There is a difference between, on the one hand, fighting epidemics of contagious diseases and, on the other hand, what is called “public health.” In reality, public health is basically a political movement that aims at increasing government intervention in the health area as well as in other areas of life.
I provide a few examples of this in a comment on the Reason Foundation’s website (“Public Health Officials Far Too Often Ignore the Costs and Trade-Offs Involved In Policy Decisions,” April 7, 2020). Three short excerpts, even if other parts of the article are also, I think, very relevant to the current Covid-19 crisis:
The humongous failures of public health organizations such as the Centers for Disease Control and Prevention (CDC), Food and Drug Administration (FDA), as well as the World Health Organization (WHO), should raise serious doubts about their effectiveness.
Many might be surprised to learn that [public health] is mainly a political movement with a specific ideology. This concept is recognized in one of the most popular textbooks of public health, Bernard Turnock’s Public Health: What It Is and How It Works (5th edition, Jones & Bartlett Learning, 2012, p. 22), which says, “In many respects, it is more reasonable to view public health as a movement than as a profession.”
Gerard Hastings of Stirling University writes in a medical journal that “lethal though tobacco is, the harm done to public health by our economic system is far greater.” Marketing, he claims, “undermines our mental as well as our physical well-being” and, when done by multinationals, presents “a major threat to public health.” (“Why Corporate Power Is a Public Health Priority,” BMJ, 2012)
READER COMMENTS
Phil H
Apr 7 2020 at 8:38pm
From the article: “Turnock (6th edition of the same textbook, 2016, p. 320) writes, “The argument that resources are limited and that there simply are not adequate resources to meet treatment, as well as prevention purposes, is uniquely American and quite inimical to the public’s health.”
This is an obviously non-sensical statement.”
This is not right. there is one very important sense in which health is a non-scarce resource. The most vital input to healthcare is knowledge, and knowledge is infinitely reproducible and non-excludable.
Knowledge is why we’re rich, and why even in the face of very major institutional failures, this pandemic will kill many fewer than the Spanish flu.
Jon Murphy
Apr 7 2020 at 9:40pm
That something is non-excudable and non-rival does not imply it is non-scarce.
Mark Brady
Apr 8 2020 at 4:39pm
Would you agree with the statement that existing knowledge is nonrival, and were it not for intellectual property rights, nonexcludable?
Jon Murphy
Apr 8 2020 at 8:35pm
It’s non-rival, sure, but certainly excludable.
Phil H
Apr 8 2020 at 11:34pm
I’m not sure about “excludable” and I don’t really care about it. The fact is that open science exists. The medical profession made the conscious choice *not* to exclude, even if it is in theory possible. Medical textbooks are online; the research is available in any big library. It is in the public domain.
Jon Murphy
Apr 9 2020 at 10:38am
All that is true, but does not mean knowledge is not excludable or non-scarce (or even replicable).
A lot of knowledge is inarticulate. Greg Maddox or Randy Johnson could publish a book on pitching, make it zero monetary price, and distribute it widely, but that does not imply everyone who reads it would become a Hall of Fame pitcher (and not merely for lack of effort). Much of what goes into being a great pitcher (or doctor, or whatever) is inarticulable knowledge. It comes from experience, from small, perhaps even unconscious, adjustments.
Pierre Lemieux
Apr 8 2020 at 12:43am
The “most vital” (assuming we can make some sense of this expression) input of many things, perhaps of most production, is knowledge. This does not make them non-scarce. Take a (good) blog in which the “most vital” input is quite certainly knowledge. Now, consider the following statement: “The argument that resources are limited and that there simply are not adequate resources to meet demand for blogs is uniquely American and quite inimical to free speech and personal development.”
Phil H
Apr 8 2020 at 4:16am
Yep, Pierre, I’m pretty happy with that. I and everyone I know pays zero for blogs. That puts our demand at zero. And it is satisfied. The idea that a zero demand is not satisfied does sound bizarre, American, and inimical to good sense.
Jon Murphy
Apr 8 2020 at 8:53am
No. Your demand is not at zero. The monetary price (but not the total price) you pay is zero. Different things. To speak of “Demand is at zero” would imply your quantity demanded at every price point is zero, but as we can clearly see, that is objectively not the case.
Pierre Lemieux
Apr 8 2020 at 11:06am
As Jon says, your blog consumption is paid by somebody else. There is a zero price for you but not for the one who pays. Real resources are going into a blog, and they have to be offered free or paid for by somebody to bid them away from other uses. It the same for the old religious charitable hospitals: their prices (for some patients) might have been zero but it doesn’t mean there was no cost.
Jon Murphy
Apr 8 2020 at 11:17am
If I may, I’d like to suggest an amendment to your point. Phil is still paying a cost for blog consumption: time. I guarantee he still has a downward sloping demand curve for blogs
Pierre Lemieux
Apr 8 2020 at 3:22pm
Jon: Oh, I thought he was spending all his time reading this fantastic blog! By the way, that time is scarce and its use represents a cost is why few billionaires buy 50 Ferraris. Not only would the storage costs be high, but the billionaire wouldn’t have time to drive them all more than for a very short time.
KevinDC
Apr 8 2020 at 9:17am
Hey Phil –
I can see a few problems with some of your comments.
You say that the “most vital input to healthcare is knowledge”, and since “knowledge is infinitely reproducible and non-excludable” this means “there is one very important sense in which health is a non-scarce resource.”
Even if we grant the idea that “knowledge is infinitely reproducible and non-excludable” (which we shouldn’t, because it’s just flat out false, but let’s take it for the sake of argument), it doesn’t follow from this that “health” itself becomes a non-scarce resource in any sense. Suppose a good required ten inputs, and one of those inputs was infinitely available, and could be conjured out of the ether from nothing. The other nine inputs are subject to the usual scarcity of the real world. There is no sense in which the actual good becomes non-scarce as a result of the infinitude of the first input. The scarcity of the good is still going to be bound by the scarcity of the other nine inputs. Just like a chain is only as strong as its weakest link, the scarcity of any good is bound by the availability of its most scarce input. If we discovered tomorrow that an infallible cure for all cancers came by mixing seawater and five ounces of tritium, this cure would be extremely scarce, because there are only a few dozen pounds of tritium on earth. It just doesn’t matter that seawater is available in practically unlimited supply. If I was to say “there’s an important sense in which the cure for cancer isn’t scarce, because one of the required inputs is practically unlimited,” that would just be a confused statement.
You also said in a later comment “I and everyone I know pays zero for blogs. That puts our demand at zero.” No. Just, no. You have a habit of using economics terms in a way that is unrelated to what those terms actually mean in economics – this appears to be one of them, with your use of the term “demand.” First, the price of something never affects the demand for it. Price can impact the quantity demanded, but not demand itself. It might sound like I’m nitpicking in calling out a difference between “demand” and “quantity demanded,” but these are very different things with very different implications. A change in “demand,” and a change in “quantity demanded,” aren’t remotely the same. So saying “The price is X and that puts demand at Y” is a nonsensical statement.
Your statement “That puts our demand at zero” is also wrong in every sense. If the demand for something is zero, that means the consumption of it will also be zero, no matter how low the price is, even if it’s available for free. The fact that you regularly read this blog, and take the time to comment on it quite often, means your statement “that puts our demand at zero” is demonstrably false.
Pierre Lemieux
Apr 8 2020 at 11:10am
You’re right. I would also recommend to Phil a post I did on supply and demand at https://www.econlib.org/archives/2018/01/a_frequent_conf.html
Phil H
Apr 8 2020 at 5:06pm
Thanks, Kevin. I think your reply was a little more considered than the rather kneejerk versions from Jon and Pierre, so I’ll try to give a more thoughtful answer.
(I don’t particularly want to defend my rather snotty rejoinder to them, but the zero price > zero demand idea is not quite as absurd as you suggest – revealed demand is in fact measured by what people pay for something. But I know there’s a lot more to it than that.)
OK, so the multiple inputs argument. Firstly, you’re obviously correct. Healthcare requires multiple inputs, most importantly labor, and that is scarce.
But within healthcare, in particular, there are certain kinds of demand that can be met *perfectly* given the current state of medical knowledge. That’s a rather unusual situation. Normally demand is regarded as being potentially infinite. But medical science defines certain types of treatment as being *enough*. If you take X amount of medicine, you’re cured; you cannot demand any more. The classic example is vaccines: one dose per person is enough. There can be no additional demand beyond that (given the current state of medical technology). So once your country is rich enough to satisfy that demand, there is a real sense in which there is no more need for a market mechanism to allocate this resource.
On the scarcity of knowledge itself: Because of the commitment to open science, the price of knowledge to the reading public is now zero, and so that’s the cost of that input to healthcare. Again, this is radically different from the past. My father-in-law was lecturing me just last week about dynasties of Chinese doctors who passed down their herbal remedies from father to son. Now, that input is free, and that’s made healthcare for all very much possible. The change in technology has changed the way resources are allocated, so that a higher standard of living is possible. That’s not exactly an unorthodox kind of economics!
Phil H
Apr 9 2020 at 12:26am
Huh, I wrote a long reply but the internet seems to have eaten it.
Summary:
First, you’re right that the other inputs to health are scarce.
But health knowledge is a technology change (definitely an economics concept!), and technology change, while not eliminating scarcity (in the technical, economic sense), absolutely can turn something from being lacking to being abundant. Oil did it with electricity. Knowledge has done it with healthcare. That’s a significant difference.
The second sense in which health knowledge can affect scarcity is that health knowledge actually sets upper bounds on the demand for certain types of healthcare. For example, while people can still demand reiki, they can’t demand it for their health. Or moxibustion. Or bleeding. With vaccines, there is an absolute limit to the amount that can be demanded *for health*. You can want a second dose of vaccine, but it will do you no health benefit. This kind of hard limit to demand is radically different to other goods (e.g. food: there is no objective distinction between the demand for basic rations and the demand for extra portions; in healthcare, that distinction exists).
So health knowledge, and the free availability of it due to open science, do create some differences in the relevant economic models.
KevinDC
Apr 9 2020 at 10:34am
Hey Phil –
I understand, the internet eats my comments here a fair amount too.
First, what you write about knowledge being like technology and thus increasing potential output is largely correct. This is a standard market mechanism. Knowledge about fracking techniques made natural gas more easily accessible, which caused resources that might have been used as inputs to other goods to be allocated to natural gas production, which in turn made natural gas more abundant on the market. But, it would still be false to say this new technology made natural gas “non-scarce” is any important sense – there’s a huge difference between relative abundance and non-scarcity. Regardless, the idea that increases in knowledge leads to increases in output is a standard point of analysis in all markets – healthcare, or natural gas, or electricity as you pointed out, or growing apples and oranges, or camera lenses, or anything where knowledge is an input to production. Which is to say, everything. The idea that increases in knowledge can lead to increases in output doesn’t have any special implications in the market for medical services, or create any relevant differences in the models for that market – it’s true everywhere. Whatever implication it has for medicine, it also has for the production of beanie babies. (Do they still make those? I’m not actually sure.)
I’m not sure I understood what your second point is supposed to be saying. When you say “a person can’t demand X for health”, where X stands for some form pseudoscientific medicine, or a redundant or unnecessary service – I find this a bit opaque. For example, you said “while people can still demand reiki, they can’t demand it for their health.” What do you mean by saying they “can’t demand it for their health?” Is this meant to be a general point that demanding such services as a form of health care is epistemically unjustified? True, and an interesting topic in its own right, but not particularly relevant to modeling the market for healthcare. Or do you mean “they can’t demand it for their health” to mean people literally unable to get such services provided in the name of heath care? Because that’s just false. People demand, and receive, pseudoscientific and unnecessary or redundant medical interventions all the time. (I work as a healthcare economics consultant – I’m neck deep in these data as part of my day to day life.) If you meant neither of these, then, well, I’m a bit lost. People can demand, and be supplied, with services and procedures that aren’t justified according to the totality of medical knowledge and therefore…what? This somehow has an important implication that fundamentally alters how we should analyze scarcity and demand in the healthcare market? I don’t see it.
One last point – you said that medical knowledge creates a “hard limit to demand” and this “is radically different to other goods.” You are again failing to understand what demand actually means in economics, because increases in medical knowledge simply do not create limits to demand, as the term is used in economic analysis. Such a statement falls into the category of “not even wrong.”
Or maybe you meant that healthcare providers (or regulators, or whatever), due to their knowledge, would refuse to provide unscientific or unnecessary and redundant procedures, thus creating the aforementioned hard limit? If so, that would be even worse for your case. Aside from the point that this is false as a matter of empirical fact, even if it was perfectly true, and no provider ever so much as gave someone a duplicate vaccination because the patient insisted on it (which, again, happens all the time in the real world, but lets pretend it worked that way for a moment) – it would still be absolutely, 100% false to say this would create a hard limit on demand. This would have no impact on demand whatsoever! This would represent a restriction on the supply side, not the demand side. Specifically, it would be a hard limit on quantity supplied. I don’t mean to come across as snarky, but you’ve been mixing up lots really basic concepts when you talk about these things.
So to sum up – as near as I can tell, you’ve said a few things that are either factually false or theoretically incoherent, or you’re just identifying features of the healthcare market that are present in every market, and don’t give any particular reason to view the healthcare market differently. (Which isn’t to say there are no important or different features of the healthcare market – there are. Just nothing you’ve mentioned.)
Jon Murphy
Apr 9 2020 at 10:40am
That’s incorrect; diminishing marginal utility exists. Demand curves for all goods slope downward.
Brandon Berg
Apr 8 2020 at 6:15am
I’ve always thought of public health as the social psychology of medicine, but perhaps that was too charitable.
Thomas Hutcheson
Apr 8 2020 at 12:32pm
Public Health Officials Far Too Often Ignore the Costs and Trade-Offs Involved In Policy Decisions
So what else is new?
[Non-economists and some economists, too] Far Too Often Ignore the Costs and Trade-Offs Involved In Policy Decisions.
What is the conclusion? That they make no policy decisions (what ever that means) or that they should take account of costs and trade-offs?
Clearly CDC did not take account of (ignore?) the costs of the US not having a test and track system like Taiwan does. How do WE create incentives for it to take account of such costs in the future?
Congress is ignoring the costs and trade offs involved in setting the tax rate on net CO2 emissions. What should WE do about that?
Pierre Lemieux
Apr 8 2020 at 3:03pm
@Thomas Hutcheson: I don’t know what YOU will do. But here, we gathered a few people who share some ideas about incentives, supply and demand, institutions, methodological individualism, and such, and we collaborate in a blog to try to persuade other people. In fact, it is slightly more complicated than that. Some entrepreneur(s) at Liberty Fund had the idea of a blog and gathered our limited “we” for the purpose of producing the blog. It’s even more complicated than that: more than half a century ago, an Indiana entrepreneur, Pierre Goodrich, who shared our ideas and values, created Liberty Fund (without really any “we”), where internal entrepreneurs were, decades later, to have this idea of a blog. Thanks to them, I am able to write on public health (among numerous topics) and the illusion that Leviathan can turn society into nirvana–and to happily include you in the conversation. Let’s hope it will help people to not forget costs nor the vacuity of the political “we”
Pierre Lemieux
Apr 8 2020 at 3:06pm
@Thomas Hutcheson: I don’t know what YOU will do. But here, we gathered a few people who share some ideas about incentives, supply and demand, institutions, methodological individualism, and such, and we collaborate in a blog to converse and try to persuade other people. In fact, it is slightly more complicated than that. Some entrepreneur(s) at Liberty Fund had the idea of a blog and gathered our limited “we” for the purpose of producing the blog. It’s even more complicated than that: more than half a century ago, an Indiana entrepreneur, Pierre Goodrich, who shared our ideas and values, created Liberty Fund (without any “we”), where internal entrepreneurs were, decades later, to have this idea of a blog. Thanks to them, I am able to write on public health (among numerous topics) and the illusion that Leviathan can turn society into nirvana–and to happily include you in the conversation. Let’s hope it will help people to not forget costs nor the vacuity of the political “we”.
Tom DeMeo
Apr 8 2020 at 3:42pm
It seems there is a tendency to project powers onto agencies and regulators that aren’t there. We see the normal consequences of bureaucratic mediocrity and ascribe dark ulterior motives.
Taiwan has a different healthcare infrastructure and a different social and political contract. I don’t know whether the CDC correctly anticipated that a test and track system was an essential tool or not, but I’m quite sure they lacked the influence to get it taken seriously. I’m not sure anyone or any party was powerful enough to get such a thing done before this, much less the CDC.
We can’t even agree on basic principles of registering people to vote. Quickly tracking a person’s contacts and consistently executing quarantine measures? I don’t think so.
America has a problem consenting to such things. It isn’t our government’s fault that we didn’t do this, it’s ours. Ever since Reagan, a fundamental distrust of government and its motives has been growing. Whether you believe this completely or not at all, you must accept the fact that it is self fulfilling.
Jon Murphy
Apr 8 2020 at 10:53pm
That is the great public choice question
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