Thursday, February 5, 2009

Social Medicine

Life should come with an "AS-IS No Warranty" sticker on it. There are no guarantees in life in part because resources are scarce and they must be allocated somehow or other. It seems to me that we should prefer those means of allocation that maximize efficiency so that the most satisfaction of human wants, for a given amount of resources, can be achieved. This goes for doctor-hours and hospital beds as well as it does for crackers or Volkswagens.

Naturally, no one believes that a child who develops leukemia should die at a young age simply because his parents didn't exercise the foresight to buy health insurance against leukemia. That said, neither does the fact that a child develops leukemia morally obligate those in the business of treating leukemia to foot the bill (by providing free treatment). Socializing health risks is the solution offered by a lot of people, but is it actually worth the cost? Sure, you save some hardcases who otherwise would have died, but every economic cost (including taxation or subsidization of health risks on the back of the general public) can potentially result in loss of life (e.g. the mother with a child having a medical emergency who can't dial 911 because she couldn't pay her cell phone bill because of the increased burden of socializing the health risks of society at large). If we could consult an omniscient oracle to determine that a particular socialist policy would save 10 lives per year that otherwise would have died due to insufficient philanthropic generosity, but result in 100 additional deaths due to additional costs imposed across the taxpaying public, would it be worth it?

It is always easy with social programs to count the benefits because these are seen. The child who is saved by a leukemia treatment paid for by the public has a face that can be photographed and a story that can be written. But the additional privations borne by countless individuals who paid 50 cents for his treatment (and 33 cents for another child's treatment down the hall, and $1.25 for brain surgery for the elderly man upstairs, and so on and so forth) cannot be portrayed for a news segment. These are the uncounted costs.

The right solution is not socialism (in its pure or weaker variants), because socialism requires taxation and taxation is theft. In addition, socialism, for all its good intentions, still supplants the distributed knowledge of the market with the information-starved centrally planned bureaucracy. In short, socialist welfare bureaucracies suffer from the same economic calculation problem that communist central planning bureaucracies do. This means we should expect socialist charity to be inefficiently allocated at any level of funding.

The right solution is voluntary philanthropy. It has worked quite well down through the millenia and would continue to work just as well today if the government would excuse itself from the forced-charity business. It is exactly because people have compassion and empathy for one another (as the socialists regularly claim) that voluntary philanthropy can and does work for helping those who fall through the cracks.