How constitutional is government health care?

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The attempt of the Obama administration to copy the NHS is beginning to unsettle many in the US. According to the WSJ, some of them are seriously considering legal action on the grounds of the right to privacy which is threatened by government health care rationing and other regulations. The precedent is of course the famous supreme court ruling of 1973 Roe v Wade which ruled out any state intervention in family planning measures such as abortion. Although the argument was not abortion-specific, the decision legalized abortion in the United States to this day. What is interesting is the fact that the ruling was based on the principles supporting the right to privacy. The reasoning behind this is expressed in a similar ruling of 1992 Planned Parenthood v Casey:

These matters, involving the most intimate and personal choices a person may make in a lifetime, choices central to personal dignity and autonomy, are central to liberty protected by the Fourth Amendment. At the heart of liberty is the right to define one’s own concept of existence, of meaning, of the universe, and the mystery of human life.

Well the gist of all that can be similarly applied to many other medical decisions regarding disease prevention and treatment. Euthanasia is a case in point, but more generally the prioritizing of medical resources away from the elderly. This is something President Obama has openly embraced in a recent broadcast interview.

The free access to any kind of healthcare is something Americans have always taken for granted. Another way of looking at this is to consider the role model of the NHS and how far it has been allowed to trespass upon the Bill of Rights of 1688 and the principles of classical Whig liberalism. Obama's policies should give us a welcome opportunity to open up a new discussion on the right to privacy in health care in this country too.

Do we need the BBC?

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The revelation that BBC executives are claiming outlandish expenses is not all-together shocking. This second expenses scandal seems to have a different air than the exposure of MPs; the BBC officials are not elected and are not there to represent us. People feel less betrayed, though more ripped-off. This latest revelation simply illustrates the problem of public waste and a culture totally disassociated from the taxpayer.

There is no place for a state broadcaster in an age of such technological advancement and variety. Entertainment and information is now at most people’s fingertips via the internet, the state does not need to provide it. This change in technology has decreased the barriers to entry in the broadcasting markets, as blogs and YouTube video sharing have shown. The BBC is a public industry operating within a free market, they are chasing the same staff and resources as ITV and Sky but with none of the profit incentives, which makes them much more inefficient.

Currently, the BBC is wasting vast sums of public money producing substandard broadcasting. As long as the government continues to pump funding into the BBC they will continue to act as a monopsony power, stifling this market.

Dealing with pensions the Danish way

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Whisper it gently but there are a number of things worth copying from the social democracies of the Nordic countries. Sweden has school vouchers, no inheritance tax and no national minimum wage. Denmark has low statutory labour protection, meaning a more flexible workforce. And now, from the Economist, I find that Denmark is the first country to really grasp the pensions nettle.

So far only Denmark has taken the radical step of indexing the pensionable age to life expectancy.

This has to be the way to go, even Brad DeLong, no rightist he, has been known to advocate the same thing. The pensionable age should be set at the average age of death of the previous age cohort.

The basic and simple problem is that current pensionable ages were set when everyone was living rather shorter lives. When Bismark started the state pension you would have to be lucky to reach pensionable age. When Lloyd George started ours you'd have to live longer than average to get it. Now you'll be unlucky if you don't reach pensionable age, although obviously there are some through illness or accident who do not.

With ever increasing life spans this simply cannot go on. We need to work for more years, that's it. You can of course do what you want with whatever savings you have made and good luck to you, but as far as the State is concerned there is no reason why a hale and hearty 69 year old should be consuming the taxes of those still in the labour force. As above, raise the pensionable age to that of the average age at death of the previous age cohort. That would mean around 77 for men, 81 for women as things currently stand. Return the State pension to what it was always supposed to be, social insurance against outliving your rational level of savings.

Of course, there will be criticisms of this. Does Worstall really insist that we must all work until we drop?

No, only that half of us should.

Drowning in the sea of disbelief

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Conservative leader, David Cameron, gave a speech at Imperial College, London, on Thursday, outlining how the Conservatives would roll back the state. This would involve publishing information relating to any public expenditure over £25,000 (why not publish everything?), abolishing such things as ID Cards, reviewing Ripa and also the extradition treaty between the UK & US.

It's painfully true that our freedoms have been eroded faster than ever over the past 12 years, but the Conservatives are just as culpable having been a subservient opposition that has failed on a number of occasions to stand up for liberty. When they form the next government (which they seem certain to do) they will have little room for manoeuvre. It will have to be spending cuts and/or higher taxes (obviously higher taxes would only be to service debt rather than expand government further, but you can't trust politicians). What they will need to do is explain why abolishing large swathes of government is the right course, and why society will be vastly improved without them.

Shining a light on public expenditure is not reining in the state. We will no doubt see the black pen of government used again. If the Conservatives really want to rein in the state then they will need to cut spending and cut taxes. They could then re-energize the UK economy and improve government revenues through expansive growth to pay off the accrued debt of Labour's creation. The beast must be starved to set us free, and allow us to never again be the playthings of authoritarian politicians.

But politicians are a breed that have evolved into beings that can't say no, and seek to interfere in all business. They aim to micromanage all, or they fear that they will be accused of being uncaring and out-of-touch. The blame for this though covers us all: the politicians are mostly at fault for neutering us via centralization and we for our blind apathetic allowance for it to occur. Is it a surprise that scepticism arises when a politician says he will roll back the state.

 

Why is American health care so expensive?

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It's an interesting question, why American health care is so expensive. It's also an important one as various parties line up to radically change how the system works and throw the odd $ trillion or two around while doing so. As Greg Mankiw, Russ Roberts and others point out, part of it may be to do with the remuneration doctors get. Other explanations are also floated, such as the tax deductibility of employer provided health insurance, excessive treatment in the last few months of life, the way in which the US system carries much of the development costs of new drugs, well, add your bugbear to the list. And there's truth in all of those complaints as well.

It's certainly true that the US spends more of its GDP on health care than other countries, there can be no doubt about that. But why not look at this through the other end of the telescope? What if it's the US that is spending the correct amount of national income on health care and everyone else who is wrong, everyone else that is the piker? That was the thought that Johnny Munkhammar of Timbro floated back in 2005 and I still find it persuasive.

Firstly, take the point that as income changes we spend different proportions of those incomes on different things. Subsistence farmers spend almost nothing on entertainment as they are too busy ensuring they subsist. As incomes rise we quite naturally spend more on leisure, education, clothing, housing and making idiotic TV shows. It isn't just amounts that change, but proportions: food now takes some 10% of the weekly budget as opposed to multiples of that only a few decades ago.

Now, how would we decide what is the "correct" portion of these rising incomes which should be spent on any particular sector? The best way to find out what the individuals whose income it is think about it is to have a free market in it. Let the people choose as it were. Now, neither Munkhammar nor I are saying that the US health care system is an entirely free market. But it's a lot more free than anyone else's in the rich world. So perhaps, as incomes rise, people actually do want to spend 15%, 16% of national income on health care, for that's where they perceive the greatest marginal utility? The biggest bang for their buck?

If this is true then it's the US that has the better system, not us in Europe who deliberately cram down the amount spent on health care as a percentage of national income. We're deliberately denying the will of the people in over riding their wishes and insisting that the Man in Whitehall knows best.

Why we're mad as hell

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A council cleaner in Buxton earning £14,000 a year - officially below the poverty line - pays her income tax and then gets an extra bill from the BBC for a licence tax. She pays that to a wealthy TV executive driving into London who claims on his expenses for a congestion tax paid to a government quango.

The taxes are used to fund a taxpayer maintained MP's flat-screen television so that the MP, eating food paid for by the taxpayer can watch the Prime Minister on television talk about a "fair and equal" society and how he is determined to make the economy grow.

That's mad as hell, and so are we, and we are NOT going to take it any more.

The dispersed interest of taxpayers is gradually being allowed transparency of the grand corporate culture that emerges when big institutions get grand ideas.

Those cultures have to change. Three hundred pound hotel rooms, expensive meals after an "extended working day of 12 hours" do not go down well with the small businessman tucked in his Travelodge bed with the late evening hamburger half-eaten at the bedside after 16 hours on the road trying to avoid trading losses. They go down worse with the cleaner from Buxton hearing about six hundred pound restaurant meetings for Controllers when she's stuck in a janitorial cupboard being told by her supervisor that her supplementary hours are being cut due to shortage of cash.

It's time the BBC executives "got it" as well as MP's.

All good things…

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After a wonderful month in Westminster, I bid a fond farewell to my friends at the Adam Smith Institute.

It was an exciting time in UK politics and, consequently, an exciting time to be at a leading UK think tank. Courtesy of the ASI, I had a front row seat for the unfolding of the MP expenses scandal, the historic European Parliament elections and the near collapse of Prime Minister Brown’s government. There was a two-week period when not a day went by without a major media outlet – be it CNBC, the BBC or a national newspaper – calling for an interview with someone on the ASI staff. I had an amazing experience from start to finish.

It was a privilege and a pleasure to work with the outstanding people at the ASI. The people at ASI are of the finest quality as are the ideas and work product they generate. They certainly convinced me to reevaluate my policy positions in a number of areas.

Although I leave 23 Great Smith Street behind, I will certainly remain connected to ASI through the Facebook groups, Twitter and, of course, the Blog.

Change is coming to the House of Commons. I can hardly wait to see what role ASI will play in the development of a new (and better) Britain.