Plain Dumb Luck
by Jason Kuznicki · March 22, 2012
In my perfect world, I'd have Michel Foucault's old job: Professor of the History of Systems of Thought at the Collège de France. Here's a bit of what I might want to teach.
The graduated income tax
Women's suffrage
All were strongly associated with the progressive/left ideology in the first decades of the last century. For good or ill: Today almost all of us find the graduated income tax untroubling, immigration restrictions right-wing, eugenics unconscionable, women's suffrage morally obligatory, and prohibition a tragic mistake. (Except when it isn't.) Lashed together for a time, these questions have had anything but a common fate ever since.
Take it from someone who has studied it: The history of ideas is a stone cold bitch.
The point here is not to condemn, or to praise, early twentieth-century lefties. It's to note that when we look at readily identifiable, real-world ideologies from the outside, they often turn out to be highly contingent. They're brought together by one political moment only to be separated by the next.
This is very different from how they look to a true believer. To those who hold an ideology, that ideology is entirely correct, and it springs from a deeper, even transcendent source. Or at least, so says almost everyone.
Almost everyone is probably wrong about this.[1]
It's very satisfying, but still probably too easy, to say in light of this perceived relativism that relativism itself constitutes the true ideology, or at least the true response to all others' ideologies. The problem, though, is that real-world problems don't go away, and relativists still come up with solutions to them. Sweep away all systems, and the result is a system. You may even know all about the play of contingency — and still find a given ideology compelling. Ouch.
So where do these strutting certainties come from? And why are they so often dashed? The answer is in the raw material of politics itself. This material is not an abstract conception of right or wrong — is not a transcendent moral order — is not even human nature, in any biological or economic sense.
It is, as far as I can tell, plain dumb luck. As an example, consider the following fact: Employer-provided health insurance is tax deductible.
This means it's often a good idea for employers on the margin to spend more on health care than on cash raises for their employees. Raises in cash get taxed. Raises by way of health insurance don't get taxed, making them relatively more attractive to employers. Partly as a result of this, employer-provided insurance becomes the norm, with 90% market dominance.
That's not because employers are especially good at providing the service. It's because almost no one who already gets health insurance as part of a compensation package is ever going to seek insurance anywhere else. And, as already noted, there are tax advantages for employers who want to make health care a bit more expensive rather than giving a raise.
Markets coordinate the interests of buyers and sellers, but when you're not a buyer or a seller — and here, that's almost all of us — you shouldn't be surprised when your interests are not coordinated, but brutally disregarded. That's what markets do. They brutally disregard everything that's extraneous in the pursuit of efficiency. (But for whom?) If employers provided your automobiles, they'd also be way too expensive, and they'd also totally suck, just like your health insurance.
And yet the system sprung up almost entirely by chance, and what wasn't chance was the product of economic conditions that don't exist anymore:
While its origins can be traced back to 1929, when a group of Dallas teachers contracted with a hospital to cover inpatient services for a fixed annual premium, the link between employment and private health insurance was strengthened by three key government decisions in the 1940s and 1950s. First, during World War II the War Labor Board ruled that wage and price controls did not apply to fringe benefits such as health insurance, leading many employers to institute ESI. Second, in the late 1940s the National Labor Relations Board ruled that health insurance and other employee benefit plans were subject to collective bargaining. Third, in 1954 the Internal Revenue Service decreed that health insurance premiums paid by employers were exempt from income taxation.
This is the backdrop for one of the most important issues in public policy today. In its own terms, it makes no sense whatsoever, and no sane person would ever have designed a health care system this way. Still, and despite it all, when people judge "the free market in health care," overwhelmingly this is what they are judging. And you know what? They're not wrong to find it wanting.
We could go on. Why do we still have greyhound races? They're a veneer of respectability for video poker, in an age when it's not at all clear which forms of gambling are okay and which are not. Why are there so few distilleries? Because of face-saving rules put up for the temperance movement at the end of Prohibition. If we'd synthesized aspirin a few years ago, and if Vioxx grew in a plant, the former would be illegal and the latter would be an over-the-counter drug. (Of course, growing in a plant didn't help marijuana, which had the misfortune of being smoked by immigrants.) We seize defendants' property and charge the property with a crime — just as our superstitious medieval ancestors did — because doing it that way is easier and makes more money for police departments.
This is what your ideology is made of. Mine too. And everyone else's, if it makes you feel better. Have a nice day.
[1] The most important exception I can think of is Robert Nozick, who often confessed to varying degrees of certainty about different parts of his intellectual project. He also wondered why others didn't do the same. Nozick was probably more right about this observation than he was about anything else he ever wrote.
Tags: Francehealthhealth insuranceinsurance
Jason Kuznicki
Jason Kuznicki is a research fellow at the Cato Institute and contributor of Cato Unbound. He's on twitter as JasonKuznicki. His interests include political theory and history.
Weekend!
The New White City
Guaranteed Wrong or Your Money Back!
This means it's often a good idea for employers on the margin to spend more on health care than on cash raises for their employees. Raises in cash get taxed. Raises by way of health insurance don't get taxed, making them relatively more attractive to employers.
This is interesting. My annual raises are unimpressive but my health insurance seriously kicks ass. My company is HUGE so it has massive buying power on the insurance market. My wife makes $20,000 more than me but when you factor in my healthcare that variance reduces by half.
I also like that my employer serves as a middle man between me and the insurance company and makes policy information much easier to digest. When I see my in-laws pouring over medicare documents for hours it gives me heartburn.Report
Jason Kuznicki in reply to Mike Dwyer says:
You're right that there is a huge demand for simplifying health care provision, as well as for access to the services themselves. I admit I don't know what the best provision model might be for this in-demand service. HMOs aren't terribly cost-cutting, and saving money is presumably one of the benefits we'd all want to have here.
Unrelatedly, but in the interests of being a gentleman, I'm very sorry to have stepped on your excellent marriage post just below. I hit "post" and was disappointed to find I'd bumped you down. My bad.Report
Mike Dwyer in reply to Jason Kuznicki says:
No worries Jason – luck of the draw. I think most of our readers probably use RSS so I don't worry too much about the front page.Report
Tod Kelly says:
JK – This was just outstanding. It's one of those posts I was wishing I had written myself when I was reading it.
On more anecdotal note on luck to attach to your anecdote: Those teachers from Dallas not only started the ball rolling with the concept of health insurance, they changed the face of healthcare. Prior to the rise of insurance in the early-mid both century, much of what people went to "hospitals" for was simply convalescence when one's survival was unsure; what's more, what the relative comfort of that convalescence was greatly dependent upon economic class. The growing money stream that employer-based health insurance brought to the industry changed it completely, and shaped it into that more proactive and specifically reactive practice we universally think of today when we thing of "healthcare."Report
Mark Thompson in reply to Tod Kelly says:
This was just outstanding. It's one of those posts I was wishing I had written myself when I was reading it.
Ditto.Report
Michael Drew in reply to Mark Thompson says:
x3Report
DensityDuck in reply to Tod Kelly says:
"Prior to the rise of insurance in the early-mid both century, much of what people went to "hospitals" for was simply convalescence when one's survival was unsure; what's more, what the relative comfort of that convalescence was greatly dependent upon economic class. "
This is true, but it's also the case that there just wasn't that much you could do in terms of "health care". It wasn't until the 1930s that pharmaceutical antibacterials (penicillin and sulfonamides) started to be used, for example.Report
Jason Kuznicki in reply to DensityDuck says:
Indeed, I understand that before 1900, you were more likely to be hurt by a doctor than helped.
Women in particular were much better off delivering a baby at home than in a hospital, where they often contracted sepsis from unclean hands and instruments.Report
Jaybird in reply to Jason Kuznicki says:
If you want me to wear a clean white coat like a doctor on his first day, maybe you'd be better off having the kid in your own danged house!Report
James K in reply to Jason Kuznicki says:
In fact that's how homeopathy developed a following when it was invented in the 18th Century. Homeopathy did nothing, but that was preferable to what doctors could manage at the time, so it gained a reputation as a superior form of medicine.Report
I suspect that Prohibition had as much to do with immigrants as Marijuana Prohibition.
Germans drank beer, Italians drank wine, Irish drank whisky.Report
MikeSchilling in reply to Jaybird says:
And the descendants of the English and Scots-Irish were teetotallers?Report
Jaybird in reply to MikeSchilling says:
Compared to the Irish, we're all teetotalers.
James K in reply to MikeSchilling says:
WASPs weren't random members of the English and Scots-Irish communities, there was a heavy weighting toward Puritans.Report
MikeSchilling in reply to James K says:
Who were still non-drinkers centuries later? Perhaps, but I'l need some convincing.Report
Kimmi in reply to MikeSchilling says:
Scotch Irish weren't anglo saxon, thus not waspReport
DavidTC says:
As someone on the left, I've always pointed out that the left came up with, basically, almost all good ideas in this country. Sadly, the left has also come up with almost all bad ideas, too. This is probably because the left tends to be made up of the disaffected, who actually want to fix things, where as the right, until recently, was not. (I have no idea what's going on with the right now. They're angry at completely random things, and none of the things they propose would actually solve any of the problems they claim to see, even pretending those problems made sense.)
Some of the stuff was even more closely tied together. Prohibition and women's suffrage, for example, were both 'women's rights' issues. Because the world was such that men (Who were the only allowed breadwinners), would go out drinking, spend all their family's money, get blind drunk, and beat their wife. And no divorce either. Sure, by then it was often _legal_, but it was unworkable…it meant the woman losing custody of the kids. And remember, no contraceptives, and no such thing as a man raping his wife…so there were always kids. (And after divorce…no making any money by the woman.)
So the solution was, apparently: Forbidding alcohol.
Now, from _our_ historic perspective, there were other obvious solutions, such as 'Making divorce possible' and 'Legalizing contraception' and 'Forbidding wife-beating' and 'Forbidding wife-raping' and 'Actually treat women as human beings deserving of dignity and respect'. However, at the time, those solutions were not possible. So the women's rights movement latched onto the idea of prohibition, which had been floating around forever, and managed to get it to happen. It's easy to look with hindsight and think it was just some moralizing busybodies, but it was moralizing busybodies who said 'It is unacceptable to spend all the family's money drinking, and then go home and beat a women who wasn't able to leave you', which I suspect we all agree with…we just disagree with the solution to that.
On of the interesting things about the modern right is watching it, as it has increasingly attempted to 'solve problems' that it says it sees, how it completely refuses to actually let go of bad policy positions. For example, standing there and arguing for DADT. Really? Gay marriage is still decisive enough that it _might_ be a reasonable idea to oppose it, but you're going to have to look far and wide to find people who think that gay people should be drummed out of the military.
Changing positions once the previous one has either failed or just become unworkable is an important lesson the left learned decades ago, although often the right fails to notice it does this. (It's always fun to watch the right rant about the left trying 'Gun control', an issue the actual left pretty much decided was pointless a decade ago and has attempted to do nothing with since.)
The right will, however, let go of policy positions the second the left looks at them and says 'Okay, we can do that'. 'Okay, I guess we can do cap and trade instead of just regulating amounts.' 'Okay, I guess we can make an insurance mandate instead of medicare for all.'
This is why I have often argued that the right policy makers are inherently dishonest, although I'm sure that's not a popular opinion here. A good deal of 'policy proposals' from the right are just things to use to argue that the left's solution is 'wrong' so the problem doesn't get solved…as demonstrated by the fact that when the right comes up with a solution the left doesn't find objectionable and is in danger of using, the right immediately flees from it like a bat out of hell. I've often wished for a honest opposition party that attempted to also solve problems, but in a different way…instead of just coming up with near-nonsensical alternatives to hide the fact they're standing atop history crying 'STOP!' and don't really want to solve the problem at all. (Although recently they seem to realize this looks stupid, and instead have dedicated themselves to attempting to solve problems only they can see, like how dare unions wages not have gone down as much as everyone else's!)Report
Kimmi in reply to DavidTC says:
Koch's your solution to what's going on behind the right these days — same solution as racism, different leader.Report
Rufus F. in reply to DavidTC says:
Well, if it helps, the left comes up with all the bad ideas and the right fights to keep them ten years later.Report
Michael Drew in reply to DavidTC says:
Welcome. Stay. Comment a lot. This is awesome.
Prohibition rightly gets slammed a lot around here, to where it's more a cudgel for use in other arguments than a contingent, real historical event of its own logic. This is the context I've been wanting to place it in (not because no one here knows about it, but because no one ever talks) for years now, but just haven't found the right time to do it or the words you offer. You did it better than I could have.
Unfortunately necessary caveat: this is not a defense of nor even a remotely good word for, prohibition. But excluding context is its own kind of lying. Context is reality.Report
Roger in reply to DavidTC says:
I like your comment that the left has championed the good and bad ideas of the past. Although it is an oversimplification, there is a dynamic at play of a conservative force to preserve institutions and a progressive force to change. Over time the proven changes are embraced by the conservative forces and similarly preserved against further experimentation. One way to look at it is that it is not the panoply of initiatives and causes at any given era that is the focus of the battle as much as the dynamic of conserving vs experimenting.
But allow me to offer another dimension to the analysis. There is the dynamic struggle between top down problem solving ( or experimentation), and bottom up or decentralized problem solving. Implicit in the statement about most good and bad ideas is that most ideas are actually coming from the top down. I'd argue that the vast majority of good and bad ideas (thus most experimentation) are generated from the decentralized actions of individuals, locales and various corporations. Solving a problem in a centralized top down fashion often precludes experimentation and evolutionary learning from the bottom up.
I guess I am saying that there are two levels to consider in change. Should we change? And Who and how should we experiment?Report
MikeSchilling says:
There's a great book by Stephen Jay Gould called Wonderful Life, in which he discusses the explosion of new forms of life that occurred in the early Cambrian period, one of which, the first chordate, is our very, very, very remote ancestor. Is there any way to predict that that one would found the lineage of all the most complex species on Earth while most of the others would die out? No, he concludes, pure dumb luck.Report
BlaiseP says:
The history of ideas might be a stone cold bitch but it's been put forward by so many quarrelsome bitches, few of whom have anything good to say about what came before. I grow increasingly disgusted with every new iteration of Thought Systems: they all seem to be mere reactions and criticisms of all that came before. Blissfully unencumbered by a working knowledge of statistics or calculus nor yet any understanding of health care, these Systematizers of Thought are the worst affliction ever to burden mankind since the astrologers learnt a bit of geometry. Let me retract that, for these People of Thought have not even gotten as far as algebra or geometry. They might do better if they actually understood what the word System actually meant.
If the 20th Century was characterised by Relativism, it was nothing but disposing of the rotten wreckage of Certainty, collapsed under its own freight of lies and self-delusions. Verdun and the Somme closed the book on them all and the Holocaust and the advent of nuclear weapons was all the proof we shall ever need that Certainty was bunk.
The matter of public health has been pulled about like so many savage and ignorant horsemen playing buzkashi with a dead calf. Only the innumerate fail to understand the Law of Large Numbers, proven since the time of Bernoulli, prattling on about employer-provided health insurance. The larger the pool of lives, the more affordable insurance became. Were there less Ideology in the world and more Science and Mathematics, particularly statistics, these discussions would take on a far more reasonable form and we would do as every other advanced nation has done, enlarge the pool of lives to encompass all its citizens.
Plain dumb luck? Or application of statistics? Make your choice, folks.Report
Jason Kuznicki in reply to BlaiseP says:
Verdun and the Somme closed the book on them all and the Holocaust and the advent of nuclear weapons was all the proof we shall ever need that Certainty was bunk.
Are you sure?Report
BlaiseP in reply to Jason Kuznicki says:
Numbers don't lie. Thought Systematizers do, though only to themselves, and nobody else believes them since they can't properly construct a two-tail T or explain a Gaussian distribution to save their lives.
Chris in reply to Jason Kuznicki says:
It seems that the examples — Verdun and the Somme, the Holocaust, and nuclear weapons — prove something with a high degree of certainty, it just doesn't have anything to do with health care (the opposite, in fact).Report
BlaiseP in reply to Chris says:
It has a great deal to do with the Somme. Mere addition didn't solve the problem of the machine gun. All this nonsense about how the Free Markets shall solve the statistical problem of health care is only preached by the aforementioned Innumerate Idiots.Report
If what you are saying is true, it would be true whether the state or the market ran the health care system. And yes, you may very well be right.
What we have now is emphatically neither state nor market for the typical consumer. It's also clearly inefficient and clearly a matter of regulatory accident. To charge me with innumeracy for pointing this out is ridiculous.Report
Far from it. You're on the right track, attempting to dispose of these Fatuous Certainties. The numbers are all that matter. Your problem, it seems to me, as a Libertarian, and here I must choose my words carefully, resolves to a failure to apply statistics to the problem. Insofar as you're willing to say employer-based health care is not the right approach, more power to you, for you are on the right track in this.
But the Libertarian has a serious problem, philosophically, in his reliance on the Individual and the Market. The Libertarians have stoutly refused to acknowledge the power of the collective. In this, yes, they are innumerate. It's a matter of doctrine with you lot, I've been here long enough see every Libertarian here fall down this hole, a hole you dug for yourselves, a hole you ought to fill up. The individual is hugely important, but he has more power to achieve personal freedom when he operates in concert with those of like mind, intent upon maximizing their own freedom.Report
Robert Greer in reply to BlaiseP says:
Blaise, I think you're right that this "collective-as-sovereign" Rousseauian kind of thinking is a major ideological fault line between libertarians and big-government-tolerating liberals. But I'm not sure why you liberals would be unambiguously in the right.
It's true that the law of large numbers makes large insurance pools more robust, and therefore larger insurance schemes are more robust if all other things are held constant. But that caveat represents a whole world of possibilities: A larger insurance pool may contain people who are vastly more expensive to treat, thereby increasing the costs for the overall pool; it may also dilute the bargaining power of minorities within the pool and represent a wealth transfer away from them, as arguably happens with Social Security; or it may become more lashed to political processes and therefore gain institutional inertia on controversial issues like experimental treatments, or end-of-life care, or women's health. Put simply, there are more reasons than death panels to be skeptical of government-provided health care, and as the insurance pool gets larger and its marginal robustness diminishes, these other factors loom in importance.
I think the health care debate illustrates very well the contradictions inherent to big-government liberalism. Liberals understandably want economic inequality, and they see the state as a possible actor to achieve it. But liberals too easily forget that the state's power is predicated on its claimed monopoly of violence, which in turn rests on historical technological inequalities. When liberals seek to implement their aims via the state, they situate their moral claims in an environment where power backed by violence reigns supreme. Therefore, instead of curbing indefensible relations between the powerful and the weak, the big-government liberal instead legitimizes their form. In effect, they assert that Thrasymachus was right.
But don't take any of this to mean that I'm against wealth redistribution. I'm just skeptical that we can trust the state to do it right.Report
Kimmi in reply to Robert Greer says:
I say we trust the state as little as possible, and give every citizen the chance to avoid the state's charity. That said, I trust the state to be "equal" more than I trust any individual actor of smaller scale.
I wonder what you say about the corporations that have guns and aren't afraid to use them? Should they also be run out of town? Or at least treated with the same skepticism?
I'm pretty sure corps have killed more people in America this year than government (where it is possible to sort out the difference, of course)Report
Robert Greer in reply to Kimmi says:
I would treat corporations with roughly equal skepticism. On the one hand, there isn't even the appearance of representativeness in corporations, but on the other, sometimes market pressures get things right more quickly than political pressures. I think Fortune 500 companies are better on gay rights than most state governments, for instance.Report
BlaiseP in reply to Robert Greer says:
I am with Hobbes: it doesn't matter which form of government a nation might espouse: it's just a matter of how much dissention (and concomitant corruption) it's willing to tolerate in the process. I do AI work for insurance companies. My rulesets enact their policies. Pretty nasty stuff, seen in the aggregate.
What on earth are you talking about with this Negotiating Power? Please expand on this thought. The individual policy holder will often pay ten times the going rate for a company with 10,000 lives in that pool. The individual has no power.
Tell you a true story. So Blue Cross / Blue Shield of North Carolina wanted to change its incorporation from not-for-profit to a for-profit charter, so they could dump all the state union members on their policy, planning on circling around and picking up those policyholders at vastly inflated rates. The state employees got wind of it and made sure the legislators didn't allow that change.
I do not propose to nationalize health insurance. I propose to maximally increase the life pool and centralize around a single payer system, exactly as checks are cleared through the Federal Reserve system. Sounds like a sound market based strategy to me, making insurers contend for lives in that pool, exactly as banks compete for depositors. Quit waving your hands around and trying to conflate Big Government with a mathematically optimal insurance scheme. It's ridiculous and even you know it. The reason we don't have a national life pool seems clear enough: there are enough Innumerate Idiots in the world who can be easily swayed by ignorant arguments.Report
I'm not denying this; I'm only denying your claim that larger pools are always more beneficial for everyone. Imagine an insurance pool predominately populated by members of a specific minority that has peculiar genetic tendencies to specific health problems. If that pool were made larger via an influx of non-minorities, then there would be a lot more pressure to drop coverage of the minority-specific health problems.
This example actually dovetails perfectly into my fears that the welfare state preferentially serves those who are closer to state power. If the policyholders weren't state employees, don't you think that would have dramatically lowered their chances of success?
Quit waving your hands around and trying to conflate Big Government with a mathematically optimal insurance scheme.
Look, if I'm given no alternative to the current governing structure, I think a single-payer system is clearly the way to go. But such a system has not arisen in the current structure despite its clear advantages, and I think liberals should ask themselves why this is so. If you think, like I do, that we don't have single-payer because the state is inherently captured by the powerful, then the proper reaction is to re-examine whether we actually want the state to do this. I'm all for redistribution, but as long as redistribution is done through "legitimate" political channels, it'll be done on the terms of the people who have demonstrated that they don't actually want it to happen.Report
BlaiseP in reply to BlaiseP says:
The larger pool now encompasses everyone. That's the whole point of this exercise. How can a company drop coverage for anything if they're obliged to take up a high risk member of the pool? The whole point of the larger pool is to eliminate cherry picking. The smaller the pool, the more prevalent the cherry picking.
North Carolina only shows the power of a union, nothing else. I know, Liberals are always thinking it's OUR government and not THE government, big difference there, one I can't overcome without pointing out if we were all in such a pool, we'd have just such leverage.
Likewise, I've pointed out the forces at play, none of them serving anyone but the insurance companies, whose PAC money flows up through the sewer grates and toilets of Washington. They're unregulated banks. No federal oversight, they're state entities. What other organization do you know which gets regular inflows of cash (annuities in accounting terms) then decides if and when it will pay out?
Chris in reply to BlaiseP says:
Yeah, I think the connection your making between charging machine guns at the Somme and health care, which you seem to be taking as direct rather than analogy, is pretty tenuous (I wonder how beginning to use rolling barrages maps onto health care?). But your claim was that those events proved Certainty is bunk. I'm simply pointing out that they themselves proved something with a high degree of certainty, namely that we'll come up with more and more effective ways to kill each other.Report
Tendentiousness is no substitute for actual thinking, Chris, nor snark for cleverness. Health care is rather like home repair: nailing up and caulking a single loose board can save an entire wall, indeed a whole house. The hardware store will gladly sell you a nail or wallboard and timbers. They really don't care and neither does the hospital: they'll amputate your leg or suture up your cut with equal aplomb.
The obviousness of applying statistics to the problem of health care is my only point. A Maxim machine gun could shit out 450 rounds per minute. The old thinking which sent all those poor bastards over the top into open ground where Hiram Maxim's invention could mow them down is really no different than the jackasses who tell us the Free Market shall solve every problem, from measles to mumps to menstrual cramps to monetary theory. That sort of Stupid Certainty gets people killed. Failure to adapt. Failure to apply numbers to problems. Adherence to old doctrine. Bullshit. Nonsense.Report
Blaise, if we are to take the Somme and Verdun seriously, as they actually happened, then I think we're left with a very different lesson. By 1916, the war planners on both sides were well aware that mass attacks against heavily fortified positions with modern weapons including artillery (which did a lot more killing than machine guns) and machine guns and massed infantry in layers, was a horrible tactice. They just didn't have any better ideas, and they had to keep doing something, particularly since the Allies had decided that it would be a war of attrition and eventually Germany would be bled to death. This was because they actually had run the numbers (Britain and France had more men and resources to throw at the problem than Germany and Austria, particularly while the Russians were involved, and the Austrians were dying as a nation). I think this is a pretty good analogy for our health care system: everyone knows it doesn't work, and there are two opposing sides who let it continue in the hopes that the other side will eventually run out of steam and have to capitulate, but in the meantime, neither side seems to have any real clue about how to get from the current badness to their version of the better (the market or the state). But I'm not sure this is the lesson your'e taking from it.
Also, the Somme is a bad example of your futility argument. The British did adapt, which is why, after the first day, their casualty rates dropped significantly (the two adaptations being the rolling artillery barrage and the tank). They didn't achieve any important local strategic victories, though in the larger scheme, the Somme was a roaring success for the Allies (it took large amounts of resources from Verdun, where the French were holding on by a thread, and it caused a ton of German casualties, casualties they couldn't afford as much as the Allies could afford their own). The Somme was the beginning of the end for the Central powers.
Also, I don't think you know what tendentious means, if you think anything I said was tendentious. I was just making an entirely separate point with your analogy, because I don't think your analogy works at all as you're using it.Report
Do pay attention, Chris. Jason was making an entirely reasonable point, to wit: All were strongly associated with the progressive/left ideology in the first decades of the last century. It was to that point I was responding.
He then said:
This means it's often a good idea for employers on the margin to spend more on health care than on cash raises for their employees.
And again, Jason's attempting to put out yet another strut on his premise of Dumb Luck. But it isn't dumb luck. It's probability and statistics. There's nothing dumb about it and luck is for people who haven't had Algebra II. The larger the pool of lives, the better the odds of prediction become. That's a simple, proveable fact, going back to Bernoulli.
And it's there where I sailed into him. Nobody with a single course in Statistics and Probability would say this was Dumb Luck.Report
Now that you've become a good bit less oblique about what you meant, we can talk.
I wasn't saying that it was "plain dumb luck" that some people get sick, or some people stay healthy, with variably predictable effects on variously sized insurance pools. If that were my point, you would be right to criticize me.
But I don't dispute that larger pools tend to work out better because they are more predictable. That's simply a fact, and it also wasn't what I was talking about.
Where was the "luck" I referred to? It was in the confluence of wartime wage controls, a handy way of circumventing them them, and a peculiar, hard-to-defend IRS ruling — all at about the very same time that the modern insurance industry coalesced in the United States.
Without these things happening together, I doubt we'd have an employer-centered health insurance system. Without that system, we might look at health insurance in very different ways, and thus align differently ideologically.
That's the luck aspect I meant, anyway.Report
The reason we do not have an optimal life pool, to wit, the entire nation, is because a host of Innumerate Idiots, funded by the insurance industry (whose statisticians are perfectly aware of the Law of Large Numbers), continue with their notions of Dumb Luck.
And there are the Libertarians, their most useful idiots, yammering away , telling us we ought to deregulate the health care industry and doing away with the FDA. Aren't you guys just a little ashamed of yourselves? It's not like you guys don't have college degrees, surely somewhere along the way you met up with probability theory.
There are no certainties. There are only probabilities. Tax deductibility for health insurance is not the problem. Quit pretending it is.Report
Blaise, if it were as simple as understanding numbers better, we'd have improved our health care system decades ago. It's not. It's not just dumb luck that leads to a system like ours, but the inertia that follows it as well. It doesn't matter how many statisticians are chosen as the C.E.O.s of major health insurance companies, because inertia trumps knowledge.Report
It's not inertia, Chris. It's the insurance companies themselves who have lobbied long and hard to keep on this path, scaring the rubes with horror stories about Communism. As long as they can play little statistical games, pretending each little life pool lives on its own planet and as long as a certain cadre of intellectual bankrupts thinks these insurance companies are operating on the square, it will continue.Report
Blaise, that doesn't argue against inertia. I'm not sure why you think it does. In fact, it's sorta how intertia works in our political and economic world. The insurance companies have a system where they make money hand over fist, and basically get to do whatever the hell they want. Why the hell would they want something else? Even if it is just a local maxima, it's not clear how going in some other direction gets them to a better place anytime soon — certainly not soon enough for stockholders and the pocketbooks of CEO's.Report
When Karen Ignagni, the chief negotiator for the insurance companies, went to meet Obama (rather in violation of Obama's promise not to hold secret negotiations, especially not with lobbyists) to talk about Obama's proposed health care reforms, she looked him in the eye and coolly told him if he put through Single Payer she would spend a billion dollars on attack ads.
Obama blinked.
Yes, there's a measure of validity to your point about Inertia. But Bernoulli did more than give us the Law of Large Numbers. He also gave us the equations of lift, which Goddard expanded, saying with enough thrust, anything will assume an aerodynamic form, which means you really can get a brick aircraft to fly. This explains the Space Shuttle in a nutshell, and ACA as-passed.Report
ACA, as passed, looks pretty much like the current system with bandaids on a couple of its many wounds to me.
But I think that, given our current political and economic system, the only efficient and just way to distribute health care is through a single-payer system, so maybe that's just me.Report
Paul Barnes in reply to BlaiseP says:
From my understanding of the Western Front in World War I, (the Eastern Front requiring much more mobility among the various forces than what occurred in the West) the primary cause of casualties was artillery rather than machine guns. In fact, I have read numbers ranging from the 60-70% figure. Additionally, the tactical mistakes of the Allied generals compared to Germans created a situation where the figures were nearly 2:1 in favour of the Germans. Included in this were the initial forward deployment of allied forces which caused havoc for them at both the Somme and Verdun. The French Army nearly revolted at the careless use of them by their superiors and was only stopped by the quick action and tactical reassessment of Petain (later of Vichy France).Report
MFarmer in reply to Jason Kuznicki says:
"Are you sure?" He's 100% certain.Report
BlaiseP in reply to MFarmer says:
You're cordially invited to STFU, Farmer. The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt. That's Bertrand Russell.Report
MFarmer in reply to BlaiseP says:
Regretfully, I must turn down the invitation. You've made Russell appear very wise.Report
Vladimir Wallachian in reply to BlaiseP says:
You can't have it both ways Mr. P. Plenty of bad ideas (and plenty of good ones) in the 20th century came to a head because people thought they had Science! on their side. And the bad ideas were bad sometimes because the Science! was wrong (or incomplete) but other ideas, (and the worst ideas) Science! wasn't the right answer to the question being asked.Report
Steven Donegal says:
I think Daniel Kahneman would argue that they arise from the design of our brains. The end results of those processes may be pure dumb luck, but the cause of our insanity (doing the same thing, again and again, expecting a different result) is surely neurological.Report
Will H. says:
I think our system might be better served were the coalitions which form our political parties to realign themselves with greater frequency.
Then again, that perception is likely largely the result of perspective; that such things are easier to note from a historical view where the movement is more clear.
As for employer-based health insurance, I think it's fairly clear that we need to move away from that at some point.
I also think it's fairly clear that the sooner the better.
That was actually what I saw as part of the travesty of the whole Rush/Fluke affair:
At a time when unemployment is something like 8.3%, with de facto unemployment being much higher, rather than looking for other delivery options, the stance that health insurance must be provided by the employer is strengthened.
That it was done so at the expense of the churches makes it that much more egregious.
But then, I'm one of those hard-liners that believes that the police, in pursuing a murderer who flees into a church, should wait outside until that person exits to arrest them; that something granting more certainty that probable cause of a crime possibly being committed within should bar their entry.Report
Jason Kuznicki in reply to Will H. says:
Indeed. We might also be better served by an electoral system that favored more than two political parties.Report
While we remain governed by Congress and not by a Parliament, the two party system is the optimal format and has been since the inception of the Republic. The more factions at work, the less possibility of compromise.Report
I just got a duplicate comment error.
Just wanted to mention it.
I'll try to recreate the salient point later, but for now, I am needed elsewhere.Report
Will H. in reply to Will H. says:
Looks like it was that wireless setup again.
Wireless can be such a pain.Report
Dan Miller says:
Great post, but I think it's also worth pointing out that employer-paid insurance acts as a backdoor version of guaranteed issue. Many people would be frozen out of the individual insurance market, but it's rare to not be hired due to a pre-existing condition.Report
Michael Cain in reply to Dan Miller says:
No, but it's not that uncommon to not be hired due to the potential for developing conditions; eg, those over about age 55. If you are a small firm, hiring oldsters is a guarantee that your group premiums will go up as soon as the underwriters get around to looking at you. It's not the oldsters fault — they've just outlived the originally-designed lifetime, and either accident or infections were supposed to have killed them already. As that didn't happen, the degenerative diseases start showing up with much greater frequency. The first social "crisis" that the Baby Boomers are going to precipitate isn't going to be bankrupting Social Security or Medicare — it's going to be the employment crisis the emerges when it becomes clear that the private sector is not willing to provide them with meaningful employment as they age.Report
I'm mostly in agreement, but I'm unsure that "dumb luck" is really the right term for the origin of our ideologies or for why political systems are the way they are. Luck seems to suggest a source other than human action, and yet it's the varieties of human action (and idiocy) throughout history which we must thank for our political habits and certainties.Report
Jason Kuznicki in reply to Kyle Cupp says:
The terminology is tricky. "Contingency" may be the most precise — it's not that anyone is throwing dice anywhere. It's more like "things largely unrelated to the thing at hand exercise a determinative effect upon it, in ways that no one can predict before the fact."Report
Kyle Cupp in reply to Jason Kuznicki says:
That's well put. I wonder if there's a adjective or two for contingency that captures this.Report
I did use "contingent" and "contingency" in the post. I'd even titled the draft "The Play of Contingency," but I thought it sounded too pretentious. (And when I think something sounds too pretentious, well…)Report
I personally have no qualms about being pretentious.Report
MikeSchilling in reply to Jason Kuznicki says:
It would sound like you were talking about tort reform 🙂Report
Tod Kelly in reply to Kyle Cupp says:
Lucky contingency?Report
BlaiseP in reply to Kyle Cupp says:
There are ways of approaching the problem. The algebra of causation.Report
Yeah, those will help in cases like this.
Argh, that there is no actual sarcasm tag in html sucks.Report
Alas, that stats and probs are the only way we're going to ever dismiss all the dogma and cant from these Contingency Theory Weenies. They're worse than the Marxists, I swear they are.Report
The problem is that for a system that complex, we're going to need statistical methods that we don't yet have. Hell, look at how advanced foraging models are now, and they're just modeling the foraging behavior of simple autonomous agents. We're so far from getting to the poing where we can model the behavior of complex social and political systems with long histories, multiple independent actors, and social and psychological dynamics that we barely understand, that even suggesting that we might someday do it is probably a stretch.Report
Chris in reply to Chris says:
Put it this way: we don't even know what the outcome variables are!Report
I contend it's not a matter of statistics, hence my link to the Judea Pearl paper. Any attempt to define these output variables is lunacy. Look, here's how to think about optimality in any model.
The oddest and to my mind most interesting part of life as we know it is the relationship between DNA and RNA. DNA replicates imperfectly, inducing small changes, these we call Theta. But these errors aren't the same all along the genome. We call these high-theta and low-theta regions. Even within the same organism, evolution is proceeding at different rates. So I began to write my own models accordingly.
If I've got an overtrained neural network, it outperforms all the others, but only within a very specific domain. A neural net which can periodically reset parts of itself, or better yet, create copies of itself with inferential links, replicating successful copies and but not entirely abandoning its failures begins to emulate this DNA theta model. Oh, this replicating network, this hive of agents with the Queen Ant, constantly spawning models, will take casualties, but fewer than the overtrained one in a wider domain. Such a model is "strong" but not "brittle". In short, it continues to evolve.
An ideology, by definition, is an overtrained network. Its axioms were established long ago, when its philosophers were actually thinking, training the network. Here's a classic case in point: the complaints about John Maynard Keynes. Now whatever you make of him today, when he was yet alive, he was a fine economist who took the world as it was and reached what I consider to be necessary conclusions about that world. But we don't live in Keynes' world. Some of his axioms remain with us today, because they're applicable to our world. Yet when the Free Marketeers crashed and burned in 2008, including that moron Henry Paulson, whose solutions did they apply? Keynes' of course. Good thing we didn't burn all his books, eh?Report
I really like the "brittle neural network" analogy. But what I think is really interesting is that yours is exactly the same kind of argument Hayek used against Keynes in the economic calculation debate. Given how reliant Keynesian regulatory frameworks have become on neoclassical modeling over the years, I'm surprised more liberals haven't abandoned hope in the enterprise altogether.Report
I like how you roll, Mr. Greer. Here's the problem with prophets, their acolytes say they follow his principles but they seldom follow them.Report
I dunno, man — ontological shoehorns can insert a LOT of ideology into ostensibly-pristine mathematics. Chicago made a whole school of econ outta that.Report
True Dat, Mr. Greer. And for a while, the Chicago Boys' plans seemed to work wonderfully. Trouble was, they didn't understand what they were creating when they set to work. Profit equals Risk and always will. But with Risk comes the need for Regulation. The Chicago School never grasped that Regulation bit. I'm not talking about the overweening sort of distributive ethos which punishes the profit maker, but the regulation of markets which separates Winners from Losers. The Chicago School took as an article of faith that risk takers would behave wisely, hedge their bets, understand the forces of market distortion and avoid reckless speculation.
And like the Marxists, they failed. Look at the Chinese now, big white-hot rise soon to be followed by an equally precipitous crash. They haven't regulated their markets and their banks. They've been playing with fire, allowing the growth of a huge underclass of the disenfranchised and alienated to form in their cities. There will be hell to pay, not because capitalism doesn't work, but because it does. The only route to reward is paved with prudence.
I don't know that regulation is the answer. Regulations are enacted under the prevailing economic paradigm, which is created by the same people and institutions that run the banks, and thus have many of the same blind spots. I think the Austrians are right in that we'll see periods of boom followed by these black swan events for as long as we allow innovation in financial services. And the marxist in me doesn't think this heightening of the contradictions is necessarily undesirable: After all, a whole generation of Republicans is openly questioning America's military role in the world because the financial collapse has highlighted the price of hegemony.Report
All entirely reasonable concerns. Yet regulatory theory shouldn't be defined by the present so much as the past: it's the one case in AI where the past is really useful. How many bank failures does it take before we learn our lesson here? How many stock market crashes does it take before we oblige speculators to pay off on their bets?
The Austrians are the very worst on this front, look at their idiotic ranting about Keynes. When the shit hit the fan, as it inevitably does, the biggest Free Marketeers of all time found themselves scuttling away like so many cockroaches when the light's turned on. That old Mercantilist Theory stuff from the days of the foundation of Lloyds of London, where they pulled a button off your suit jacket, just to remind you of the totality of your obligation, that part the Austrians sorta forgot. Spent a whole lifetime sneering at it. Crackpots and lunaticks, all of them.
The Republican leadership is a gaggle of fearful little Robespierres who shall all come to a very bad end. The only candidate with a lick of common sense, Jon Huntsman, was damned near laughed off the stage. I had to laff, Romney's trying to present Bush43 and Henry Paulson as the saviours of the economy the day before. Henry Paulson, noted Keynesian. They're all too stupid for words. For all their much-talking about History and Conservatism, they learn nothing from History. As for Conservatism, they're anything but. Nononono — trust us, deregulation won't recapitulate previous catastrophes. Some Conservative positions there, huh?Report
Robert Greer in reply to Robert Greer says:
One point I try to make whenever I can is that the standard liberal explanation of the 2008 collapse comports astonishingly well to actual Austrian theories of the business cycle. Deregulation of the financial markets represented an astounding opportunity for innovation in the industry, which is exactly the kind of thing Austrians think ends up causing bubbles. All the mercantilist stuff is best relegated to the 18th Century, though.Report
As a diagnostician, Hayek was a genius. His cures, not so. Any competent Vegas pit boss and head of house could manage the SEC better. How did Steely Dan put it?
Those black cards can make you money
So you hide them when you're able
You must put them on the table.
You go back, Jack, do it again
Wheel turning round and round…Report
James Hanley in reply to Robert Greer says:
Eh, the easiest thing to do is to pretend it was a free market problem, and ignore the very evident facts that the markets still operated under a semi-trailer full of regulations and perverse policy incentives.
It would be amusing, were it not so sad, that intelligent people smugly assure themselves that eliminating one particular regulation makes a market "free," while abstaining from using that intelligence to consider the remaining policies.
clawback in reply to Kyle Cupp says:
Seems like "path dependence" covers it pretty well.Report
Plinko in reply to Jason Kuznicki says:
A while back there was some post on what we really believe and someone (I think it was Christopher Carr) posted a comment of 'everything I believe is contingent' which I thought was a pretty good approach.Report
Michael Cain says:
I didn't used to be particularly in favor of immigration restrictions, until I started looking more deeply into forecasts for energy resources. To me, looking at the next 25 years, the combination of a 25% population increase, most of the commercial nuclear power plants being shut down as their (renewed) licenses expire, plus doing anything to dent coal use, looks like a recipe for disaster for the electricity supplies, particularly in the states of the Eastern Interconnect. For the last 50 years, per-capita GDP changes have closely followed (or vice versa, since causality probably runs in both directions) changes in per-capita electricity use. Speaking personally, it seems unlikely that we can/will implement efficiency improvements fast enough to keep up with all of the factors mentioned above. Stabilizing the population, or at least sharply reducing population growth, makes it more feasible to meet future energy needs.Report
Robert Greer in reply to Michael Cain says:
I don't think this is enough of a justification for immigration curbs. Twenty-five years is a very long time when it comes to energy technologies, especially now that our computational abilities are so strong. We're probably going to have fissionless fusion with five years or so, and solar power is expected to become clearly cheaper than fossil fuels in about ten (it's already cheaper in many American markets). Add wind power to the portfolio, and the increased efficiency from things like smart grids or carbon nanotube wires, and you'll find plenty of reason to be optimistic. Hell, we could even have energy from new physics twenty-five years from now.Report
Anne in reply to Robert Greer says:
We may even have Mr. FusionsReport
Robert Greer in reply to Anne says:
Who knows, dude?Report
Michael Cain in reply to Robert Greer says:
With no disrespect, you're hopelessly optimistic about the Eastern Interconnect:
ITER started construction in 2007. They expect to have first plasma in 2019. Among the purposes of the ITER experiment is to determine if any of the materials they use to build to the containment system and energy extraction system can actually stand up to the neutron flux they will experience — call it another five years minimum after they're actually running, with some probability that the answer is "No, none of this sh*t holds up." Then they think they'll know enough to design an actual commercial unit, which will take more years to build. First of its kind is always risky — consider the Fort St. Vrain experience. The inertial containment folks think they can reach break-even sooner than ITER, but have no viable design for capturing the released energy on a large scale. Any commercial fusion is at least 15 years away, and that requires everything to go exactly right.
25 years is actually a relatively short time. 25 years ago today is 1987. What are we running today that's different than in 1987? A handful of super-critical coal-fired plants and some use of natural gas for baseload generation. Some wind, but not significant in the big scheme. The Eastern Interconnect has more than 90 aging nukes, a majority of which are into their final 20 years (licenses have already been renewed, at which point they're 60 years old and will definitely be retired). Some are relatively small. If you were to replace them with 50 big fission plants, you need to turn up two per year for the next 25 years — extremely unlikely. Wait 12 years to start and you need four per year. If the Eastern Interconnect wants to replace half its pre-recession coal use over the next 25 years with new nukes, they need another two plants per year.
Getting significant wind or solar into the mix in the Eastern Interconnect is very problematic. States in the Eastern Interconnect currently generate (and consume) almost 10 times the amount generated in the Western Interconnect. For various reasons, total per-capita electricity consumption in the West is much smaller than in the East. You can find serious engineering studies that show how to get substantially more than half of the Western electricity from renewables in 25 years, but (a) the West is already at 25% with existing hydro and wind, (b) the renewable resources are of higher quality and relatively closer to population centers in the West, and (c) the absolute size of the problem is a small fraction of the size of the problem in the East. I've seen no similarly serious engineering studies for the East; mostly fantasies that they'll pave the Southwest and build tens of thousands of miles of HVDC transmission to carry the power to the East. Western states are likely to take exception to such projects.
Next story Spamments
Previous story Lighten Up (Or You Will Be Pun-nished)