Posted on 02/16/2005 11:07:38 PM PST by jb6
Karl Marx may have suffered a second death at the end of the last century, but look for a spirited comeback in this one. The next great battle between socialism and capitalism will be waged over human health and life expectancy. As rich countries grow richer, and as healthcare technology continues to improve, people will spend ever growing shares of their income on living longer and healthier lives.
US healthcare costs have already reached 15 percent of annual national income and could exceed 30 percent by the middle of this century – and other industrialized nations are not far behind. Certainly, an aging population is part of the story. But if economic productivity keeps growing at its current extraordinary pace, Europeans, Japanese, and Americans could triple their current income per person by 2050. Inevitably, we will spend a lot of that income on improving and maintaining our health.
Which brings us to Marx. When the price of medical care takes up just a small percentage of national income, it is hard to argue with the notion that everyone should enjoy similar medical treatment. Sure, critics may gripe that the higher taxes needed to pay for universal health coverage may cut into economic growth a bit, but so what? A little redistribution won't suddenly transform the United States into a failed, Soviet-style "workers' paradise." But as health costs creep up to, say, 25 percent of national income, things get more complicated. Americans would see their tax bills more than double, while total taxes could reach 75 percent of many Europeans' income. With oppressive tax burdens and heavy state intervention in health – already the largest sector of the economy – socialism would have crept in through the back door.
Of course, smug Europeans, Canadians, or Japanese may think that exploding healthcare costs are a purely US problem. Certainly, the British and Canadian governments successfully wield their monopolies over healthcare to hold down both doctors' incomes and prescription drug prices. And part of the rise in US healthcare costs stems from the breakdown of the checks and balances that more centralized systems provide. (For example, Americans are several times more likely to receive heart bypass surgery than Canadians, where the procedure is reserved for extreme cases. Yet several studies suggest that patients are no worse off in Canada than in the United States). And even the most fanatical free marketers recognize that healthcare is different from other markets, and that the standard supply-and-demand principles don't necessarily apply. Consumers have poor information, and there is an obvious case for greater government involvement than in other markets.
But if all countries squeezed profits in the health sector the way Europe and Canada do, there would be much less global innovation in medical technology. Today, the whole world benefits freely from advances in health technology that are driven largely by the allure of the profitable US market. If the United States joins other nations in having more socialized medicine, the current pace of technology improvements might well grind to a halt. Even as the status quo persists, I wonder how content Europeans and Canadians will remain as their healthcare needs become more expensive and diverse. There are already signs of growing dissatisfaction with the quality of all but the most basic services. In Canada, the horrific delays for elective surgery remind one of waiting for a car in the old Soviet bloc. And despite British Chancellor Gordon Brown's determined efforts to rebuild the country's scandalously dilapidated public hospital system, anyone who can afford to go elsewhere usually does. With public healthcare systems fraying at the edges, many countries outside the United States increasingly face the need to allow a greater play of market forces.
During the next few decades, modern societies will wrestle with very tough questions and tradeoffs: What, exactly, are people's basic health needs in an era where medical technology relentlessly advances the frontiers of the possible? How do we help people while still giving them the incentive to economize on their use of scarce healthcare resources? And who plays God – the bureaucrats, the doctors, or the forces of the market?
Ultimately, the case for some government intervention and regulation in health care is compelling on the grounds of efficiency (because costs are out of control) and moral justice (because our societies rightly take a more egalitarian view of health than of material possessions). The issue is precisely how much redistribution of income and government intervention is warranted. With the health sector on track to make up almost a third of economic activity later this century, the next great battle between capitalism and socialism is already underway.
Kenneth Rogoff, FOREIGN POLICY's economics columnist, is professor of economics and Thomas D. Cabot professor of public policy at Harvard University.
Complete crap from another moron with an economics degree.
For a little more complete reply:
There is NO compelling case for government intervention in health care for ANY reason, least of all for "efficiency". A very persuasive case can be made that previous excursions by government into health care is the predominant reason for high health care costs in the first case.
Nor can there be a case made out for government intervention in the interest of "moral justice" whatever that might be. Government intervention will always and inevitably result in lowered standards, reduced access, higher costs, and more sickness, disability and death, across all income levels and social strata. How is this moral? Or just? It's just nuts.
Finally an "egalitarian view of health"? What the Sam Hill is that supposed to mean? That we all get sick equally? That we all suffer the same level of pain in our joints?
Illness and health is in fact the most UN-egalitarian of things. Illness mocks egalitarianism in that it is random and implacable. It may strike both rich and poor, but those it strikes cannot take comfort in that poor fact.
The fact is that Marxism is dead except on college campuses and in the fevered brains of some so-called economists, most of whom can't hold a true economic thought in their heads long enough to write it down.
I can think of little besides defense that government does, which cannot likely be done more efficiently by the private sector. The recent privately funded spacecraft is one example... private enterprise got a ship designed from gounrd up and into space for less than the cost of rolling a shuttle to the pad.
correction.. ground up
Liberals believe the best way to prevent the spread of Marxism is more Government intervention.....
If the Liberals had all the money in the world, they still couldn't buy a clue
Wrong question Professor. The real need is to advance economic and political freedom in the worlds so called underdeveloped countries. If there is one thing the economic development in the Asian Tigers and some South American countries, it is that development is the norm for reasonably free countries. Our American future depends on the development of wealth is so-called poor countries. If you look at the Third World and compare it to the developing former third world, you will find that poor countries are poor due to fanatical religions (Islamists), idealogical tyranny (Communism/Marxism), corruption/croney capitalism, tyranny of the gangster, etc. Little of this can be blamed on USA, particularly since the neo-cons have brought morality back into foreign relation.
There, I have used my Pontification Quota for today.
Half the costs go to support the medical malpractice litigation scam.
It seems the socialists won't give up their false notion that the US health care system will be their inroad to other segments of the economy.
I agree totally.
Four word "prescription for Marxism"... Hillary Rodham Clinton '08
It's the same with Illuando in Chile. He was a socialist, out nationalizing everything in an effort to stave off the communist revolution. Well all it did was embolden the communists. It was Pinoche's belieft that every Chilian had to afford an apartment and a car that drove off the communist threat....oh that and he shot about 20,000 of them...ooops, should have hung them, cheaper.
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