David R. Henderson  

John Goodman Hits a Home Run

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On his health policy blog this morning, John Goodman asks whether there's a moral case for the Affordable Care Act. The whole thing is worth reading. Some excerpts:

Search the world's ethical codes and you will have a hard time finding any that are consistent with a health reform that:
Gives people in health insurance exchanges up to 10 times as much federal subsidy as people at the same income level getting insurance at work.
Forces young people to pay two or three times the real cost of their insurance in order to subsidize older people who have more income and more assets.
Takes from low-income seniors in order to provide subsidized health insurance for non-seniors who have higher incomes.
Takes from people who use tanning salons and people who need crutches and wheelchairs and pacemakers and gives to ... well .... who knows?

One's first thought might be to point to the late John Rawls, author of A Theory of Justice, right? Goodman thinks of that. He writes:
Some might point to John Rawls and his theory of justice. Because of a quirky assumption, Rawls concludes that a just society is one organized to maximize the wellbeing of the least well off. As an economist, I can assure you that doesn't mean socialism. In fact, if you consider the least well off indefinitely into the future (and it's impossible to justify excluding them), Rawls' theory implies an extreme form of capitalism -- one that maximizes economic growth. Minus the quirky assumption, Rawls' theory implies garden variety utilitarianism of the type embedded in neoclassical welfare economics.


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COMMENTS (5 to date)
Methinks writes:

There is no moral case for aggregating living, breathing human beings into categories and punishing and rewarding them as the powers see fit. The specific groups punished and rewarded is irrelevant.

Rawl's theory sounds to me like slavery. It rejects that all men should be treated equally under the law. The least talented and laziest have a right to use the most talented and most driven for their own purposes.

Nathan Smith writes:

I'm not sure why John Rawls' system would imply extreme capitalism. After all, if the economy grows over time, the least well-off people are probably living now, so including future generations in one's calculus might not make a difference.

John Rawls' theory certainly WOULD imply open borders, however, even if he denies this. But then, so does any other reasonable meta-ethical position-- capitalism, socialism, natural rights, utilitarianism, whatever. That's why in some ways I wish people would just be more principled and don't care that much what principles they try to realize. The consistent application of any plausible system of ethical principles would dissolve our world's most egregious injustice.

David R. Henderson writes:

@Nathan Smith,
Well done, especially your first paragraph. I had not thought of that.

Ted writes:

I think he's wrong in suggesting that Rawlsian theory implies an extreme form of capitalism that purely maximizes economic growth. Rawlsian primary goods go well beyond income considerations and I think pure capitalism is unlikely to maximize those primary goods for the least well-off. The price mechanism is basically a rationing device. It's sole purpose is to ration scarce goods and services. There is little reason to suppose the market mechanism would not ration the poor out of medical care (which would be necessary to sustain the heath component of primary goods). Rawls laid out a general moral theory whose practical implementation could only be determined empirically - but I don't think a pure market system would be likely to allow the poorest of the poor access to technology to guarantee their health. I think in the Rawlsian world the ideal system would be one where the market is allowed to run it's course free of all the absurd regulations we impose and then redistribute, in the form of lump-sum transfers, to the poor so they can achieve their primary goods directive - but this must be so balanced against incentive effects from inequities as illustrated under his Second Principle of Justice.

Suffice to say though, Goodman is correct that Rawlsian theory would give little support to Obamacare on the grounds that the implementation is unlikely to meet the goals laid out by Rawls.

John Goodman writes:

@ Nathan Smith

It depends on what discount rate you use. If the discount rate is equal to the rate of growth of the economy, I believe the least well off could be iving in any time period.

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