Comments on: Health Care Postscript

By: Mike

Mike — Fri, 18 Dec 2009 21:14:31 +0000

Cutler’s argument that “hospitals don’t minimize costs because they are (mostly)nonprofits is absurd. “Nonprofit” status means you don’t have stockholders who act as residual claimants on income. It DOESN’T mean that you are indifferent to the existence of those profits, as Kling points out. Indeed, even if we posit altruistic motives to nonprofits, they can do more “do gooding” (e.g., charitable care), the bigger the volume of profits they extract from paying customers. Moreover, the empirical literature on hospital competition makes it abundantly clear that the differences between for-profit and non-profit hospitals are minimal. Presumably Cutler knows this (and if he doesn’t, he shouldn’t be opining on this issue).

By: Dave

Dave — Thu, 17 Dec 2009 01:07:42 +0000

Phil: Libertarian political beliefs essentially say government shouldn’t intervene in your life.

Economics helps decipher what the effects are of different interventionist policies.

I doubt that there is a better explanation of the inevitable boom bust effect after the government artificially expands the money supply and set interest rates than the Austrian Business Cycle Theory. Do you think there is a better explanation?

If not, then ABCT should go a long way to defend the libertarian non interventionist point of view (at least in the monetary system).

By: thedifferentphil

thedifferentphil — Thu, 17 Dec 2009 00:22:13 +0000

I have read Hayek and Mises. Hayek I enjoyed reading. Mises, not so much.

By: Josh W.

Josh W. — Wed, 16 Dec 2009 23:56:19 +0000

I think you are focusing on the flaws despite the wide breadth of great work. Have you read Hayek, Mises, Rothbard, Menger, or Hazlit? There’s so much good stuff, I recommend that you give it a shot even if you agree with Caplan’s critique. “Austrian economics” is far from homogenous.

By: thedifferentphil

thedifferentphil — Wed, 16 Dec 2009 23:37:29 +0000

I am not really worried about either a Harvard econ department junta or a GMU econ department junta ruling me, so we are in the world of the hypothetical. In my ivory tower, liking the political conclusions of a school of thought are not a sufficient reason to embrace what appears to be nonsensical view of economics. It would be like a strong believer in God embracing the theory of intelligent design, because the conclusions of I.D. support the existence of a god. The I.D. theory is nonsense, but if it supports one’s belief in God, then you better not criticize it. There are many defensible reasons to have libertarian political beliefs, but Austrian economics is not one of them.

By: Josh W.

Josh W. — Wed, 16 Dec 2009 23:22:58 +0000

Take that back, I misread you. But considering that Austrians are libertarians you don’t have to worry about them governing you either. The economics department at George Mason definitely understands markets and liberty.

By: Josh W.

Josh W. — Wed, 16 Dec 2009 23:21:07 +0000

thedifferentphil-

Considering that Caplan is an anarcho-capitalist you don’t have to worry about him governing you.

By: thedifferentphil

thedifferentphil — Wed, 16 Dec 2009 21:55:54 +0000

I wasn’t trying to start an argument either, but this is a blog supporting a pro-math book and the Austrians sound irrationally anti-math. Also, not wanting to be governed by someone who believes in Austrian economics (as presented by Caplan) is definitely not the same as supporting Krugman. While I may agree with some Austrian conclusions, I can’t really respect the methodology (again from Caplan) that draws those conclusions.

By: Drew

Drew — Wed, 16 Dec 2009 21:15:21 +0000

Speaking of Krugman, I may be crazy, but his latest piece seems to a) not make any sense to me b) be diametrically opposed to something I could see him writing in the 90s.

http://krugman.blogs.nytimes.com/2009/12/16/would-cutting-the-minimum-wage-raise-employment/

In it, he argues that cutting the minimum wage is a bad way to raise employment. I can’t really follow his arguments about the effects of liquidity, but I’m not sure how he gets from reducing the minimum wage to “reducing wages,” let alone a “general cut in wages.”

By: ouchris

ouchris — Wed, 16 Dec 2009 19:34:53 +0000

I find it ironic/funny that those who are for Keynesian style “spend till you win” economics somehow manage to forget that we’ve been employing this concept since the early teens of this past century (institution of the Fed Reserve). How can one even begin to argue for such an economical model when we are in this mess because of that model to begin with? Yes, yes I know. Keynesian’s got us out of the great depression (what was it, about 16 years after the initial start?) So clearly their method is tried and true OR you could read the other side and figure out how those policies only exacerbated the problems.

p.s. I’m not saying anyone is arguing for/against Paul Krugman style economics, but since the Austrian school is as far from that style as you can get, I’d say the hope is that there is something better than the Austrian style. I’ll say the day we’ll know that is after we implement an Austrian style (no fed, no welfare state, no warfare state, etc) and things get worse.