Greg Mankiw on health care inequality

Interesting, but:

An optimist might hope that my doctor, or someone higher up in the health care hierarchy, made a rational cost-benefit calculation on society’s behalf. To figure out whether my treatment makes sense, one would have to weigh the cost of the drug against the benefit of an extended life. And to do that, one would have to put a dollar value on my life — the kind of calculation that makes everyone but economists squirm.

Who is that “one” who weighs costs and benefits and puts dollar values on lives? Cost-benefit calculations on society’s behalf make very little or no sense. Only individuals value, and they do so subjectively. Aggregating individual valuations is absurd. There is no objective value of a life. A treatment makes sense for you if you value the life extension it could provide for you more than what it costs to you.

With collective issues such as socialized health care it is not the case that someone at the top wisely decides on society’s behalf. Those at the bottom will support the policies that they think will give them concentrated benefits while diluting the costs (I mostly benefit, others mostly pay for it). Individuals may care for other individuals, so they might also support political measures which do not benefit themselves directly but which benefit others they care for. Individuals also care for ideas like ethical values or principles of social organization, so they might support more egalitarianism or more freedom.

The politicians at the top try to pass the legislation that will keep them in power (or give it to them if they are out of power), so they attempt to produce more popular legislation (keeping the votes they had, winning some more and not losing too many), but voters cannot consider each issue separately, with just one vote for a candidate or a full political program they cannot differentiate which policies they like (and how much) and which policies they do not support.

3 Responses to Greg Mankiw on health care inequality

  1. bsanchez dice:

    Greg Mankiw is always interesting. Escribiendo BUT antes de su cita parece que le vas a echar algo en cara. Lo único que dice ese párrafo es que un optimista esperaría que fuera así, y Mankiw es escéptico no optimista. Por eso después escribe este párrafo:

    “The push for universal coverage is based on the appealing premise that everyone should have access to the best health care possible whenever they need it. That soft-hearted aspiration, however, runs into the hardheaded reality that state-of-the-art health care is increasingly expensive. At some point, someone in the system has to say there are some things we will not pay for. The big question is, who? The government? Insurance companies? Or consumers themselves? And should the answer necessarily be the same for everyone?”

    Lo que caracteriza a Mankiw es que siempre hace las preguntas apropiadas.

    • Francisco Capella dice:

      Mankiw está recordando que existen los costes y que alguien debe tomar decisiones para la asignación de recursos escasos. Pero, muy propio del mainstream económico, pasa por encima de lo absurdo que es sumar los beneficios de unos con los costes de otros: son cosas que ni se pueden medir ni tiene sentido agregar.

      Mankiw a veces suelta grandes disparates, como cuando propuso hace poco lo del sorteo para invalidar billetes con una determinada terminación. Que se tome estas cosas en serio revela cómo ciertos economistas no son conscientes de las limitaciones de las formalizaciones que manejan y que no entienden bien el significado y la importancia de algunas instituciones fundamentales, en este caso el dinero. Quizás sólo lo ven como una variable en una ecuación sin entender qué funcionalidad tiene el dinero para la acción humana: han olvidado o nunca han aprendido lo del depósito de valor.

  2. […] Greg Mankiw on Health-Care Inequalty [Intelib] […]

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