David R. Henderson  

Designing Men vs. Spontaneous Order

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The Myopic Empiricism of the M... Rand Paul's Filibuster...
The man of system, on the contrary, is apt to be very wise in his own conceit; and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. He goes on to establish it completely and in all its parts, without any regard either to the great interests, or to the strong prejudices which may oppose it. He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might chuse to impress upon it. If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder.
This is VI.II.42 from Adam Smith, The Theory of Moral Sentiments.

Why do I quote it? Because it's an answer to a commenter on some previous blog posts of mine. This commenter defended the existing laws that require people to spend substantial time as residents in a hospital before becoming doctors. I criticized those laws. The commenter, zdc, then wrote:

So, you think you can design an improved (not sure if this means in terms of outcomes or costs or what) system.

I answered that I don't think I can design an improved system. Why did he think that I thought I could? It's because he's stuck in the "man of system" or "design" paradigm. Over the years, various governments have designed a particular system. I criticize the idea that they get to design it. Then zdc assumes that means that I think I should be able to design it.

But I'm not a designer. I'm a person who believes in spontaneous order. That is, I think that people should be free to come up with other systems and I'm willing to predict that they will. As an economist, I could speculate about what they will come up with, but there's a good chance that my predictions would be wrong. Where zdc and I probably agree is that if I were to design such a system, it would be a disaster.

Fortunately, I don't need to design a system.

So what do I propose? Letting people come up with their own systems. And my prediction, which I'm fairly sure of, is that they would come up more than one.

Consider an example from outside medical care. Imagine that back in the 1960s, the government had given IBM a legal monopoly on computers. Imagine that some economist came along and said, "I think we shouldn't have a legal monopoly on computers." Then zdc's counterpart back then would likely have said, "Oh, yeah? Then tell me how you can make computers better." The economist would have had to admit that he couldn't. Then zdc's counterpart would likely have declared victory, confident that because the economist couldn't predict what kind of computers would be built in the absence of a legal monopoly, letting IBM have a legal monopoly on computers would clearly have been the right policy.



COMMENTS (41 to date)
Tom West writes:

Wow. I love the IBM analogy. It's a beautiful counterpoint to my natural "systems" tilt.

Bedarz Iliaci writes:

Prof Henderson,
There does seem a certain tension between your previous recommendation of paternal libertarianism and dividing people into Econs and Humans (and claiming Econ status for yourself) and this denial of claiming planner-hood.

Why, if central planning is so lacking, it is so widespread? How do you understand this?
Also, you ignore that the central planned solution do evolve. The Govt is not just one autocratic individual and rational debates do take place inside the Govt organs.

The weakness in the Hayekian local knowledge argument is that people are unequally distributed with respect to their attributes and this includes their intelligence. Thus some people have more knowledge, even more nonlocal knowledge than someone having local knowledge. That is, a person A can know more about the situation of a person B.

Man is a visionary animal and all politics is a struggle to realize individual visions. Some people are better at this and consequently have greater power over other men.

Tracy W writes:

Iliaci: Thus some people have more knowledge, even more nonlocal knowledge than someone having local knowledge.

This is quite possibly true. The problem, however, is identifying the people who actually have such better knowledge, as opposed to the people who merely think they do.

Which is basically my response whenever someone tells me I'm not qualified to judge x (such as God's nature, or which man to date), if I'm not qualified to judge x for myself, then how can I decide who else's judgement to trust on x?

john hare writes:

As a start up construction company twenty mumble years back, I had to make all the decisions about everything that happened. If I was wrong 1% of the time, and I was, the problem cost time and money to fix. After I got a crew leader trained and motivated, mistakes dropped dramatically. If I was wrong 5% of the time, and he was wrong in challenging that 5% of the time, we had a problem 1/4 of 1% of the time. Profits climbed.

The construction economy crashed before I could get full benefit from layers of motivated people. My projection is that if I could have fully developed a company of motivated self starters, I would have been well on the way to serious wealth.

Crew leaders designing their own crew operation instead of me controlling everything was really working, and will work again when the construction market recovers.

Theory: Create a situation in which the desired result falls out in the natural course of events.

Greg G writes:

The term "spontaneous order" is in danger of becoming little more than a compliment for processes whose results you improve of David.

Many millions of people in many different countries elect many thousands of political leaders. They then hire many more thousands of government employees. They then all compete and cooperate in complex ways that produce unpredictable results that vary dramatically.

In some cases the previous system is improved. In others it is degraded. Either way, the result of this process is as spontaneous an order as any other whether or not you approve of it.

Greg G writes:

"approve of" not "improve of"

Daublin writes:

IBM in charge of computers would have had us losing out on quite a lot of innovation.

We would also have missed out on the relatively free-wheeling Internet that we have today. There were several major bids in the 90s for major companies to corner the Internet (AOL, Microsoft Network, Compuserve, Prodigy). These companies failed because they had to compete with each other. They all had to add gateways to the others or their customers would leave.

IBM could have done it, though. We would all be using IBMnet right now and not even know what the Internet couldhave been.

For extra fun, think about a government monopoly on web *sites*. Google, Facebook, Meetup, Wikipedia.... imagine if someone had had to go lobby Congress before these things could even be attempted? Some of them would have been rejected, and of those that got through, it wouldn't be the best of breed that we get, but whoever gets the first license from the government.

Like with school vouchers, or with alternative medical licensing, or with non-patent drug financing, we would never even know what we were missing.

david writes:

I can sketch a million spontaneous orders that end in horrifically bad equilibria at the same speed you sketch orders that end in Pangloss.

The real argumentative work is being done by the hidden assumptions of how people behave in spontaneous orders, not the assertion of a spontaneous order itself. Until that is elaborated upon, the assertion has no content.

Tracy W writes:

Greg C: any word is of course in danger of becoming little more than meaningless. The difference between spontaneous orders and government orders is that the government is hierarchical, with everyone within a government's territory expected to obey legally-given orders (even if in practice these are blithely ignored, as for example with the trade in illegal drugs).

The distinction is important, even if at the edges concepts blur into one another, just like there's a difference between green and yellow, or childhood and adulthood, even if we can't pinpoint the change of state.

Seth writes:

"Why, if central planning is so lacking, it is so widespread?"

Is it?

I certainly think there's an appearance that it's widespread, but I think that's just a optical illusion due to the fact that it's something everyone can see. If you were to consider the amount of spontaneous order decisions and centrally planned decisions, I think you'd find it's not as widespread as it seems. I'm even amazed out how much spontaneous order there in highly controlled environments like prisons.

"Also, you ignore that the central planned solution do evolve."

Does it? Examples? If it does evolve, it evolves by failing and being replaced with something else. In that sense, it's like a big company that fails to evolve with consumer preferences and eventually dies at the hands of competition that offers consumers what they want vs. a company that sticks around because it allows for innovation to continually discover how consumer preferences are changing.

Aaron Zierman writes:

"To act on the belief that we possess the knowledge and the power which enable us to shape the processes of society entirely to our liking, knowledge which in fact we do not possess, is likely to make us do much harm."

-FA Hayek

"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."

-FA Hayek

The true strength of spontaneous order is that the designers are many. Some will fail, sure. Some will succeed. And those who succeed will be copied, while the failures are not.
The alternative? Planning by a central authority. If "they" choose a successful design, everything is fine. If "they" don't? What are their motives and incentives versus the spontaneous planning of the many?

ColoComment writes:

β€œβ€¦in the long run the aggregate of decisions of individual businessmen, exercising individual judgment in a free economy, even if often mistaken, is less likely to do harm than the centralized decisions of a government; and certainly the harm is likely to be counteracted faster.”
--- John Cowperthwaite, Hong Kong financial secretary, 1961-1971

Greg G writes:

Tracy W
You make some good points. I am almost always sympathetic to those who want to resist false dichotomies and point out how "at the edges concepts blur into one another" even when there are real and important differences between them.

Certainly it is true that if you want to talk about "THE government" and "THE market" as monolithic aggregates you will find more hierarchy in government. But once you start to look more closely than that, this special treatment of the term "spontaneous order" cannot stand for long.

Many, if not most, corporations are extremely hierarchical. And they are often inclined to collude rather than compete. And isn't one of the main insights of Public Choice Theory that we should not view "THE" government as some monolith where everyone works toward a common goal, but rather as a collection of individuals with complex individual motives?

As for "everyone" being "expected to obey legally-given orders" there is a spectacular amount of disagreement about what a legally given order is from the man in the street right up to the Supreme Court.

This is one reason we are so bad a predicting the future. It all unfolds in a spontaneous order - not just the parts we approve of.

The weakness in the Hayekian local knowledge argument is that people are unequally distributed with respect to their attributes and this includes their intelligence.

You're confusing two different things. Intelligence isn't knowledge.

Thus some people have more knowledge, even more nonlocal knowledge than someone having local knowledge. That is, a person A can know more about the situation of a person B.
Again, this is confused. 'Local knowledge' comes from experience, which is open to anyone--regardless of their 'intelligence'--willing to experiment and strive.
Then zdc's counterpart back then would likely have said, "Oh, yeah? Then tell me how you can make computers better."
Oddly enough something like this was actually proposed by Stanford's Paul David in the 1990s. In making his arguments about 'path dependence' and 'lock-in' due to network effects, he actually proposed some sort of government agency be established that would evaluate newly invented technologies for their potentially dangerous tendencies to keep us from developing even better things in the future.

Needless to say, he hadn't exactly worked out the details of how that would work in practice.

Colin Fraizer writes:

@Greg G,

You seem to be confused about what makes an order spontaneous. In a spontaneous order, choices by individuals lead to an outcome that evolves as they evaluate and make different choices.

Elections and governments are not spontaneous orders. They are ordered, but not spontaneous.

We could have an election wherein on a particular day we pick the "best retailer" and everyone votes and at the end of the day, only that retailer is allowed to operate. That is very ordered, but not spontaneous.

Alternatively, we could allow anyone to trade. One might imagine (as many liberals do) that this would simply lead to (a) chaos with millions of tiny retailers and no one taking advantage of higher-order organization, economies of scale, et cetera; OR (b) monopoly with one giant retailer crushing all others with their superior economies of scale and better networks of distribution, using their power to immiserate the masses.

What we find, however, is that an order emerges. It is not static, but evolves over time with a Sears-Roebuck emerging, but later falling to be replaced by Target or Walmart.

My liberal friends often tell me that "Someone has to be in charge," to which I counter, "No, someone does not." I do not know how many brands of ketchup should be produced. Or how many types of beer should be produced. Neither does anyone else, but numbers emerge without an election and without the use of force to prevent new entrants or the failure of old ones.

The America of my childhood would almost certainly have voted (had such a vote happened) for there to be two kinds of coffee: Folgers and Maxwell House. The America of my childhood, fortunately, had the wisdom not to have such a vote. I fear that wisdom is fading.

That's why so many believe that _someone_ has to decide how much we spend on healthcare. If that were true, I guess democracy is the least-bad way to do it. However, it's not true.

In addition to being "men of system", I believe most people are also overcommitted to the idea that almost all systems are path-dependent. That is, if we could just shift things a little, we could move ourselves onto a stable path that is better for everyone (or almost everyone). (That's why Facebook and my inbox are so commonly full of schemes to have a "gas strike" to permanently shift the price of gasoline downwards by not buying gas for a day or two.) These infinitely-repeating games make it uncommon that such a thing could happen.

In case some find it hard to believe, here is exactly what Paul David proposed in, Path dependence and the quest for historical economics:one more chorus of the ballad of QWERTY

One thing that public policy could do is to try to delay the market from committing the future inextricably, before enough information has been obtained about the likely technical or organizational and legal implications, of an early, precedent-setting decision.
In other words, preserving open options for a longer period than impatient market agents would wish is the generic wisdom that history has to offer to public policy makers, in all the applications areas where positive feedback processes are likely to be preponderant over negative feedbacks. Numerous dynamic strategies can and have been suggested as ways of implementing this approach in various, specific contexts where public sector action is readily feasible. Still more sensible and practical approaches will be found if economists cease their exclusive obsession with traditional questions of static welfare analysis, and instead of pronouncing on the issue of where state intervention would be justified in the economy, start to ask what kind of public actions would be most appropriate to take at different points in the evolution of a given market process.
The "first best" public policy role in these matters, therefore, is not necessarily the making of positive choices, but instead the improvement of the informational state in which choices can be made by private parties and governmental agencies. In the context of the recent literature on sunk cost hysteresis and options theory, one may see that the more history matters -- because complementaries create irreversibilities in resource commitments -- the more worthwhile it is to invest in being better informed prior to leaping. There is an evident opportunity cost in giving priority to investments in further information acquisition; quite standard economics can be relied on to balance the expected value of waiting (searching) for further "news" against the anticipated costs to the current generation(s) of not allowing markets to make choices on the basis of the knowledge that is presently available. Obviously, some assessment of the rate at which the relevant information states are capable of evolving will turn out to be of critical importance in determining when a stage has been reached where it no longer is best to defer irreversible resource commitments.

Greg G writes:

Colin,

No, I don't believe I am confused about what makes an order spontaneous. I think what makes an order spontaneous is having the outcome depend on a large number of independent agents in a process that results in an unpredictable outcome. Whether individuals are inside or outside of government, they do "evaluate and make different choices" and that does "lead to an outcome that evolves."

Despite your ideas about "liberals" who might think it would be a better idea for us to choose a single retailer or brand of coffee, or a central plan on how many bottles of ketchup should be produced, I know of no one who actually thinks those would be good ideas.

I am NOT making an argument for central planning over a market economy. I am making an argument against special pleading for the use of the term "spontaneous order."

Ritwik writes:

The lack of spontaneous order (relative to what David may want it to be) is itself the result of spontaneous order. I suppose we have reached the Orwell point with spontaneous order.

Aaron Zierman writes:

@Greg G

I don't know how many people care which "term" is used to describe the order that emerges naturally, apart from any centrally organized force or plan. Perhaps I am not understanding your hang-up over the term.

I also would argue that there is a very distinct difference between orders that emerge from within government versus a private market. The primary difference is incentive. Even if we presume to have excellent political leaders (which is quite a leap), their motivations will still be to pursue creating orders that are at a minimum palatable to the general public. They will largely be risk-averse and self-protecting.

You are correct that there is a continually evolving process both within and without government. However, there is a vast difference in how that evolution takes place and where that evolution takes us.

Additionally, I use the monolithic-sounding "they" because I must use some word to describe a third party. "They" seems the easiest.

Colin Fraizer writes:

@Greg G,

I'm sorry, but your description of elections and decisions by government employees is not a spontaneous order. It is certainly an order, but not a spontaneous one.

The decisions *are* made by millions of people and (perhaps) are constantly re-evaluated (re-thought), but are not continuously updated. There is no feedback mechanism that increases the weight of successful votes versus non-successful, so order cannot *spontaneously* emerge. An order can be created, but it is not spontaneous.

I beg your pardon if using the term "liberal" caused offense. I meant it in a descriptive, not a pejorative way. I realize that to some, only liberals can use the term as a non-liberal can only mean it as an insult.

Nevertheless, it is self-described liberals who champion the creation of single-payer systems for healthcare and who led the charge for various New Deal cartels and co-ops for dairy, sugar, orange juice, dry cleaning, et cetera. I don't think it is unfair to suggest that liberals tend to both (a) be suspicious of private bigness (anti-Walmart, anti-Microsoft, et cetera); and (b) favor government-sponsored bigness ("Government is just a word for what we choose to do together." [at gunpoint].)

Colin Fraizer writes:

@david (commenter, not Henderson),

Could you please describe a few of these spontaneous orders with negative equilibria? I know many people who believe in such things, but I don't know many examples that persist.

Qwerty keyboards are often used as examples, but seems questionable. It's possible there is a slightly better world we could have been in had a different keyboard emerged sooner, but my impression is that the value of the utility function at that point is only a tiny amount higher than the value at the point where we are (if higher at all).

Colin Fraizer writes:

Ha! I guess I should have read the comments in order. @Patrick R. Sullivan already brought up Qwerty.

I tend to disagree with ideas like those Mr. Sullivan describes from Paul David. I don't think we suffer from as much negative lock-in as Mr. David seems to suggest. Some argue (or argued) that Microsoft Office or Internet Explorer had that, but we already see that alternatives are emerging/have emerged that offer enough benefit to overcome the cost of switching.

The bigger danger is _government_ standardization as it essentially sets the cost of switching at +∞. Are there benefits to being able to use a friend's phone charger? Yup! But the micro-USB standard (by law in EU) forces slow charging that Apple's Lightning connector sidesteps. Micro-USB was *great* for small, dumb digital devices, but not good enough for power-hungry iPads.

Tom West writes:

but we already see that alternatives are emerging/have emerged that offer enough benefit to overcome the cost of switching.

One *could* attribute the reason that such alternatives exist was the Microsoft felt artificially constrained from such obvious moves such as buying and shutting down Apple, buying/merging with Intel and competitors to prevent alternative OS's, etc. by fear of government intervention.

david writes:

@Colin Fraizer

You are thinking too small. The most obvious mechanic is where someone realizes that they can make themselves better off by using their wealth to influencing politics to extract rent, instead of pursuing productive investment. This characterizes much of the developing world - that is, the majority of humans alive - so it is not a minor consideration.

These do not have to be explicit governments - many countries merely have powerful cronies to which politicians and civil services alike submit, rather than vice versa.

There are many kinds of un-spontaneous orders. It seems self-evident that some of these are much worse than others, yet much more lucrative for the opportunistic. The problem with spontaneous orders is characterizing how they remain fluidly adaptable rather than descending immediately into a bad un-spontaneous outcome.

Tracy W writes:

Greg C:
An important difference I think between a spontaneous order and a planned order is the reaction of the planner to outcomes that were not planned.

On thinking about it, perhaps another way to look at the distinction is to think about it in terms of ideals, not institutions. There's a big difference between a parent who hopes that their child will be happy and healthy, and plans to enjoy however their child achieves this.
Versus a parent who hopes that their child will be happy and healthy, will be a Lutherean, go into the family business, live on the same block as their parents, marry a person of suitable social standing, before they turn 30, have 4 children, play hockey and and go fishing every Saturday afternoon, and is willing to use all the weapons of emotional and financial blackmail to achieve those outcomes.
And again, this is a matter of degrees, a parent who wants their kids to be happy and healthy and with a good basic education is somewhere between the two situations I outlined.

A big difference between parents and governments is the level of firepower, of course. If a government gets outcomes that it doesn't like, it can take up fining or imprisoning people, or worse. See how the drug wars ratcheted up.

I agree that there is often a spectacular amount of disagreement about what a legally given order is right up to the supreme court, or whatever the country in question's equivalent is. But at a certain point, if you disagree, you're in prison (or dead).

Hazel Meade writes:

I see the point that at SOME level everything is a spontaneous order. Governments emerged spontaneously over human history, they didn't get imposed by God.

However, through the practical course of human history, even if at some deep point in the past government emerged from human social hirearchies, in practice, they are often so far removed from that and become active in supressing the emergence of new spontaneous orders. There are plenty of examples of one form of ogvernment being forcibly imposed on a foreign culture, or some govenment forcibly suppressing rebelliion.

And this applies to democracy as well. Even though one might try to claim that democracy is a form of government that allows spontaneous order to emerge and shape the state, the practical reality of politics often belies this. The strucutre of our two-party system in America is basically an oligarchy. We have two power structures that have their own internal interests, and voters are effectively forced to choose between them. At a certain point, that's not really permissive of spontaneous order, it's really just a mechanism by which the establishment interests maintain the illusion of legitimacy.

MingoV writes:

A number of medical educators, myself among them, looked at alternative paths for training physicians. Two were tried: 7-year and 6-year programs with 2-3 years of college followed by medical school. The 6-year program was unsuccessful because many of the students lacked sufficient maturity to examine patients in the second year of medical school. The 7-year program was marginal. Both would have worked if students were selected for intelligence and maturity.

Different approaches to the hospital-based residency system were debated, including an apprenticeship-like program. None of the alternate approachers were tried because accrediting agencies would not approve them. There also was discussion of two career routes: hospitalists and outpatient physicians. At present, both groups are trained in hospitals (which seems inefficient).

I found it frustrating that the only training changes made were within the existing structure and worsened education.

Ted Levy writes:

Some people here seem to not have a strong grasp on the idea behind a "spontaneous order." For those with access, Robert Nozick in his book Anarchy, State, and Utopia provides a nice list of a dozen or so examples of spontaneous social order (circa 1970s, but still relevant) to introduce the topic as he applies it to (an I think ultimately unsuccessful) effort to develop a State from a state of nature.

Colin Fraizier said;

I don't think we suffer from as much negative lock-in as Mr. David seems to suggest.

In fact, no one has ever come up with even one example of an inferior product that was locked in. The history of such quests being well-told here.

There is also going to be a paper published sometime this year in Research Policy by Scotsman Neil Kay, Rerun the Tape of History and QWERTY Always Wins, which uses probability theory to show just how good QWERTY really was. It pretty much reduces David's 'historical accident' theory to shreds.

Bill Drissel writes:
>I criticize the idea that they get to design it. Then zdc assumes that means that I think I should be able to design it.

Dr H
One of my guiding principles is: The future is unpredictable ... the future is more unpredictable than most people think ... If you think that you or anyone else can predict the future, then the future is much more unpredictable than you think.

Whenever I mention this, someone is bound to ask me to predict something - usually the stock market.

Regards,
Bill Drissel
Grand Prairie, TX

zdc writes:

@drh

"So what do I propose? Letting people come up with their own systems. And my prediction, which I'm fairly sure of, is that they would come up more than one."

You're as crafty as a politician -- avoiding answering any questions to which you don't know the answer, or know your answers are wrong, while redirecting the conversation to a topic with which you're comfortable.

Apparently your 'solution' to 'creating' more doctors in the US is to allow anyone who wants to hang a shingle and say, 'Hey, I'm a doctor', and let the market and spontaneous order sort things out. I can't see how anything would go wrong there...

So, from your statements, you're in support of doing away with all medical licensure and training standards. Sounds like a return to pre-Flexner days, which didn't work out so well.

You see, the information asymmetry between practitioners of medicine and those with no background in medicine is so high (as evidenced by your rather amusing lack of understanding with regards to how physicians are trained), that the 'spontaneous order' that would tend to emerge from such a system (as has occured independently numerous times throughout history), is one of quacks, snake-oil, and irreparably harmed patients.

Creative destruction and systems trial and error is a great thing when it comes to developing technology and businesses. Plenty of computer makers have come and gone since the 60's. When an idea doesn't work you throw out some inanimate hardware, chalk it up as a loss, and move on. If you think letting all sorts of programs go about producing 'dotors' with no standardization and no basic requirements is a good idea, I volunteer you to be the first to undergo a critical surgical procedure by someone who got their medical degree on-line in 6 weeks from the upstart University of Excellence. They've got great review on Angie's List though!

So, when someone has a car-wreck, is dragged unconscious from their vehicle by EMT's, gets Air-Evac'd to the nearest trauma center, and needs life-saving surgery at 3am, who's going to decide that surgeon is sufficiently trained? Hmmm...looks like someones going to have to decide that for that patient, without their knowledge or consent.

"I'm a person who believes in spontaneous order." Unfortunately, believing in something doesn't make it so. If you think doing away with all government intervention with regards to medical training would result in some sort of new golden age of medicine, you're ignorant of history. What I don't get from your above statements, is wouldn't some of these 'the people will come up with their own systems' have regulations with regards to who can do certain things (otherwise they wouldn't be systems), wouldn't we just be back to where we are today, where somebody, be it a State Medical Board, or Steve's List of Physicians Who Do Really Good Work, or Consumer Reports decides who can practice and who can't (either de facto or by legal fiat)?

There are plenty of cheap doctors in Mexico, who gladly treat US patients for pennies on the dollar relative to the costs for similar (in name) procedures here in the US. Can't tell you how many women I've seen come back horribly disfigured after getting 'cheap' (in direct cost dollars) surgery in Mexico. Guess the trial and error system didn't reach a stable steady state soon enough for those women.

I posed the question of how you'd design a system to train physicians, not because I thought you could design the ideal system. Rather, it seems your understanding of medical training and what goes into making a physician (and practicing as one) is superficial at best. It's an amazingly complex process that (thankfully) goes unappreciated by most outside observers, who don't see the thousands of hours of study, work, and training that the physician, nursing staff, and others involved in their care put in to get to that point. The residency training systems (and it's analogues for nurses, pharamacists, etc) arose from the very spontaneous order you suggest should be employed to better it. The residency system is built on foundation of untold millenia of cumulative work by both the greatest medical educators and long-since-forgotten nameless thousands over more than a century. And it's not some monolith as you seem to envision it, but rather, thousands of small experiments in how to do things best, underpinned by a framework of minimum competency and standards. It's a system that is constantly evolving, and functions to achieve results not thought possible even a few generations previously.

Back to your original post that began our discussion, it's cost, not medical school slots or residency slots that limits the number of capable practicing physicians in this country. It's really expensive to train a doctor, because it takes a great deal of time (their own and that of their teachers), scarce resources, and expertise. The government doesn't have a hard, legal cap on the number of residency training spots in the US, they simply don't plan on paying for any more than they already do. Plenty of hospital and programs have found alternative funding sources (often times coming from Big Pharma or the hardware manufactures, the potential conflicts of interest being readily apparent). Training more doctors would cost more money, and nobody is willing to pay for it. There's your coda.

Bedarz Iliaci writes:

effort to develop a State from a state of nature

Does by a state of nature Nozick mean the same as Locke?

For Locke, it is the princes (i.e. the sovereigns) that are in a state of nature. The individuals are in a state of laws.

Also, it needs to be noted that Aristotle held the State to be an irreducible. And so far, nobody has been able to refute him. Also all empirical observation is for Aristotle and against those that seek to reduce State to a collection of individuals.

Mr. Econotarian writes:

The current "system" has clearly allowed plenty of idiot doctors to practice (in my personal experience)!

Tom West writes:

zdc, I think you are making the unwarranted assumption that only a system with as few failures as we have now is acceptable.

Why do people go to Mexico for medical treatment? Because the benefits (in terms of lower prices) are, to them, worth the risks. (Surely you don't think it inconceivable that someone would make different informed choices than yourself.)

The current system denies its citizens the right to make such a choice (within the country).

While I actually *don't* agree letting anyone hang out a shingle, unless one can understand that there are concrete benefits to such a policy, one can't be said to be making a rational choice between systems. (While often I nag Libertarians about not enumerating the costs of their preferred policies, in this case possible costs are iterated often enough that I don't think they need to be rehashed here.)

And the IBM example in the original article is illuminating. Who is to say that a hundred thousand lives saved by the government preventing risky treatments hasn't prevented innovations that night be saving millions of lives now?

In the end, zdc, I agree with medical licensing. But claiming that there isn't any even slightly viable or realistic option is wrong.

Apparently your 'solution' to 'creating' more doctors in the US is to allow anyone who wants to hang a shingle and say, 'Hey, I'm a doctor', and let the market and spontaneous order sort things out. I can't see how anything would go wrong there...
Well, that would probably result in less needless death and suffering than the current system. (You wouldn't by any chance, be a physician would you?)

The market would quickly sort out the competent from the incompetent medical practitioners. Much more quickly than the current system of board licensing does. There's a reason why people shop at Nordstrom, and pay higher prices; Nordstrom guarantees their products.

Your lengthy diatribe is not well thought out, and was long ago demolished by Milton Friedman. In fact, I upon reading it I thought of Friedman's joke about the AMA and Cadillacs.

As far as medical school being necessary, there's a nice example from MBA-land explained here.

Essentially, it got to be too expensive to hire Harvard and Stanford B school grads, so corporations simply undertook the training themselves. Absent the stranglehold the AMA has on training doctors, the same thing would happen in medicine.

Daublin writes:

Several commenters discuss the availability of riskier doctors at a much lower price. That's certainly interesting by itself, as other commenters point out.

Less obvious is that there might well be *less risky* doctors also available. It is far from obvious to me that the current system of training and accrediting doctors is outrageously effective at either education or at choosing the good ones. Indeed, I kind of get the impression that it's a small number of binary decisions right now. You have to pass your exams, but after that, you have to not do anything horrible.

"Not do anything horrible" is not a good target. I strongly suspect that in a less regulated medical industry, effective ways would emerge to separate out the good from the merely not-horrible.

Brian writes:

Patrick, Daublin, et al.,

I think zdc's point is that it takes so long and so many resources to create a competent doctor that the kind of free-market weeding out that you envision becomes impossible, at least on relevant time scales.

If we threw everyone into the doctor pot and let the patients find out who was best, we would identify those who had the best natural ability to be doctors. And that ability might be sufficient to do a great job on, say, 80% of medical treatments. But to actually improve what the best do, to improve the state of the art, and attend adequately to the remaining 20% would require decades of trial and error. And that trial and error would have to be done on patients with devastating consequences. The current system reduces that training time to a decade and avoids leaving behind a trail of broken and dead patients. The free market, as zdc says, has already done its job of producing high-level care; it's just taken a centuries to do it.

Brian, if that is zdc's point, it's wrong. The free market does (comparatively) better, the more complex the problem. The simpler ones are more amenable to central planning.

zdc is merely repeating long discredited, special pleading.

Ken B writes:

@DRH:
I agree wholeheartedly of course. I think you would be interested in some developments in computer science, where designers make efforts to let running systems evolve behaviour according to specified constraints. This sort of thing was impossible decades ago when computer cycles were scarce, but are growing in importance now.

Even that notion of scarcity is relevant. In a system with millions of interacting decision makers we have more computational power than if just a few central planners do it. Who would design a complex computer system now, and insist on having less processing power?

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