Milton Friedman Sparring
By Arnold Kling
Robert Kuttner attempts to debate Milton Friedman
MF: …in the case of medicine, I would really like to see, and I wish I were competent myself to do it myself, a comparative study between dentistry and medicine.
RK: But dentistry is peripheral. It’s a very small fraction of total health spending.
MF: A very small fraction with exactly the same kind of problems, and I would like to know whether there has been any less technological development in dentistry than there has been in medicine, whether costs have gone up anything like in medicine. They all have the same kind of problems. The key problem of medicine is third party payment. Nobody pays his own bills.
Read the whole piece. The way I see it, Kuttner ends up sputtering. Near the end, he talks about the real income of doctors being down from 1950. This is almost certainly false, although I do not have a definitive data source. this report says that doctor fees rose 43 percent faster than inflation from 1950-1977. My guess is that since 1977 doctor fees have at least held their own relative to inflation. For Kuttner to be correct, they would have to have increased much more slowly than other prices over the past 25 years.
Friedman is rightly regarded as one of the best debaters in the profession. His contrast of dentistry and medicine is an example.
For Discussion. If you could argue with Friedman on any of the positions he takes in this article, which position would it be and what would be your argument? (This question is for people on the pro-government side of the Friedman–I’m not so interested in libertarians nit-picking.)
UPDATE: Alex Tabarrok reminds me of another example of free-market medicine.