Friday, December 6, 2013

More on Obamacare.. Oh Man...

Something a little weird happened with my latest Bloomberg column, which appeared last Monday only to disappear pretty much instantaneously and for mysterious reasons. After some investigation, it seems that a "code" was missing in the html or in who knows what other language. Anyway, it's there now.

The topic is Obamacare. Briefly, the theme is that healthcare isn't something we should expect to be easily solved through markets (think of A Market for Lemons and that theme about market failures in similar situations). Economists, I think, mostly know this; some things can be better organized by government. Why doesn't that message get out? Or don't economists really believe this? I can't tell.

Anyway, everyone should have a look at two things that go much deeper than my piddling little column:

1. A great recent article by Michael Sandel that examines how and why markets are often anything but value free; making a market for something often changes how we think about and value that thing, with huge implications for whether markets are beneficial or not. An important point he makes is that whether something should be left to the market IS NOT a question of economics; it always (or almost always) involves consideration of values far broader than economic efficiency and so goes way outside economists' claimed area of expertise.

I think Sandel is right. And I think lots of people are starting to realise this. Even the Pope!!

2. A second thing worth reading is a fascinating book from 1976 by Fred Hirsch, The Social Limits to Growth. I'd never heard of it before reading Sandel's article, which is a little embarrassing, as I'm sure every graduate student in economics has read it as part of their ordinary training. I have a lot to learn. It is a fascinating book, a real classic, and suggests that some of our basic psychological and social behaviors must have long-term effects on our economic well being that the usual theories of markets completely miss. Kind of obvious when you say it like that, but this is economics.... people have tried very hard to deny the obvious.... Hirsch tried hard not to...  

And, for a short excellent primer on Hirsch, see this by someone in the philosophy department of the University of Manitoba, or connected to that department, or a dog of someone in the department.... I have no idea who. But it's written very clearly and I admire it.


  1. Thank you for so much useful info in one short article. I bookmark the page to study everything carefully later, I do believe that markets influence our attitude to goods and services proposed. As soon as people got to know more about fast cash loans for instance they created demand for it, though often misuse the means and got trapped, but still the market works and develops.


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