his followers will surrender and sign a peace treaty. That’s the way wars between centralized nation states usually end, but not the way wars with decentralized groups will end. Many scholars, therefore, argue that a more effective strategy for fighting the “War on Terror” would be to approach it as a “War of Words,” an ideological struggle for the hearts and minds of future terrorists. That will entail spending much more on “words” than “weapons.” One way to control terrorism is to eliminate its main targets: free-standing nation states. Many of us peacenik libertarians look forward to a distant future where nation states are replaced by a single, international minimal government that focuses its energies on enforcing the non-aggression axiom, contracts, open markets, and borders. Can you imagine: a world without nation states: a Middle East without borders, a Europe without borders, an America without borders? Imagine a world where corporations compete without collusion, subsidies, tariff protection, or favorable tax status? Can you imagine a world order where we all rely on free markets to fulfill our wants and needs? Can you imagine a world where acts of terrorism are universally condemned and national armies are replaced by one single police force?

War and the Non-Aggression Axiom

War is an enormously complex human phenomenon. The fact that throughout human history, in all times and all places groups of human males have been engaged in war, suggests a natural foundation. However, the mere fact that war is natural does not shed much light on whether it is good or not. Libertarians argue that violation of the Non-Aggression Axiom can SOMETIMES be justified only as a means of self-defense. However, the precise meaning of “self-defense,” is a bit fuzzy.” Most wars are initiated by the leaders of nations as offensive acts of aggression in pursuit of specific goals such as resources or territory. Some wars are initiated as preemptive strikes against perceived threats of aggression. Others are initiated as retribution for previous acts of aggression. Therefore, peace-loving libertarians must draw clear lines between self-defense and various acts aggression. But that’s not easy. That’s because the concept of “self-defense” is highly malleable and subject to political manipulation by leaders. Nations naturally “defend” themselves against not only harms, but also threats of harm. The clearest example of self-defense is when a nation is actually under lethal attack by another nation. If Canada or Mexico sent armed troops, tanks, and/or launched missiles across our borders, it would be a clear act of lethal aggression and the United States would be justified in violating the Non-Aggression Axiom. Most of the conceptual malleability associated with the concept of a “threat” can be attributed to imperfect information available to pre-emptive defenders. But most wars have been initiated in defense of economic interests and/or in defense of religious, tribal, or national ideological goals. Since the twentieth century, the United States has justified most of its use of lethal aggression in defense of ideological principles such as “freedom” and/or “democracy.” Given the overwhelming worldwide plurality of aggressive, non-democratic, authoritarian political regimes, this stance drastically expands our list of potential enemies. How many despots can the U.S. afford to depose? How much are we willing to spend on these non-defensive wars and the subsequent nation-building? If war is not a very effective means of reducing non-defensive, state sponsored, lethal aggression, what’s left? How can we promote world peace? Most, but not all libertarians, have faith in markets and see warfare through the lens of market failure. Competitive human males that are engaged in mutually-self-interested commerce tend to be more peaceful and avoid war. Therefore, if we hope to minimize the global incidence of human warfare, we need to prevent the formation of coalitions between unemployed young men and leaders of nations. That entails lessening the influence of government and increasing the influence of non-governmental organizations, especially corporations. How do we do that? Well, in democracies, the first step is for wary citizens to minimize their leaders’ capacity to wage non-defensive wars by limiting the number of troops and resources at their disposal. Although large standing armies may deter invasion by some hostile neighbors, they also provide leaders with a powerful incentive to engage in pre-emptive strikes and/or invade their neighbors. In the tradition established by John Stuart Mill, we libertarians are wary of the power of governments: not only the power of the governments of other countries, but also our own.

Competition

Libertarians have a lot of faith in competition. Why? Whether we like it or not, in Nature, competition is about variable degrees of winning and losing. Winners get a “prize” (survival) and losers do not (extinction). Humans decide when to compete based on our assessment of the value of the prize and the cost of competing. Some prizes are worth the expenditure of time, energy, and resources required and other less so. Assessment implies a clear understanding of the rules. Rational players enter competition, if and only if, they understand the rules. Once we understand the rules, we decide whether it’s worth playing the game. This requires assessing costs and benefits. Competition is ruled by “Supply and Demand,” therefore, accurate information concerning number of competitors is always useful. The number of competitors is largely contingent upon the desirability of the prize(s) offered and the costs associated with entering and playing the game. As a general rule, the more competitors there are the more difficult it is to win. Even though you probably will not win the lottery, you might decide to risk $5.00 to win $1,000,000. Other entry decisions are more complicated. Lotteries are based on a random selection process while other more complex games are based on human judgment. If you are deciding whether or not to compete, it helps to know something about the rules that the judges will apply in the selection of winners. Sometimes winners are decided based on an objective set of rules: in poker a full-house always beats a pair of aces. But sometimes winners are decided based on subjective rules that depend more on the personal, wants, desires, and/or taste of the game-keepers. Most games are played under variable degrees of subjectivity, which is why good looking persons with outgoing personalities tend to win many competitions. If you can enter a competition with an abundance of time, energy, and or resources, one sure-fire way to increase your odds of winning is to manipulate the entry requirements in your favor: that is, convince the game-keepers to raise the cost of entry. For example, if the game-keepers raise the entry fee (increase the time, energy, and resources required to compete) and if you have more time, energy, and resources than the other competitors, your odds of winning will be increased. A more indirect way is to convince the game-keepers to raise entry qualifications. “You can enter this competition, if and only if, you meet certain preconditions.” These preconditions usually involve requiring an advanced college degree, professional certification, a license, or union membership. How does a well-situated competitor go about influencing the game-keepers? Bribes and/or threats have always been very reliable. Bribery involves offering the game-keepers an enticement in exchange for skewing the rules in your favor. Money is the universal enticement. But bribery thrives in secrecy. If word gets out that the winners will be decided based on bribery, non-bribing competitors tend to not enter (or exit) the competition. Then the winners are decided based on who offers the most enticing bribe. Another way to skew competition is to threaten either the game-keepers or the other competitors. Groups engaged in organized crime routinely bribe and threaten both game-keepers and competitors with loss of resources (theft) or physical harm (aggression). “If you try to enter this competition I’ll steal your car, beat you up, and kill your wife!” However, as the value of the prize increases, more competitors willingly take those risks. What will these new risk-taking competitors be like? Well, they’ll probably not have a car or a wife, and they probably they'll probably be powerful enough to thwart or match threats. One way to increase the incidence of illegal bribes and threats is to create a “Black Market” by making the prize illegal: drugs, gambling, prostitution etc. Government skews competition by not only creating Black Markets, but through legalized bribery and legalized threats. Competitors can always get a leg-up on competitors via legalized bribery: that is, by lobbying Congress to alter the rules of the game in their favor. Governmentally enforced licensure requirements reduce competition by threatening non-licensed competitors with fines and prison. Hence, if you want to open a liquor store or drive a taxi, you must pay for a very expensive license. Who originally lobbied for these licensure laws? You guessed it! Liquor stores and taxi cab companies that can afford to pay the costs of those licenses.

Health Care Reform

In the United States, there is a growing consensus that our health care system is in dire need of reform. How should we proceed? Well, most critics agree that reform must address three key issues: access (Who can access the products and services they want or need?), quality (How good are the products and services that can be accessed?), and cost (What is the cost of providing these products and services, who pays that cost, and how?). As in the case of education, the provision health care in the United States involves both public and private payment systems. “Public systems” (Medicare, Medicaid, Veteran’s Administration, and Social Security) are financed by tax revenue and private systems are financed by non-governmental payers (patients, insurance companies, charitable organizations). Where does this money go? Well, it goes directly or indirectly into the pockets of a staggering number of health care providers. Hence, these “providers” are really “sellers” of health care products and services. They include: doctors, nurses, allied health professionals, research scientists, malpractice lawyers, hospitals, research laboratories, medical schools, private health insurance companies, financial institutions (banks), credit card companies (Visa and MasterCard), public and private research laboratories, technology corporations (General Electric), drug companies, and the lobbying firms that represent all of the above. For a libertarian, the first step to health care reform is to openly acknowledge and embrace the obvious, inescapable reality that health care is about buying and selling. Because the frontline sellers (doctors, nurses, allied health professionals, researchers, etc.) are highly educated and therefore have substantial college loans to pay back, they expect to earn a substantial return on their investment of time, energy, and resources. If you are a retiree, you probably hold stock investments in corporations that sell health care products and/or services. If so, you certainly expect a healthy return on your investment. Traditionally, pharmaceutical stocks have been a staple of the most lucrative mutual funds. If you own stock in a corporation that provides health insurance to its employees you are probably concerned with the rising cost of providing that benefit. If you are an employee of a corporation that provides your health insurance you are probably dissatisfied with the access, quality, and cost of the health care you receive. So as we explore access, quality, and cost of health care, the basic problem is that it will be prohibitively costly to provide Americans with universal access to high quality health care. Therefore, in the real world, there are three possible rationing strategies: 1.) provide less-than-universal access, 2.) provide less-than-high quality products and services, or 3.) reduce unnecessary costs by increasing the efficiency of the system and/or shell out a lot more money. When health care reformers suggest any combination of these strategies, they invariably alienate stakeholder groups, which contributes to high-stakes lobbying activity. Therefore, given the current political structure in the United States, health care reform will be shaped by access, quality, and cost of hiring lobbying firms that can persuade (or bribe) government officials to ration health care in their favor. Now, what does all of this suggest about the prospects of meaningful health care reform?

Public Education

There is widespread agreement that our system of primary and secondary education is in dire need of reform. The most distinctive feature of this system is competition for students and money between public and private institutions. But, unfortunately, the competition is not fair. Usually, private schools are financially supported by a combination of tuition and charitable giving (e.g. parochial schools), while public schools can (at least temporarily) dip into an unlimited source of tax revenue. In Ohio, public schools are funded via a property tax based on the value of one’s home. What is the justification for public education? Ideology states that an educated citizenry is a public good that is best distributed equally via tax-supported, governmentally-operated monopolies. Before we explore the question of whether public schools, in fact, distribute education equally (see next blog), let’s look closer at what they actually distribute. Ideology conveniently obscures the fact that school boards distribute contracts to purchase more tangible commodities such as: classroom buildings, classroom furniture, libraries, books, computers, sports stadiums, and parking lots, and food. They also distribute service contracts for not only faculty, but also an army of support staff: librarians, security officers, nurses, bus drivers, and custodians. The contracts for all of these providers are highly coveted due to their generosity. Ideology states that contracts are based on a transparent, competitive bidding process that balances quality and cost negotiated by impartial, civic-minded superintendents and board members. However, in the real world, school boards have little incentive to engage in hard-nosed bargaining with providers. Moreover, the bidding process is usually less-than transparent and undermined by cronyism. Try to find out exactly how much your local school district actually paid for that new air conditioning unit, desk, social studies textbook, or football helmet. As for hiring personnel, entry into these positions is restricted by governmentally mandated licensure requirements and/or labor union contracts. In order to gain access to the “teaching profession,’ you must earn a state-mandated license, which requires graduation from a public or private college or university with at least a bachelors degree in education. Most of the educational curriculum at colleges and universities is designed by government officials that are sensitive to well-funded lobbyists. For example, the more credit hours required for a degree, the more students have to spend on tuition, which usually means heftier student loans from banks. Teachers unions lobby for more stringent requirements, which tend reduce the pool of potential teachers competing for jobs. Now back to the competition between public and private schools. Unionized urban and suburban teachers usually earn hefty paychecks, generous tax-supported retirement pensions, and health insurance coverage. The largess of public school teachers has little if anything to do with the quality of education. In fact, some dreadful urban school districts (Cincinnati) pay their teachers very generously. But don’t blame the teachers. Teaching is a pretty crappy job. State and local school boards tell them what to teach, when to teach it, and how to teach it. They also lack the authority to discipline unruly students that interrupt their classes. Little wonder that the vast majority of primary and secondary teachers leave the profession within five years of graduation. What I worry about are the few that choose to remain in a profession that is micromanaged by elected school boards.

Equality of Public Education

As stated in my previous blog, one of the basic arguments offered in support of public education is the idea that it provides an equal opportunity for students to secure an education. Is that true or is it propaganda? School boards pay providers of products and services with tax revenue. In Ohio, schools are funded by property taxes. Revenue, therefore, depends on whether you live in a rural, urban, or suburban community. Because suburban property is generally more valuable than either rural or urban property, suburban schools are often extravagantly funded, while urban and rural schools operate on tighter budgets. If governments were really interested in equality of education, you would expect suburban schools to be subsidizing rural and urban schools. However, there is little political support for that kind of redistribution. If you earn a decent income, you have an incentive to purchase a home in suburbia, where property values are higher. If you have young children you also have an incentive to move away from urban cores and rural areas where school funding is much lower. If you are a teacher, you have an incentive to teach in a suburban school where salaries and benefits are usually more generous. Historically, public schools compete with private schools. But private schools cannot compete with generously funded public schools. Therefore, most of the surviving private schools tend to be located in suburban areas where there are dysfunctional public schools. In fact, if you live out in the suburbs, you are more likely to be able to afford to send your kids to private schools or home school. Eventually, the market for urban private schools dries up and parents are stuck with public schools. When suburban public schools decline, parents can send their kids to private schools or homeschool. When suburban schools begin to decline and parents send their kids to private schools, they (along with with parents whose children have already graduated) grow weary of escalating property taxes and vote down levies. This leads to over-crowded suburban schools that that cut back on faculty (usually art and music teachers go first), library services, special education, bus service, and sports etc. Fortunately, those education-minded suburban parents that moved out to the suburbs in pursuit of better schools have options that urban parents do not. But urban parents are not only disappointed in the quality of their new schools, they are left without any private alternatives. The ultimate irony is that Americans tend to equate quality of education with generous funding. Unfortunately, there is little correlation between quality of education and how much the district pays its various providers. But there is a definite correlation between generous funding and tax rates.

Economic Freedom

Libertarians are champions of economic freedom. But exactly what does that mean? Economic freedom is usually defended within a rights-based moral framework: that is, a moral argument based on interlocking rights and duties. Hence, if economic freedom is a right, that right confers a duty upon others not to interfere with the exercise of that right. All rights are enforced by either legality (government), morality (culture), or both. Economic freedom refers to the right of individual and collective buyers and sellers to forge contracts with one another based on mutual self-interest, without governmental interference. If buyers and sellers own their own bodies, then they own the fruits of their labor. As an ideal, economic freedom is usually associated with contracts forged based on perfect information, perfect freedom, and perfect competition. In the real world, perfection is elusive, therefore, some libertarians argue that government must monitor and enforce laws against false advertising, theft, and/or collusion. Others prefer to allow the free market enforce those ideals. If you defend economic freedom as a right, you must accept the corresponding duty to NOT INTERFERE in voluntary transactions between individuals unless those contracts violate the rights of third parties: that is, harm other non-consenting persons or their property. This means that government may not interfere with the forging of contracts involving harmless immoralities. Economic exchanges that involve products and services regarded by third parties as immoral, but harmless, must be regulated by morality (blame) but not legality (fines or prison). Therefore, morally suspect transactions between consenting adults ranging from the sale of pornography to the sale of liquor on Sunday can be regulated by culture, but not by government. In a society based on economic freedom, individuals must remain free to engage in the exchange of goods and service without outside interference, unless convincing arguments are presented that indicate involuntary harm is being inflicted on third parties. Therefore, libertarians prefer to allow public debate over these issues and thereby allow critics to convince individuals to not engage in these harmlessly immoral activities, but critics cannot simply employ the coercive power of government to usurp our economic freedom. One of the more recent assaults on economic freedom is a proposed law in Ohio that will set limits on how much interest "payday lenders" can charge buyers, which will in effect drive these sellers out of Ohio. (a topic for a future blog?)

Freedom's Philosopher