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The economics of Terri Schiavo?
Steve Landsburg weighs in on Terri Schiavo:
I have less understanding of why Schiavo’s parents want to keep feeding her. And insofar as they want others to keep feeding her–through Medicare, etc.–I think we can safely ignore their preferences. But provided they and their supporters are willing to bear those costs, I infer that this is something they want very much and there’s not much reason to stop them.
I doubt that a "willingness to pay" standard accurately values human life in such instances (in fairness to Landsburg there is more to his position, read his entire post). Often it picks up a mere ability to spend money, rather than any relevant notion of human welfare. Whether the husband can outbid the parents may simply depend on whether he has gone bankrupt from his previous involvement in her care.
Nor do I think that family decisions — whatever your view in the Schiavo case — should be decided by a real or hypothetical societal auction. If there is any "protected sphere" for human decision-making, surely it is here. The problem is that we don’t agree on how to define the guardian of the sphere — is it "Terry" or "husband as guardian of a no-longer-living Terry"?
This case will only grow in symbolic importance. Keep in mind, the care of Terriy Schiavo has been financed by the state of Florida and Medicaid for the last several years. According to one AP story, it costs $80,000 a year to keep her alive. Note that "a judge approves all expenditures, from attorneys’ fees to the woman’s haircuts."
Therein we see the problem for the future. Say you take a "pro-life" stance on this case. What will happen when we can maintain, say, 30 percent of the "dying" population in this kind of state for decades? Such technologies are probably only a matter of time.
Say you take a "pro-husband" stance. Presumably you cite evidence for Terri’s severely impaired mental facilities. What will happen when we can keep, say, 30 percent of the "dying" population in a somewhat less impaired state for decades? Such technologies are probably only a matter of time. Was her vegetative state really the issue, or was it just cost? Our views will be tested, sooner or later.
I don’t see much guidance here from economics, political philosophy, or virtue ethics. My instincts are to "look toward the future," but I don’t have a good argument that avoids all possible repugnant conclusions. (I will never forget Julie Margolis, asking me in my job interview at UC Irvine, why we do not value human life at replacement cost. That would be no more than a few thousand dollars, given that some women stand right on the verge of wanting another baby. I didn’t have a good answer, although they hired me anyway.)
As Medicare grows as a percentage of the federal budget, this issue will become increasingly important. And as technology advances, no one will be left with a comfortable intellectual position.
The evolution of protectionism
To get the industrial Midwest with its 140,000 steel workers to vote Republican in congressional elections, President Bush slapped a prohibitive tariff on imports of steel from Europe and Japan in 2001. He got what he wanted: a (bare) Republican majority in the Congress. But while the large steel users (such as automobile makers, railroads and building contractors) were forced by the tariff to buy domestic, they immediately set about cutting their use of steel so as not to spend more on it than they would have had to spend had they been able to buy the imports. Bush’s tariff action thus only accelerated the long-term decline of the traditional midwestern steel producers and the jobs they generate. Tariffs, in other words, can still force users to buy domestic, but they are no longer capable of protecting the domestic producers’ prices. Those are set through information and on the world-market level.
This development underlies the steady shift in protectionism: from tariffs–the traditional way–to protection through rules, regulations and especially export subsidies. World trade has grown spectacularly in the last fifty years. The largest growth has been in subsidized farm exports from the developed world: western and central Europe, Australia, Canada and the United States. Farm subsidies are now the only net income of French farmers, as their crops produce nothing but net losses and are grown only as the entitlement for the subsidies. These subsidies are in fact a major–perhaps the major–cement of the Franco-German alliance [TC: touche’, und Autsch!], and with it, of the European Union.
That is Peter Drucker, read more here.
Sachs v. Easterly
It’s sad to see a first-rate economist descend to the level of a third-rate politician. But saddened is what I feel after reading Sach’s response to Easterly’s review of The End of Poverty (see also Tyler’s comments).
Consider this:
Easterly’s simplistic approach fits well with many conservatives in
Washington, who would rather blame the poor than help them. Somehow the
world’s poorest people are made out to be our enemy. According to this
upside-down worldview, the people dying of malaria are out for our
money — all $3 per year that it would cost each person in the rich
world to help Africa mount an effective control program!
Easterly, of course, said no such thing. What he said is that the tinpot dictators of Africa and their cronies are out for our money and they often succeed in diverting it to their own pockets. Ignoring this reality is the simplistic approach.
Two of my favorite things
NASA, in partnership with the Spaceward Foundation, will offer prizes for advances in strong lightweight tethers and for methods of transmitting power wirelessly, both key aspects of a space elevator. More from the NYTimes.
Africa fact of the day
…the four hundred richest U.S. taxpayers had a combined income in 2000 that exceeded the combined incomes of four of the countries of Mr. Bush’s tropical tour. The difference was astounding: the $57 billion in combined income of Botswana, Nigeria, Senegal, and Uganda [TC: Botswana and Senegal are relative success stories in Africa, and Nigeria has oil] was the income of 161 million people, who average $350 in income per year, whereas the $69 billion was the income of four hundred individuals.
That is from Jeffrey Sachs’s new The End of Poverty: Economic Possibilities for Our Time. And you got it right, there is no typo, that is 400 people richer than 161 million people.
Left-wingers think: "My goodness, how can so few have so much? They were lucky anyway. Let us raise marginal tax rates."
Randians think: "Hail the productive powers of capitalism!"
Rawlsians think: "They didn’t produce that wealth, we did."
Others think: "My goodness, Africa is screwed up."
The economist? The economist wonders why there is not more trade between the two groups…
Pierre Boulez turns 80
Today is his eightieth birthday, here are some appreciations and critiques. I side with George Benjamin:
…a rigorous compositional skill is coupled to an imagination of extraordinary aural refinement. Pli Selon Pli, Eclat/Multiples, the spectacularly inventive orchestral Notations, Explosante-Fixe – these are among the most beautiful works of our time. Boulez’s music has a very distinctive flavour – a love of rare timbres and spicy harmonies, a supreme formal elegance and a passion for virtuosity and vehement energy. The polemics that periodically surround him obscure the intensely poetic source of his musical vision.
Who buys hard drugs?
Check out these images, courtesy of Mahalanobis. Overall the rich countries are the biggest users, but other patterns are evident as well. Opiate and heroin seem to be most popular close to the source, including in Russia. It is the English-speaking world which loves Ecstasy.
Robert Barro agrees with me on Social Security
I once thought personal accounts for Social Security were a good idea but have changed my mind….Overall the accounts are a bad idea…
Contributions that fund just the minimum cannot go into a meaningful personal account. People would opt for too much risk, knowing they would be bailed out if they fell short. Also, contributions that cover the minimum provide no individual return and, therefore, amount to a tax that discourages work.
Personal acounts have to supplement the minimum payout. But then why have a public program at all, rather than relying on individual choices on saving? I think there is no good reason to go beyond the minimum standard; that is why I view personal accounts as a mistake — they enlarge a Social Security program that already promises too much.
To provide an acceptable standard of living, baseline Social Security benefits should be indexed to prices. The practice of indexing initial benefits to past wages should be eliminated.
That is from the 4 April Business Week. Barro also supports raising the retirement age and opposes a boost in the payroll tax.
Addendum: Here is the column.
Blog dare
I dared Bryan Caplan, our resident non-bleeding heart libertarian, to blog today’s lunch conversation. The result is called Let Them Get Roommates. His best fact is:
[the] poorest 25% of Americans have more living space than the average European.
His bottom line is:
Before anyone starts collecting welfare, it is more than fair to ask them – for starters – to try to solve their own problem by taking on some roommates. Is it beneath their dignity to live like college students? I think not.
Addendum: Several of you have asked what is my point of view. I worry about the idea of a welfare bureaucracy "residency police." And the general cost of welfare — as opposed to broad-based entitelments such as Medicare — is relatively small. So I would not push the button on this one. I also would fear the symbolic connection to workhouses and the like.
General Motors facts
Ratio of active workers at General Motors to retirees on its pension rolls: 2:5
Total pension costs of the company per vehicle it produces: $675
Those are from Harper’s Index, April issue.
Will a wealthier China democratize?
Maybe not. Daron Acemoglu, Simon Johnson, Pierre Robinson, and Pierre Yared report:
We revisit one of the central empirical findings of the political economy literature that higher income per capita causes democracy. Existing studies establish a strong cross-country correlation between income and democracy, but do not typically control for factors that simultaneously affect both variables. We show that controlling for such factors by including country fixed effects removes the statistical association between income per capita and various measures of democracy. We also present instrumental-variables using two different strategies. These estimates also show no causal effect of income on democracy. Furthermore, we reconcile the positive cross-country correlation between income and democracy with the absence of a causal effect of income on democracy by showing that the long-run evolution of income and democracy is related to historical factors. Consistent with this, the positive correlation between income and democracy disappears, even without fixed effects, when we control for the historical determinants of economic and political development in a sample of former European colonies.
Here is the full paper for $5. Here is a version for free.
Does prekindergarten help kids?
…early education does increase reading and mathematics skills at school entry, but it also boosts children’s classroom behavioral problems and reduces their self-control. Further, for most children the positive effects of pre-kindergarten on skills largely dissipate by the spring of first grade, although the negative behavioral effects continue. In the study, the authors take account of many factors affecting a child, including family background and neighborhood characteristics. These factors include race/ethnicity, age, health status at birth, height, weight, and gender, family income related to need, language spoken in the home, and so on.
In other words, you learn both how to read and how to raise hell, but a head start is useful only for the latter talent. Here is the link to the summary and study.
Unintended consequences, installment #637
..if this case [Schiavo] has prompted a marked increase in the number of people specifying when they do not want heroic measures used to extend their biological life, then by their actions the Bush administration and both houses of Congress will have retarded rather than extended the culture of life.
Just a thought.
That is from Daniel Drezner.
Junk mail
I’m reading Adam Hochschild’s excellent history of the abolition movement, Bury the Chains. I’ll post more in the future but there are lots of interesting tidbits on people, institutions and economic history. Debates about who should pay for incoming cell phone calls, for example, are nothing new.
Reverend James Ramsay was an outspoken critic of the slave system and was attacked in a variety of ways by the sugar plantation owners, including this:
His enemies sent him packages of stones from the West Indies, because under the prevailing postal system, charges were paid by the recipient.