[p2p-research] Paul Krugman on the limit of markets and healthcare & basic income comments

Paul D. Fernhout pdfernhout at kurtz-fernhout.com
Sat Aug 1 04:34:21 CEST 2009

Today is the 44th year anniversary of Medicare (socialized health insurance 
for those 65 and older, and a few others) in the USA.

Just for future reference in seeing the limits to the market, a recent blog 
post by Paul Krugman:
   "Why markets can’t cure healthcare"
"There are two strongly distinctive aspects of health care. One is that you 
don’t know when or whether you’ll need care — but if you do, the care can be 
extremely expensive. The big bucks are in triple coronary bypass surgery, 
not routine visits to the doctor’s office; and very, very few people can 
afford to pay major medical costs out of pocket. ... The second thing about 
health care is that it’s complicated, and you can’t rely on experience or 
comparison shopping. (“I hear they’ve got a real deal on stents over at St. 
Mary’s!”) That’s why doctors are supposed to follow an ethical code, why we 
expect more from them than from bakers or grocery store owners. ..."

Paul Krugman has written similar things in the past in more detail,
   "The Health Care Crisis and What to Do About It"
but finally people seem to be paying attention; he got more 827 responses to 
that recent blog post before closing it for comments.

There was an amusing attempt today by a liberal Democrat (Rep. Anthony 
Weiner, D-NY) to eliminate socialized Medicare in the USA, intended to call 
the Republicans hypocrites in terms of "put up or shut up", and it got zero 

I was a little disappointed that his next step, a proposal for Medicare for 
all in the USA (a very straightforward thing for the electorate to 
understand), was lost in some compromise to have talks later on single payer 
insurance (something that has been "off the table" in all previous 
negotiations). It would have been great to see Medicare-for-all come to a 
vote now (even if it lost), because, with every representatives vote on 
record, it could have become a popular rallying point for future elections, 
even for a complete political upheaval for more support for third parties 
like Greens in the congressional elections next year.
   "Single Payer Gets A Vote"

I am seeing more and more this health care struggle in the USA is another 
aspect of a more general issue of social equity in a world of increasing 
abundance in the face of an increasing rich-poor divide (like by 
rent-seeking doctors off their MD degrees given their monopoly status and 
insurance companies off their market position and control of Congress. :-) 
Ownership by the wealthy of ever better robots and ever better patented and 
copyrighted designs related to medicine only increases that divide.

But, unlike the basic income situation about paying for food, consumer 
items, and rent (which are fairly predictable), the unpredictable nature of 
medical expenses suggests they should be handled outside a basic income. Or, 
social insurance for medical expenses can essentially be seen as a part of a 
person's basic income that is never directly received but instead goes to 
fund health insurance for all. So, in that sense, Medicare for all could be 
seen like a basic income that pays a health insurance premium. So, from that 
perspective, any plans in the USA for Medicare-for-all are really basic 
income plans, even if they are not explained that way (including by people 
like Paul Krugman).

I guess I've lost interested in the US health care debates now that I have 
come to believe a basic income, or really a basic income plus health care 
(essentially Social Security and Medicare for all), is the *only* way to 
make markets work anymore for humans in the face of rising automation and 
better design (I say "only" even as, no doubt, there can be different ways 
of implementing such a thing as patchworks). I expect this will become more 
and more evident over the next ten years or so. In the context of my belief 
that such a plan is the *only* future way forward that makes any long term 
sense (as long a we have a market-focused economy), all the current debate 
seems pretty ludicrous half-measures and appeasements to currently strong 
corporate interests. All the counter arguments by the conservatives just 
seem ludicrous in ignoring the trends about both abundance and unemployment 
I have been posting on (and the Triple Revolution irony of increasing 
poverty from unemployment in the face of a potentially abundant market). 
That does not mean the outcome of the debate is not important to real people 
right now, just that, for me, the debate is no longer about analyzing long 
term trends or coming up with broad ideas that are sustainable; the debate 
is really just about short term politics (as important as that is), or, 
ideally, but unlikely, educating people about these long term issues. A 
short YouTube video about health care as it relates to abundance and 
unemployment (so, a basic income) might have some small chance of becoming 
popular and at least getting out some ideas for down the road.

Long term, for a market to work, we'll need to put a such a basic income 
system in place funded by taxes or other means (or transcend the market 
towards local peer production including 3D printing, a gift economy related 
to exchange or a commons, or similar things, with likely there being a mix 
of approaches for a time -- hopefully avoiding war and universal 
prison/schooling as the two other "solutions" to this mathematical equation).

Here is a long list I put together of ways the government can fund things 
without direct taxes on income or property:
  "Re: Eighth Congress of the U.S. Basic Income Guarantee Network"

The preamble from one of my own proposals from a while back, before I really 
saw how big the "basic income" movement was or even understood that was the 
right term:
"A modest proposal for transitioning the USA to a post-scarcity paradigm"
It seems that, sadly, we can expect zero privacy in our personal affairs in
the USA between warrantless wiretapping and banks and ISPs rolling over for
any governmental request for any reason. The US government is now
underwriting all the major banks and the three major US car companies to the
sum of approaching about a year's GDP. And the Fed is now doing
"quantitative easing" which is Fed speak for printing money. This is all
very *radical* (and hypocritical) compared to the ideology espoused by most
political and economic leaders in the USA historically. We are now in
uncharted territory. So, since privacy is history, and banks are now 
socialized enterprises, and the main engines of US manufacturing (the car 
companies) are now run as welfare organizations for all those US Americans 
who otherwise would lose their jobs, and I could say more on what's going 
wrong but won't here, how can we get something  good out of this spirit of 
radical innovation by our leadership by looking on the bright side? :-) ...

Again, I feel the relevance of that issue to peer-to-peer is that better 
social support for everyone translates into more time at a higher quality of 
health to engage in peer-to-peer activities, whether local production or 
gifts to commons. I think it is fair to suggest that gift economies may be 
more likely to happen in situations of abundance than scarcity. A government 
wealth transfer program to create a baseline of prosperity for all is thus 
indirectly fostering the further development of a gift economy, because 
people may give things to a commons or to peers with more confidence they 
can still survive in the future. This is more like hunter/gatherer times, 
when almost everyone knew how to survive meagerly from the bounty of nature, 
so sharing a big find of meat or pretty rocks or a new rhythm did not ever 
risk a person's basic livelihood. So, the exchange part of that economy 
(even as an indirect exchange of gifts to a tribe or commons, not as barter 
or for money) was above the subsistence part. But, in today's economy, for 
most people, there is no way to survive without depending on the market (or 
perhaps dumpster diving). This is a big change from the last global 
depression, where most people either lived on a farm or had a relative who 
lived on a farm. Now, few people know anyone who farms, so subsistence does 
not seem like an option.

By the way, my previous (long) post on the evils of modern schooling seems 
to be unable to get through SPAM filters from some use of various terms (at 
least from my systems). In there was a a teeny-tiny positive part with a 
core idea of taking existing infrastructure like school buildings and 
repurposing them as community centers, which, ironically, might eventually 
mean their vast expansion and increasing prestige and salaries for 
administrators and teachers: :-) From;
  "Terrafoam and schooling and peer networks (was Re: US/European...)"
"But maybe if every family could just use the school building as a hangout
place when they wanted, then it could be like a community center for everyone?"
"But then how would children learn anything?"
"They'd learn from their parents, from friends, from relatives, from
neighbors, from the community."

I should have added a section there to realizing the school was not big 
enough to hold every one who might want to use it then. So, the school would 
have to be added on to so it could have all the facilities any community 
might like to have in a learning center (a machine shop, a garage, a rifle 
range, organic gardens, a freecycle center, and so on). And thus increasing 
the administrator's job security. :-)

But anyway, creating public schools that are like public libraries might, 
from a basic income perspective, also be done on a insurance basis in a way, 
that part of the basic income was directed to a network of such schools. I'm 
not sure if that would be better than a free market solution for such 
education, but it would be a way to build on existing infrastructure as well 
as preserve the jobs of existing school employees.

--Paul Fernhout

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