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Health Care: Two Books in Review
December 8, 2004
by Byron Fraser

Beyond the Public-Private Debate : An Examination of Quality, Access and Cost in the

Health-Care Systems of Eight Countries

(Vancouver, BC: Western Sky Communications Ltd., 2001. 66 pages. For printed and bound copies: ph. 604-726-3274/fax: 604-689-1525. Or, to download from the Internet, go to www.davidgratzer.ca)

by Cynthia Ramsay

Mortal Peril : Our Inalienable Right to Health Care?

(Reading, MA: Addison-Wesley Publishing Company, Inc., 1997. 532 pages)

by Richard A. Epstein

Review Essay by Byron Fraser

Introductory Quotes:

“…It is frequently assumed that systems that permit a private sector component - especially for the financing and/or delivery of acute care - discriminate against lower income individuals, offering them a lower quality of care or even denying them any care whatsoever.
This study explores the validity of this assumption….
Contrary to the common belief in Canada, the health index demonstrates that either a publicly or privately funded health-care system can deliver timely, quality medical care to all residents. First place Singapore relies heavily on private sector financing of health care and puts much responsibility on patients to finance at least a portion of the costs of their care, while second-place United Kingdom has a private system that operates alongside the National Health Service.
As well, Canada is not the only country in the world that values universality. In terms of access to care, all eight countries have measures that attempt to ensure that their citizens receive health care when they need it, regardless of their ability to pay….
The index used in the study is calculated in the same way as the United Nations Development Index….
Singapore has the ‘best’ health-care system, followed by the United Kingdom, Switzerland, Germany, Australia, Canada, the United States and South Africa. The recent WHO World Health Report 2000 - the first attempt by any organization to rank countries’ health-care system worldwide - yielded similar results….”

-- Cynthia Ramsay, Beyond the Public-Private Debate, “Executive Summary,” pp. 4-5.

“…The overall social level of production necessarily caps the amount of benefits that can be provided. The less wealth that is generated, the less wealth that can be redistributed. The social problem of coerced giving therefore is not solved simply by getting a stock of existing goods to persons in need. It also requires a set of rules to induce their production in the first place. These constraints on production cannot be ignored simply because discourse describes health care as a ‘right’ that should be respected independent of the market. What good is there in creating a set of positive rights that exceed the ability of any society to provide them? And what dangers lie in creating a set of positive rights that reduce the level of goods and services that are generated?…

-- Richard A. Epstein, Mortal Peril, p. 44.

“…A state system on its face purports to guarantee its recipients the satisfaction of minimum needs. But the illusion of security that it creates is subject to constraints that even the state cannot control, for once demands outstrip resources, the painful process of contraction must take place. The common law system offers no grandiose guarantees that help will be forthcoming, but it relies on the decentralized efforts of private groups to fill the vital function. It is too easy to be misled by the rhetoric of rights, when the issue is overall levels of performance in the long run. What reason is there to believe that the current system will be able to deliver the health care it promises? It is not sufficient to set the aspirations of the legal system high; it is also necessary to reach the target. It is just at this level that the current system is beginning to crumble….
…When the state coerces the transaction, it must decide, without knowing quite how, that differences in utility justify the forced transfer of wealth, even though this coercive transfer reduces the total amount of available wealth. It is easy to make a moral case for averting tragedy by talking about the cases of ‘extreme want’ that everyone recognizes…. Those extreme cases are surely the easiest for any system of private charity to identify and correct. It is far more doubtful whether any system of public coercion can respond to those cases without overshooting the mark and creating collateral disabilities of its own.”

-- Richard A. Epstein, Mortal Peril, pp. 40-41 & 48-49.

“…at no time does the overall resource constraint disappear because affirmative rights are created. We could declare generally that each person had a right to an income of $1 million per year and forget about funding health care by decree in our new age of abundance. But the massive inflation that comes from having more dollars chase fewer resources would leave everyone worse off than before. [Or, in a similar vein, as with numerous underdeveloped nations’ ‘socialist experiments’, we could ‘guarantee’ everyone 100% free care and absolutely equal access to all health goods and services, only to discover that 100% of nothing is still nothing. - B.F.] In an environment with constant pressure to use expensive and heroic techniques in the treatment of well-nigh hopeless cases, how do we scale down ambitions to manageable levels? Not by giving everyone a right to health care on demand, which imposes intolerable burdens of over-utilization. [The flip-side of open-ended high maintenance unchecked spending is, of course, the situation where unthinking and unlimited “free” access at non-acute levels of care destroys the capital base for - and leads to life-threatening rationing of - services to those in the most dire need. This, also, has been a prominent feature of numerous socialist health care system models in practice. - B.F.] Health care may well be ‘special’ to some, but even if it is not rationed by price, it still must be rationed in some other way. Scarcity and self-interest do not disappear just because market systems of allocation are rejected.”

-- Richard A. Epstein, Mortal Peril, pp. 47-48.

“Chronic capital shortage is a standing weakness of the public economy.”

--Madsen Pirie, Dismantling The State:The Theory and Practice of Privatization (1985), p. 62.

“…[all countries are] facing common challenges to the sustainability of their health-care systems…. Health care costs continue to rise, whether a country has a mainly public or mainly private financing or delivery system. Most governments see these rising costs as problematic….
…Health-care systems, whether public or private, are financed on a pay-as-you-go basis, whereby the focus is only on funding care that is required in the present…. No one is saving for the future’s elderly and sick. The problem with this method of funding is that, as the population ages, there will be less people funding a more costly system…. Such a system is unsustainable. What needs to happen is for people to start saving today for health care they need tomorrow - these savings are put aside for the time being, invested as capital and, therefore, generate new capital. Only in Singapore is such an approach being taken.”

-- Cynthia Ramsay, Beyond the Public-Private Debate, pp. 22-23.

Some wag famously said, “There are statistics, and statistics, and just damn lies” - and I’ve always thought that that was a pretty good cautionary note to keep front and center when approaching the heady world of policy studies. Empirical datum is virtually never presented without a whole lot of bias, sins of omission, commission, context-dropping and exclusivist “reframing”, etc. We all know this. And, nevertheless, from time to time, there appear very good quality technical/analytical studies which do exhibit a great deal of inherent integrity and skill, as well as doing a significant service by graphically collating, in a succinct fashion, relevant/timely facts we most need to know. I believe that Cynthia Ramsay’s work falls into this category. And that is why she is one of the most respected health economists in Canada.
I first came across Cynthia’s work several years ago when I read her 1998 study on Medical Savings Accounts:Universal, Accessible, Portable, Comprehensive Health Care for Canadians shortly after it was published by our local Fraser Institute. I had read the now “classic”, rather massive (696 pages) parent-volume which first introduced similar thinking in a big way to the American health-care scene (-- and actually went a long way towards revolutionizing their thinking, virtually overnight), John C. Goodman and Gerald L. Musgrave’s Patient Power:Solving America's Health Care Crisis (Washington, D.C.: Cato Institute, 1992) circa 1993 and was anxious to see the Canadian “translation”. And of course Cynthia’s brief overview was quickly somewhat eclipsed by Dr. David Gratzer’s very well-known, more definitive, book-length treatment, Code Blue:Reviving Canada's Health Care System (1999), but as an illuminating reader-friendly introduction to the subject, I must say that I was tremendously impressed with it. The ideas of returning purchasing power to the patient, while at the same time providing guaranteed universal catastrophic care coverage and well-capitalized funding for indigent care (what is covered in Singapore, for example, by their Medifund provision), and also factoring in incentives (tax-deductions/exemptions/deferments and negative income tax or tax credit schemes for poor people) so as to constructively build a capitalization/savings component looking toward future needs, all made eminently good sense to me. And the implications for the mental health field were obvious: what if the phoney state-monopoly attempted cover-up scam-label “consumer” actually became a reality and real “sovereignty” were returned to individuals and their mental health care choices vis-à-vis “alternatives”? What if you put the money arbitrarily “taken” from them back into their pockets in a meaningful way, allowing them to demonstrate their real preferences with dollars they truly controlled - while, at the same time, facilitating easily specified advance directive stipulations re treatment options in their health insurance policies? Is there any way in hell, in other words, any fully informed real "consumer" with real purchasing power would choose neuroleptic drugs or ECT and so on? Every honest ex-mental patient knows the answer to this one: you’d have to be right out of your ever-lovin’ mind!
In any case, I should also say, right off the top, that as a libertarian, I cannot sanction the coercion entailed in such nominally private but heavily state-regulated schemes as “The Singapore Model” so widely touted by Friedmanite conservatives, et. al. As critics from both the Left and the Right (e.g. “Austrian School” economists) have correctly pointed out, this is a varient of political-economic “fascism”, in the precise historical/ideological - and not merely rhetorical/sloganeering or pejorative - sense of the term. The clear operative distinction between fascism/national socialism and outright socialism/communism is that, under the former, some private property and market mechanisms are allowed - but with strict and all-pervasive state intervention through regulation - whereas, under the latter, there is complete state ownership of all property plus similar extensive regulation1. “Fascism” was only “Right-Wing” in terms of the Old Left and Old Politics categories (circa early-to-mid 20th Century) and is, properly speaking, a varient of socialism and conservative statism (which, historically, are very intimately linked and today, for all intents and purposes, amount to the same thing2). The really “Radical Right”, in both its classical liberal and modern-day “market liberalism”/libertarian-anarchist forms, has ever and always been opposed to conservatism/fascism/socialism/communism which are simply viewed as, essentially, “of a piece” on a similar end of the Right/Left spectrum. The fact that Old Left ideologues desperately tried to keep the “total dialectic” confined to the advantageous (to them) categories/terms of right-wing socialists (fascists) versus left-wing socialists (communists/Marxists) for many years, confused a lot of political ideology neophytes for quite some time -- and the residual effects of this still requires us to make such a preliminary distinction for purposes of “on the same page” intelligible discourse - however these are the current accurate realpolitik categorical basics.
To return to Ms. Ramsay’s Medical Savings Accounts study, though, I thought that, while far from my “perfect” ideal, it certainly was a magnificent breakthrough “step in the right direction” in terms of facilitating a practicable transition-phase program that was “real-world” politically feasible. Ditto for her more recent study, Beyond the Public-Private Debate. And what I see her doing here - again, in a very concise, easily readable/digestible form (though there are some minor obtuse technical sections which can be profitably skipped over by non-specialists, without losing her drift) - is creatively expanding the bounds of what is permissibly thinkable/doable in the health care field. Let’s face it, we’ve all been inundated with national socialist clichés on this subject for umpteen years, even told that a socialist monopoly in this area was somehow part of our Collective “Identity” (needless to say, also having the added “virtue” of making US inherently distinct from - and morally superior to THEM damn “Ugly [‘compassionless’] Americans” [why are chauvinism/jingoism/collectivist-thinking slanders/ ruled totally “out of court” for any references to race/gender/cultural diversity but still considered totally O.K. for trying to muster support for this last bastion of the 20th century socialist movement’s legacy?]) - which I’m sure was true for the numerous Public Employee self-proclaimed “socialists” who found that de rigueur line conveniently self-serving while making out like (legislatively privileged) bandits with the requisite “social concern” cover for doggedly amassing as much personal private property (“Marx” bless them!) as their “public choice” demands on the system would bear - but which, for the rest of us, has all become just so much tiresome cant. We’ve seen through “the veil” and we know it’s time for some fresh thought and alternative solution-focus.
So Cynthia expands our horizons here by giving us these comparative systems synopses which really go a long way towards shaking up erstwhile commonplace presumptions and expectations traditionally held on both “the Left” and “the Right.” I personally like this approach, too, because I’ve often found that what has log-jammed progress more than anything else in similar areas of ideological debate has been mainly ostensibly “opposed” factions not seeing any way to “move ahead” simply because of stultifying old-thought categories which will not admit of any broader frame of reference which can incorporate, perhaps slightly modified, the essential validity and/or worthwhile contributions of the “contradictory” point-of-view - thus putting an end to the “at cross-purposes” missing the point (or same goal-realization identity). For instance, consider the basic socialist insight: private (legislated/mercantilist) monopolies are bad and unjustly deprive (“exploit”) workers of their due property right by virtue of their labour’s “true value”. However, if workers were to risk pool their assets, in imitation of the very successful market innovation of capitalist insurance companies, multiple “social benefits” would accrue to individual members and, moreover, with ONE BIG MONOPOLY - or all the private means of production confiscated by “their” State - and no private property, there would be redistributive abundance and “economies of scale” that competitive markets couldn’t achieve. Sounds good on paper. And most people who were originally sold on socialism bought it because it looked like it would profit them personally more than anything else being offered - that is, it seemed to make the most rational appeal to selfishness or self-interest. More than this, it wasn’t all that far wrong - however, there proved to be several extremely large devils in the details. Namely: 1) “economies of scale” due to firm “bigness” only obtain in non-monopoly truly free (from corporate entities propped up and given an exclusivist share by government “barriers to entry” legislation [which, by definition, is what a monopoly is]) markets where there are genuine incentives to economize, 2) with even the minimal private property right to their mutually consented to value-price in their labour-product gone (“communized”) under socialist regimes, workers were far more devastatingly “exploited” (with no recourse to even strike or unionize in any meaningful sense - de facto and de jure serfs and slaves, in other words, for the most part) under Total Statism than they ever were under market conditions, and 3) because of the elimination of the efficient market mechanism for non-arbitrary (State-“planned”) allocation of resources via a free price system reflecting aggregate cardinal utility - or pertinent information about actual supply/demand/scarcity - and, therefore, any possibility of rational calculation ( -- i.e., the far greater levels of realistic planning and co-ordination routinely achieved in the marketplace - specifically by not engaging in some merely ordinal numerical computation), the indispensable basis for capitalization over time was completely destroyed3, with the result that 4) the cumulative effect of the aforementioned State-exploitation of the workers through not only scamming off a far greater percentage of their labour-product, but also squandering/mismanaging/dissipating that product, was the anti-“social” reality of less total “benefits” for distribution or, in economic terms, a net “deadweight loss” situation. Witness the history of State Socialism.
Cynthia will hopefully excuse me this digression but, to return to the central point, we can see how it is constructive to grant that “the other side’s” end-goals and motives are probably not so different from one’s own. Moreover, it takes a genuine “reaching out” attempt to fully appreciate others’ points-of-view, to conceptually master their specific terms of reference, and thereby (hopefully) to transcend rigidified and divisive ideological/semantic obstacles which really need to be slashed through. This I see her doing by graphically demonstrating that it is far from a foregone conclusion that any monolithic no-choice-but-socialism worldview must rule this field of service provision. That is the presumption that has been dominant to date - but as she ably shows, it is assailable right across-the-board, not only on the brute empirical evidence ready-to-hand, but also according to the best modern economic theory which can be applied to the raw data. There are choices, options, funding alternatives - in other words - which can and do embrace the best features of private property rights and voluntary contractualism (“the marketplace”), as a proven great problem-solver - with the concrete realization of essentially “traditional socialist goals” (e.g., universality [in one form or another], virtually equal access/distribution, and maximal quality care - for all). In fact it is now more than evident that only the increasing adoption of market-oriented solutions is likely to save or “rescue” these original socialist ambitions which have fallen prey to all-pervasive problems of “government (or State-managed) failure”. So a more accurate title for Cynthia’s study might have been: “Beyond the stage the Public-Private debate has been at” - which, in truth, has been for decades, essentially: “nowhere”; we’ve been living in a one-sided vacuum of no debate, for all intents and purposes. And we’re now seeing the first halting, but sure, steps towards that impasse being breached.
As to the specifics of her study, there are only 3 major subject-heading areas of focus: “Comparative Health Systems", “The Determinants of Health”, and “Ranking Health Systems”. The brief historical overviews and capsule summaries of relevant legislation and systemic mechanisms in place under the first are excellent “neat” glimpses of the bigger international picture. Not too many surprises for me personally here but I suppose there are still many Canadians who aren’t yet aware that the United States has not had a “private” system for many, many years now (close to half of all health-care spending is “public sector”) and nor, in spite of the fact that 16% of the population is uninsured - and the persistent mythology, together with occasional anecdotal evidence supporting it, which we tend to harbour - are persons routinely turned away from hospitals when in need:
“…being uninsured in the United States does not mean that a person will not receive medical care if they require it. By law, neither public nor private hospitals are permitted to refuse treatment to an indigent patient. [This has been “officially” the case since 1986, however, was widespread de facto practice for many years previous with most hospitals routinely voluntarily setting aside approximately 10% of their annual budgets to deal with indigent care. - B.F.]” ( -- p. 13)
Otherwise, the many different public/private “mixed-medleys” are ably elucidated with highlights, again, on how many governments are looking to the private sector to relieve the burdens and reduce pressure on public hospitals and public budgets thus freeing up and maintaining an ongoing capitalization base consistent with sustainability.
The most noteworthy finding under “The Determinants of Health” section was what Cynthia refers to as “The apparent disconnection between health-system factors and health status… reflected throughout…”. Canada, for instance, (many of our readers will be happy to know), actually ranks first in terms of overall per capita “health status” - which is an indicator independent of how our health-system ranks vis-à-vis those of other countries on the broad spectrum of total other variables. As well, “The strongest relationships with health status seem to be with the socioeconomic, rather than health-system, determinants of health”. (The implications of this general finding and its enormous significance when applied in the context of ongoing mental health care reform are, of course, currently becoming very well-known and will not be lost on readers of this journal. As she says:
“…, recent focus has described how socioeconomic status affects health status. The notable socioeconomic factors [include]… the availability of housing and whether people have the social support systems to get then through a crisis.
…, there is the worry that too broad a scope will only result in more government and non-governmental agencies being involved in the promotion of health, and little constructive action that improves health status. Given a limited number of resources, it is important for policymakers to be clear in their own minds as to what problems they are addressing. For example, if the main determinants of health are socioeconomic, then more public sector attention should be directed towards improving these factors than to… elements of the medical system.”)
Concluding, then, on this primer to the health care debate which, to paraphrase John Paul Jones, we have “not yet begun (to have)”, I’ll simply say that there are many more fascinating details and even paradoxical or expectations-challenging datum awaiting the interested reader therein. Not a bad starting point, all in all, for those wanting to get a firm handle on current realities governing the field, in a clear and comprehensive - yet abbreviated - form.
For the sake of the more stout-hearted, however, who are ready to move beyond “Beyond the (Non-)Debate”, I have decided to also make mention of Richard Epstein’s Mortal Peril:Our Inalienable Right to Health Care? The reputation of economics as “the dismal science” has probably not so much to do with its technical intricacies being inherently uninteresting, in my opinion, as it does with the fact that it often brings home to us many “hard truths” which we’d rather not hear about or “deal with” - but actually very much need to, in any case. And Epstein’s book is a very courageous “next step” treatment which squarely faces virtually all of the really “hard questions” in the field of health economics. A very highly regarded legal scholar in the U.S., Professor Epstein is also one of those polymaths who is equally conversant in economic theory and has a wide-ranging multidisciplinary expertise - a fact which is amply reflected in the versatility of his many other (often quite “controversial”) published writings. He is also a long-time libertarian, like Yours Truly, and if modern-day libertarians are “traditional anarchists who have learned something about economics”, as one popular saying has it, then Richard certainly “fits the bill” - and in spades. He also possesses a truly inimitable, crisp/cogent - and continuously innovative - literary style (commented on by most reviewers) which makes him a constant delight to read. This is the guy, too, who’s done all of the relevant, more complex, concept-mastery homework, so some people find him a little bit difficult to follow without having to take frequent stops for checks of the referent-definitional roadmap. (That is to say that, many people whom I’ve talked to who have read him have complained about his writing like “Well doesn’t everyone just know this?” or of having some difficulty keeping up with the level he thinks at. So “be prepared”.)
In any case, I don’t have space here to do more than give the broad outline of the book and hint at some of its salient features. I should say, too, that although Prof. Epstein’s immediate focus is more particularly on the American health care scene, the broad scope of issues covered - from foundational political philosophy to economics to law, bioethics and current controversies - makes it completely relevant and applicable to everything that’s most topical in Canada right now as well. This is also, in contrast to Ms. Ramsay’s overview, a very extensive analytical work: there’s lots of thorough argumentation, contextual historical background, and detailed relevant references here (fully 42 pages of “Endnotes” alone, e.g.).
The book is divided into two parts: the 1st consisting of 8 Chapters under the rubric of “Access to Health Care”, and the 2nd consisting of 12 Chapters dealing with “Self-Determination and Choice”. Some sub-section subject-matters covered in the former are “Positive Rights”, “Demanded [rights to unlimited care on demand] Care”, “Necessity and Indigent Care”, “Wealth and Disability”, “Community Rating and Pre-existing Conditions”, “Medicare”, and “Clintoncare: The Shipwreck”. And, in the latter, we find: “Organ Transplantation”, “Alienability and Its Limitations: Of Surrogacy and Baby-Selling”, “Active Euthanasia”, “Physician-Assisted Suicide”, “Abuse”, “Incompetence”, plus 3 Chapters on Liability Doctrine; its history, efficiency, and the need for reform (NB: Epstein is something of a specialist in this area, having written an important book, A Theory of Strict Liability:Toward a Reformulation of Tort Law [San Francisco: Cato Institute, 1980] - which, believe it or not, this crazy reviewer read many years ago - and many published papers on the subject). So you can see already that there’s no shirking from tackling a whole host of the “really tough questions” in the field of health care here.
As I say, though, there is no space here to even begin to go into the substantive answers Prof. Epstein gives to these questions - only to point the direction to them. One very noteworthy discussion I would like to comment on, however - which is unmistakably emphasized and alluded to in my introductory quotes selections, and goes also to Cynthia’s main point about the need to break through stultifying conceptual impasses in the Left/Right dialogue - is the basic philosophical divide, with us for many decades now, often described in terms of the distinction between the “negative liberty”/ “freedom from”/individual or common law rights (Rule of Law)/ tradition, on the one hand, and the “positive rights”/ “freedom to”/collectivist or state-“entitlement” rights/ tradition, on the other4. Can this gap be constructively bridged such that the material abundance engendered by a free market economy, predicated on retaining the fundamental justice/integrity of “freedom from” natural rights to life/liberty/property, can be translated into completely adequate voluntarist-type “social safety net” or “minimal (dire needs and comprehensive insurance) entitlement” sorts of charitably-subsidized contractarian “freedom to” rights arrangements - without “killing the Golden Goose”, as it were? That has become the perennial sixty-four thousand dollar question. And I think the answer is “yes”5.
Clearly we cannot “turn back the clock” to the unsustainable “government failures” of socialism - which repeatedly have simply not “delivered the goods” to poor and needy people. But we need to respect the very valid moral intuitions which attracted many people to its broad “social”-goals, in the first place, regardless of what an unmitigated disaster its means made of all attempts to realize these in practice. As the good Prof. puts the matter:
“…we possess, and act on, some powerful intuitions in dealing with health care questions. On matters of health care, side by side with the market is an extensive network of voluntary charitable organizations that are, and should be, a part of any decent society. But the key to the argument lies in the futile efforts to transform that moral intuition into a legal right.” (-- p. 31)
And it is just here that I want to sound a small note of dissent. While I fully understand this criticism of State-mandated and open-ended “positive” legal rights, and all of the very real net social harms, inequities and injustice attendant to them, my thought, somewhat along the lines of the noted Canadian philosopher, Prof. Jan Narveson6, is that might it not be not only politic but astute to grant the validity of these “leftist”, so-called, desires for secure insured legal claims to basic needs (food/shelter/health care, and so on) but - without violating libertarian (non-aggression against the equal rights of others) principles - to simply concretize these rights on a voluntarily subsidized contractarian basis? Something like the Singapore Model Medifund - and like schemes - could relatively easily be facilitated and capitalized in perpetuity from the proceeds of widespread privatization (just “for instance”, in the Canadian context, it is estimated that the national debt could be paid off - and social welfare benefits multiplied many times over - virtually overnight, any time the government chose to do so by lifting its moratorium on water sales to underdeveloped nations in need [see especially the findings of the Winnipeg-based Frontier Centre for Public Policy: www.fcpp.org]) or simply from general revenues and/or charitable tax-deductions, etc. Then everyone would have the much-desired security of legal rights for insured basic needs claims, albeit within a properly judicious and prudent voluntarist “checks-&- balances” framework. Something to think about!


1) See especially on this the “Epilogue” added to the 1969 edition of the classic study, Socialism:An Economic and Sociological Analysis (London: Jonathan Cape, 599 pages), by world-renowned economist, Ludwig von Mises, under the sections on “Fascism” and “Nazism”, pp. 574-82.

2) See further on this -- and especially on the close affinity between the thought of Marx/Engels and European Conservatism - the excellent essay by Stephen J. Tonsor: “The Conservative Origins of Collectivism” in Liberty and the Rule of Rule (College Station and London: Texas A&M University Press, 1979), edited by Robert L. Cunningham, pp. 224-41.

3) The definitive work on this which drove the last nail through the coffin of the theoretical corpus of socialist economic thought, in terms of all recognized serious scholarly work on the subject, was Economic Calculation in the Socialist Commonwealth (Auburn, AL: Praxeology Press, 1990) by Ludwig von Mises, originally published in 1920. Of course, it took a good deal longer for the incarnate body politic “history lesson” of socialism’s “passing” to reach us with abundant empirical evidence of what Mises had so clearly deduced and demonstrated a priori - at a time when few paid his message any heed. That, thankfully, is no longer the case. (Cardinal as opposed to ordinal numbers are those containing a subjective value-input component rather than a merely random order ranking - which does not constitute useful information [real “utility”] in any economic sense. Socialists tried to argue for years that, with the advent of computers, the “knowledge/information” problem of centralized State-planning without market prices would be solved; you would just survey everyone’s needs/wants virtually instantaneously, do the [computerized] math, and them allocate on that basis. The fallacy operative here, of course, was that the problem was one of calculation and not “knowledge”. You could have all the raw data in the world and, without numbers tied to demonstrated preferences, your decisions based on it are worthless in terms of economizing, “meaningless” for efficient [capital building and optimally sustainable] resource use and planning. This was not a technical/cybernetics glitch in translating theory to practice as early socialists had hoped/supposed, but rather an inescapable logical impossibility which has forever doomed the practicability of their ideological enterprise - and achievement of its goals - on their own terms. [See also, for a great summary overview of this controversy as it played out historically: Economic Calculation in the Socialist Society (Indianapolis, IN: Liberty Press, 1981) by Trygve J. B. Hoff.])

4) These defining “lines in the sand” which have essentially demarcated the classical liberal/free market position off from, or over-&-against, the left-liberal/social democratic one, for at least the last half-century - and a good deal longer, in one form or another - are most commonly associated with the seminal distinctions outlined by Sir Isaiah Berlin in his Two Concepts of Liberty (Oxford, 1958).

5) For some suggestive ideas on not only how this has been successfully achieved historically but also what can be - and is being - done right now, along these lines, see especially: The Tragedy of American Compassion and Renewing American Compassion (Washington, DC: Regnery Gateway, 1992 & 1996, respectively) by Marvin Olasky. Also: From Mutual Aid to the Welfare State - Fraternal Societies and Social Services, 1890-1967 by David Beito.

6) See especially his The Libertarian Idea (Philadelphia, PA: Temple University Press, 1988) and For and Against The State (1996) for more on contractarian solutions to bridging the “Negative Liberty” vs. “Positive Rights” dilemma.

About the Authors:

Cynthia Ramsay is a Vancouver-based consultant specializing in health economics. In addition to consulting, Ms. Ramsay is co-owner and publisher of the Jewish Western Bulletin, BC’s only Jewish community newspaper. From 1993 to 1998, she was senior health economist at the Fraser Institute in Vancouver. She authored the Institute’s study on medical savings accounts for Canada, co-wrote a study on the use of alternative medicine in Canada, co-authored numerous editions of the Institute’s annual survey of hospital waiting lists, Waiting Your Turn, and is co-editor of the book, Healthy Incentives:Canadian Health Reform in an International Context (1996). Ms. Ramsay has written numerous articles that have contributed to the Canadian health-care debate which have appeared in such outlets as The Medical Post, The Globe and Mail, and Family Practice. She also speaks frequently to groups and via radio and television media on the necessity of health-care reform in Canada.

Richard A. Epstein is the James Parker Hall Distinguished Service Professor of Law at the University of Chicago and an adjunct scholar of the Cato Institute, Washington, DC. He is the author of Simple Rules for a Complex World and Takings:Private Property Under the Power of Eminent Domain, among other books, and a noted authority on Tort Law.

(This review essay was first published in the Spring 2003 edition of In A Nutshell.)

NB: Richard Epstein's Mortal Peril is currently available in the hardcover edition from Laissez-Faire Books (Toll-Free: 800-326-0996) at the special sale-price of $5.00 U.S.)

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