Free market consumer driven healthcare

“Consumer driven healthcare” plans were introduced in the USA in 2001. The idea was simple enough. Here’s how Republican Presidential hopeful Ben Carson described it: In order to right the ship, we need to return the responsibility for good health care to the patient and the health care provider. One of the best ways to do this is through health savings accounts, which patients can control. Republicans see this principle of patient responsibility as particularly important, because they mostly believe in an economic theory called moral hazard.

The purpose of education

I’m not generally a big fan of Daily Mail style “why oh why” pieces about the decline of civilization, but Harper’s magazine has one I find to be remarkably insightful for the genre. If you want to burn your free paywall passage for the month you can go read the whole thing, it’s titled The Neoliberal Arts. You can also get a subscription for $18 a year. Anyway, within said article William Deresiewicz discusses how college (university) education has abandoned its most important goals to slavishly follow neoliberal market doctrine.

FotFM: The Domain Name System (DNS)

Once upon a time, back in the ancient history of the Internet–before the 1990s–domain names were carefully controlled and regulated. A single organization controlled each top level domain. If you wanted a domain name, you had to meet their requirements. Often the policies enforced were quite picky. If you wanted a .uk domain name, you were required to actually be in the UK, for example. If you wanted a .org domain, you were required to be a non-profit organization.

The spam problem part 3: Objections to attention bonds

In part 1, I enumerated the approaches to spam eradication I was aware of, and explained my conclusion that the only approach which will work is an economic approach. In part 2 I discussed various options for tackling spam economically, ending with the one I think would actually be acceptable and useful: attention bonds.

Now I’ll run through (and shoot down) a few of the objections commonly brought up when the possibility of involving actual cash in e-mail sending is raised.

The spam problem part 1: Describing the problem

A great many words have been written on the subject of e-mail spam. Effort has been poured into all kinds of technological measures against it. In my view, many of these efforts have been a waste of time, because they have failed to address the fundamental problem of spam.

To explain my thinking, I’ll start with some basic statements:

  1. Your attention is a valuable resource. If you doubt this, you need only look at the amount of money spent on advertising in an attempt to acquire your attention.

  2. Therefore, your inbox is a valuable resource. Many people, perhaps most people, now check e-mail multiple times a day. In fact, according to some surveys college students spend more time on the Internet than watching TV. They check their e-mail inbox more than they look at ad breaks.

  3. SMTP e-mail allows anyone to send mail. There’s no centralized registration required in SMTP; there’s no control over the growth of the SMTP e-mail network. While some servers restrict which SMTP clients may connect to them, there’s essentially no control over who sends mail, as it’s always possible to open a new web e-mail account, buy a new ISP dial-up account, or whatever.

  4. SMTP e-mail is free for the sender. Sure, many people pay for their Internet access; but once you have an Internet connection, sending e-mail basically doesn’t cost you anything—it has marginal cost.

Now, let me re-cast those four statements:

We have unrestricted access for anyone in the world to use arbitrary amounts of a valuable resource.

Can you think of any case where there has been a system like that, and it has worked? I can’t. The canonical example is the tragedy of the commons, but there are plenty of others, including the Cambridge ‘Green Bike’ scheme and the overfishing of cod.

In order to avoid a “tragedy of the commons” situation, we need to alter the situation so that one of the statements above is no longer true. Let’s go through them again and consider our options.

Failures of the Free Market: US healthcare

One of the things that continues to amaze me about the US is that Americans seem to believe they have the best healthcare in the world. Truth is, Americans have the most expensive healthcare in the world. A few of them have excellent healthcare, but most get the kind of treatment you’d get in a third world nation. Bloated, blue-collar Americans—gorged on diets of fries and burgers, but denied their share of US riches—are bringing the nation’s steady rise in life expectancy to a halt.

Failures of the free market: food

One of the nice things about the USA is that every food package has a handy table on the back listing the proportions of various nutrients it contains. (It looks like the one on the front page of my web site.) This makes it very easy to look at two cans of soup, and say “Jeez, this one is 34% of my recommended sodium intake for the day, and 20% of my recommended fat… but this one is only 10% sodium and 2% fat.

The invisible hand at work

As a response to the (deliberately manufactured) energy crisis in California, some of the electricity distribution companies began offering special contracts to encourage corporate customers to be more efficient. The deal was: They’d get a cheaper electricity rate, if they agreed to cut their usage by 15% when asked to do so during peak time shortages. If they failed to do so, they’d have to pay extra-high premium prices. This is, of course, rational market-based pricing of goods—as the theory goes, people who need lots of electricity when it’s in short supply should pay more, and the way to encourage efficiency and flexibility is to give it a financial incentive.