Calling It Reform Doesn’t Make It Work

“Government is a health hazard.”

-P.J. O’Rourke, The Liberty Manifesto

    Any attempt to create a national health care system is certain to backfire unless some basic reforms are undertaken first.

    The problem with health care is a problem of supply. There is not enough to meet demand, so the market rations it. Giving more people money for health care will only raise the price to absorb the extra dollars, without increasing the amount supplied by one iota. In fact this is exactly what has happened over the last several decades as health insurance coverage has broadened. (Insurance also creates huge amounts of paperwork which eats up the doctor’s valuable time, without contributing anything at all).

    We have an artificial bottleneck on the health care supply, created at the instigation of the AMA. The educational requirements for physicians (and even nurses) are absurd. In the US, to obtain a prescription for a common antibiotic you need the permission of someone with five to ten years of expensive university education, much of it unrelated to medical practice – the permission to buy a medicine will often cost you many times more than the medicine itself. Yet you can easily look up the side effects and interactions of any medication for yourself, and then you will know more about it than the doctor probably does. The only experts on medications are pharmacists – who aren’t allowed to prescribe.

    If you thought the ten-year training makes our doctors better, think again. A good third of the curriculum has nothing to do with medicine at all, and hardly any of it gets to the business of actually diagnosing illness and knowing the right treatment (and you could look the latter up easily enough for yourself). When a new American physician goes into practice, her useful training is just a couple of years. Can your doctor solve integrals, read French, and debate the merits of Confucianism? Do you care? Well, that’s a good deal of what you’re paying for (see “Education is Class Warfare” for more ranting on this topic). We spend more per capita on health care than any other country, but we have a second-world life expectancy.

    In fact nurses could do the great majority of what doctors do, and increasingly in most states the highest rank of nurses (PA/NP) are doing so – which has led to whining among doctors that the PAs should have seven years of education, which of course would cut down on the competition and preserve the ability of doctors to bleed you dry.

    The claims that high health care prices are caused by liability issues or by the uninsured are lies. Rather, it works the other way around; people sue doctors because they can’t afford the bills, and health care was relatively much cheaper when few people had insurance. It’s the insured people who drive up the cost, because people consume health care more readily when they don’t pay for what they use. Malpractice suits only result in the indigents’ costs being passed on to the insured which they would be anyway. Making health care affordable would eliminate the lawsuits and the need for insurance for ordinary medical expenses, not the other way around.

    Lack of insurance is NOT the problem. Less than a fifth of the population is uninsured. Furthermore, many of these people choose not to carry insurance because they don’t feel that it’s worth the price – they are mainly younger people without health problems, who are indeed cheated by group health plans. If they do have a health problem, the uninsured do not receive full medical care – their only option is to go to the emergency room, which they usually avoid, and even then hospitals will deny them care to the greatest extent possible. Of the care they do receive, a large portion is paid for by themselves or public assistance. Uncompensated care for uninsured individuals contributes only a small fraction of the total demand for health care – less than 5% even at the outrageously inflated prices which the uninsured are billed.

    Giving more people insurance, however it is paid for, can only increase the demand for health care, and it will do nothing to increase the supply. More insurance = just as many people go without care, but the price goes up.

    The market will not help with this problem – rising incomes in the health care industry cannot draw enough people into it. The incomes of doctors have gotten so ridiculously high that further increases actually cause a drop in the supply, as doctors work fewer hours, take more vacations, and retire earlier. (The price supply curve for the time of physicians has a negative slope, for those who know what that means). Can anyone remember when doctors worked all week like normal people and didn’t retire until old age?

    Even if more people want to go into medicine, they can’t. The supply of trained medical personnel is strictly limited by the capacity of the medical schools. The tuition goes up, of course, to meet the rising demand, and graduates have incredible mountains of debt, but their number is not much increased. Even if it was, million-dollar incomes don’t necessarily attract the kind of people into medicine who ought to be there. Who would you want for a doctor, the person who cares at least a little about your health or the one who only wants a new Rolls Royce every year?

    The only way to bring down the cost of health care is to increase the supply. We have to stop squandering our limited education resources on superfluous crap, build more medical schools and hospitals, and train more doctors, nurses, therapists, lab technicians, radiologists, etc. etc. That won’t happen unless it’s done directly and with public funding. Anything else will just result in money being drained into the existing system, which is a proven and effective way of screwing you (literally) to death. If the market were capable of correcting itself or even reaching equilibrium, it would have done so long ago.

    We need to eliminate the absurd barriers to entry into the medical professions. If you’re willing to pay extra for a doctor who can discuss Nietzsche vs. Stirner with you, go look for one. We need shorter, more focused education. We need increased roles for the under-utilized and less over-educated RNs and LPNs, and for pharmacists.

    We need to make medical training accessible to any young person with suitable ability and inclination, not just the wealthy. That means not only building more medical schools, it means 100% public funding for the students. Sounds like it would cost a lot of money? Wouldn’t it be a bargain compared to the blood money we’re putting up now for shitty insurance and three-minute doctor visits?

    We need to eliminate the prescription requirement for anything that’s not genuinely dangerous, including lab procedures. If you want birth control or a blood test or an X-ray, you should be able to get them at the provider’s cost without having to bribe a millionaire doctor as well.

    We need to curb the pharmacy giants. If they can’t make a profit selling medicines at less than 60000% markup, I’m sure the government could manage to produce and distribute patent-expired medicines for a lot less. Newer medicines are usually only a marginal improvement anyway, if at all.

    We need to put a ceiling on what doctors can charge for services, not just to bring the prices down but to make doctors take on a few more patients to pay off their Rolls Royces.

    We need to stop providing insurance for routine health care. Will some people do without? Yes, at least until supply increases. Some people are doing without already. It’s the supply that determines how many people get health care – insurance only determines which people. The federal government can lead the way by changing the insurance it provides – Medicare, Medicaid, employee benefits, etc. – to eliminate coverage for minor medical expenses. To make up for it, they can provide complete coverage for catastrophic medical expenses.

    Arguably, we need a national health care plan that would insure everyone against catastrophic health care costs, so no one would face bankruptcy – or death – simply because they are unable to afford insurance (or are cheated by an insurance company). This would also reduce employment overhead and make it much easier for businesses to hire new employees. For minor problems or elective surgery, no insurance should be provided or allowed – that would discourage people from wasting the doctors’ time with their hangnails, and eliminate the need to fill hospital beds with patients who only need them because they are too heavily insured (hence profitable) not to be admitted. Vaccinations and preventive screenings should be covered only if that is cost effective in reducing major care costs.

    With prices under control and individuals bearing the cost of their own routine doctor visits, everyone should be able to pay for their own catastrophic health insurance without drawing on public funds – but if not, so be it. Maybe public insurance wouldn’t be needed – but given the reputation of insurance companies for cheating people, I think it’s just as well that they be replaced with a public policy that cannot raise your rates or cancel your coverage when you get sick.

    What we do NOT need is increased health care coverage without first addressing the problem of supply. This will accomplish nothing but driving the prices up even faster.

    We also do not need a government-operated health service. Government bureaucrats are certainly not going to do a better job of managing hospitals than is already being done, and instead of rationing health care based on ability to pay it would be distributed by political preference – a nightmare for anyone not living in a major city, given the nature of the administration likely to implement such a plan.

    What we do need, first and foremost, is to abolish the AMA, one of this country’s best funded political lobbies. They are the ones responsible for the health care crisis, and nothing can be done about it as long as they have power. To be on the safe side, we should probably also abolish every Congressvermin that has taken their money. That should eliminate about 535 of the bastards. At the very least we should force them to use any public health care that they foist on the rest of us.

The King Is Dead

“No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.”

-Adam Smith, Wealth of Nations

    In Anatomy of a Depression I explained the proximate cause of the ongoing depression. Of course, when I correctly predicted the current economic trainwreck, I gave much too optimistic an impression by exploring only the most immediate source of the present trouble – that is, an extreme inequity in the distribution of income which has led to an economy driven by untenable consumer borrowing. That’s plain old-fashioned Keynesian economics. Conceivably we could salvage the economy, at least for a while, by redistributing wealth (the pork stimulus won’t work, as you already know because I explained it in Why the “Stimulus” Will Fail). But the underlying problems go deeper than Reagan’s tax cuts for the rich: for several reasons, capitalism itself is no longer viable.

    I can already hear the whining: “Those Commie Pinko Socialists have been saying for a hundred years that capitalism was obsolete, and they were wrong! Capitalism has to last forever, because it’s still around!” Bullshit. The Commie Pinko Socialists were right. Capitalism was obsolescent more than a hundred years ago. Economic history ever since the Industrial Revolution has been a history of struggling to find solutions for the problems caused by capitalism. In the first Great Depression, in the Thirties, it failed completely and did not recover. Capitalism isn’t dying; it’s long since dead.

    But what about the boom period of the Forties, Fifties, and Sixties? Didn’t FDR save capitalism from extinction? No, he didn’t; what he did was put the terminal patient on life support. The American economy since the New Deal has been modeled on Mussolini’s Corporatist plan – a close partnership between industry and government, with a huge chunk of GDP directly ordered by the government and the rest tightly regulated. Sometimes it’s hard to even tell where the government ends and the corporations start. It’s a sweet deal for the big corporations, who are supported by government contracts and subsidies, protected by regulations that smother competition, and bailed out if they somehow manage to fail anyway. Even the big unions get in on the action, skimming a share from the surplus provided by the remainder of the workforce that is still productive.

    What keeps this government/corporate Frankenstein going is war. The high spending and high taxes (or prodigal borrowing) necessary to keep the masses employed have to be justified to the sub-literate public and the greedy corporate execs. “Emergency” economic measures may be acceptable during a collapse, but as soon as things have recovered somewhat, people start complaining about the impositions of “big government”. The underlying problem, though, has not been solved; massive government spending is the only way to keep aggregate demand high enough and stable enough to sustain the economy. Without it, any flicker in public confidence could lead to a swift and total shutdown.

    World War Two was a necessity for America, as FDR realized; support for the New Deal couldn’t last much longer. Soon after the war was over, the economy had come apart again, and a new war (Korea) had to be found. After that, the economy slid again but the Korean war was replaced by escalation of the Cold War, which provided a good excuse to keep military spending high even in peacetime, and then there was Vietnam on top of that. Times were good; except for a couple of brief interludes where military spending declined, the economy soared for three decades. But it wasn’t a capitalist economy; it was a wartime corporatist economy.

    Then some misguided people with insufficient knowledge of macroeconomics got the heretical idea that wholesale killing with no compelling political justification was a bad thing, and, even worse, that colossal peacetime preparations for total war were unnecessary and even dangerous. The Vietnam stimulus plan was cancelled; the economy went in the crapper and finally collapsed. It only recovered (sort of) when Reagan reinvigorated the Cold War stimulus plan. After it broke down again in 2000, it had to be restarted with the Iraq stimulus plan…

    There are a couple of problems with this way of doing things, aside from the fact that we can’t seem to keep the American economy functioning without bombing anyone. One of them is that Reagan’s regressive tax cut not only left the government ultimately insolvent but undermined the effectiveness of the system. Another is that we’ve created a monstrosity of government that has made democracy meaningless. But even if we were to continually fight big enough wars to keep things moving, and tax the rich enough to prevent the gradual concentration of all wealth in a few hands, it wouldn’t keep us afloat much longer. The historical conditions that enabled capitalism (even our bastardized modern corporatism) to create so much wealth (and it did, indeed, create a vast amount of wealth) are disappearing.

    Capitalism is based on certain fundamental assumptions, some of which are no longer valid. Among them are:

  • Competition among producers. Most of the purported benefits of capitalism come from competition, both between businesses and workers. Competition is supposed to regulate business profits, eliminate products that people don’t want, and encourage workers to be productive. In reality, genuine competition between businesses is a rare exception (competing advertising is not competition in any useful sense). Monopolism and collusion are problems that have long been recognized but never successfully dealt with. Even workers sometimes manage to beat the principle of competition by forming unions, allowing them to leach off of a non-competitive industry or the government (i.e., the taxpayers). But should we even want businesses to compete? The pressure of short-term competition encourages them to do irresponsible things ranging from long-term degradation of the industry to deliberate environmental contamination. The modern world requires a level of integration and planning that are inconsistent with ruthless competition.
  • Boundless growth is both possible and desirable. Continual growth is necessary for capitalism to work. A growing economy creates new industries that haven’t been monopolized yet, invents novel products that people will buy even though they don’t need them, and provides opportunities even for people who aren’t already rich and connected. Without growth, there are never enough jobs, competition disappears from the stagnant economy, and only the rich can get richer. But it should be evident to any sane person that growth cannot go on forever, at least not without a declining population to compensate. The Earth can only handle so much waste, only produce so much food, only provide so much energy. Every technological fix we find for an environmental problem or resource limitation creates more problems. Even when solutions are found in time, there is no guarantee of them being used. (See Hippies Cause Global Warming for example.) If we try to sustain infinite growth in a biosphere that isn’t growing at all, sooner or later we will make a fatal stumble. But even if we don’t, do we really wish to live in a world every square foot of which is overrun with people, superfluous consumer junk, and waste?
  • Consumption is unlimited. Implicit in the concept of capitalism is the assumption that people will always want to purchase more stuff, no matter how much they already have. However, most people (in the West) now have everything they actually need to live, and many people have so much crap that new crap has little marginal utility. It takes hundreds of billions of dollars of advertising every year to keep people buying, and most of them can still very easily cut their purchasing dramatically (for instance, if they are uncertain of the future and want to save). This is why a depression like the current one can happen so swiftly – the whole card castle depends on nearly everyone spending money as fast as they can borrow it, but there’s little or no real need for much of the spending and it can stop at any time. The mere expectation of hard times can cause total collapse.
  • Human labor is valuable. Capitalism is a cycle of production and consumption in which people freely exchange their own production for that of others; that is, they are only able to consume if their production is valued by others. This system worked great in the era when human labor was the key factor in production (i.e., before machinery) and was relatively scarce (i.e., before modern medicine) – it was certainly a huge improvement over the slavery that preceded it. But in the modern world, most human labor has very little value. The supply of people in the world is much larger than could ever be efficiently employed, and most kinds of labor can readily be replaced by machines. The price of labor in the world market accordingly can be no higher than the cost of mere subsistence; any deviations from this are due to national markets being protected from competition against nearly-free Asian labor, and these protections are crumbling. Once, automation was widely believed to be the future of manufacturing; now, an endless supply of arbitrarily cheap labor has mired us firmly in the sweatshop era.

    Better-educated workers are not a solution to this problem. A large supply of skilled workers would just drive the cost of skilled labor down to the same starvation level. Even now, the high incomes of the most intensively trained professions (medicine, law, engineering) are maintained only by artificial barriers to entry (see Education is Class Warfare) and strictly rationed education. If we produced more doctors and engineers, this would have some benefits, but if every human capable of absorbing the education received it, doctors and engineers would be reduced to the same poverty as garment workers and without eliminating the surplus of the latter. There are just too many people, and technology is getting better and better at replacing even skilled labor.

    Another problem with capitalism is that it deals poorly with what economists call “externalities”. These are costs or benefits of an activity that aren’t automatically charged to the person who causes or benefits from them; it is often infeasible to allocate them at all. National defense is an example; it is very difficult to say who benefits from it or how much. No one is going to mail in a check for what they think it is worth to them, and there is no way to just cut off the national defense service to your house if you don’t pay. Roads and public education also provide major externalities. Pollution is a negative externality – it is not practical for a company which causes some pollution to negotiate with every person who might ever be affected by it to pay them what they think fit to put up with it. Government intervention is required for externalities to be accounted for. When externalities were a minor aspect of the economy (i.e., when things were simpler and nobody cared about pollution), government interference could be minor. In the modern world, however, externalities make up a huge share of the economy, perhaps most of it.

    In the future, the limiting factor in production will no longer be the supply of human labor, or even the supply of capital; it will be factors in the natural environment: energy, land, and above all the need to preserve a livable environment. In fact we have already reached the point where environmental factors should be limiting, even though some countries (China) allow horrendous pollution. The ever-escalating consumption that capitalism demands cannot be sustained or allowed, nor can unrestrained competition, nor are these things even possible under capitalism without massive government interference. We need a different solution, one that can provide a bearable life to the people who inhabit this planet while preserving it for many future generations.

    What about isolationism? Except for oil and tropical fruit, America is capable of producing everything it needs, yet we import most of our manufactured goods, with dire economic consequences. If we banned the imports we don’t need, and expelled the illegal aliens, we could have full employment – for a while. We’d still be dependent on the whim of the public to keep buying unnecessary junk, and we’d run down our environment that much quicker with more manufacturing – infinite growth would still not be possible. And after a generation or two, better automation might bring back mass unemployment anyway.

    What about an economy based on services and intangible (intellectual) products? If people were content to consume mostly software and entertainment, a lot less waste would be generated. Unfortunately, it’s really easy to steal intellectual property – so easy that some people think it isn’t stealing, just like some people think there’s nothing wrong with helping themselves to your wallet if you’re careless enough to drop it. Most people are never going to be good enough at anything creative (or at programming) to be paid for it anyway, and people can abruptly stop buying such things just as easily as they can any luxury goods. Most services are far from necessities, too, or are needed only in relation to consumer goods, or require exceptional talent. The only services that people will reliably purchase are medical. Could we build an economy in which most of the population works full time just to make sure no one-in-a-million disease goes undetected and everyone who is too fat to stand up has their own personal bed pan changer? Maybe, if you don’t mind the slack-jawed girl who got through high school by copying your homework being your operating room nurse – but I’m not exactly looking forward to the world where all of society’s efforts go to extending the average lifespan by three weeks, the only employment for most people is nursing homes, and most of the gross national product is controlled by insurance companies. I think we can do better than that.

    If they were given a choice, many people would likely prefer less work and more leisure to achieving the maximum possible throughput of disposable consumer goods. The main goal of technology and capital in the past has always been to produce more junk, but higher productivity could just as well be used to reduce work. Manufacturing less superfluous crap would alleviate a lot of our environmental problems, it would stabilize the economy against sudden lapses in the crap-buying behavior of consumers, and it would give people more time to educate themselves, exercise, travel, get drunk, or whatever they want.

    If the amount of available labor were reduced or restricted, it would make labor scarce and valuable again. This alone would stop many abuses by employers, who could no longer be guaranteed of replacing any employee at will, but without protecting abuses by workers (which current labor laws do, when they are enforced). The distribution of income problem which has led to the present crisis would be solved by a combination of higher wages and paying people not to work. (We already do the latter, but we try to pretend it is somehow based on “need” or “merit”, which is pure baloney because no one is a worse judge of need or merit than a bureaucracy.)

    Paying people to not work would reduce the oversupply of labor, remedy the distribution of income, and stabilize the economy without frantic unsustainable growth. It could replace many existing programs that subsidize non-work, such as welfare, unemployment benefits, disability, and perhaps social security retirement. Unlike those programs, it would be fair, because everyone would have equal access to the benefits. There would be no need to pay armies of “social” “workers” to recruit “clients”. Every American would be guaranteed at least a minimum survival level of income, and they could decide for themselves whether they should work. With labor scarce and valuable, there would be a strong incentive to work for those able. Production could be limited to what is environmentally acceptable, without depriving tens of millions of Americans of their livelihood; there would be no need for gratuitous wars to accelerate public spending.

    Limiting the length of the work week would help stabilize the supply of labor; shorter hours would encourage more people to take jobs while preventing the more ambitious from creating an excess labor supply through sheer overwork. The so-called forty hour week is a joke; employers can and do demand as many work hours as they want, and overtime pay is no penalty because they just pay a lower base rate to make up for it. Workweek length should be an absolute limitation, or at least there should be a penalty to discourage overtime (a surtax, for instance).

    A simple guaranteed income plan would solve the distribution of income problem and stabilize the economy without the need for any “stimulus” spending or monetary shenanigans, ever again. It would cost a lot, certainly: the simplest and fairest way to do it would be to make a payment to every adult citizen, without trying to find out who is really unemployed and who is cheating the system by working “off the books”, and without punishing anyone for working. That would cost two or three trillion dollars a year. But there is no doubt that we can afford it; after all, we are already affording a basic living to almost everyone. Taxes would have to be higher, of course, but the subsidy would outweigh the tax increase for most people. The rich would have to pay more, but that is far overdue anyway.

    [By the way, don’t believe any liar who tells you that high taxes on the rich will ruin the economy. Some of this country’s biggest booms have happened when the top rate was 91% or even higher.]

    Here are some other things we need to do to fix the economy:

  • End competition with impoverished foreign workers who breed like flies. That means high tariffs or outright import bans targeted at countries with low standards of living – not tariffs designed to protect particular industries. It also means getting rid of illegal aliens, if necessary by closing and mining the Mexican border, and banning the employment of legal aliens. Eliminating imports would also mean we’d quit paying the Chinese to pollute the atmosphere.
  • Provide free training in useful occupations to those with the necessary aptitude. It’s a stupid ideological pretension that people should pay for their own education; the benefit to society outweighs the cost so it’s a common sense investment (provided of course that people are trained in useful things like teaching, medicine, or auto repair, not fripperies like drama and journalism). We also need to reform higher education to make it less wasteful, and lower education to make it effective – but that’s a different topic.
  • Fix the broken healthcare system before it devours us. We don’t need to spend more on healthcare; that only makes the problem worse. We can have better medicine for a lot less money – maybe I’ll explain how sometime.
  • Abolish labor unions. They prevent businesses from having the flexibility they need, and all they accomplish is allowing freeloaders to be grossly overpaid – largely at the expense of real workers and taxpayers. The workers who actually need protection are never unionized.
  • Get rid of regulations like the notorious Americans with Disabilities Act that are supposed to promote social justice. They’re a huge burden and more often abused than not. If the supply of labor is kept proportionate to the demand, workers will have the bargaining power to take care of themselves as they see fit.

    Capitalism was once a great economic system; it would have been perfect 300 years ago (i.e., before it was realized). Capitalism industrialized the world and gave us enormous wealth – including luxuries like education that enables us to find better solutions now that capitalism has died. It’s been gone for eighty years now; with dramatic but simple reforms we can replace its bastard child, the corrupt corporatist quagmire that we facetiously call “free enterprise”, with a functioning, stable economic system that will provide for the needs of all, preserve the environment from the consequences of profligate consumption, remove the economic imperative for continual warfare, and give us a solid foundation for adapting to future change.

Education is Class Warfare

“The exclusive privileges of corporations, statutes of apprenticeship, and all those laws which restrain, in particular employments, the competition to a smaller number than might otherwise go into them… are a sort of enlarged monopolies, and may frequently, for ages together, and in whole classes of employments, keep up the market price of particular commodities above the natural price…”

-Adam Smith, The Wealth of Nations

“The history of all hitherto existing society is the history of class struggle.”

Karl Marx, The Communist Manifesto

    Everyone knows that education is the key to success, right? You have to have a good education to get a decent job to make enough money to pay for the education and hang on to your own little slice of The Middle Class so you can go to the doctor when you are sick and live indoors when you are too old to work and pay some shyster to bribe a judge to give your jackass kids community service when they get caught driving drunk with a carful of weed. It’s the American Dream.

    So it’s your responsibility if you’re poor, because you didn’t get an education. Shame on you, everyone has opportunity and it’s up to you to grab it. All you have to do is have parents with an income in the top quartile who can pay for it, or be a star athlete or a certified genius with an obsession for writing essays and kissing ass. These are, after all, necessary prerequisites without which you could never be qualified to listen to some sick fool whining for five minutes and then write him a prescription for amoxicillin, to shout down a class of unruly sixth graders, or interview drug addicts at the welfare office. You don’t deserve to have a decent job because you didn’t try hard enough – you could have worked two full time jobs at once, one to keep you alive and one to pay for your tuition, while going to school full time and still making passing grades. Dozens of people do it every year, some of them without using meth.

    If you think this system sucks, you’re not alone. If you think the answer is for the government to pour more and more money into education, you’re still not alone. You’re also a fool.

    Here is what happens when government puts more money into education: the price goes up. The number of people who get degrees remains about the same, because there is still the same number of schools, the same classrooms, the same teachers. When more money comes from the Federal government, state governments make up the difference by reducing their own contribution; i.e., they raise tuition. Every time Federal aid goes up, tuition increases by the same amount. Of course, the Federal money is mostly loans, so the students not only pay more for college, they have ten years worth of debt just for a bachelor’s. If by some bizarre chance the state fails to cut education funding, the extra will invariably be devoured by administration salaries, idiot projects like having classes on a Caribbean cruise (I’m not making that up), new sports facilities, or “rennovations” that suddenly become necessary.

    The last damn thing they will ever do is to actually educate more students – to build more classrooms, hire more teachers, start new schools. When a university gets too crowded, they are about a hundred times more likely to raise fees than they are to expand. And why is this?

    Because “education” isn’t about creating skilled workers who can do the things that are in demand. Well, maybe about 20% of it is. The other 80% is about making sure there aren’t enough skilled workers to meet the demand. Universities are a social institution to maintain class differentiation.

    If everyone who had the talent and desire to be a doctor was able to afford the ten years of training, would doctors be making a quarter million dollars a year? (Hint: NO.) The cost of health care (in this country at least) is rising at a rate that would embarrass many unstable third world dictatorships whose exchange rates have to be given in scientific notation, but it damn sure isn’t because of the quality. It’s because doctors can charge whatever they please. How do they get away with charging hundreds of dollars for a five minute “visit” during which they check your insurance status and then recommend some five thousand dollar screening test for whatever is the least likely cause of your symptoms?

    Education, my friend. Price is controlled by supply and demand; if you can limit the supply, you can control the price. The decade of training has far more to do with limiting the quantity of doctors than ensuring the quality. If everyone who was able and willing to be a physician could be, physicians would no longer be an elite, super-wealthy class. There would be enough doctors to go around, and people could pick and choose the best or the cheapest instead of being assigned one by a crooked HMO that pays the doctor extra if he keeps you from getting any treatment.

    If you’ve ever looked at the requirements for admission to a medical school, you already know that a large part of that education is pure bogus. A typical requirement, for instance (I’m not making this up, either), is to already have three years of college classes. Which classes? Doesn’t even matter! Half of them aren’t specified at all, and most of the rest are “this or that” alternatives: meaning that neither alternative is actually necessary (if they were, they’d both be required). Of the remaining handful, almost none have any relevance to the practice of medicine. Chemistry? What the hell for? How often does your doctor synthesize a new medicine for you? Does he really need to know how to calculate how many joules of heat will be released in your stomach if you swallow 37.5 grams of crystal soda lye? He’s not even going to do your lab tests.

    Here’s the funny part: Even though they have to study chemistry that they will never use, doctors are not required to have any formal training in pharmacology. They get this information – probably the most-used of anything they know – from reference books, periodicals, and adverstisements by drug companies. Instead of three expensive years of mainly irrelevant learning, wouldn’t it make more sense to have pre-med students spend just one year studying, oh, I don’t know – physiology, sickness and treatment?

    But shorter training (or more schools) would mean more doctors, and that wouldn’t serve the real function of medical “education”, which is to maintain the position of a wealthy and exclusive class.

    Lest anyone think I’m only talking about doctors, I should point out that all professions use the same method of exclusion. Lawyers have at least as much wasted quasi-training as doctors, and they make (i.e., extort) even more money while the net gain to society of having them is decidedly negative (doctors at least do some good on the whole, and we’ll need them to implement my plan of turning all lawyers into organ donors).

    Nearly every job with decent pay or any security requires a college degree. Often it doesn’t even matter what the degree is! If you have a “college education”, you’re eligible for many lower middle class jobs, such as management, that don’t actually require any skills beyond high school level. Why do employers insist that you have a college degree?

    Class solidarity is why. If you’ve bought your college degree, they know that you have an investment in their class. You’re a Responsible Person and can be trusted to share their values, act predictably, and uphold the system. There might be a hundred working class drones with high school diplomas who are better able to do the job, but such an inferior person, with different tastes, different values, and different manners, would never be trusted, might offend his respectable coworkers, would probably suck at golf, might steal the toilet paper. America has a diverse middle class, but one thing they nearly all have in common is a college education and the sense of superiority that comes with it. It’s this country’s foremost class distinction.

    Engineering is another profession where “education” is in large part a matter of buying entry to a privileged class. Engineers, with only five years of quasi-training, make a lot less money than doctors or lawyers, but the principle is the same. A glance at the curriculum for a certain college shows that a third of the classes are at best totally unnecessary, and often sublimely absurd (like art and philosophy courses for math geeks who will spend their careers figuring out ways to minimize the cost of making dishwashers and running power plants). Another third are important only to certain sub-disciplines, and a good part of the rest are of dubious value (Differential Equations, for instance; at one time a necessity, but these days computers do all that.)

    Yet in spite of all this padding, there is virtually no training in the tools that engineers will actually use on the job – specifically, software. After five years, many of the basic skills have yet to be acquired! Getting a degree is not so much a matter of learning to be an engineer as it is of preparing to learn on the job and of purchasing the right to do so.

    Some people will try to tell you that all this superfluous “education” has to do with making the student a more “rounded” or “broader” person. Well, that’s a load of horseshit. No one really cares if an engineer can quote Shakespeare; they want buildings that don’t fall down when the wind blows. Does it matter to you whether your doctor spends her leisure time reading Heidegger as opposed to bowling? How many hundreds of thousands of dollars are you willing to part with to know that she’s a “rounded” person?

    Anyway, real personal depth does not come from slogging through pointless mandatory classes – that just makes the victim hate the subject. Depth comes from actually spending time living life. Skill in a profession also comes mostly from real world experience, not the classroom. Irrelevant education is not only a waste of money and a barrier to entry, it delays the beginning of actual practical experience. Seriously, if you had your pick, would you want the surgeon who, after twelve years of learning about everything from Russian history to neurology, is about to perform his first real heart surgery on you – or would you prefer one who had three years of training practicing different procedures on cadavers and nine years of experience doing them on live patients?

    A lot of what we call “education” is not only giving us fewer and more expensive professionals, it’s actually making them less competent.

    Every society has its way of maintaining economic class barriers; in the Middle Ages, prosperity (for a commoner) could only come from buying one’s way into a trade guild and enduring an apprenticeship of many years in order to earn the right and (supposedly) acquire the arcane skill needed to tan hides or hammer horseshoes. Then, as now, it was a crock of shit.

    So what should be done about it? Well, obviously, nothing will be done. The majority who would benefit from a change have no political power, and the privileged few who benefit most from the status quo certainly do. But we should at least realize what is going on. “Putting more money into education” is one of the top slogans of every backstabber in Washington, because few people object to it and those that do are only concerned with the immediate cost.

    Yet everyone who cares about education should oppose increased aid to students – in fact they should oppose any increase in funding that does not go directly into increasing the capacity to educate students. That means more teachers and more schools, NOT more money spent on the same facilities we have now. Giving more money to students is the worst thing you can do for them (and I say this as a college student): it only drives up the prices, resulting in them graduating with more debt and raising the class barrier ever higher.

    If we, as a society, were actually capable of reform (we’re not), or interested in remaining an economic superpower (we’re not), we’d not only make education available to more people, we’d make education actually fit its ostensible goal. We’d radically revise the current requirements for entry into the various professions, and replace this twelfth century crap, where “education” means learning a little bit of everything, with specialized training in useful skills and quicker introduction to practical experience. The world needs doctors more than dilettantes.

    Students should be able to choose for themselves whether they want to learn about (for instance) literature or geography before attempting to design an electrical circuit. Sick people should be able to decide whether they need to pay five times as much to receive care from a doctor who has a deep grasp of the relation between Picasso and Existentialism.

    And the professions should be open to all those with talent, not just those who can buy their way past artificial roadblocks.

The Future of Creation

“Opportunity makes a thief.”

-Francis Bacon, Letter to the Earl of Sussex

    No one snivels more loudly or less convincingly than a three year old child deprived of a toy or a record exec unable to squeeze every last drop of profit from someone else’s talent. No one sympathizes with a lazy tycoon who wants to put a teenager in prison for downloading a song, and the rantings of the RIAA and other aggrieved exploiters of creativity serves only to undermine public sympathy for the very existence of copyright laws.

    Not that the laws themselves are wrong. When anyone puts his or her own precious time, energy, and skill into creating something, it is rightfully his or her own property. It is no less real, no less an investment of human effort, and no less worthy of ownership than a steer – moreso, because the latter is directly a product of grass, land, and bovine ancestors that came originally to human hands ready-made for the taking. That a thing is easy to steal does not mean it is not property, anymore than I forfeit ownership of my furnishings by leaving my door unlocked. Nor does the argument that the creator is not diminished by the theft have any weight; the person who has made the exertion to create something, or purchased it by voluntary exchange, has the right to deny any other person the use of his labor. One might as well say that rape should not be a crime, if the victim be uninjured.

    And what of the argument that copyright exists only to encourage the production of creative work, and that such work actually requires no encouragement? Beside the fact that property remains property even in the absence of laws to protect it, that claim is certainly fatuous. To make bad music, write bad poetry, publish unfounded speculations, make a crude video of one’s living room or paint a canvas with random colors is easy and common enough, and indeed the world is deluged in such items, made at no profit and even for a loss. What is not so common is worthwhile instances of creation; to attain mastery of an art, and to put that mastery to full use, is no trifling thing. Rarely do people take the trouble to produce powerful music, good poetry, reliable texts, quality films, or artistic images with no thought of reward for their effort. Nor do they release them to the public in the hope that others will take them, distort them, present them falsely, expand on them in any direction they please, or even claim authorship. Any “artist” who submits a work to the public domain admits implicitly that such work is inferior, and unworthy of reward, or else has abandoned all hope of being rewarded.

    Instructively, those persons who are opposed to the idea of intellectual property are invariably those who have never created any worthwhile intellectual property and have no prospect of ever doing so. What they propose is parasitism, by the lazy and the inept, of the few who possess the talent and industry necessary to create the things they want but would rather not pay for. They have duped themselves into believing that good artists, writers, and inventors will work just as hard absent any prospect of profiting thereby, just as inferior artists, writers, and inventors are always willing to work for mere fleeting attention. They think that confiscating all intellectual property would enrich the public – but the reality is that free art and free information are generally worth what you pay for them.

    The difficulty with copyright laws is not – in spite of the excesses sometimes committed (like the inevitable periodic extension of copyrights on material by the long-dead Disney) – moral, it is practical. The extant laws simply cannot be enforced. In a perfect world, those who create would own their creations absolutely, whether those are tangible or not. But in the real world, it is no longer possible to have much control over information products. Technology has made reproduction perfect and virtually free, and methods of copy prevention range depend on artificial constraints that are not only intrusive, but defeatable.

    The root of the problem, perhaps, is that most people don’t see anything wrong with taking intellectual property for their own use. The author thereof is not thought diminished thereby, and certainly not if the taker is not reselling it and would not have otherwise purchased it. When people see no harm in breaking a law and are accustomed to seeing it broken, they will not refrain from breaking it, will not report others breaking it, and will not support the draconian punishments or intensive hunting for violators that would alone furnish a deterrent. (The loss of credibility of government in general also contributes to the disrespect of law, but that’s another issue.) The result is massive disobedience, impossible to suppress, just as hundreds of millions of people speed every day in spite of the huge amount of resources devoted to fighting it. People won’t stop copying things for each other unless they’re convinced it’s wrong, which seems improbable.

    On the other hand, those who condone or even practice “piracy” often consider the selling of copies, and perhaps the stealing of material by those who could easily afford it, to be wrong. Most of us sympathize more with the homeless man who shoplifts than the lawyer who pilfers from the offering plate, or with the jobless teen downloading music as opposed to a businessman using stolen software. Moreover, it’s much more difficult to sell pirate copies without being caught, since non-cash transactions can be traced and also because people tend to resent such profiteers and are more likely to turn them in. Compared to the volume of illegal copying, very little reselling of it occurs.

    The current marketing method of most copyrighted material creates a feedback cycle that keeps piracy at a maximum. When some consumers of a product fail to pay for it, the cost is passed to the others – those who create the product must be compensated somehow. As the price becomes more burdensome, more and more consumers will choose to steal the product instead of buying it, and the price goes higher still. Some software vendors are now in the position of dealing more or less exclusively with businesses; no one else can afford their product. But if the cost were spread among all those who would like to use it, it would be too cheap to bother stealing. If twenty million copies were sold at just a dollar each, the revenue would be adequate for many programs – programs that otherwise might be free but more likely won’t get written at all. The problem is collecting the money without putting the buyer through too much trouble or spending too much on processing.

    Likewise, how many people would be too miserly to shell out fifteen cents for a song? Probably most people would donate that much even if they could legally get the song free. Yet that’s more than most musicians get from royalties. Again, the only obstacle is processing the transactions.

    Of course, the record labels wouldn’t like that – where music is concerned, they are strictly middlemen, and they would be eliminated. But it isn’t music per se that they are selling in the first place.

    When Americans (at least) pay for entertainment, they are not just buying the content, they are buying something even less tangible – participation and image. In our society, music and movies are an important way of being accepted into a larger group (whether society at large or some small clique of fans) and are also a tool by which people build their self-images. Listening to music and watching movies is an induction to the common culture and earns a place therein – tastes and experiences that are (somewhat) individualized, but fit into a framework that we have in common. Thus we can discuss among ourselves which entertainments we like and which actors or musicians we admire, and each of us can have different opinions, but we (mostly) share the conviction that such things are important personal identifiers and worthy of discussion.

    The business of Hollywood and the record companies and the television studios is not so much producing content is it as producing cultural referents. The conventional view is that the millions spent on “promotion” and the images so expensively cultivated serve to facilitate the sale of the content – the reverse is true. The content, music and movies and shows, is rather an inducement to buy the real product, which IS the promotion and the image – the cultural and personal referents.

    The cost of actually producing music (at least) is not very great; advances in technology may do the same for movies in the future. The talent required to produce good music is not common, but is hardly so scarce as to create a dearth of supply. Copyright laws or not, the cost of music sold for its own merits could be expected to fall toward the cost of its production, which is not very great. The issue, for the RIAA and its ilk, is the image and social valuation of music. This is what they are really selling, and it not so cheaply created. Their problem is that their existing means of charging for this service is to bundle it with music, a commodity which is now so cheap that many people prefer to acquire it separately (for free) – and they get the image along with it, at the same price.

    If groups like the RIAA are to continue successfully milking the public appetite for referent images, they’ll have to quit bundling image with recorded music, and find some other way to induce people to pay for cultural participation. If they don’t, the funds for “promotion” (their real product) will eventually dry up, “rock stars” will be a thing of the past, and some other industry will step into the gap and market some other kind of image. If they want to get into the music business, “record” companies could sell their marketing services to artists, or even to consumers (for instance, providing personalized music recommendations to subscribers). This wouldn’t support any billionaire record execs, but they themselves are the only ones who see that as a problem.

    For the actual producers of content, there are several potential solutions to the problem of copytheft. One has already been mentioned – basically volume selling. The cost of a billion copies being essentially the same as one copy, the object is to sell the product so cheaply that no one would bother stealing. If the cost of transaction processing can be reduced to a few pennies, this might be a very effective way of marketing low cost, easily copied content like songs, magazines, images, or small programs – much like iTunes, but without the high prices and spyware.

    For established artists, or those who are good at self-promotion, one marketing option (which as far as I know hasn’t been tried yet) would be to sell works to a buying audience collectively. Potential buyers would tender a minimum sum to an escrow account, and when (if) the total balance reached the selling price, all would receive a copy, and perhaps resale rights as well, or rights to publish derivative works, depending on how much the buyer paid. If the sale expired without meeting the price, the money would be returned. There would be fewer and larger transactions than with the above scenario, ameliorating the burden of transaction costs.

    Another possibility, something like the GNU Public License, would be to sell certain rights along with the product itself. An artist might, for instance, sell the original work to distributors with the right to not only sell copies but to resell that right (perhaps to smaller distributors). Individuals who bought the work would get the right to make copies, and perhaps even to sell copies. In this kind of system, the artist would get the money up front, based on speculation, instead of after the fact based on end consumption. This system wouldn’t finance any millionaire rock stars, because no one would pay too much up front for a property that would rapidly depreciate as pirate copies inevitably began to circulate. It might, however, allow content producers to make a living. For a little while after a new release, the only owners of copies would have paid dearly for them, and would presumably be more reluctant to give the property away – and they might be more vulnerable to detection if they did, since there would be a limited number of sources to investigate for any leak. Such a method of distribution might work for things like movies and tv shows, or inventions, that are harder to copy than music or software and can be profited from without giving every customer the ability to produce more.

    Finally, there is the possibility of giving content away as a means of marketing something else, thus making the content valuable at least to the marketers. Software vendors often do this, giving away an inferior version of a program as an advertisement for the real one (which includes customer service that can’t be copied). It also works for radio and broadcast television, and seemingly now for some internet services. It does require that copyright laws exist and be enforced; luckily, it’s hard to use stolen material for advertising without being detected. Unfortunately, this system depends on the existence of some suitable (non-stealable) product or service that can be sold, and the profitability of the creative content itself depends on the value of the secondary product, not the demand for the content itself.

    One might wish that intellectual property could be guarded as an absolute monopoly, but the reality is that it cannot, and some new way of profiting from creative effort must evolve. Clinging to the models of the past will, as ever, be fruitless: the days of vinyl are gone and the days of paper are numbered. It will be interesting to see what new models are tried and how they work out. It would be nice if certain business concerns would place less emphasis on futile rearguard struggles and start preparing for the future.