The Older Brother lets his inner econ nerd run wild (Part II)…

Okay, fellow Fat Heads, if you read Part I and came back anyway, thanks for your patience. I’m sure it was grueling for some of you, but I wanted to illustrate some fundamental economic concepts for a model that helps explain our current nutritional predicament, and the Business Cycle analysis covers a couple of those. Here’s a quick synopsis:

* Government “helping” in the economy — via government programs, money printing, subsidies, bailouts, regulations, tax breaks, etc. — distorts prices. This is an unstated but automatic goal.

* Price is the mechanism by which markets convey information, so government intervention = bad information.

* Whenever a company or industry or government program gets created or propped up, a constituency is created that has an existential interest in maintaining those subsidies.

* As this bad information gets diffused and incorporated throughout the economy, its source becomes rapidly unrecognizable, but the damage doesn’t lose potency.

We’ll hit a few other concepts as we go.

[ Finally, please note that this model and these concepts apply regardless of stated intentions, desired outcomes, or party affiliation, okay? I’m getting tired of being called a closet Republican. Thanks. –OB ]

Okay, let’s get back to my premise from Part I — real food seems to cost too much, but it’s really the right price. It looks high because Big Food costs too little.

First, let’s put our cool-looking Official Junior Economics Nerd beanies on and take a walk down to the farmer’s market.

We’ll note that — setting aside the burdens, barriers, and hoops local food providers have to jump through (which do increase costs) — there’s not a lot else in the price at our vendor’s booth that isn’t real. Real labor, real fertilizer, real sunshine, real seeds. Gas money for the 20 mile drive to market. That’s their costs. Not much place to hide anything. Hopefully, they’re adding enough of a markup to make a good living for themselves and their families, but they’re not flying to shareholder meetings on the corporate jet (not that there’s anything wrong with that).

If they get a little too proud of their produce, the folks in a booth a couple of doors down will probably be exerting a little “market discipline,” i.e., charge a lower price. Even if they all band together like OPEC to collude on prices, by the end of the day they’ve either got to sell at a price that literally “clears the market” or they’re hauling the result of all that time and sweat and seed money home to the compost pile.

That’s about as honest of a price as you’re going to get.

So the cost of that dozen eggs may be twice what they sell for at the store, but it’s real chickens raised on real ground, fed real chicken feed shipped over a reasonably short distance, along with some water, sunshine, and labor. Same with those tomatoes, or turnips, or grass-fed beef.

So if those are real prices, that means perhaps the mega-mart goods are under-priced. But how so? Grocery stores are pretty low profit margin operations (they make their money on volume), but surely they’re not selling food for half its cost.

Of course, “economies of scale” (meaning it’s usually more efficient to make, say 1,000 widgets in one place than it is to have 10 widget factories making 100 each) could certainly be a factor, but how are the Big Food boys so ungodly efficient that they can ship eggs 500 miles, or move fruit up from South America, and still undersell a family farm that lives in the same zip code by 50%?

Perhaps there’s some bad information? Let us count the ways.

Let’s start with outright subsidies.

Under the (proposed 2012) five year Farm Bill, our government will again tax or borrow $100 billion a year from somewhere and inject it into the food system. How’s that for bad information?

About $20 billion of that goes to things like commodities support. Said commodities consist 90% of corn, soybeans, wheat, cotton, and rice. These billions are spent to keep prices stable, meaning “up.” Okay, nerds, follow along:

By guaranteeing a minimum price level and income, we’ve now manipulated the profit and risk information farmers evaluate when making planting decisions, driving production away from other types of crops (green veggies, pastured operations, etc) and into the subsidized and insured (mostly grain) crops. That means supply is higher that it would’ve been otherwise, which reduces the market price. So, spending money to keep the prices ends up reducing the price. Hello, Cheerios.

[The government sometimes buys up these excess commodities to boost the price back up. Can’t give it out here, though, because that would just be silly, so we magnanimously bundle it up as foreign aid and ship it to other countries, where free food tends to wipe out any indigenous agricultural markets and make them dependent on handouts and just a wee bit resentful. Ingrates. (In case there’s an extra credit question on the quiz, kids, that would be a good example of the “Law of Unintended Consequences.”)]

Meanwhile, back in the States, the fact that there’s not enough farm state votes in Congress, means that in order to pass a Farm Bill to spend $20 billion to boost food prices, you’ll have to include another $80 billion for food stamps to help the “po folk” buy the food the urban politicians are voting to help jack the price up on.

Those food stamps, now being passed out to one in seven of your neighbors, apparently aren’t chasing fresh veggies around at the market. If they were, we wouldn’t keep hearing how obesity, diabetes, etc. disproportionately affect lower income folks. Think of it as a $80 billion transfer payment to the cereal, macaroni and cheese, fruit juice, soda, and junk food manufacturers.

Now for a couple of indirect subsidies or hidden costs.

It’s not always dollars getting shoveled around that distorts the true cost of our SAD foodstuffs. All of the government commodity programs incentivize high yields to maximize income because that means buying more chemicals and equipment from Big Ag,which higher income drives land prices and rents higher, but higher yields means prices go down (more supply = lower price, remember) which means increased reach for even higher yields to increase income, because there’s loans to pay for that equipment and land. Rinse. Lather. Repeat.

What’s getting lost in the equation is topsoil. Like the money we’re borrowing from our childrens’ futures, farmers are “spending” their kids’ topsoil at unsustainable rates in exchange for dollars to pay those loans and rents. The fact that we’re rapidly losing, through erosion and chemical sterilization, the very dirt that our agriculture depends on, is as much a ticking time bomb as the national debt.

Also not showing up on our SAD grocery receipt is all of transportation and fossil fuel infrastructure that gets subsidized by taxpayers generally, then benefits Big Food and Big Grain directly. Commodity corn doesn’t grow without fossil fuel based fertilizers and chemicals, and Big Meat doesn’t run without commodity grains. Or without taxpayer financed inspectors and regulators.

Related to the fossil fuel subsidies, let’s not ever forget that those are paid not just with treasure, but also blood. We can’t make “cheap” food without “cheap” oil, and for decades we’ve pursued policies and relationships around the world that say clearer than any speech that we’d rather have cheap oil, deal with despots, and pay with blood, than we would let the price of energy do what the market wants and adapt, adjust, and innovate our way around it.

(HA! NOW DO YOU BELIEVE I’M NOT A REPUBLICAN?)

I know I’ve gone really long, and if you’re still reading this your patience is probably getting really short, so I’ll just hit one final point of the economics of nutritional insanity:

Cost shifting. That’s where the actual cost of something gets paid somewhere else not related, making a good or product look cheaper than it really is. (You’ve probably noticed that many of these concepts overlap).

One of the commenters on Part I mentioned that they were spending somewhat more on food after going LCHF (and some folks report spending less money than on their former SAD grocery bill), but their medical spending had gone down and the savings more than offset the higher grocery bill.

That makes perfect sense, and this is exactly the kind of result we’d like to think a good system would produce. Spend an extra $100 a month on groceries, but end up with $200 less a month in medical costs — maybe less allergy attacks, avoid insulin or other diabetes drugs, all kinds of good things people here talk about. And feel better to boot. Beautiful. Doing smart things makes your checking balance bigger.

But, as I responded back, what if you didn’t have to pay any medical expenses out-of-pocket? In Illinois, 2.7 million people — more than one out of five — are on Medicaid (this occurs with anyone with subsidized health care, but Medicaid is generally “free”). So looking now, and dealing with people of limited means and options, what does it cost to make the same decision?

Let’s see, now you spend the extra $100, but in return, your savings are … zero. Yeah, feeling better, breathing easier, and not having your toes amputated would be nice, but the mashed potatoes and cola are cheaper than the argula and grass-fed beef (or store bought lettuce and hamburger), and coming up with another $100 a month isn’t a real option.

It’s going to shift costs to “society” potentially in the tens of thousands of dollars per person in future health claims, but that person on the bottom rung of the ladder is going to make the best rational decision they can. Based on really bad information.

All of this and more gets worked through our system, pushing prices up, pushing them down, pushing them sideways, to the point that you just have no idea what that carton of strawberries in the produce aisle is trying to tell you. All you can really know for sure is that whatever they’re saying, they’re lying their seedy little guts out, because they got bad information, too.

Okay, I guess you get the point. They don’t call economics “the dismal science” for nothing.

I’ll wrap up Thursday with a short (I swear) entry on why I wanted you to understand this, and what I think you should do with your new found fascination of all things economic — see you in the comments.

Cheers,

the Older Brother

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74 thoughts on “The Older Brother lets his inner econ nerd run wild (Part II)…

  1. Paul

    you should seriously get together with Younger Brother and put together a sequel to fat Head based on this stuff… great post!

    I’m flattered you think so. Tom has sworn that the only way he’d take on a sequel is if someone hands him a big honki’g check so he doesn’t have to go out on a limb with his family’s financial future again.

    Hopefully, he and Chareva will a chance to start moving on their book idea sooner rather than later.

    –the Older Brother

    Reply
  2. Denny

    Fantastic post OB. Comments to comments are superb as well. Thanks for putting this up. I’ll see if I can get Thomas Woods to read it, I’m a huge fan of his and I think you will be too. He is hosting the Peter Schiff show this week and next, you should tune in. http://www.peterschiff.com If you have an iPhone you can get it with the Tune-In Radio app.

    Cheers and thanks again!

    Thank you. I’ll look for the radio show, but remain happily dumb-phone bound at this point.

    –The Older Brother

    Reply
  3. mark

    I live in Canada – there is no such thing as free health care. Screw free health-care!! I’m tired of paying for everyone else’s bull***t. If your sick and can’t afford it – ***-you. Its about time we bring back natures survival of the fittest – we are over populated anyways.

    Seems to generate strong feelings either way, no? Of course it’s not free. Health care is a scarce resource. If it weren’t, then it wouldn’t be an economic question.

    If we’re adult enough to accept the notion that resources are finite, then the question economics is meant to address is, how do those resources get allocated? By force (government), or by free will (market)? By queue (waiting, rationing), or by price (if you want it, pay for it)?

    “Free” is a completely dishonest subterfuge.

    Cheers

    Reply
  4. Pierce

    I appreciate the response and discussion. I think I need to respond that I by no means disagree with you in everything. I think that farm subsidies have become a travesty, although I don’t entirely agree how and why and what to do about it. For example, I think that they are attributable as much, if not more, to the Senate system where each state gets two Senators regardless of population (meaning the relatively large number of agricultural state with their relatively small populations renders them particularly easy to appease with subsidies) than to some sort of grand compromise between farm states and “food stamp” states (which aren’t mutually exclusive lists). I also think the farm policy, combined with “free trade” policies with other nations like Mexico has done damage comparable in scale to the health damage done by the farm subsidies.

    But I digress. My point there is you can come to similar conclusions from different trains of thought. I agree 100% that “real law” is derived through observation and testing, but I guess that’s where our agreements disagree. The idea of free markets or maximum liberty or efficient information or what have you are not laws in that sense. They’re a classic example of the ultimate challenge in philosophy, which I am not convinced that anyone has resolved: the means or possibility by which one can get from an observation of how the world is to how it should be or could be. As crisp and logical as some Austrian ideas sound, they do depend on some underlying and unprovable assumptions. The idea of rational consumers, for one, I argue is not grounded in reality nor provable. Perhaps if all consumers were perfectly rational given perfect information then the ideas would be appealing to me, but of course that’s an ideal world not a real world.

    I am not saying this is a flaw unique to this particular philosophy… it’s of course been the central philosophical struggle for centuries… the question of what truths are indisputable and thus can serve as the [Cartesian] points from which one can build a foundation of logic. I personally don’t think there has ever been a satisfactory answer to this question or ever will be… so I generally reject any philosophy that tries to build itself upon universal or unassailable truths and instead just take the world as I find it, roll up my sleeves, and dig into the details.

    That was my point as well about veganism. I don’t mean that the two are intellectually on the same level or that there’s any necessary overlap between the two sets of beliefs. I mean only that both of them are schools of thought based upon unprovable assumptions about the world, or perhaps more accurately assumptions about an ideal world. They’re hardly the only two like this… pretty much all “grand” philosophies are, which is why I reject the idea of trying to find some universal truth that will give way to useful principles, because I don’t think it’ll happen. Instead, I tried to explain only that they are more similar to each other than they are to a proposition like “white bread raises blood sugar more than does a candy bar.”

    Which brings me to my ultimate point. When it comes to value judgments about how the world should or could be, there is no definitive answer, and intelligent people can disagree. It’s not possible to come to conclusions in the same manner as one does with scientific measurements. So, I disagree with a lot of the assumptions and conclusions derived from Austrian school thought, I also agree with some. And I bet we both disagree with a lot of assumptions and conclusions derived from moral vegan thought. But, in an ideal world, we and the vegans could agree that white bread raises blood sugar higher than does a candy bar. So my whole original post was an attempt to object to the idea that libertarianism is The Answer or The Truth, because it’s at best a truth based on assumptions that rational people can accept or not.

    Thanks for the discussion.

    Reply
  5. bigmyc

    Well, at the risk of belaboring this discussion, I have to remark that no one is going to make me take statins.

    No one is advocating a massive government that will pilfer our individual resources and squander it on ill advised ventures. The position that I am railing for is one of a smaller government but one whose prime directive would be to ensure domestic tranquility, provide for the common defense and also offer an equitable health care environment like a civilized nation might have the calling to do.

    You, as a libertarian, might recognize at least two of the aforementioned tenets as they emanate from the incipience of this nation. If a smaller form of government is the goal, then a welcome by product of that system would be a more efficient allocation of human resources to the task of governance. In other words, a greater concentration of competition for those jobs. In addition, wastefulness would be under consistent scrutiny and “worthwhile” government programs like health care initiatives would be streamlined in the process.

    This can’t (shouldn’t) be perceived as anything but civilized advancement. Keep in mind, at this point, entitlement programs would be all but dissolved. Where libertarians get the bum rap (including being grouped in with Republicans et al) is that so many are as pigheaded as any group in the political arena. They don’t set themselves apart in the PR department regarding their inability to make sense of any other conflicting ideals. Having ONE or a FEW social programs is not mutually exclusive to having MANY or a MULTITUDE of social programs. I’ve met a score of libertarians who couldn’t see the forest through the proverbial trees.

    Make you take statins? I know — that’s just silly. The government would never do something like that.

    Of course, your doctor will be required to “recommend” them to you and write the prescription if she wants to keep her license. Keeping our arteries from clogging up with cholesterol will be vitally important with government footing the bill, and they’re not about to let a bunch of quacks who’ve bought into some crazy alternative so-called “theory” run up the health care bill for everyone else by insisting that statins don’t help. After all, Pfizer has already done hundreds of evidence-based research proving they’re good for everyone.

    Your doctor will also be required to report non-compliance to the national health care database, so the experts can keep track. But they wouldn’t force you. They can fine you, but they can’t force you. Or maybe they meant to call it a tax. Depends on which argument they were making to the Supreme Court that day. You don’t have to send it in, your employer will just get a directive from the IRS to increase the withholding amount from your paycheck.

    Once health care is “free” for everyone, and demand therefore approaches infinity, some form of rationing will have to be implemented, just like everywhere else with free anything. So when you get a little older, and you show up at the hospital with a tough cancer, and the medicine is pretty hard to procure what with price controls and all, they’ll just do a quick cross-check in the health-care database and see that you’re something of a lifelong non-complier, aren’t you Mr. Myc? And then you’ll hear the words some people in the UK who need dialysis hear,

    “I’m sorry, there’s nothing we can do.”

    But at least they’d never force you.

    If you’re going to finish nationalizing the 15% of the economy being drained into health care, how does that make entitlements all but dissolved? National health care IS an entitlement program. By definition, it’s a massive government operation that will pilfer resources and sqwuander them.

    Those first two tenets did ring a bell. I must’ve been sleeping in class the day they discussed how Jefferson, Adams, et. al., also meant free heart surgery and medicine. I’d have guessed they rather meant their document to prevent that kind of reach into people’s personal lives.

    Cheers

    Reply
  6. Paul

    you should seriously get together with Younger Brother and put together a sequel to fat Head based on this stuff… great post!

    I’m flattered you think so. Tom has sworn that the only way he’d take on a sequel is if someone hands him a big honki’g check so he doesn’t have to go out on a limb with his family’s financial future again.

    Hopefully, he and Chareva will a chance to start moving on their book idea sooner rather than later.

    –the Older Brother

    Reply
  7. bigmyc

    Well, at the risk of belaboring this discussion, I have to remark that no one is going to make me take statins.

    No one is advocating a massive government that will pilfer our individual resources and squander it on ill advised ventures. The position that I am railing for is one of a smaller government but one whose prime directive would be to ensure domestic tranquility, provide for the common defense and also offer an equitable health care environment like a civilized nation might have the calling to do.

    You, as a libertarian, might recognize at least two of the aforementioned tenets as they emanate from the incipience of this nation. If a smaller form of government is the goal, then a welcome by product of that system would be a more efficient allocation of human resources to the task of governance. In other words, a greater concentration of competition for those jobs. In addition, wastefulness would be under consistent scrutiny and “worthwhile” government programs like health care initiatives would be streamlined in the process.

    This can’t (shouldn’t) be perceived as anything but civilized advancement. Keep in mind, at this point, entitlement programs would be all but dissolved. Where libertarians get the bum rap (including being grouped in with Republicans et al) is that so many are as pigheaded as any group in the political arena. They don’t set themselves apart in the PR department regarding their inability to make sense of any other conflicting ideals. Having ONE or a FEW social programs is not mutually exclusive to having MANY or a MULTITUDE of social programs. I’ve met a score of libertarians who couldn’t see the forest through the proverbial trees.

    Make you take statins? I know — that’s just silly. The government would never do something like that.

    Of course, your doctor will be required to “recommend” them to you and write the prescription if she wants to keep her license. Keeping our arteries from clogging up with cholesterol will be vitally important with government footing the bill, and they’re not about to let a bunch of quacks who’ve bought into some crazy alternative so-called “theory” run up the health care bill for everyone else by insisting that statins don’t help. After all, Pfizer has already done hundreds of evidence-based research proving they’re good for everyone.

    Your doctor will also be required to report non-compliance to the national health care database, so the experts can keep track. But they wouldn’t force you. They can fine you, but they can’t force you. Or maybe they meant to call it a tax. Depends on which argument they were making to the Supreme Court that day. You don’t have to send it in, your employer will just get a directive from the IRS to increase the withholding amount from your paycheck.

    Once health care is “free” for everyone, and demand therefore approaches infinity, some form of rationing will have to be implemented, just like everywhere else with free anything. So when you get a little older, and you show up at the hospital with a tough cancer, and the medicine is pretty hard to procure what with price controls and all, they’ll just do a quick cross-check in the health-care database and see that you’re something of a lifelong non-complier, aren’t you Mr. Myc? And then you’ll hear the words some people in the UK who need dialysis hear,

    “I’m sorry, there’s nothing we can do.”

    But at least they’d never force you.

    If you’re going to finish nationalizing the 15% of the economy being drained into health care, how does that make entitlements all but dissolved? National health care IS an entitlement program. By definition, it’s a massive government operation that will pilfer resources and sqwuander them.

    Those first two tenets did ring a bell. I must’ve been sleeping in class the day they discussed how Jefferson, Adams, et. al., also meant free heart surgery and medicine. I’d have guessed they rather meant their document to prevent that kind of reach into people’s personal lives.

    Cheers

    Reply
  8. cndnrose

    The articles bring me here, and I come back for the comments. This is why I love reading blogs, the best ones become a discussion, and this has become one of the best.

    Reply
  9. David

    A great overview of Austrian economics. Kudos.

    A bit more in response to the guy who claimed the macro-economics is a pseudo-science. It is, although not for the reasons he cited. Science does not require experiments or double-blinds. Science is about advancing hypotheses about the operation of the universe and then making predictions based on those theories to prove or disprove them. Gary Taubes talks about this a lot in GCBC. The Theory of Evolution, for example, is not based on experiments or studies. Neither is the Hertzsprung-Russell diagram and the Theory of Stellar Evolution. Both, however, make predictions which can be falsified and thus stand the test of true science.

    Austrian Economics is really more like math than either science or philosophy. Both math and economics are based on a few fundamental axioms about the nature of the universe and proceed to build up an entire system of thought through the application of logic to the axioms.

    To refute math, you either have to deny the axioms or to find an error in the chain of logic based on them. I don’t think that anyone would disagree with this, yet the same people who agree with this premise are perfectly happy to heap scorn on Austrian economics without even attempting to address either the axioms or the logic.

    The Austrian logic leads ineluctably to the conclusion that the state is incompetent at performing any task to which it is applied. Mises pointed out that the state has no mechanism with which to decide how to allocate scarce resources (the market uses the price system while the state basically relies on political infighting). Hayek upped the ante by showing that it can’t even have sufficient information to act. Both conclusions are based on logic, not experiment.

    The state is incompetent to perform even the simplest task. The Communists couldn’t even make decent cement, let alone make sure that there was food in grocery stores. Why, then, would anyone think that it is capable of performing far harder tasks like providing health care, policing, justice or defence?

    According to Austrian theory it can’t, and according to the practical outcomes in every state on the planet, it doesn’t. Earlier, you say “as for police and courts, I don’t see having a society without some mechanism to objectively apply force for the protection of innocents”. The whole point of the Austrian analysis is that all value, including the protection of innocents, is subjective. There is no such thing as a mechanism to objectively apply force. It cannot exist.

    As such, if you leave the police and the courts in the hands of the state, then these tools will be used to advance the case of the tax thieves and ensure their control over the rest of us. Unsurprisingly, that is exactly what happens. Always.

    If you cannot imagine a society based on voluntary justice then I submit that you haven’t looked hard enough, either at history or theory. The state hijacking of the Common Law is a thousand years old (largely a consequence of the Norman Conquest; there is a reason why most legal terms, such as crime, justice, and judge, have French origins) but the police are a much more recent phenomenon.

    The American Founding Fathers railed against what they called “standing armies”, which basically amount to police forces. The first modern force was instituted in London in 1829. London was a city of a million people at the time and they managed to live quite well without police until then. The first American force came to New York City in 1853. There were riots against them. The people understood quite well that their purpose was control, not protection.

    As for your “2%” argument, the main problem is that the world simply does not work like that. Once you have conceded the principle of taxation and state control over the law and its enforcement, you have conceded everything. The state will inevitably use these powers for its own aggrandizement. The American experiment is proof enough of that.

    Reply
  10. cndnrose

    The articles bring me here, and I come back for the comments. This is why I love reading blogs, the best ones become a discussion, and this has become one of the best.

    Reply
  11. David

    A great overview of Austrian economics. Kudos.

    A bit more in response to the guy who claimed the macro-economics is a pseudo-science. It is, although not for the reasons he cited. Science does not require experiments or double-blinds. Science is about advancing hypotheses about the operation of the universe and then making predictions based on those theories to prove or disprove them. Gary Taubes talks about this a lot in GCBC. The Theory of Evolution, for example, is not based on experiments or studies. Neither is the Hertzsprung-Russell diagram and the Theory of Stellar Evolution. Both, however, make predictions which can be falsified and thus stand the test of true science.

    Austrian Economics is really more like math than either science or philosophy. Both math and economics are based on a few fundamental axioms about the nature of the universe and proceed to build up an entire system of thought through the application of logic to the axioms.

    To refute math, you either have to deny the axioms or to find an error in the chain of logic based on them. I don’t think that anyone would disagree with this, yet the same people who agree with this premise are perfectly happy to heap scorn on Austrian economics without even attempting to address either the axioms or the logic.

    The Austrian logic leads ineluctably to the conclusion that the state is incompetent at performing any task to which it is applied. Mises pointed out that the state has no mechanism with which to decide how to allocate scarce resources (the market uses the price system while the state basically relies on political infighting). Hayek upped the ante by showing that it can’t even have sufficient information to act. Both conclusions are based on logic, not experiment.

    The state is incompetent to perform even the simplest task. The Communists couldn’t even make decent cement, let alone make sure that there was food in grocery stores. Why, then, would anyone think that it is capable of performing far harder tasks like providing health care, policing, justice or defence?

    According to Austrian theory it can’t, and according to the practical outcomes in every state on the planet, it doesn’t. Earlier, you say “as for police and courts, I don’t see having a society without some mechanism to objectively apply force for the protection of innocents”. The whole point of the Austrian analysis is that all value, including the protection of innocents, is subjective. There is no such thing as a mechanism to objectively apply force. It cannot exist.

    As such, if you leave the police and the courts in the hands of the state, then these tools will be used to advance the case of the tax thieves and ensure their control over the rest of us. Unsurprisingly, that is exactly what happens. Always.

    If you cannot imagine a society based on voluntary justice then I submit that you haven’t looked hard enough, either at history or theory. The state hijacking of the Common Law is a thousand years old (largely a consequence of the Norman Conquest; there is a reason why most legal terms, such as crime, justice, and judge, have French origins) but the police are a much more recent phenomenon.

    The American Founding Fathers railed against what they called “standing armies”, which basically amount to police forces. The first modern force was instituted in London in 1829. London was a city of a million people at the time and they managed to live quite well without police until then. The first American force came to New York City in 1853. There were riots against them. The people understood quite well that their purpose was control, not protection.

    As for your “2%” argument, the main problem is that the world simply does not work like that. Once you have conceded the principle of taxation and state control over the law and its enforcement, you have conceded everything. The state will inevitably use these powers for its own aggrandizement. The American experiment is proof enough of that.

    Reply
  12. bigmyc

    Well, clearly you’ve miscontrued my point about the principles upon which the founding fathers established this nation. I wasn’t suggesting that health care was fought for along with “life, liberty and the pursuit of happiness.” That was my offering to what is already a substantial foundation…and in no way am I giving equal billing to all three of those tenets that I mentioned. I think better judgement will allow you to discern which of those three that I would rank lowest.

    Again, I think there’s a disconnect here between the willful adherence to one’s long established libertarian identity and that which could actually work in practice aside from theory. Essentially, “all but dissolved” to me, means “almost dissoved.” So, if virtually the only entitlement program that remains is a well thought out, flexible and equitable national health program, than so be it. Not everything has to be so black and white. Espcially in politics. In fact, the art of politics in general practice boils down to the art of compromise. Government doesn’t have to be terminally inept. It just has to be manageable. That’s the trick. I would think that a substantial “trimming of the fat” would attain this very goal.

    Another thing for the self affirmed libertarian soul to consider; when someone mentions a “health care initiative,” it does not necessarily mean “anything along the lines of Obamacare.” In fact, according to my outlook, it means, “virtually anything but.” The situation that you purport in Britain sounds very little like the flexible and equitable system that I am extolling. The comprehension firewalls that people will build in front of themselves are astounding. If you can pay for exempliary health care, then so be it. If not, well you’ll get the best that your nation can currently offer or at least, supplement.

    I don’t think that we should feel so violated by the attempt at national health care…at least in comparison to what currently goes on courtesy of your(our) tax dollars.

    Reply
  13. Rocky

    Elenor is spot-on in her observation. One of the greatest coups that the health insurance industry has ever pulled was ensuring that the debate has always been about “affording health care coverage,” not affordable health care.

    Rather than focus on the core problems of wildly inconsistent, manipulated, and skyrocketing costs of medical treatment (both necessary and unnecessary), it’s all about “coverage,” thus ensuring another layer of profit and control between the individual and the healthcare provider.

    Reply
  14. bigmyc

    Well, clearly you’ve miscontrued my point about the principles upon which the founding fathers established this nation. I wasn’t suggesting that health care was fought for along with “life, liberty and the pursuit of happiness.” That was my offering to what is already a substantial foundation…and in no way am I giving equal billing to all three of those tenets that I mentioned. I think better judgement will allow you to discern which of those three that I would rank lowest.

    Again, I think there’s a disconnect here between the willful adherence to one’s long established libertarian identity and that which could actually work in practice aside from theory. Essentially, “all but dissolved” to me, means “almost dissoved.” So, if virtually the only entitlement program that remains is a well thought out, flexible and equitable national health program, than so be it. Not everything has to be so black and white. Espcially in politics. In fact, the art of politics in general practice boils down to the art of compromise. Government doesn’t have to be terminally inept. It just has to be manageable. That’s the trick. I would think that a substantial “trimming of the fat” would attain this very goal.

    Another thing for the self affirmed libertarian soul to consider; when someone mentions a “health care initiative,” it does not necessarily mean “anything along the lines of Obamacare.” In fact, according to my outlook, it means, “virtually anything but.” The situation that you purport in Britain sounds very little like the flexible and equitable system that I am extolling. The comprehension firewalls that people will build in front of themselves are astounding. If you can pay for exempliary health care, then so be it. If not, well you’ll get the best that your nation can currently offer or at least, supplement.

    I don’t think that we should feel so violated by the attempt at national health care…at least in comparison to what currently goes on courtesy of your(our) tax dollars.

    Reply
  15. Rocky

    Elenor is spot-on in her observation. One of the greatest coups that the health insurance industry has ever pulled was ensuring that the debate has always been about “affording health care coverage,” not affordable health care.

    Rather than focus on the core problems of wildly inconsistent, manipulated, and skyrocketing costs of medical treatment (both necessary and unnecessary), it’s all about “coverage,” thus ensuring another layer of profit and control between the individual and the healthcare provider.

    Reply
  16. Leila

    Hello from Canada! Love, love, love this series, it’s been very educational – huge THANK YOU OB for presenting it!

    Just to weigh in on “free” health care – as I understand it, Americans pay much less in taxes but have to pay-as-you-go for health care; and Canadians pay much higher taxes but don’t normally pay any fees for medical care. I know, that’s vastly over-simplified. My point is, we pay for it somehow.

    I myself don’t get sick all that often, which is great because when I do visit the doc, I get the same old bad advice everyone everywhere seems to get – lose weight, eat hearthealthywholegrains & industrially-processed seed oils, avoid salt & sat fat & take your statins regardless of your cholesterol. But, I have a husband with congestive heart failure and a son who needed surgery at age 7 for a brain tumour known as a medullablastoma, so my family accesses the health care system fairly frequently. My son, now 27, has had two surgeries and a mild stroke in the past year, and no fees have ever been charged for his treatment. It’s an enormous relief to me to know that when we really need it, excellent medical care is available and we don’t have to worry about being able to pay for it.

    Having said that, I think the fact that I can walk into any doctor’s office, clinic or hospital & obtain medical care has serious drawbacks. When government takes over every aspect of their lives, people seem to want to depend on it to tell them how to live, rather than take personal responsibility for the state of their health (and finances). So they go see a doctor for every little ache & sniffle “just in case.” The result is that the health care system is overwhelmed, the wait lists are long & people can’t get the care they need unless they’re in desperate straits.

    I don’t what the solution is – charging a fee might discourage frivolous use of the system but it might also stop people from getting medical care that they truly need. I know there are people who don’t fill their prescriptions because they can’t afford them. Maybe the solution is less government involvement in all aspects of people’s lives to encourage rthe people to become more self-reliant. Hmmm, I think that makes me a libertarian!

    Reply
  17. Leila

    Hello from Canada! Love, love, love this series, it’s been very educational – huge THANK YOU OB for presenting it!

    Just to weigh in on “free” health care – as I understand it, Americans pay much less in taxes but have to pay-as-you-go for health care; and Canadians pay much higher taxes but don’t normally pay any fees for medical care. I know, that’s vastly over-simplified. My point is, we pay for it somehow.

    I myself don’t get sick all that often, which is great because when I do visit the doc, I get the same old bad advice everyone everywhere seems to get – lose weight, eat hearthealthywholegrains & industrially-processed seed oils, avoid salt & sat fat & take your statins regardless of your cholesterol. But, I have a husband with congestive heart failure and a son who needed surgery at age 7 for a brain tumour known as a medullablastoma, so my family accesses the health care system fairly frequently. My son, now 27, has had two surgeries and a mild stroke in the past year, and no fees have ever been charged for his treatment. It’s an enormous relief to me to know that when we really need it, excellent medical care is available and we don’t have to worry about being able to pay for it.

    Having said that, I think the fact that I can walk into any doctor’s office, clinic or hospital & obtain medical care has serious drawbacks. When government takes over every aspect of their lives, people seem to want to depend on it to tell them how to live, rather than take personal responsibility for the state of their health (and finances). So they go see a doctor for every little ache & sniffle “just in case.” The result is that the health care system is overwhelmed, the wait lists are long & people can’t get the care they need unless they’re in desperate straits.

    I don’t what the solution is – charging a fee might discourage frivolous use of the system but it might also stop people from getting medical care that they truly need. I know there are people who don’t fill their prescriptions because they can’t afford them. Maybe the solution is less government involvement in all aspects of people’s lives to encourage rthe people to become more self-reliant. Hmmm, I think that makes me a libertarian!

    Reply
  18. Elenor

    Leila: “charging a fee might discourage frivolous use of the system but it might also stop people from getting medical care that they truly need.”

    Yeah, they do that here in America — they call it a “co-pay.” It doesn’t really work unless you make it onerous enough to discourage folks, and then, all too often, you end up discouraging the WRONG folks. It becomes just one more way to push more of the cost off the insurance companies and onto the allegedly covered.

    Reply
  19. Elenor

    Leila: “charging a fee might discourage frivolous use of the system but it might also stop people from getting medical care that they truly need.”

    Yeah, they do that here in America — they call it a “co-pay.” It doesn’t really work unless you make it onerous enough to discourage folks, and then, all too often, you end up discouraging the WRONG folks. It becomes just one more way to push more of the cost off the insurance companies and onto the allegedly covered.

    Reply
  20. Lisa

    Great post. This is a lot to think about. It’s a shame more people don’t know about how prices with food are influenced.

    Reply
  21. Lisa

    Great post. This is a lot to think about. It’s a shame more people don’t know about how prices with food are influenced.

    Reply

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