Ethics Delay

I've been writing my next ethics in emergencies installment, and having an awful time with it. I haven't found a good organizational structure for it yet, and I'm dissatisfied with the clarity of what I've written so far. The threads aren't weaving together into a whole. This isn't a good writing day for me, and I can't force it, so I'm just going to delay publication until Monday or Tuesday night.

This has been a music weekend, not a writing weekend. I spent a lot of time playing with CMN, a Lisp-based language for sheet music notation, because I want to create a more readable rendering of a piece I'm learning to play. I've had a lot of trouble with that, too… but I probably deserve it, for using a tool that describes itself as "a simple little hack."

I did learn 20% of the piece this weekend, though. This is a much higher music learning productivity than I've ever had before. I guess it gets easier with practice.

Iraqis Vote

Who won the Iraqi elections? The people have won.

I walked forward to my station, cast my vote and then headed to the box, where I wanted to stand as long as I could, then I moved to mark my finger with ink, I dipped it deep as if I was poking the eyes of all the world's tyrants.

I put the paper in the box and with it, there were tears that I couldn't hold; I was trembling with joy and I felt like I wanted to hug the box but the supervisor smiled at me and said "brother, would you please move ahead, the people are waiting for their turn".

Engineering: Theory and Practice

I had an interesting day at work. By itself that's not unusual, but what's interesting about this case is that I can talk about it.

In my team, we've made the phrase "How did this ever work?" into a cliché. We use it so much that we've acronymmed it (HDTEW), and we've even got people outside our team using it. We like to think that we're a positive influence on our peers. :)

It may sound strange that we're often surprised by success, but it's true and happens regularly. My team works on microprocessor debug tools. (If your computer has an Intel® Pentium® 4 processor, thank us.) In some respects our debug tools can be very fragile, because although the theory is simple — I can explain it in three slides — the engineering involved to make it work in practice is tremendously complex.

Every so often we'll discover a case where our tools don't work, and as we look into the details to understand the source of the problem, a sudden series of revelations will occur as we think about the implications of the problem to other aspects of the tool. At that moment the problem seems so large and its implications so malignant that we're astonished we hadn't encountered the problem earlier and frequently. I see why it's breaking here and now — but how did this ever work?

We're in the philosophically amusing position of having a tool that works very well in practice, but struggling to explain how it could work in theory. The problem we've discovered shatters our assumptions — and without those preconditions, how could it work as well as it does?

When we go through the effort to understand it, the reason is always of the form: the problem seems large in isolation, but other circumstances affect the situation and ward off the trouble almost all the time. The opportunity for failure is actually very small when the other factors are brought into the analysis. While there is no "redundancy" in the system, it does exhibit a satisfying resilience.

I love this stuff.

This is the kind of thing engineering students are never exposed to. It's not until you're working in industry that you get to have fun on this magnitude.

Weekend Preview

Ahoy, me hearties! Yer Cap'n is, as usual, and sadly, only possessin' a tiny bit o' time for bloggin' through the week. Never ye fret, for even as I'm fighting the HWTEW pirates at work, I'm thinkin' of me next ethics installment.

Pirates, like businessmen, need philosophy. :)

I got an e-mail from Josh that anticipates where I've been headed with the recent series of articles about emergencies and obligations. It gives me the warm fuzzies — er, the pirate fuzzies — to get mail like this:

A couple of months ago, I think I remember you talking about how so-called 'price gouging' on gas, repairs, or other scarce resources in Florida after the series of hurricanes should be allowed, as it will lead to an influx of workers, sellers, etc eager to cash in leading to a return to equilibrium.

[Yup, I did.]

But aren't the government sponsored 'price fixing' laws that maintain the pre-disaster prices an example of an emergency context where the normal free market laws are suspended? If so, is it right or wrong to do so, and how do you arrive at the conclusion?

Maybe you've already addressed this — if so, sorry!

I haven't yet, but I've been inching toward it. :) The short answer is "no" but for the long answer, watch this space over the weekend when I have time to write at length. I haven't decided yet if I'll wrap this series up in only one or in two more articles… but repent, for the end is near!

(Writing takes a long time for me. I'm very deliberate about phrasing and trying to avoid ambiguity, so I tend to spend a lot more time re-writing sentences than creating them in the first place.)

Reisman on the Exploitation Theory

I always have less time to blog during the week, but as a self-professed Reisman cheerleader I have to link to Dr. Reisman's critique of the exploitation theory even if I don't have time to comment on it.

But you don't need my comments anyway, when lots of other people have commented on the Mises blog.

Ethics: Emergencies and Obligations - Part 4 - Interlude on Voluntarism

Last time, I talked about individual rights as the basis for politics rather than making politics an enforcement of some particular ethical system.

I also said I'd explain the relevance to emergencies in the "next installment", but I've realized that I can pause here to make an important point. It's related to ethics and politics, but not to emergencies. We'll get back to emergencies next time.

I want to talk about voluntarism. Individual rights are, essentially, the legal mechanism to forbid the initiation of physical force. Murder, theft, censorship, etc. are all violations of individual rights and are all instances of the initiation of physical force. Rights also set limits on acceptable behavior of government agents when they are using force retaliatively. (Or they may be procedural in nature; as with last time, I'm ignoring such cases.)

This is not a coincidence. Force and rights are linked concepts, unlike (as I explained last time) wrongness and illegality.

If politics is not used to implement any particular ethical system, many people who want it to be used that way will be upset. A political system of the kind I advocate will not stifle their free exercise of their ethical system — it will, however, prevent them from imposing it upon others without their consent. That is where the line must be drawn in civil society. Human interaction should be voluntary.

The requirement of voluntarism does not prohibit the various government programs that are so popular. Strike the word "government" and its implication of mandatory adherence, and you're free to set up a private program with the same goals.

Take Social Security. (Please!) I don't want to be involved. Today, participation is mandatory. Under the kind of political system I advocate, a private group would be allowed to set up a transfer system like Social Security, but participation would be voluntary.

That's right: If you want Social Security, you can have it. Feel free to arrange it among yourselves. But you can't drag anyone in (like me) who's unwilling. This is win-win — you have the system you want, and I can stay out of it. The only potential source of unhappiness here is if you had been planning to play me for a sucker, taking more from me than you'd give back. (If that's the case, you should be ashamed of yourself — I have no sympathy for would-be thieves.)

You want universal health care? Set up a private organization to pool resources and administer the system. You want welfare? Set up a private organization to pool resources and administer the system. You want subsidies? Set up a private organization to pool resources and administer the system. Sensing a pattern?

If someone's cheating, kick them out. If someone's not paying their dues, kick them out. (And feel free to price discriminate to make the system more "progressive" — you can do that, too! Soak the rich, baby!)

It is a great tragedy that so many people with good intentions (by their own standards) seek to foist their plans upon everyone through the strong arm of the government, rather than yielding to individual rights and voluntarism. When you have a good idea for a government program, stop and ask yourself, "Why does everyone have to participate?" You may discover that a program whose members are like-minded about its value will be more successful than one with members who hate it and want out.

Think about single-payer universal health care. Lots of people want it. It's popular. The people who like it should create a private system to implement it, and they should forget about trying to bring people like me into the fold. They could do it today. Nothing is stopping them. Except, perhaps, the half-realized, half-evaded fear that the system won't work unless it can siphon off money from the rich to pay for everyone else's expenses. But this should not stop them. George Soros comes to mind as a rich person who might agree to it. Convince them voluntarily, and implement it amongst yourselves.

But leave me out of it.

• Part 1: Inappropriate Universalization
• Part 2: Emergencies in Context
• Part 3: Ethics and Politics

HSA Financial Tradeoff

An interesting comment on this EconLog article got me thinking about the break-even point between an HSA and traditional coverage:

People are amazingly reluctant to make the move. One law firm I know of made HSA - type policies available to their attorneys. One of their tax people ran the numbers and concluded that they couldn't possibly lose with the HSA deduction, combined with lower premiums. The worst downside was a small advantage.

Yet not a single attorney took the HSA option. If you have this problem with a well-educated and informed group, that's scary.

I have an HSA myself, and it's great. I'm not sure what it will take - maybe just time and a slow process of education will eventually start to turn things around.

I switched to an HSA-eligible plan for 2005, the first year my employer offered one. My old plan cost me $300/yr (tax-deductible) and was traditional insurance with a $10 co-pay. It was the sort of plan you'd love to have if you were a big health-care consumer. But I'm not. I'm young, male, and single, so I don't see a lot of doctors.

I assume a 25% marginal tax rate throughout the following.

My new plan's deductible, and HSA contribution limit, is $1100 — lower than I would prefer, but it was the only option. It costs me $0/yr to enroll; the premiums are paid entirely by my employer. (My new plan is significantly cheaper to my employer than my old plan was, though I won't disclose the details. I wish they could pass the savings along to me as wages, but I think they're legally forbidden. Socialism has to stay competitive somehow, eh?)

My old plan actually increased premiums this year, but I don't remember the amount so I'll calculate with last year's figure. The $300/yr premiums cost $225 after tax.

With my new plan I can get the tax deduction on $1100. The $1100 goes into the HSA, costing only $825 in after-tax dollars, for a benefit of $275.

My old plan cost me $225/yr. My new plan benefits me $275/yr. As long as my annual health care spending is less than $500, I come out ahead — and that's before the customer service benefits of the new plan, and ignoring compound interest in my HSA balance.

Unlike the attorneys, I'm not guaranteed to come out ahead. If I need expensive care I could end up paying more. But that's a risk I'm willing to assume, because I think my spending will be much less than $500.

In this situation my employer gets the better half of this win-win, saving significantly more than $500 in premiums, but I won't begrudge them that. I'm just happy to have something that more resembles insurance than pre-payment for services I don't plan to receive.

TennCare Update

My original TennCare article has scrolled so far down that I thought it was better to use a new post for the update instead of adding to the old one.

James writes:

It nice to see some discussion form the blogsphere on Medicaid Managed Care or as specifically referenced in your article, TennCare. What your readers may not know is that this type of experiment is going on across the country. In fact I run a company that specializes in the implementation of these programs. Your home state of Oregon has one of the highest penetrations of managed care in the nation at 77.74% (330,874 beneficiaries of 425,627 eligible).

Yes, managed care is popular here. But not with me. I switched to a high-deductible plan with a Health Savings Account. The Oregon Health Plan has some embarrassing problems, and there's also an interesting pattern of voters rejecting tax increases to pay for the OHP.

Funny that tax increases should be required, isn't it? If the system were set up properly to begin with — i.e., including an accurate assessment of costs — we should't have a funding problem. Yet we do.

"Inconceivable!"

John Bailes has started a blog dedicated to TennCare and has very interesting interviews there.

He's also criticized the TennCare cuts at the Chattanooga Pulse, arguing that costs will increase because people will turn to emergency rooms.

I rather think this will be more than offset by people no longer overconsuming "free" health care. But I've already had my say — go read his.

Over at poop happens, you can find some commentary about TennCare from someone who's been in the health care industry there for 27 years.

Janie goes by the pseudonym "poopie" and describes herself as "a smartass". <rimshot>

This is hilarious.

Ethics: Emergencies and Obligations - Part 3 - Ethics and Politics

This installment isn't directly about emergencies, but rather about the intersection of ethics and politics. The relevance will be explained in the next installment.

This was inspired in part by Rainbough Phillips's murder vs. morality post at Catallarchy.

What is the relationship between politics and ethics? Is politics simply an extension of ethics, such that "legislating morality" is natural, or is there a more limited relationship?

First, let's recognize that there are things in government that are orthogonal to this question and don't concern us here. Procedural rules, such as how to hold elections, we can leave aside. Things such as traffic codes that in the private sector would be described as user agreements also don't concern us. The focus here is on the criminal code.

The clearest example of a strong relationship between ethics and politics is is that of the former Taliban government of Afghanistan, explicitly ruling according to fundamentalist Islam. What Islam forbade the Taliban forbade, and what Islam required the Taliban required. Politics was an extension of ethics.

In nonfundamentalist countries, the same relationship is often assumed to hold, or desired to be held. Rainbough's example is great:

"There's nothing wrong with legislating morality. We legislate morality all the time. Murder is illegal and its immoral."

The difficulty with this particular statement is that it is technically correct. Most of the activities that are universally considered to be crimes are also universally considered to be immoral.

My snarky response to the murder example is, "Of course murder is wrong, but that is incidental."

If you accept the politics-as-extension-of-ethics idea, the paramount question for you is where to draw the line between what is so bad (good) that it must be forbidden (required), and what to leave to individual discretion. The Taliban drew that line over at one extreme. Enthusiasts for liberty could be understood as drawing that line at the other extreme. Some encourage this interpretation, by pointing out that freedom lies in the space between what is good and what is required, between what is bad and what is forbidden.

I'll surprise no one by saying I reject the idea of politics as merely an extension of ethics. There absolutely is a relationship between the two, but politics is not a mechanism to enforce morality. It is something quite different. (I say this with an unfriendly glare toward both the Right and the Left.)

Since this is not a political treatise, I'll abbreviate the discussion by simply saying that I agree with the political philosophy of the United States Declaration of Independence:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.

Government exists to protect individual rights.

Murder is not illegal because it is wrong, it is illegal because it violates individual rights. Theft is not illegal because it is wrong, it is illegal because it violates individual rights. These and many more examples are straightforward.

Many laws are, unfortunately, grounded in the notion of politics as an extension of ethics. I regard all such laws as improper. Their implementation requires the violation of individual rights, making them antithetical to proper government. Laws against prostitution violate the individual rights of consenting adults. Minimum wage legislation violates the rights of employers and employees to trade.

Whether you believe prostitution or low wages or any of a myriad of other possible examples to be wrong is irrelevant. The only relevant matter is whether they violate individual rights. Returning to the murder example, murder is not illegal because it's wrong, but rather because it violates the rights of the victim.

To say it awkwardly: It's about rights, not wrongness.

When the debate is framed in terms of rights, the proponents of politics-as-ethics change their strategy, but their goal is clear as ever. They will mold society toward their vision of the good by inventing new rights. Thus, the government is still acting as advocate of their particular ethical system.

The invention is the idea of "positive rights". "Positive rights" impose an obligation on others. To make discussion easier, individual rights as understood by the Founders are called negative rights, because they do not impose an obligation on others.

The (negative) right to life prohibits action — murder. The (negative) right to free speech prohibits action — censorship. The (negative) right to property prohibits action — theft.

The (positive) right to health care requires action — caregiving. The (positive) right to an education requires action — teaching. The (positive) right to a home requires action — the creation of one. (Drat, there's no single English word for that.)

Rhetorically, I can't do better at refuting the idea of positive rights than Ayn Rand did. From her essay "Man's Rights":

Jobs, food, recreation (!), homes, medical care, education, etc., do not grow in nature. These are man-made values — goods and services produced by men. Who is to provide them?

If some men are entitled by right to the products of the work of others, it means that those others are deprived of rights and condemned to slave labor.

Any alleged "right" of one man, which necessitates the violation of the rights of another, is not and cannot be a right.

No man can have a right to impose an unchosen obligation, an unrewarded duty or an involuntary servitude on another man. There can be no such thing as "the right to enslave."

A right does not include the material implementation of that right by other men; it includes only the freedom to earn that implementation by one's own effort.

"Positive rights" violate negative rights. They're an attempt to usurp the very word "rights" to make it mean the opposite of its original meaning.

If you counter that negative rights are the problem, and that there would be no conflict if we simply did away with those pesky negative rights, you're wrong. "Positive rights" conflict inescapably. I owe the following example to an e-mail discussion I had last year with Jim, a retired philosophy professor.

Consider two people, but only one with a functioning liver. The other is close to death. Let us stipulate that there are no spare livers; they can only be obtained from otherwise healthy people. If the sick man has a "positive right" to life or to health care, any surgeon who comes by must treat him, as he is a slave to their needs. The problem is that while a liver transplant fulfills the obligation to the recipient, it creates a new obligation to the person who's just been deprived of a liver. If the dying person had a right to a liver, the newly dying person does, too. The surgeon must endlessly transfer the liver back and forth in a futile attempt to satisfy both peoples' "positive right" to life or to health care. But they cannot be simultaneously satisfied.

I don't mean for this example to be taken as an emergency or lifeboat situation for the purpose of ethical contemplation. I intend it simply as a vivid example of the problem of scarcity. If people have a "positive right" to X, but X is scarce, these "rights" cannot be simultaneously satisfied.

Yes, X is always something scarce. If it wasn't scarce, politicians wouldn't be angling to win elections by promising to deliver it.

• Part 1: Inappropriate Universalization
• Part 2: Emergencies in Context

Mailbag Lampooning

When I get spam offering to help me lose weight or grow my boobs I delete it without thinking twice. Spammers don't know anything about the people they're writing to, so receiving spam targeting some other demographic group is normal.

But I still raise an eyebrow when I get badly-targeted postal mail. If they're paying to send the letter, they ought to be better informed. So when I get an invitation to a day spa, I can only wonder what makes them think there's a woman here. I'll grant that "Kyle" isn't an overwhelmingly masculine name like "Leonard" (or "Dick"!), but it's pretty far removed from the ambiguous names like "Kim" or "Chris". I'd cut them some slack if the letters were addressed to Resident, but they're not…

They're just not paying attention. This must be how Milton felt. nobody listening to him. (You know, Milton, the guy with the stapler obsession from Office Space.)

First, from ITT Technical Institute:

There is a definite need for skilled, knowledgeable people in the HIGH-TECH industries of this country. Employers are constantly searching for individuals with the proper technical skills. At ITT Technical Institute, we provide those skills.

Yes, but… excuse me… Yeah, it's hard to find qualified people to hire. I've turned down several candidates. Strangely, none of their resumés used the word "HIGH-TECH" and I don't think it would have helped them if they did.

ITT Tech offers a valuable education in a variety of fields in which you can find a rewarding and secure future. It doesn't take four long years of college and you certainly don't have to be at the top of your class to qualify.

Yes yes, but I already have one of those.

Next, from David Wu, my Representative in the U.S. Congress:

Thank you for contacting me to express your opposition to President Bush's plans to privatize Social Security. I appreciate hearing your thoughts on this matter, and I apologize for the delay in my reply.

But… I told you I wanted out. You're not listening; I actually (sort-of) support Bush's plan. And, um, what delay? I wrote to you Monday evening and got something back in the mail on Friday. That's pretty damn fast for government, I'd say.

A few paragraphs later…

Social Security does face a current political crisis, however. Many members of Congress want to dismantle Social Security and replace it with a gamble. I am not one of those members of Congress. Like you, I agree that we should preserve the funds for Social Security and Medicare. In fact, the first bill I introduced in Congress was a lock-box to protect such funds.

Well, okay, but… that's the last straw.

I wish "many" members of Congress wanted to dismantle Social Security. They don't. But this is a popular theme. Somehow Democrats have mistaken Republicans for Libertarians. Republicans genuinely want to save the system. I want to kill it, not them.

It's just a lie to call partial privatization "a gamble" — are 401(k)s and the Thrift Savings Plan gambles too, Mr. Wu?

The "Like you" sentence is just slightly presumptuous. And the notion of a lock-box doesn't pass the horselaugh test. That's almost as funny as saving the system by raising the interest rate on the Social Security bonds.

There are many ideas being discussed on how best to preserve Social Security, including raising the retirement age. Please be assured that I will oppose efforts to prioritize [sic!] Social Security and will work hard to strengthen [… blah blah you know how this goes]

Raising the retirement age is the responsible solution to the program's problems. And it should be coupled with an individual opt-out.

Incidentally, I'm opposed to paying for Social Security out of general revenues. The separate bookkeeping entry is what makes opt-out implementable.

Inaugural Address

I haven't seen any video of Bush's inaugural address, but now I've read it.

I'm disappointed.

The early portions were powerful, wonderful — and I found myself wishing I could call it magnificent. But it was marred by two unfortunate phrases that I'm not feeling charitable enough to forgive. Then, I just tuned out when I reached the paragraph about Bush's domestic agenda. I suddenly didn't care, and wasn't stirred again until almost the conclusion.

That could have been a great speech. They must have changed speechwriters in the middle. :(

(Yeah, I know this is fluff — still too busy to do any meaningful blogging, but I had the itch to post.)

I Want to Opt Out of Social Security

I know how to fix Social Security. Let individuals opt out.

The system's accrued liabilities exceed its assets, so the typical person is clearly a net expense. Ipso facto, if people are allowed to opt out of the system, they'll improve the financial strength of the system they leave behind.

People like me, who morally object to Social Security, will be free of it.

I suspect this option would be popular with lots of other people, too. The self-employed, who bear the system's full taxation directly. The poor, who urgently need that payroll tax money today, not decades in the future. The young, who see Social Security for the Ponzi scheme it is. People with lower expected lifespans, who would be unlikely to cash in on Social Security anyway.

If you want to stay in the existing system, you can. That's fine. I want the option to leave; no one's going to push anybody out.

I'll give up all future claim to Social Security benefits in exchange for being exempt from all future Social Security taxes. I'll take full personal responsibility for providing for my own retirement. I'll forfeit everything I've paid into Social Security already. (The employer portion of the taxes should, of course, also be zero for people who have opted out. That money would become take-home pay, albeit with some adjustment for income tax.)

I just wrote my congressional representatives about this possibility. I can't figure out why this isn't being shouted from the rooftops. What obstacle would politically kill this straightforward, freedom-enhancing reform?

P.S., I've gotten busy again so I'll be on blogging hiatus until the weekend.

Fascist Social Security Reform

A few days ago President Bush said:

"Most younger people in America think they'll never see a dime. That's probably an exaggeration to a certain extent, but a lot of people who are young, who understand how Social Security works, really do wonder whether they'll see anything." [source]

I am one of those people. I believe, and have believed ever since I learned how Social Security works, that I will not receive anything back from the system.

I believe that by the time I become eligible for retirement benefits, the system will be means-tested. Since I also believe I will be rich, I will not qualify. I will have paid my taxes (12.40% on income under $87900, including the employer portion) every year for my entire working life, certainly over a quarter million dollars, and will not get any of it back. Not a dime.

If you ever wonder why young people get worked up about Social Security, that is the reason. This isn't empty political positioning — I sincerely believe that I and other young workers are being taken advantage of.

Brad DeLong, econ professor at UC Berkeley, is very suspicious about Bush's as-yet-unreleased proposal for Social Security reform. He's posted a set of talking points, of which a few beg for comment:

The projected long-run Social Security Trust Fund deficit ranks no higher than fourth in urgency and in size on our list of fiscal problems.

I agree Medicare/Medicaid are bigger problems. My preferred solution is to wind down and end the programs. I have never heard any serious advocacy for any other solution. I do hope that the collapse of TennCare will provide ammunition for Medicare/Medicaid reform when the time comes. I do not fault Bush for not trying to fix those programs — rather, I fault him for making them worse with his prescription drug benefit. That's why I'm confident that Medicare/Medicaid reform will not occur during this presidency.

Brad's other two examples of bigger problems are really the same thing, the General Fund deficit, although I'm mystified that he thinks Social Security contributes to that problem only starting in 2020 — it actually starts contributing to it in 2009, the first year when the Social Security surplus (which helps cover the General Fund deficit) begins decreasing.

As an aside, none of the dates floating around in this debate (SS surplus begins decreasing, SS surplus becomes negative, SS "trust fund" exhausted) matter very much. All changes will be gradual. Nothing will happen suddenly, unless you believe present law forcing severe benefit cuts when the "trust fund" is exhausted will still be in effect when that happens. I don't.

But private accounts funded by cutting Social Security contributions are a bad idea: Robbing Peter to pay Paul is in general not a good idea.

What can I say? The irony is obvious: Social Security is such a system, pay-as-you-go with younger workers (Peter) being robbed to pay benefits to retirees (Paul). I agree it's not a good idea, though my "it" is the Social Security system itself.

Further, the criticism is wrong. Private accounts funded by cuts in contributions are a case of robbing Peter to pay Peter. The point of private accounts is that you retain ownership of those funds, even if you can't fully control them. (Attention Bush-haters who think he's a fascist: This is fascism, de jure but not de facto ownership, not that other nonsense you prattle about.)

A good system of private accounts would be very different than the game of three-card-monte the Bush administration wants us to play.

Bush hasn't even advanced a specific plan yet. This criticism is empty — and silly, and beneath a Professor to make.

Personally, I want out of the Social Security system. It has problems. It's going to rob me throughout my life for no personal benefit.

If I were given the option to opt-out today, paying no more Social Security taxes and giving up eligibility for benefits, and forever losing all the money I've paid into the system so far, I would do it without hesitation.

I don't think I'll be given that option. But it looks like I'll be given the option of a private account, through which I'll be able to retain "ownership" of at least a very small portion of my money. In principle, that is why I support Bush's reform. When the details emerge I'm sure I'll find things I don't like about it, but it's unlikely to be worse than the current system, which will rob me my entire life and give me nothing in return.

But please don't call me an apologist for fascism. I'm just taking the lesser of two evils — fascism and socialism. Capitalism isn't even on the table. Such is the nature of entitlement programs.

UPDATE 2005-01-17 15:58:09 UTC: Jeffrey writes:

Kyle, this strikes me as alarming. Must we really sign up either rightist or leftist forms of economic management? Nothing good can come from this. If Bush wanted to make us freer visa vis social security, and didn't mind the fiscal consequences, there is an easy way: cut the payroll tax. But it doesn't strike me as a good alternative to socialism to create, for the first time in peacetime, a new system of forced savings. In fact, I don't really understand why all free market types are not unified in rejecting this.

I think the answer is, "yes we do", until free-market ideas prevail in the culture and make broad political change possible. Until then, we're stuck with the system we've got, and incremental improvement is all we'll get.

I've watched the Palestinians make this mistake over and over again. They reject incremental improvements in their relationship with Israel because they think that by refusing, the Israelis will make an even sweeter offer. But that doesn't happen. Decades pass and generations turn over, waiting and waiting for the perfection that never comes, ignoring the improvement they could have had. They've made the perfect the enemy of the good.

You've already identified why Bush won't cut the payroll tax — he does mind the fiscal consequences. Plus, it would be political suicide, not a good way to start his second term. (At least he pledged not to raise the payroll taxes!)

I hate forced savings. Simultaneously, I recognize that forced savings are better than outright robbery. If I can turn even a small part of this robbery into forced savings, that's an improvement.

I would oppose partial privatization if I believed it were possible to get a better deal by holding out. But in this political climate, I don't. It's too soon, culturally, to get what I really want — freedom.

I think individual opt-out is an idea that might work politically. It has precedent, too, e.g. religious objectors have been allowed to opt out in the past. I don't think partial privatization makes individual opt-out any more difficult, politically, and it might even make it easier.

Ethics: Emergencies and Obligations - Part 2 - Emergencies in Context

Ethics is not a deductive science. (On this, Hume was right. But I am intentionally bypassing that debate, it's not germane to my purpose.) In my inductive understanding of ethics, the difference between emergency circumstances and metaphysically normal circumstances is very important.

The purpose of ethics is to guide us in answering the question "what should I do?" throughout out lives. It is the nature of inductively-derived knowledge that it is valid within the context from which it was discovered. In a sufficiently different context, it may not apply.

This is important to remember when considering ethics. The overwhelming bulk of ethics is concerned with and is derived from the metaphysically normal circumstances under which the overwhelming majority of our lives are spent.

Emergencies are quite unlike metaphysically normal circumstances. An emergency is a situation where human survival is imperiled. Emergencies are atypical — if great peril were common, lifespans would be short indeed. Because emergencies are rare, most people do not spend much time thinking about the ethics of emergency situations, and are easily tripped up by persistent questioning along those lines. People attempt to apply the ethics of everyday life to situations that threaten life, and easily reach conclusions that they are uncomfortable with.

Questioning about so-called "lifeboat situations" is typical in philosophy classrooms, and is used to plant doubt in students' minds to make room for the professor's ideas. This is a monstrous practice, and a pedagogical error. Students should not be learning that their preexisting ethics are incomplete — of course they are, that's why they're in class — they should instead be learning that emergencies are a fundamentally different context than regular life, combined with a guided explanation of inductive ethics and the resulting comfort with the fact that ethical principles are contextual and therefore may need to be modified to be applied to a different context.

(Aggressive lifeboat questioning is also dangerously close to purely arbitrary questioning, which on principle should never be answered. Care should be taken to introduce real, historical examples of emergencies, with context, and questioning should be based on reality.)

Failure to recognize the contextual basis of ethical principles leads to dogmatic and deductive application of those principles beyond their appropriate scope. Libertarians are particularly prone to this error because they are predisposed to think in terms of basic principles. For example, "if stealing and trespassing are wrong, but you were caught unprepared in a blizzard, would you break into a cabin to wait out the storm, eating the food inside?"

A reflexive application of property rights is not appropriate in this case. The reason property rights are important in normal circumstances is that they're the essential means to sustain one's life through productive work. In the blizzard emergency, "respecting" property rights would create the opposite outcome — you would die of exposure.

Property rights are a tool to sustain your life. There are contexts in which they do not serve that purpose, and that's important to know. You should not use a tool in circumstances where it's unsuited for your purpose.

I want to state a useful ethical guide, but without going through all the reasoning to justify it. (Please forgive the jump.) Your life is your ultimate value, and if you ever believe that your morality obligates you to die, your morality is wrong, or misapplied.

• Part 1: Inappropriate Universalization

Ethics: Emergencies and Obligations - Part 1 - Inappropriate Universalization

The Indian Ocean tsunami has lead to an enormous and worldwide outpouring of generosity. People desire to "do the right thing" — but what is the "right thing", and how do you know? What should you do personally? What should people do as groups? It is worthwhile to step back and examine the ethical fundamentals of emergencies and obligations.

There is an unfortunate tendency in politics. I do not know if there is a formal term for this, but I would describe it as inappropriate universalization. When one person makes an ethical conclusion, it is common for them to expect others to make the same conclusion. Those other people might not share that conclusion, and if they're vocal about their disagreement, it's very easy for tension and emotion to flare.

For example, if Alice donates to tsunami relief but Bob does not, Alice may feel holier-than-thou and look upon Bob with scorn. This reaction can be automatic, even if there isn't a genuine ethical disagreement — perhaps Bob desired to donate, but could not afford it because his wife was ill and the treatments were expensive. If Alice knew this, her scorn would evaporate and quite rightly be replaced with embarrassment. Why does this occur? Alice recognizes that in this instance, Bob's ethical system was congruent with hers, but due to circumstances one of Bob's most important values was in peril, and this outweighs considerations of the tsunami.

People do not value all things equally. The value of one's spouse is much higher than the value of helping an anonymous person. People apply their resources (including financial resources) in the pursuit and maintenance of their values according to how strongly they value those various things. If a person has few resources, they will pursue things of greater value but will be unable to pursue things of lesser value.

This example is not controversial. In this case, the ordering of values and matching of resources to values is recognized and accepted and ordinary.

The problem of inappropriate universalization enters because people think — for whatever reason — that other people are like themselves, or ought to be like themselves. "I've concluded that I should donate to tsunami relief" becomes "everyone should donate to tsunami relief." In politics, this is the justification for public funds to be used for tsunami relief. Alice would be embarrassed to make this demand of Bob in person and understanding Bob's circumstances, but making the demand of the general faceless public can be and is made with an air of moral superiority.

Inappropriate universalization also occurs on another level. In the above example, the error was in assuming that others' resources were similar to one's own. The other level of error is in assuming that others' values are similar to one's own. Attainment of a value requires both that the object actually be considered a value, and resources sufficient to get it. If a person's values are different, they may pursue different things than you would, even if they are not constrained by resources.

Here the temptation to moralize is strongest. Not contributing to tsunami relief because you don't have the money is one thing, but not contributing because you don't think it's important is vicious! and evil! and you're a bad person! Step back a minute. Why should everyone have the same values?

Ethical philosophers have grappled with the issue of creating moral codes for thousands of years and have yet to come anywhere near a consensus. Indeed, some schools of thought have concluded that there is no single correct universalizable moral system. And those systems that are put forth as objective and universalizable provide principles and guidance, but not thoroughly detailed rules. Nonphilosophers in particular should avoid the trap of thinking they've got everything figured out and that everyone's values should be just like their own. Ethics is hard. People will differ. Not everyone who disagrees is an evil heartless monster. Ask them how they arrived at their values and they might surprise you with a sophisticated and reasonable argument (even if you ultimately don't agree).

In politics, this form of inappropriate universalization leads to the value systems of particular people (or groups) being codified into law, forcing those who disagree to submit. To put it mildly, this is arrogant.

To concretize this, let's say Alice believes tsunami relief is important in order to lessen the impact of sudden devastation. Bob may believe the number of individual lives saved is more important than the circumstances that created the need, and therefore prefers to fund efforts for the relief of slow, steady killers like malaria, tuberculosis, and AIDS whose death toll is much greater. If Alice and Bob talked about their preferences, in person, it is very likely that they would talk amicably and agree that each should contribute to the cause they consider more important. They wouldn't seek to steal the other's money for one's favored cause. But in politics, the arrogance of inappropriate universalization will lead to one cause to be funded over the other. Alice and Bob wouldn't do that to each other in person. (It's certainly no solution to say that government should fund both; that requires more resources and puts us back in the original example of taking resources from someone who has more urgent uses for them.)

This is a reasonable point to pause. I'll continue to post on this subject (this was titled "part one") over the next several days. If this has stirred anything in your mind that you'd like me to say more about, write me and I'll try to incorporate it in the subsequent posts.

Insta-Tired

Well, I've experienced my first Instalance. It was a lot more work and a lot more e-mail than I expected. Glenn, I don't know how you do it. I'm tired.

I think I need a software upgrade. I wrote my own blogging software and started using it as soon as it was functional, but never went back into development mode to make it convenient to use. (I guess I've just made weekend plans, haven't I?)

I've got a few article ideas bouncing around in my head. An important matter not being discussed in the current brouhaha over Social Security reform, an ethics post (apropos the tsunami) about a classic emergency-situation thought experiment, and there's the MIDI how-to I promised to write. But right now I'm very tired, and I need some non-blogging time, too.

TennCare Slashed

I'm in Oregon, so wouldn't ordinarily blog about something happening in Tennessee, but this is important.

Tennessee Governor Phil Bredesen (D) has announced changes in the state's "TennCare" public insurance system (emphasis added):

Under the basic TennCare plan 323,000 adults will be cut from the plan. The remaining 396,000 individuals eligible for Medicaid will continue to receive "reasonable" but reduced benefits. The reductions do not affect the 612,000 children on the plan.

"It might not be the level of care we want to provide, but it's the level of care we can afford without bankrupting our state," said Bredesen. "We're putting limits into what has been the most generous healthcare program in the nation."

Bredesen had long maintained that many of TennCare's problems were the result of extensive pharmacy and hospital allowances granted to attendees. Doctor visits, prescriptions, and in-patient hospital stays, which had been unlimited under the original TennCare plan, have been reduced significantly under the basic plan. Enrollees will now be limited to 12 doctor visits a year, four prescriptions a month, and 20 days of in-patient hospital care. These and other reductions are expected to save the state $575 million during the next fiscal year.

The failure of this system was predictable. If you give away something valuable, people will clamor for it. You don't make an expensive thing cheap by giving it away. You do, however, encourage over-use and a horrible squandering of resources. And a crippling shortage when you're finally unable to pay for it all.

These cuts will save the state half a billion dollars. Shockingly, that's not a budget cut. Even with these changes, the TennCare budget is actually increasing year-over-year:

New fiscal projections indicate TennCare "as is" would require $647 million in additional state revenue in order to sustain it in the 2005-2006 fiscal year — approximately $322 million more than the State anticipates collecting in total new revenue. Under the revised plan, TennCare will require no more than $75 million in new revenue. [source]

Even more shockingly, these figures hugely understate the actual cost of TennCare. The program was an extension of federal Medicaid, and was subsidized with federal dollars. This half-billion dollar reduction in state expenditures also means a $1.2 billion reduction in federal matching funds.

This program bankrupted the state of Tennessee, even though on the margin the federal government was paying for two-thirds of it!

Of course, the "well-intentioned" don't yield to the plain economics of the program, and complain about how awful this is and that the right solution would have been to make other people pay for it — even more than they already were. (Quoting again from the first link:)

Enrollee advocate and attorney Gordon Bonnyman, who has long opposed reductions to TennCare, called the "basic" plan cuts "worse than any natural disaster that the state has ever experienced." Bonnyman, a lawyer with the Tennessee Justice Center, has argued that the TennCare cost problems could be fixed in part by soliciting additional federal funds for the program.

"Instead of very drastic and dramatic cuts, there are other things that other states have done that we haven't, said Bonnyman. "I would work with the federal government … and if it means making the case for federal relief, then I would do it and I wouldn't be bashful."

Leaving alone Bonnyman's appallingly insensitive hyperbole, let me see if I understand this correctly. I, a resident of Oregon, am supposed to help pay for Tennessee's brave new collapsing socialist experiment? By what right? I can't seem to shake the phrase "no taxation without representation" from my mind.

But I, and all Americans, are already paying for part of it through federal taxes. It's outrageous. This socialist — and I emphasize, single-payer — program has been such a stunning failure that I have to visualize this sentence counted out on my fingers for emphasis. Look at what happened:

1. Despite an enormous federal subsidy,
2. this socialist single-payer program was so expensive
3. that it bankrupted the state government,
4. so obviously that even the government admits the problem,
5. and it's serious enough that a Democrat pushed to reform it.

Wow.

If you want socialist health care, you have to choose between the TennCare outcome of financial ruin, or rationing as in Canada and England.

Economically, it cannot be any other way. Maintaining below-market prices for something requires a subsidy, or the resulting shortage will require resource distribution by some method other than price (e.g. waiting, rationing, political connectedness&hellip).

Given the alternatives, a free market in medical care is clearly the way to go. Tennessee is beginning to learn this. Let the rest of us be the wise people who learn from others' mistakes, rather than making those same mistakes ourselves.

UPDATE 2005-01-11 15:25:07 UTC: Welcome, Instapundit readers. I'd like to link to other TennCare reactions, so drop me a line if you've blogged about it.

Have a look around, enjoy your stay. Front page is here.

UPDATE 2005-01-12 03:42:16 UTC: The trouble with living on the west coast is that it's very late for everyone else by the time you get home from work. Ah, well. Thanks to everyone who wrote, especially those from Tennessee.

Mark writes about his experience with health care in Tennessee:

I recently had to seek health care for the first time since tenncare was instituted, the folks at the hospital simply couldn't wrap their minds around the concept of "uninsured, but not indigent". I managed to get my gallbladder removed anyway, without signing up for TennCare, but it took more time arguing with the administrators than seeing doctors (not counting the actual surgery).

It's obviously possible to simply pay for services received in this state, but its far more of a fight than even I suspected it might be, and I'm cynical about these things. Assuming anyone else wants to receive medical care without being forced to apply for tenncare or its successor or getting some other form of insurance, my advice is bring a letter of credit from your bank, just like you were going to an auction.

This phenomenon is true in Oregon as well. I have a friend without health insurance who needed some simple medical attention (some glass was embedded in her skin) a few months ago, but kept getting turned away by doctors simply because she didn't have insurance. Even if you tell them you're paying cash, they're not interested.

CJ of The Unmentionables connects an earlier post about cheating on disability payments to the importance of whistleblowing on such people to hold down costs of programs. I have no idea how much direct cheating there may have been in TennCare, but I'm confident that even totally legal forms of overuse (because it's "free") contributed hugely to its costs. Even nearly frivolous consumption of health care can have some benefit for the patient, and if they pay no cost for treatment, they're incentivised to consume as much as they're able.

Lynn of Vorticity has written about TennCare costs and cuts.

Another letter from "z" (no name provided) mentioned legal price floors in medical care:

Medical cost increases come from government interference, trial lawyers and courts deciding proper medical procedures, and middleman insurers. I have a doctor who refuses to deal with insurance companies, beyond filling out claims forms for his patients. He tells me he cannot charge less than he does, but he could charge a lot more. When asked why, he told me that Medicare and Medicaid set prices on "healthcare" and will indict any doctor or other provider for fraud should they dare charge less. Government criminalizes competition, increasing "healthcare" costs. Private companies are prosecuted for price-fixing and collusion for the same activity.

In economic terms, government is preventing price discrimination, which I believe could be an important way to provide medical care to the truly needy while actually making providing health care more profitable (if providers at least recoup their "variable costs" for that care.) The essay in that link is focused on prescription drugs, but price discrimination can be applied on a larger scope.

UPDATE 2005-01-12 05:22:57 UTC: Skip Oliva, who does great work over at Citizens for Voluntary Trade, has this to add:

The other side to the "price discrimination" ban is the FTC's policy of prosecuting any physician group, under the antitrust laws, if they try to negotiate higher fees with payers. (And the FTC, in turn, decides whether to prosecute based on how far the private contracts deviate from the government-set Medicare rates.) In many cases, the FTC will charge a physician group for simply trying to enforce the terms of an existing contract. The Bush administration's first FTC chairman worked as a managed care lobbyist, and he openly used his FTC position to attack physicians that crossed paths with his former clients. One such case is now before the FTC and we're filing an amicus brief on Friday in support of the doctors.

Jeffrey Tucker at the Mises blog, one of my daily reads, notes that Tennessee is forced to behave fiscally responsibly because it can't print money like the federal government could.

Bill Hobbs describes TennCare as a nice idea gone wrong and blames previous Gov. Sundquist for ruining it, and patient advocate groups for blocking reforms.

Finally, Bob writes about his experience as a foster parent that I want to post in its entirety:

We were foster parents for a number of years. When our natural children were sick, we used to make a serious judgement as to whether or not to visit a doctor. Yet when a foster child was sick, there was no such need — as the visit was "free". Many kids actually expected to visit a doctor for a cold -- and often wondered why we didn't take them to the Emergency Room for even minor maladies.

When we took children for any well care check-ups, we had to pay for our own children, but foster children always received the service "at no charge" — at least to us.

We had a young lad who wore special — and expensive — glasses. He broke them regularly, and the State would simply call in a prescription for a replacement pair. The child didn't care (because they were free) and the state didn't care because it was only "government money".

The experience really soured me on the concept of socialized medical care and made it obvious to me that such a program could never work without massive outlays of money.

The message was so self-defeating — be responsible and take care of your children and you pay. Totally ignore your responsibility, and the state will reward you by taking care of them for you. And all those other suckers will pay for it.

It's heart-wrenching to think of children absorbing the entitlement mentality based on their own experiences, thinking it's normal and natural.

UPDATE 2005-01-12 04:57:54 UTC: Warren Duzak at Tennessee Indymedia writes about lessons from the TennCare experience he hopes progressives will take to heart for the future. He doesn't mention — even dismissingly — that the cost of TennCare was an important factor in its being cut.

Here's a more valuable lesson: You can't win a debate you don't engage. Ignoring the cost doesn't make it go away. You're doing your readers a disservice by not addressing it.

UPDATE 2005-01-24 04:10:28 UTC: More updates here.

ARI Changes its Tune

Shocking! Outrageous!

The Ayn Rand Institute pulled the original article by David Holcberg denouncing US government assistance for tsunami victims. You can still read the original here, and my related comments here.

The Institute posted an apologetic clarification today, which I think is outrageous. Once upon a time, you could count on ARI to be a beacon of extremism radical, principled consistency. Not any longer, I fear.

This good paragraph:

In a fully free, fully capitalist society — a society toward which ARI works — the government would not have the power to tax citizens and redistribute their wealth for the purpose of charity, domestic or foreign. The government would be restricted to one fundamental function: to protect the citizens' individual rights to life, liberty, property and the pursuit of happiness. To accomplish this, the government would need only a police force and a military to protect citizens from aggressors, and a legal system to adjudicate disputes among citizens who allege that their rights have been infringed. Charity would be left to private individuals and organizations, as it was successfully left in 19th century America (in even a semi-capitalist system, there is no shortage of wealth or of benevolence, as the public's response to the tsunami illustrates).

Is followed by this ugly weaseling:

But of all the ways in which our government today fails to uphold individual rights, providing (through compulsory taxation) short-term, emergency relief to foreign victims of a natural disaster is among the most innocuous. It was therefore inappropriate to single out for condemnation the government's offer of assistance.

No, it isn't. Public emergency relief to foreign victims is pure, unmitigated theft. That wealth simply leaves the country. It is much worse than domestic public disaster relief, which I oppose, but where at least Americans are the beneficiaries.

Theft is not among the most innocuous violations of individual rights. More innocuous violations are things like building codes, government-granted utility monopolies, nutrition and warning labeling, spectrum licensing (as opposed to sale), etc.

Nevertheless, thousands of the government's actions are more damaging to our rights. Far worse, for instance, would have been to pour the aid money into government programs and agencies whose very purpose is to violate individual rights, such as into the antitrust division of the Justice Department, which persecutes successful businesses for out-competing other companies on a free market. If one wants to fight the government's growing encroachment on individual rights, such are the areas on which to focus, not emergency relief.

Okay, I've got egg on my face. In my prior article about tsunami aid, I accused conservatives of arguing "we're not as bad as you think!" — but here, it's the Ayn Rand Institute doing it! "Outright theft isn't so bad, compared with other things the government does!" Huh!? As theft benefiting foreigners, it's worse than any of the domestic social programs, which I know ARI to consistently oppose. It looks like they've gone soft.

Perhaps I'm being too hard on them. Unlike conservatives, they're not conceding the moral dimension — they still oppose public disaster aid — but they appear to be defending it while they oppose it. I thought ARI was made of sterner stuff than this. I'm shocked. This is outrageous.

I'm compelled to use this quote: "In any compromise between food and poison, it is only death that can win. In any compromise between good and evil, it is only evil that can profit." (Ayn Rand, of course, who must be spinning in her grave.)