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| Medicare Meets Mephistopheles | | Date Created: Sep 16, 2006, 12:47 PM |
 You don't need to read the book unless you're into discussing political issues using satire and literary allusions. Epstein's foreword says it all.
The really interesting question is why did it take so long for Medicare to deteriorate to the point it has.
Medicare Meets Mephistopheles by David A. Hyman
Forward by Richard A. Epstein
From the Foreword:
"... Think of two ways in which a group of 10 teenagers can drink soda at a luncheon counter. One is to get a large pitcher and have 10 thirsty kids each use a straw to take out what he or she wants. The second is to divide the soda into glasses, and assign them one to a person. Let there be 10 pints and each teenager's initial entitlement is one pint either way. The patterns of consumption of the soda will not be the same in these two arrangements. Even if by some miracle each person gets the same amount of soda in the two configurations (which they won't), we can be 100 percent confident that the soda will be more rapidly consumed when all 10 teenagers slurp their soft drink from the common pitcher. Consumption rates will slow markedly if each has his or her own glass, for slow sipping now results in greater satisfaction, not a reduction in individual share.
So why use this example in a an introduction to David Hyman's Medicare Meets Mephistopheles? The tragedy of the commons arises because of a weak system of property rights to a given resource. Accordingly, the purpose of the law is to create some strong system of property rights that reduces the tendency to overconsume. Medicare, alas, works inexorably in the opposite direction, to create its own man-made tragedy of the commons. The control over health care resources is not a common by nature. Each individual owns exclusively his own person and wealth, and can freely trade something he has for something he desires more. Unfortunately, Medicare does not facilitate voluntary trade, but throttles it, producing the very risk of inequitable overconsumption that sound systems of law seek to avoid.
And so we must decide whether to laugh or to cry in the face of this multi-trillion-dollar mistake that encapsulates all that is wrong with the modern social welfare state. The Great Society worked overtime to encourage all takers to consume as much medical care as possible -- but always at the expense of others. Far from strengthening private decisions and market institutions, it built a bewildering system whose massive cross-subsidies become apparent only with the passage of time. Yet once these are revealed, they generate widespread political conflict between those who want to keep or expand subsidies, on the one side, and those who want to remove or limit them, on the other. We created, as it were, an enormous pool of soda into which a vast armada may sink its straws.
Set against this stark backdrop, it becomes painfully clear why David Hyman invokes Jevenal as his muse and satire as his form of expression. Medicare Meets Mephistopheles evokes, of course, the Faustian image of the bargain that a hapless Faust made with the devil. But at least Faust had the excuse of falling in love with Gretchen to explain why he was prepared to mortgage his eternal future for the sake of his current pleasure. Learned psychologists might question the rationality of any person who would make a pact with the devil that works to his lifetime disadvantage.
There is, however, no need to question the rationality of the first generation of Medicare recipients. As Hyman never lets us forget, beneath Medicare's communitarian patina lies a program that thrives largely because it allows each generation to mortgage the future of the next generation. The communitarian rhetoric that launched Medicare masks its selfish underbelly. It is therefore entirely appropriate for Hyman to continue with the metaphor by grouping the consequences of Medicare under two heading: the seven deadly sins and the two lost virtues. To remind nonbelievers, these sins are avarice, gluttony, envy sloth, lust, anger, and vanity. Our lost virtues are thrift and truthfulness
As Hyman demonstrates, it is at once ironic and predictable that lofty communitarian aspirations have led to such anti-communitarian results. With stakes so high under Medicare, individual cunning and factional politics take center stage. The Medicare program imposes a heavy excise tax on young workers that acts as a barrier to entry into labor markets. But in the face of this burden, Medicare's determined defenders paint this massively redistributive and frequently regressive program as though it were a sacred intergenerational compact in which young and old alike benefit from their caring, if anonymous, relationships..." |
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