Arnold Kling  

The Veterans Administration Model

PRINT
More Wood Chip Commentary... Insurance versus Charity...

Tyler Cowen and Brad DeLong cite a recent Paul Krugman column that praised VHA health care.

I think that it's wonderful that the VHA, which used to be administered poorly, has gotten better. But I am not ready to jump up and down and say, "Look, everybody! I found a government agency that is doing a decent job. We don't need the private sector any more!"

The Naval Academy does a decent job. That doesn't mean we ought to shut down Princeton.


Comments and Sharing





TRACKBACKS (3 to date)
TrackBack URL: http://econlog.econlib.org/mt/mt-tb.cgi/450
The author at Different River in a related article titled Paul Krugman and VA Health Care writes:
    Several blogging economists seem to have made a cottage industry debunking the New York Times columns of (formerly-respected?) economist Paul Krugman. Now, I guess it's my turn. Krugman writes: I know about a health care system that has been hi... [Tracked on February 3, 2006 4:58 PM]
COMMENTS (22 to date)
Randy writes:

I don't see the VA model as a replacement for the existing system, but I think it could be useful as an add-on. E.g., taxpayer funded "free" clinics attached to existing ERs, staffed with government employees. Such a program could be started small, to provide basic healthcare to those with no other option, and expanded with economic growth. But it would not be a full function hospital, and would not replace existing hospitals because, quite frankly, going there would not be a pleasant experience - just free.

I think the key to solving the healthcare problem is to get past the idea that we can provide top quality healthcare for all. Because we can provide basic services for all.

liberty writes:

I think the answer to the healthcare crisis is simply tax breaks for the uninsured with the requirement that they pay taxes - and hence, in general, have a job. Insurance groups can team up to offer affordable insurance to be purchased with the tax refund (the refund goes directly to your choice of insurer). Boom, problem solved.

No need to depend on a miracle of one time government efficiency.

Robert Book writes:

What Krugman says isn't even true: There's one "advantage" the VA has that other government health care systems don't have -- they get to pick their patients, and can limit the number of patients based on their budget. Contrary to popular belief, not every military veteran is in the VA system -- the VA sets eligibility requirements in order to make sure that the number of patients they have is limited to what thay can fit within their budget. In fact, only a minority of former military personnel are in the VA system.

Krugman says, the VA is "highly successful in containing costs, yet provides excellent care." True, but the do it by containing their patient load. Krugman also says something that is flat-out false: "Because it covers all veterans, the system doesn't need to employ legions of administrative staff to check patients' coverage ..."

On the contrary, it does not cover all veterans, and it does have "legions [pun intended?] of administrative staff to check patients' coverage." They have an entire web site devoted just to eligibility which states, in part "All Veterans are Potentially Eligible" (emphasis mine). There is an eight-level system of "priority" detailed here. It has categories like, "Veterans with service-connected disabilities rated 30% or 40% disabling" (priority 2) and "Veterans who agree to pay specified copay with income and/or net worth above VA Income Threshold and income below the Geographic Means Test Threshold" (priority 7 -- which has FOUR "subpriorities," only two of which are currently in use.

Does Paul Krugman really believe they can determine eligibility under such complete rules with fewer administrative staff than it takes1 another health system just to look at someone's ID card and take down their policy number?

Dr. T writes:

Richard Book's comments are correct. The VHA has eligibility requirements based on a complex mix of factors. Chronically ill but ineligible veterans cannot be seen at VHA facilities.

Mr. Krugman is wrong in another way: VHA medical care is not that great. Due to (well-deserved) political pressure, VHA administrators must "prove" that medical care is better for veterans. Like all bureaucrats, they were very inventive about finding ways to look better without making major changes (since real changes require real work). The commonest way to do look better is to focus on national "quality" indicators (such as percentage of diabetic patients who get their glycated hemoglobin measured at least once per year). These quality monitors are coded into the clinic or inpatient computers, VA clinicians are continually reminded to do those specific tasks, and the VA ends up looking really great on the monitored indicators. However, the underlying level of care may not have improved at all. In some cases, the "quality" indicators are anything but, and spending a great deal of time on them detracts from good patient care.

Another mechanism for "improving" veterans' satisfaction with VHA care is to attract greater numbers of eligible, non-elderly veterans to the VHA. We do this by dangling the carrot of free drugs. Thus, we now have many VHA patients who come to a VA clinic once or twice a year to get their prescriptions renewed. Naturally, they are very satisfied with their "care," since they can still see private doctors (covered by their workplace health insurance) and get free drugs, a benefit few insurers provide.

I am a full time physician at a metropolitan VA medical center, and I see countless examples of mediocre care. Of course, the same is true in the private sector. I'm not saying that VA health care is horrible, but it is not substantially better than private care (no matter what the surveys and quality indicators say).

spencer writes:

One of the biggest problems with health care is that there is no productivity in the system.
We seems to have a system that generates incentives that prevents the system from appling the basic principles of management that other industries do to control costs. Basically, under
the private insurance system it evolved as a "cost plus" system much like the defense industry. Moreover, government had little to do with the way the system evolved -- except for corporations being able to treat health insurance as tax free compensation --the system was created by free market capitalism.

So what the VA has been able to do over the last 20 years is apply modern management and information technology to control cost and create a system with strong productivity.

Sure, you can engage in the useless game of blaming the government when it is not the culprit. Or, you can try to figure out why free market capitalism has created such an inefficient system as the first step in correcting the incentives within the system so the private sector will use its great abilities to do what the VA has done over the last 20 years.

For example, in your new book you are saying that one of the reason health care is so expensive is that it does too much testing.
You claim that making people rather then third parties pay for the test will solve this problem.
But I will argue that even if you got rid of third party payments that the demand curve for medical tests would still be vertical. You are asking me to believe that if I go to the Dr. with a problem and he says I want to take these four tests, private patients will say, no I am not going to take the test because they are too
expensive. If you believe this I have some shares in a bridge accross the East River I would like to talk to you about.

I am sure you have correctly identified a significant reason healthcare costs are high.
But I have no faith in your proposed solution.

Of course, I don't have a better idea either.

James writes:

Spencer,

You write, "Moreover, government had little to do with the way the system evolved -- except for corporations being able to treat health insurance as tax free compensation --the system was created by free market capitalism."

Either you just don't know any better or you have a very unorthodox view of what free market capitalism is. As much as you criticize free marketers for not citing enough facts, you ought to be seting a better example, even if it means weakening your case for ever more state involvement into the economy.

In case you didn't know, there are:
- laws that prevent the sale of health insurance across state lines
- 'mandated benefits' laws that prevent insurance companies from deciding what their policies will and will not cover
- 'guaranteed issue' laws that require insurance companies to insure anyone regardless of risk
- 'community rating' laws that limit the freedom of insurance companies to charge different premiums to people with different existing conditions

And then there are the myriad federal and state interventions into other aspects of health care such as
- Medicare/Medicaid bidding up the price of health care
- government support for the AMA cartel
- 'certificate of need' laws that make it illegal to even build a medical care facility without permission from the state
- laws requiring that emergency rooms treat anyone and eat the cost of the patient doesn't pay
- the FDA adding to the cost of bringing drugs to market

This list is hardly complete. Last time I looked, there were more than 120,000 pages of regulations concerning Medicare alone, and many more covereing other party of the health care industry. So if you wouldn't mind, could you please explain why you term such a state of affairs "free market capitalism?"

Incidentally, do you have any facts to support your claim that the demand curve for medical testing is vertical? I've seen many studies which suggest that the price elasticity of demand for various medical services is low, but none that claim zero elasticity. Besides that, so what if your demand or the aggregate demand for medical tests is vertical or even nearly vertical? That doesn't mean everyone's demand for such tests is vertical but with laws requiring that insurance companies pay for whatever tests the doctor orders, even people with a very elastic demand for medical testing get stuck with costs they wouldn't incur in the absence of such regulation.

Vorn writes:

I sometimes wonder what is meant when people point to, say, Princeton or Harvard and refer to them as "private universities," as if this supposedly makes a huge difference. Okay, in a technical legal sense, they are private. But on the other hand, they are non-profit, receive huge amounts in research grants from the government, receive huge amounts from the government in financial aid, and have many other goals they pursue that clearly do not go to the issue of profit maximization. Indeed, the governance and motives of those who run these non-profit universities and public universities is suprisingly similar. Their incentives are largely the same. And from an economic perspective, isn't that what is important: incentives rather than technical legal forms?

An example of one of the most successful providers of for-profit education is the University of Phoenix. It certainly doesn't serve its students as well as non-profit ivy league universities, nor excellent public universities such as those in the University of California system.

I am picking on your example of Princeton. Of course, there is place for-profit education like the University of Phoenix. Even if the education provided by the University of California - Berkeley will always be superior.

spencer writes:

James - - would you give me some references to the elasticities studies. If I am wrong, I will change my statement. The argument is that without insurance coverage people would not take the exams. That is what I questioned.

Bob writes:

Vorn,

On what basis do you judge the education students receive at Berkeley better than what is provided at Univ of Ph?

James writes:

Spencer,

First, your claim was "But I will argue that even if you got rid of third party payments that the demand curve for medical tests would still be vertical." So, to be clear, any price elasticity of demand different from zero contradicts this claim.

On p. 43 of a RAND study called, The Elasticity of Demand for Health Care: A Review of the Literature and Its Application to the Military Health System the authors write "The literature suggests that the demand for preventive care, or well care, is somewhat more responsive to price than either acute or chronic care. Newhouse et al. (1993) used data from the HIE to estimate demand elasticities for each of these categories of care. At lower levels of coinsurance (0 to 25 percent), the price elasticity of demand for these service types is quite similar and centers on –0.17. When coinsurance rates are between 25 and 95 percent, however, differences in the elasticities of demand are found. The demand for preventive care is found to be the most price sensitive, with an elasticity of –0.43. The demand elasticities for acute and chronic are –0.32 and –0.23, respectively."

Nowhere do the authors report that they or anyone they cite found the elasticity of demand for any kind of health care to be zero, as your claim implies.

I recall learning as a principles student that perfectly vertical demand curves are exceedingly rare if they are to be found anywhere at all. So one shouldn't suppose that any demand curve is vertical without some overwhelming evidence to that effect. Was your claim that the demand curve for medical testing is vertical based on any studies?

mike writes:

Spencer,

Doesn't the fact that there were wage ceilings in place during World War II at least partially explain the emergence of employer-provided health care?

Absent these controls, employers would not have had to resort to certain forms of non-wage compensation to attract workers.

-Mike

Vorn writes:

Bob,

You can argue that a degree from the University of Phoenix is worth as much as one from Berkeley if you want to. It obviously is not.

One reason is that the signaling function is not nearly as strong. Getting a degree from Berkeley demonstrates high intelligence. The same cannot be said for a degree from the University of Phoenix.

I could list other reasons, but the above is adequate by itself to label Berkeley as superior to the University of Phoenix.

Dewey Munson writes:

Why do economists isolate "government" from their Market.

Isn't the "government" just another demand based response to human activity?

Seems like putting it under the scrutiny as a piece of the market might help its efficiency.

Dewey Munson succinctly put his finger on one of the most fundamental economic questions of the last 200 years:

Why do economists isolate "government" from their Market.
Isn't the "government" just another demand based response to human activity?

Why indeed? You have hit a ten-inch nail squarely on the head. Why don't economic models, which purport to explain supply and demand, endogenously include models of supply and demand for government services? Why is the government handled differently in most economic models, from micro to macro? Why is more attention not paid to this question in economics literature? Why are models that include recent developments not standard?

One glib answer is that the separation of the government sector from private-sector supply-demand behavior stems from a simplification made in the early 1930s by John Maynard Keynes. Keynes's goals were different, but his model had a lasting effect, perhaps because the ideas became codified in textbooks based on helpful explanations by John Hicks and Franco Modigliani. In the process of offering up an interesting solution to long-term unemployment and persistent recessions, Keynes's model also simplified and set aside the government's expenditures as exogenous. His simplification is codified by the "G" in the equation known by every college economics student:

Y = C + I + G

While C (private consumption by individuals) and I (private investment by firms) were subject to supply and demand, G was somehow separately determined. In the simplest models, it could be set arbitrarily by the government. The government could provide solutions, supply resources, and supply any amount of money, at least in the short run, without cost or consequence to individuals, and independently of C and I.

That may have been appropriate for Keynes's model and objectives, but it ended up over-shadowing a newly-burgeoning field of attempts to include models of the government in supply/demand models of the economy. When the simplified versions of Keynes's model were rejected in the 1970s, a lot of catch-up ensued. That catch-up is still going on. Developments in political science and the economics of public policy are the tip of the iceberg.

Demand and supply for government services are different from demand and supply for most ordinary goods and services. Which goods can a government efficiently supply? All goods, from oil to newspapers to savings to money supply to churches to schools to medical care to investment in research and development across the board? Or just some goods, say those economics recognizes as "public goods," where the social cost is lower than the private cost--like defence, and maybe parklands and clean air? Even that list is hotly contested--Coase's work argued that the private sector can sometimes do some of these things more efficiently than the government, depending on transactions costs. Plus, the entire structure of government differs from the private sector. Payment is by taxes, not by individual purchasers. Demand is measured by voting or by decree (or perhaps by acquience, by dictatorship, by custom, by revolution, or by opinion polls, reports by the press, or government contract). If the government messes up its predictions about demand or costs, it doesn't go out of business the way a private business would--the government is allowed to just assess higher taxes.

These questions are fundamental for economics, but are delicately side-stepped in most micro- and macro-economic models. I don't know if the reason is because the questions are difficult or because the answers are nontraditional or impolitic. Regardless, grad students are not encouraged to integrate the government endogenously into their models or to explore or test the government sector analogously to the great empirical cost-benefit analyses that so contributed to understanding demand and supply when studying the private sector in the past. The person who successfully navigates this impasse in a clear, effective, convincing model will become famous. It is part of the unified field theory of economics: to provide a single underlying framework that encompasses the short run and the long run, the private sector and the public sector--microeconomics and macroeconomics.

James writes:

Munson,

To supplement Lauren's answer to your question, economics is not without attempts to treat government as some outside entity apart from the rest of the economic system. There are the "politics as exchange" formulations from the public choice economists, i.e. Buchanan, Tullock, et al which have become more or less accepted by most economists. An exception to this approach comes from economists like Rothbard who points out

Intervention is the intrusion of aggressive physical force into society; it means the substitution of coercion for voluntary ac­tions. It must be remembered that, praxeologically, it makes no difference what individual or group wields this force; the eco­nomic nature and consequences of the action remain the same.
In other words, the problem is not that there needs to be an economic analysis of governments, but rather an economic analysis of coercion, because government is just one manifestation of the general case of coercive behavior. E.g. if I tax you and use the money to ration your health care, that's no different economically from the government doing the same.

liberty writes:

>Okay, in a technical legal sense, they are private. But on the other hand, they are non-profit, receive huge amounts in research grants from the government, receive huge amounts from the government in financial aid, and have many other goals they pursue that clearly do not go to the issue of profit maximization.

Private does not automatically mean for-profit. There are plenty of private charities, non-profit and not-for-profit firms. They do not act like public firms in the slightest. They are different beasts altogether. See below.

>Why is the government handled differently in most economic models, from micro to macro?

In my opinion it ought not have anything to do with Keynes. I do not agree with his analysis, think instead about Hayek and the other arguments against Socialism.

Government is different from private firms because of the following:

1. Government receives payment in the form of taxation and has a monopoly on force to extract said payment.

2. An individual need not pay public firms for services, hence they are not directly responsible to the customer.

3. Government does not receive price signals or respond to demand directly from the customer; government can keep prices high or low without regard to competition, demand or supply as it can always raise taxes to supplement its purchasing power and increase stocks.

4. Government acts as a monopoly, but one which need not even worry as a private monopoly does about the demand curve for the product, hence it can offer a low quality product at any price without concern that it will go out of business - so long as it can use its monopoly on force to extract payment in the form of taxation.

5. Government can grow to any size, taking on the whole chain of supply from the extraction of natural resources, to creation of initial means of production to creation of the product to distribution to retail sales, and it can act as the employer and producer for every link in the chain; but there will be no price signals, no way to calculate value, no monitor of quality and no competition.

That is a short list of the reasons why government should and must be treated separately from private firms and why non-profit private charities are not like public firms.

James writes:

The recent comments from Munson, liberty and Landsburg bring to mind another issue. For what it's worth, treating the government as being some exceptional institution in society is not something that only economists are guilty of. Most people, for that matter, treat governments as being outside of the scope of their commonsense ideas as to what people ought to be allowed to do to one another.

For example, most people would agree that it would be a bad idea if their neighbor, or a canasta club, or the upper management of some corporation, etc were allowed to take people's money and regulate their behavior. When it comes to governments taking people's money and regulating their behavior, people generally make an exception in their analysis that they wouldn't make if any other agency in society were to do these things. Whatever normative analysis they apply when the doer is a private entity doesn't seem to apply when the doer is a government. So it shouldn't come as too much of a shock that social scientists have committed a similar inconsistency by not applying the as thorough a positive analysis to government that they apply to individuals, groups and firms.

Vorn writes:

liberty:

I was being specific, not general. Public universities and private non-profit universities have suprisingly similar incentives. Both want to engage in private fundraising. Both are concerned about alumni relations. Both are able and choose to engage in unprofitable activities done for the sake of intellectual exploration. Both are affected by market forces when setting prices for tuition. Both actively foster alumni relationships for financial support. Both offer professors tenure. Both receive taxpayer money and neither has the power to tax directly but rather depend on research grants, student financial aid, or appropriations. The list goes on and on.

If you want to make an argument in this specific domain, then I think that would be interesting. Your generalized point is not persuasive. Generalities will only take one so far.

One more point I would like to address is the idea that the government has a monopoly on force. That is completely false. Have you heard of private security, bounty hunters, citizen's arrest, necessity, and self-defense? Have you heard of self-help, as when private companies seize assets without government intervention.

And the idea that the government has a monopoly on force in the context of contract litigation doesn't make sense. Sure, government is involved, but litigation is driven by private parties. In private litigation, private parties USE the government to enforce their private contracts and if they win a lawsuit then the government will act as their AGENT to forcibly transfer property. Essentially, if you win a judgment in contract litigation, you can have the government act as your agent to use force to seize property. You can also choose NOT to. In other words, you have discretion concerning whether force is used. You can win a judgment in court, but then, when the other side chooses not to pay, you can use force or you can choose not to.

Both the government and private citizens use force in our society. And both government and private citizens are constrained in the use of force by the rule of law.

Why I am it, I thought I would respond to your whole list.

"1. Government receives payment in the form of taxation and has a monopoly on force to extract said payment."

Landlords receive payment from tenants and may use force to collect rent (after getting a judgment in court). Tenants may have no other realistic alternatives on the market and may be locked in by a lease. If you don't like the terms of a lease, don't sign it. If you don't like the actions of government, vote for a different one. If you don't like the contract law that governs what terms will be enforced by government coercion in a lease, vote for a different government. With both government and private ordering, there is coercion; in our society at least, that coercion is justified by consent. Government can only use coercion against a taxpayer to collect taxes by going to court, just like a landlord.

"2. An individual need not pay public firms for services, hence they are not directly responsible to the customer."

Individuals have to pay public firms for services all the time. Ever been to the DMV? There also is competition; between political parties rather than firms.

"3. Government does not receive price signals or respond to demand directly from the customer; government can keep prices high or low without regard to competition, demand or supply as it can always raise taxes to supplement its purchasing power and increase stocks."

Governments ability to tax is limited by the income and wealth of society and, in addition, by democratic consent. When the economy does poorly, government revenues, like business revenues, decrease. If government charges too much for services, it will be held accountable by voters.

"4. Government acts as a monopoly, but one which need not even worry as a private monopoly does about the demand curve for the product, hence it can offer a low quality product at any price without concern that it will go out of business - so long as it can use its monopoly on force to extract payment in the form of taxation."

Government does need to worry about going out of business when it offers an unnacceptable product. One political party will replace another. If government does its job too poorly, then democratic majorities can and will change the government. For example, the current government has a big problem on its hand for its unacceptable performance in response to Hurricane Katrina. Government has many inefficencies. So do private corporations. Maybe the political process is not responsive enough... I am open to that argument. One idea is to end the filibuster in the Senate to facilitate responsiveness. Government consists of fallible human beings. Business consists of fallible human beings. Fallible human beings respond to incentives. If you don't think a private arrangement is working as well as it should, you should think about incentives. If you do not think government is working as well as it should, you should think about incentives.

"5. Government can grow to any size, taking on the whole chain of supply from the extraction of natural resources, to creation of initial means of production to creation of the product to distribution to retail sales, and it can act as the employer and producer for every link in the chain; but there will be no price signals, no way to calculate value, no monitor of quality and no competition."

This can happen with private firms too. Not every merger and acquisition is a rational decision. People working in M&A sometimes become committed to making a deal after, say, 18-months, even if that deal no longer makes sense. Even if the deal never made sense.

Now, obviously, I am not arguing that there is no difference between government and private enterprise. That would be silly. Certainly, there are significant differences in the way they are held accountable. I am simply arguing that you are overstating the differences. There are market failures and there are government failures. The question is how to best respond in a rational manner.

In fact, the significant differences between private enterprise and government are a good thing. They both have strengths and weaknesses which are to some degree, complementary. Thus, I think that some roles are better played by government and some better played by private enterprise. The question of optimal mix is a very interesting.

liberty writes:

vorn,

A lot of the general distinctions I made are general for a reason; you say that government can respond, by voters taking them out or by things like thr DMV - yet these are only possible when government plays a limited role in the market and even then are slow, inefficient and not directly responsive to the consumer (I pay money at the DMV yet I cannot simply take my business elsewhere if I wait hours to be seen, I must wait until the next election and campaign for the isssue and mst likely never see any action taken) and it still acts as a monopoly. If you go to a country with a stronger government presence, there is even less possibility for competition, less responsiveness (eg no party will likely change the way that government is acting in these roles as they are too entrenched), and the price signals are even fewer.

For example compare the US to the UK to Sweden of the 1960s to the Soviet Union; the more government you have the bigger these issues become.

As for univerisities - again some of the examples are true of any non-profit and have nothing to do with public vs. private (eg unprofitable activity, alumni etc), others may be influenced by government grants, I do not think that public universities respond to market prices as you assert and I argue that the two are quite different. Public universities must abide by government rules that thankfully don't apply to private universities and private universities do respond better to the customer - be it alumni, students or parents and tend to provide more highly specialized education; because public universities are a very decentralized institute of government they can excel in a way that few public firms can. Again, this becomes exceedly rarer the more that government expands in a given country.

Vorn writes:

liberty:

You make some interesting points. Are there problems with the responsiveness of government? Yes there are. Are there problems with the responsiveness of large corporations? Yes there are. Is government in some respects not accountable enough? Yes. Are corporations in some respects not accountable enough? Yes. There is no perfection with human institutions.

You suggest that these problems are mainly due to the size of government; the larger government is, the more difficult change is. I buy this argument to some degree -- larger organizations are more difficult to manage. But I think this point is overstated. Larger organizations also have economies of scale.

I think the MAJOR issue you really need to look at with respect to the problems with government is exactly what you would look at with problems in business. That is, what are the incentives that motivate the players in government.

Are you right that there are problems with customer service at the DMV and that since the DMV lacks competition, it lacks a significant source of accountability for poor customer service faced by private firms? You are absolutely right. My point in bringing up the DMV was to dispute your statement, and I quote, "An individual need not pay public firms for services, hence they are not directly responsible to the customer." What I was getting at is that problems at say, the DMV, are not caused by the lack of a paying customer, as you seemed to suggest.

One last point about the DMV. Is it possible to design a DMV system that is efficiently run, is staffed by diplomatic and polite employees, and has high standards in the absence of competition from external firms? I think the answer to this question is yes. In the absence of external competition, focus on internal competition among employees. That is, tie promotion and pay WITHIN the DMV to meeting these objectives, and have outsiders rather than insiders evaluate employee conformance with standards. You can take the best lessons learned in human relations in the private sector and apply those lessons to the public sector.

Overall, my point in responding to you was to really establish a couple of things. First, that government does not have a monopoly on force; thus any moral statements that build of that statement should be considered suspect. Second, that you overstated the differences, that obviously exist, between government and business; it seemed to me that you were focusing on the negatives with respect to government, but not focusing on the negatives with respect to, say, large corporations. You also neglected to mention the positives of government; those things government does well. I don't think that is a balanced assessment. Third, I am interested in the optimal mix of government and private enterpise. I don't think simplistic answers work. Both government and private enterprise have areas in which they excel. They have the potential to complement each other. There is no need for an all or nothing story. I think when you focus on the negatives, it seems like you are trying to create an all or nothing story. Arguing that government should be minimized and the private sector maximized.

Maybe that is the case, but to get there from here, you need to perform a balanced and honest assessment, the results of which are not predetermined by ideology or mere generalities. You may have reasons for generalities (perhaps because generalities are the safest space for your ideology) but they are often not appropriate for making intelligent assessments. Of course, I don't want to generalize about generalities; they have their place. Basically, generalities are a convenient way to organize, encapsulate, understand, and communicate knowledge. However, they can also lead one seriously away from truth when their limitations are not acknowledged and when they are not challenged with specific examples.

One last thing with respect to your point about private non-profit universities providing better service than public universities; that has not been my experience. I have attended both an Ivy League private non-profit university and a public university and do not feel that the level of customer service for students at either institution was significantly superior. Perhaps others have had different experiences. My question is this: what do you base your statement that private non-profit universities provide better service on?

There are more specializations available at the private non-profit university in many, but not all subjects. In some subjects, like computer science, at the public university I attended there were actually more specialization opportunities. Overall, the private non-profit university has more faculty members and a far larger endowment. I don't think the number of specializations that a university offers is a reasonable comparison unless you compare two institutions with similar resources. Even then, you have to make assessments concerning quality that go far beyond the number of specializations offered.

James writes:

Vorn,

Your remarks remind me of another difference between governments and private eitities. If a private entity were to act like a government by say, taxing every wage earner in the U.S., very few people would actually defend the private entity that was acting that way or suggest that maybe there is some ideal mix between private entities that tax others and private entities that only obtain revenues by voluntary exchange.

Vorn writes:

James:

Interesting thought. I am not sure where you are going with that. Of course, if the government were a private entity that taxed, then I suppose individuals would not have the right to vote. If you had the right to vote, then I don't know if I would call it a "private" entity anymore. Thus, there would be no accountability mechanism nor any way to align the actions of this private entity with the interests of those taxed.

So you are right, I don't know who in their right mind would defend such an entity. Government is justified only because people can vote and hold it accountable.

Comments for this entry have been closed
Return to top