[lbo-talk] last minute endorsement

Wojtek Sokolowski swsokolowski at yahoo.com
Thu Feb 7 06:22:22 PST 2008


--- tully <tully2 at gmail.com> wrote:


>
> But it does seem odd that there is so little talk of
> Ron Paul
> here. Many of the other lists (mostly yahoogroups)
> I'm on have
> been talking about Ron Paul for years now. But its
> like Ron
> Paul is a brand new subject here.
>

[WS:] I do not want to speak for others here, but for me what ANY politician say is pure bullshit (as defined by Frankfurter in _On Bullshit_): posturing designed to evoke positive emotions about the speaker with the total disregard of the truth function of what is being said. In other words, something whose contents is not worth the paper on which it is printed or perhaps my time to pay attention to it.

OTOH, if you want to discuss the virtues of the free market/ rat choice principle to model human behaviour in general or applied specifically to obtaining health care - here is my take on it. Such approach is sheer fantasy with zero empirical validity. There is no reason to belive that people would move from one state to another to optimize their tax/heatlh care balance (as you claimed) cheifly for two reasons: imperfect information and transaction cost.

In order to make a rational choice among states offering diffrent levels of taxation and health care (as you suggest) one needs to know the amount of tax one will pay in the future, and the amount of health care one will need, as well as its cost. It is quite obvious on its face that most people cannot predict their future health care needs or their cost (as future prices are largely unpredictable) with reasonable probablity - and if they can, it usually indicates a terminal or a chronic condition. Therefore, the only people who are in a position to make a rational decisiopn based on this criterion are those who are incurably ill i.e. need a lot of health care. Furthermore, the future level of taxation is also largely unpredictable - it depends on the needs of a particular state (e.g. if a state faces a natural disaster it may decide to either increase its tax level or shift resources from health care to emergency response), as well as changes in the balance of political power.

Secondly, every relocation involves considerable transaction costs - both economic (such as selling/buying residence, changing jobs, moving costs) as well as social (severing family ties, social networks, etc.). These transactions costs are real immediate and unavoidable, whereas any benefit obtained form the right tax/health care balance are delayed and uncertain.

In that situation, the rational choice for most people is to stay rather than move to another state in search of the right tax/health care balance. The only exception is when one knows with reasonable certainly the amount of health care one needs - i.e. when one is chronically or terminally ill. It is easy to see that this would result in overburdening the states with good health care system and a free ride for those with a bad one - the anti-thesis of efficiency that the free marketers purportedly champion.

In short, the free market model is plain bullshit - something that looks good on paper and sends positive vibes to like minded travellers, but it is empirically unsound and it is likley to have effects opposite to those claimed.

Wojtek

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