Or maybe the school my kid’s in has all its money looted by executives…and in the middle of the year I have to take a month off work to find a new one…that I have to pay for myself…brilliant!

Or you could find a school that allows for month-to-month payments. My son goes to a private school and that is how 95%+ of the parents pay. I also tell people to look for this when looking for a martial arts school. With the latter not because of “looting” but because I view the month-to-month schools as being more interested in teaching the art than making a quick buck.

I think the libertarians here miss the point about adverse selection. It is a theoretical problem with markets with asymmetrical information. If there is a well-functioning insurance market, then someone has found a way to overcome it.

Yes, but it usually entails things like different permiums and deductibles, contracts that result in non-coverage if the hidden information is revealed etc. All of these things modern day progressives see as unfair.

What is truly hypocritical about the modern progressives is that they don’t seem to see the unfairness of those with the hidden information taking advantage of not just the insurance company (i.e., people), but also of the insurance companies other customers (more people). I’m not sure if this is due to some sort of schizophrenic like nature of the progressive philosophy (corporations are bad, profit making is bad, etc.) or just simple ignorance.

I think the libertarians here miss the point about adverse selection. It is a theoretical problem with markets with asymmetrical information. If there is a well-functioning insurance market, then someone has found a way to overcome it.

But one insight behind social democracy is that many socially-desirable insurance markets don’t exist. Another is that people are rationally ingnorang about risk, and so can be better off when a paternalistic state makes them pay for insurance against risks they would otherwise ignore.

I have a complaint against a teacher, I gotta sit on hold for two hours before getting to talk to some teenager in India reading off a script…perfect!

Kaplan is a private corporation, and yet all teachers must provide students with their email address and/or a phone number and are required to respond within 24 hours to any query.

Or maybe the school my kid’s in has all its money looted by executives…and in the middle of the year I have to take a month off work to find a new one…that I have to pay for myself…brilliant!

Would you like me to point you to the many cases of government bureaucrats and teacher’s union thugs looting the money that should have been spent on education? Or how about the time that one of my sister’s teachers got sick in the middle of the year and was replaced with a incompetent substitute? (One of the reasons my sister switched schools, incidentally.)

I’d rather vote for that private army you guys keep pushing…hehe

Much worse than that public army currently using your tax dollars to wage a war against a country that represented no threat to you or me.

The idea that people are going to vote for a school that resembles “nothing more than your standard strip-mall office complex, like a dentists office with larger rooms” is exactly…zero.

Imagine having to choose between a school run by Enron and a school run by Microsoft:

I have a complaint against a teacher, I gotta sit on hold for two hours before getting to talk to some teenager in India reading off a script…perfect!

Or maybe the school my kid’s in has all its money looted by executives…and in the middle of the year I have to take a month off work to find a new one…that I have to pay for myself…brilliant!

I’d rather vote for that private army you guys keep pushing…hehe

This is not a market failure of insurance because it falls outside the definition of insurance. Insurance insures against risk. Pre-existing conditions are not a risk; they are a certainty.

Maybe you could say that this is a general failure of the market, but that is not a new complaint; everyone already knows that the “market” itself cannot provide charity to people who can’t afford things. That is something only charitable people and organizations, or thieving governments, can do.

School districts enjoy certain economies of scale because they are educating every kid in America. Under the voucher program, the cost of replacing one elementary school with 30-40 smaller ones to suit the tastes of different parents would probably double or triple the costs.

I teach part-time for Kaplan, a company that specializes in test preparation. They have a large number of offices with classroom facilities in every state in the U.S. (and multiple in driving distance from me), and they also offer classes at local schools and other facitilities. Their offices are nothing more than your standard strip-mall office complex, like a dentists office with larger rooms. Yet I doubt they spend anywhere near the amount of money you cited.

You are stuck in the mold of thinking that the free market will provide education in exactly the same way that the government monopoly does. Life doesn’t quite work like that, Bub.

And anyway, why do you care so much about the costs entrepreneurs and their venture capitalists will have to pay to create new schools? Since when is that a concern of statists? You guys are able to think of the most absurd reasons to reject a free market in education when the serious problems of state monopoly education are staring you directly in the face.

Granted the people who are very high risk are unlikely to find insurance, but I doubt many of them would want it anyways since the premium would be so high.

A more likely explanation is that the people who most need insurance will be unable to afford buying their own plan. Ever hear of a pre-existing condition clause?

Insurance only applies when an event is uncertain and for the most part unlikely. Hence the person with a pre-existing condition can’t get insurance because the cost of insurance would be equal to the cost of the medical treatement.

These are inherently adverse-selective.

Only if the insurance company doesn’t know about it, and doesn’t have the clause you note. Forcing insurance companies not to have such clauses would be very bad in that it would raise everybody’s rates and likely result in more people not having insurance not less.

I would add that they’re a market failure as well since the chronic, day-to-day medical expenses, i.e. the ones most likely to be financially crushing, are the ones that aren’t covered.

This is not really a market failure in that the market would never have worked even in ideal circumstances. Most market failures such as externalities, adverse selection, moral hazard and even public goods result from non-ideal circumstances (e.g. imperfect information, ill defined property rights, etc.).

As for Tyler Cowen, the whole “people who need insurance are too irresponsible to buy it” line isn’t quite insulting enough. He should come out and say what he means — people in the situation I used to be in should just die because we can’t afford our medical bills. Asshole…

He isn’t saying that at all, and putting words in his mouth is dishonest.

As for your plight exactly what would you have other people do? Medical resources are not infinite and if some are given to you that means other have to go without. Exactly who should go without and who should decide? Do we want that decision to be politicized? Even if it is politicized that doesn’t mean you’ll get the treatment you want or even need.

A more likely explanation is that the people who most need insurance will be unable to afford buying their own plan. Ever hear of a pre-existing condition clause? These are inherently adverse-selective. I would add that they’re a market failure as well since the chronic, day-to-day medical expenses, i.e. the ones most likely to be financially crushing, are the ones that aren’t covered.

More directly, Will, when was the last time you couldn’t afford medical care that you desperately needed? I have Crohns disease, and a few years ago I was unable to afford my $500 a month prescriptions on my $7 an hour job. I have a 10 inch scar from my sternum to my crotch, where they took out a big chunk of my intestine, to show for it. I also ran up thousands of dollars of credit card debt during that period of time on my prescription bills. There comes a point when you are forced to choose financial ruin or physical ruin.

As for Tyler Cowen, the whole “people who need insurance are too irresponsible to buy it” line isn’t quite insulting enough. He should come out and say what he means — people in the situation I used to be in should just die because we can’t afford our medical bills. Asshole…

- Josh

Small transition cost?

I think this fits in with Will’s original post nicely. An average elementary school costs about $30 million to build. Throw in books, cubbies, school buses, etc. and you are looking at over $50 million. There is one in every neighborhood in America.

School districts enjoy certain economies of scale because they are educating every kid in America. Under the voucher program, the cost of replacing one elementary school with 30-40 smaller ones to suit the tastes of different parents would probably double or triple the costs.

There may be no transition costs for the government, but someone will have to pay these costs…

when he cites his list of certain outcomes:

more prosperity and security, especially for the poor and middle classes; a cleaner environment; safer food and drugs; and so on.

… he is discussing tangible things — not ideas but material, which is to say not ideology but materialism. friedman, for his part, when he says

Freedom in economic arrangements is itself a component of freedom broadly understood, so economic freedom is an end in itself

… is in fact reciting ideology. he may feel it derived of empirical evidence, but it is a value judgement. freedom is NOT an a priori good; as hume demonstrated so clearly, there is no such thing.

unfortunately, chait (as you well note) does not recognize this point as applying to himself — his views are no less intrinsic value judgements. he simply places value on utility over individuality.

and therein the confusion — “liberal” is a word too abused to have meaning. chait seems to mean materialist. you seem to mean libertarian, when you say

But if you replace “economic freedom” in Friedman’s sentence and substitute “x” where x is anything that is part of freedom broadly understood, and you still disagree, then there is no intelligible sense in which you are a liberal.

both have been called liberal. and there are empirical examples to support both.

Actually, for the people who can least afford a decent education, it provides not only a lousy education but little chance for any other. This isn’t to say that I support vouchers – I don’t – but your argument is simply that we’ve spent so much money for mediocre results that it would be foolish to do something to get better results. That seems, at best, retarded.

Libertarians seem perfectly happy to ignore the massive transition costs of their programs

Since most libertarian programmes are actually a reduction or abolition of other programmes, the transition costs are nearly non-existent or even negative. Vouchers have a small transition cost, and the thorough, correct libertarian solution also has a small transition cost.

- Josh