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Bloggingheads 10-06-2009 09:42 PM

One-Handed Applause (Josh Cohen & Brink Lindsey)
 

kidneystones 10-06-2009 11:29 PM

Tasty and Less Filling
 
Presidenting is difficult. On that much differing parties can agree. Brink is looking for new friends. Given his distaste for David Frum, it's easy to understand why Brink might want to play a duet on Josh's shiny, black piano artfully framed in the background. Love the lighting on those stairs, Josh. And the black sweater/shirt? Elegant and understated. Simply screams: I'm one of the people.

Egalitarian Levin is evidently quite happy to dump the public option, the cornerstone of any real health care reform. Brink does a better job of stating simply that all Americans need access to some form of health care.

Stapler Malone 10-06-2009 11:48 PM

Re: Tasty and Less Filling
 
Quote:

Originally Posted by kidneystones (Post 132769)
Given his distaste for David Frum...

"Distaste??" What in God's name are you talking about? Brink & Frum are old college buddies. They were charter members of Harvard Law's Federalist Society together. They watched Reagan win the presidency from a Cambridge dorm room together. What could possibly forge a more enduring bond between two young conservatives than that??

kidneystones 10-07-2009 12:03 AM

Acorn King
 
Brink and David may have gone to college together, but Brink rejected David's clammy embrace during their last exchange at bhtv and voted for Acorn. Their rupture's probably complete.

Brink has a new agenda and wants to bring liberals and libertarians together. I expect, however, that spiraling unemployment, economic stagnation, and more handouts to Wall St. cronies will drive Brink closer to ordinary, small-government Americans.

Jay J 10-07-2009 01:07 AM

Re: One-Handed Applause (Josh Cohen & Brink Lindsey)
 
Brink Lindsey makes the point that the U.S. Market is the driver behind the bulk of the innovation achieved by the world's pharmaceutical industry. I remember an econ professor making that point at an event I attended not too long ago, and someone replied by pointing out several major European drug companies (implying that the professor was wrong, since there are so many profitable foreign drug companies).

But Brink Lindsey's point was not that what's important about innovation is that U.S. drug companies are more innovative, his point was that the U.S. market, being what it is - large and *relatively* unregulated - is the driver behind pharmaceutical innovation (therefore IF U.S. drug companies are on average more innovative, it would have to be because of their location in, or increased access to, the U.S. market, but the fact that they're American companies would be incidental).

Of course, the econ professor I mentioned made his point in perhaps an imprecise way; he said something to the effect of "we're subsidizing the world right now in terms of drug research," which is ambiguous. He may very well (and probably did) have meant what Brink Lindsey meant, but it could have also been interpreted as a statement which could be countered (but perhaps not disproved) by pointing out all the foreign drug companies that rake in profits.

Again, what Brink Lindsey said is that the U.S. market is what drives innovation, which explains why foreign drug companies have dealings in the U.S. I'm not expert on the topic, but if it's true that the U.S. is the market that most (or a largely disproportion bulk of) drug innovation happens in, or is aimed toward selling to, then Brink's point about stifling innovation seems like a good one. Of course, this argument can't counter the belief that we should have more equality in health care, come hell or high water. But I haven't seen very many people make that argument. Rather, what I usually encounter are people making the claim that innovation will not be hurt by universal health care.

AemJeff 10-07-2009 01:28 AM

Re: One-Handed Applause (Josh Cohen & Brink Lindsey)
 
Quote:

Originally Posted by Jay J (Post 132774)
Brink Lindsey makes the point that the U.S. Market is the driver behind the bulk of the innovation achieved by the world's pharmaceutical industry. I remember an econ professor making that point at an event I attended not too long ago, and someone replied by pointing out several major European drug companies (implying that the professor was wrong, since there are so many profitable foreign drug companies).

But Brink Lindsey's point was not that what's important about innovation is that U.S. drug companies are more innovative, but that the U.S. market, being what it is - large and *relatively* unregulated - is the driver behind pharmaceutical innovation (therefore IF U.S. drug companies are on average more innovative, it would have to be because of their location in, or increased access to, the U.S. market, but the fact that they're American companies would be incidental).

Of course, the way the econ professor I mentioned said it may not have been as precise as possible; he said something to the effect of "we're subsidizing the world right now in terms of drug research," which is ambiguous. He may very well (and probably did) mean what Brink Lindsey meant, but it could also be interpreted as a statement which can be countered (but perhaps not disproved) by pointing to all the foreign drug companies that rake in profits.

Again, what Brink Lindsey said is that the U.S. market is what drives innovation, which explains why all these foreign drug companies have so many dealings in the U.S. I'm not expert on the topic, but if it's true that the U.S. is the market that most drug innovation happens in, or is aimed toward selling to, then Brink's point about stifling innovation seems like a good one. Of course, this argument can't counter the belief that we should have more equality in health care, some hell or high water. But I haven't seen very many people make that argument. Rather, what I usually encounter are people making the claim that innovation will not be hurt.

I definitely don't believe that the burden of proof is on the people who question the claim that the U.S. market drives innovation. And if you assume that it is the case that the U.S. market exerts some marginal effect, could you definitively argue that increased access and better prices wouldn't outweigh the benefit of that effect? How do you argue this sort of thing rationally? In any case, arguing that unquantified suppositions based on vague (and ideologically convenient) assumptions strikes me a a profoundly unhelpful method of determining public policy.

Stapler Malone 10-07-2009 01:30 AM

Re: Acorn King
 
Quote:

Originally Posted by kidneystones (Post 132773)
...handouts to Wall St. cronies will drive Brink closer to ordinary, small-government Americans.

Yeah, I'm sure the fastest way to a Cato fellow's heart is populist grandstanding about "Wall Street cronies." There's nothing a Classical Liberals hate more than Wall St.

Stapler Malone 10-07-2009 01:51 AM

Re: One-Handed Applause (Josh Cohen & Brink Lindsey)
 
Quote:

Originally Posted by AemJeff (Post 132776)
if you assume that it is the case that the U.S. market exerts some marginal effect, could you definitively argue that increased access and better prices wouldn't outweigh the benefit of that effect?

While it may be both vague and ideologically convenient, I do think there is something to it. The idea is, basically, "the US is so profitable that competing companies innovate their way to a larger share of those profits." OK, but that assumes a pretty static pie of demand. I think your reply above is the nub of a valid counterargument.

As a defense of the current system, "US profitability" rests on the idea that this is the only way to profit, but that's not the case. As it's now, health care provision is essentially a cartel: a small group has erected huge barriers to market entry to defend their access to a captive group of price-takers with inelastic demand, and the cartel then extracts as much as they can from that aggregate (if it all comes from the rich few and they can't sell to the poor, so what?). If, instead, you increase the pool of potential customers by, say, having universal health care, the gain in volume of sales could outweigh the loss in each sale's inflated profit margin. I have yet to see a good case that selling twice as many Fancy New Wonderdrug doses at half the price would cripple the incentive to create Fancy Next Wonderdrug. Producing pills is cheap, and selling more of them for less results in just as much money to pay for producing ideas.

What's more, reducing the barriers to entry in the health care provision market (by say, a public option) would add more players to the field and break-up the cartel. This is called competition, classical liberals usually like it because it has been known to spur (wait for it...) innovation! "Defend the cartel, for innovation's sake" is a new one indeed.

To my mind, this "greater volume of sales is good for innovation" case is at least as plausible as the "don't change a thing" position. But, alas, even if my plan is just as profitable for Big Health, it requires a change in their current sweetheart deal, and you know how rentiers feel about that.

Jay J 10-07-2009 02:20 AM

Re: One-Handed Applause (Josh Cohen & Brink Lindsey)
 
AemJeff,

I'm not sure where to start.

Umm, first, I guess I'll say, I'm not sure who has the burden of proof. I think the argument is that because of the size and relatively unregulated nature of the U.S. market, it is more profitable for drug companies to sell to, or develop in the U.S. market compared to smaller and/or relatively more regulated markets. Of course, that something looks right on paper like this, does not mean it is true, but I think the plausibility of the argument should be acknowledged. If we can't discuss things at this point, then I imagine we can't discuss very much at all (and of course I'm open to hearing other claims that appear very plausible as well, but simply saying you don't have the burden of proof doesn't seem to accomplish anything).

As to your argument asking how I know that increased access and better health prices wouldn't outweigh the "marginal effect" the innovative U.S. market has, that you hypothetically allow is possible, for argument's sake:

Well, there are a couple of ways for me to read this. One is that you are trying to help me look at the overall benefit of reform, by pointing out that increased access and better prices are a good, and that this good may outweigh the good of innovation. If this is what you're saying, well, OK. But first, I said nothing at all about the overall topic, only the subtopic of innovation. Second, I don't see how denying that increased access and/or better prices outweighs innovation is less rational than saying the opposite. I won't say whether there is a fact of the matter of whether better prices/increases access is a sufficient substitute for our current pace of innovation, because I'm morally ambivalent and philosophically undeveloped on that question. But I don't see how anyone can confidently say, right off the bat, that one or the other moral position is more "rational" than the other.

Now maybe I've misread you, if so, please forgive me. The only other way I can imagine your statement here being interpreted is that you are making a direct argument that somehow innovation would be unharmed because of better prices/increased access. Is that what you're saying, or was I on the right track in the paragraph above?

As for your last sentence:

Quote:

...arguing that unquantified suppositions based on vague (and ideologically convenient) assumptions strikes me a a profoundly unhelpful method of determining public policy.
Talk about unhelpful..

kidneystones 10-07-2009 02:21 AM

Cartel My Ass
 
SM writes more nonsense...[...]

Your bogus claims are demonstrably wrong. The first sleight of hand is to conflate large health-care providers, which in some markets may enjoy almost monopolistic power, with pharma research companies which may be small or large.

In and around MIT, for example, there are a large number of bio-tech companies researching for profit. There is no cartel. The potential for profit drives innovation and research.

Competition exists; and any company with the cash and know-how to get in the game can. The key is being able to sell the research to larger players.

They may be able to in a market that includes a public-option health-care program. If you think that big government can provide the best environment for research we need only look to Cuba, North Korea and the former Eastern Bloc.

Innovation comes from free enterprise. Big government is more monopolistic than any cartel, real or imagined.

Stapler Malone 10-07-2009 02:41 AM

Re: Cartel My Ass
 
Quote:

Originally Posted by kidneystones (Post 132781)
The first sleight of hand is to conflate large health-care providers, which in some markets may enjoy almost monopolistic power, with pharma research companies which may be small or large.

Oh oops, has this whole debate the country has been having been about opening up the pharma market, while I thought it was about changing the rules of the road for the "monopolistic" health care providers in my example? My bad. I guess I was confused by the "health care reform" title and all the wrangling between the health insurance industry and consumer advocacy groups. My mistake.

You can't just pronounce something "demonstrably false" and then fail to demonstrate it. Citing examples of communist and/or military dictatorships' lack of innovation (I think there just might be a lurking variable there) or getting all panicky about Big Gubmint is, ahem, less than persuasive.

Stapler Malone 10-07-2009 02:44 AM

Re: One-Handed Applause (Josh Cohen & Brink Lindsey)
 
Quote:

Originally Posted by Jay J (Post 132780)
The only other way I can imagine your statement here being interpreted is that you are making a direct argument that somehow innovation would be unharmed because of better prices/increased access.

I think that is what he's saying (or at least that's what I read him to be saying when I agreed with him and expanded upon his point)

Jay J 10-07-2009 02:48 AM

Re: One-Handed Applause (Josh Cohen & Brink Lindsey)
 
Stapler Malone,

You make an interesting point:

Quote:

I have yet to see a good case that selling twice as many Fancy New Wonderdrug doses at half the price would cripple the incentive to create Fancy Next Wonderdrug.
I'm not surprised that you haven't seen anyone make a good case against that. I mean, it's just simple math, right?

I have to wonder if that's how the health care market works though. You just give everyone universal care and boom, there's twice as many Fancy Next Wonderdrug customers. I hate to get non-theoretical (really, I do) but my understanding is that well over half the population has insurance right now, so we're not talking about expanding the pool of covered by nearly so large a proportion.

I suppose we could just implement price controls, that would work, at least at holding prices down. Without them, the larger pool of consumers will cause demand (and therefore price) to go up (it's not like buying toilet paper in bulk at Sam's, it's like everyone deciding to go to the local gas station to purchase small packs). I imagine price controls are an argument for another day, but I'm not confident that everything will be hunky-dory if we implement them. Let's keep in mind that the argument from the left has been that we can:

Give every person coverage

Do it in a way that is cheaper than what we have now

In a way that does not harm innovation

BTW, far be it from me to deny that conservatives, and particularly politicians and corporate hacks, talk out of both sides of their mouth at times, but my understanding of the argument in favor of competition is that it has to do with private companies, which do not have the coercive power to tax, or to print money. Don't get me wrong, I don't think there's anything inherently malevolent about government, (or inherently magical about corporations) but it doesn't seem like the comparison is apples to apples, and so it also doesn't seem like quite the gotcha so many seem to think it is.

As for barriers to entry, just about every economist on the right that I've seen is in favor of removing government regulation preventing competition across state lines.

EDIT: If price controls are what's going to do the trick, fine, then we could have a whole other conversation about price controls. But the main argument that I have heard is that the increased consumer pool will allow drug companies to make just as much money as before *while lowering prices*, on account of the increased volume of purchases. Now, my understanding is that an increased demand will cause prices to go up. If the companies are missing out on poor people right now because they're too busy selling their drugs to the rich, then what will make them want to start dropping their price to sell to the poor, especially since insurance companies will be paying for the bulk of it? They can either keep selling to the rich, or get the insurers to pay for the poor, it seems. Either way, I don't see the price dropping, at least not w/o price controls.

Stapler Malone 10-07-2009 03:31 AM

Re: One-Handed Applause (Josh Cohen & Brink Lindsey)
 
Thanks for your thoughtful response Jay J!

Price control is not a policy option that I'm personally going to carry any water for, in part because of its political infeasibility (imagine the tea party howls of "socialism," and this time they'd be right!). Much more importantly, because it just wouldn't work: Price controls -> black markets -> dangerous counterfeit drugs + organized crime syndicates + loss of revenue (to both innovative private corporations and tax-collectors who bankroll public goods) -> well-founded outcry from all sides to abandon price controls. So yeah, not my bag.

As for the notion that increasing demand (or rather, empowering the nascent demand currently stored in the poor & uninsured) will drive up prices, I think I disagree. My recollection of college economics is admittedly rusty, but I feel like a new equilibrium would be reached to serve that demand. More demand only raises prices if supply of health care provision remains constant.

This is where adding more players to the health care providing side of the equation is important. You are quite right that the current heath care companies might be happy to just stick with the lucrative >50% of Americans whom they currently serve, but where there is a market opportunity (the remaining <50%) the market should rise to the challenge. We aren't giving it a chance to. Prices would eventually go down, though I can see the reasoning that would lead them to go up due to the initial shock of more demand. If the cartel, as presently composed, can't scale up, they'll be out-competed, as it should be. Keep in mind, the current equilibrium isn't some natural optimal ideal, it is very fragile and contingent, constructed around the precise contours of the postwar anachronism of employer-based insurance system we have now. Change that system and a new equilibrium will emerge from the market itself.

I don't really know though, you may be totally correct. This isn't something I claim special expertise on. In the spirit of Brink in his last diavlog with Chris Hayes, I try to temper everything with a good dose of "epistemic humility" (though I have been known to strike a know-it-all pose for the sake of effect on messageboards)

EDIT: If you do want to hear from someone with special expertise, check out this great planet money podcast with a health care economist from Harvard. Spoiler alert: he ends up basically shrugging and scratching his head as well.

Quote:

Originally Posted by Jay J (Post 132784)
Stapler Malone,

You make an interesting point:



I'm not surprised that you haven't seen anyone make a good case against that. I mean, it's just simple math, right?

I have to wonder if that's how the health care market works though. You just give everyone universal care and boom, there's twice as many Fancy Next Wonderdrug customers. I hate to get non-theoretical (really, I do) but my understanding is that well over half the population has insurance right now, so we're not talking about expanding the pool of covered by nearly so large a proportion.

I suppose we could just implement price controls, that would work, at least at holding prices down. Without them, the larger pool of consumers will cause demand (and therefore price) to go up (it's not like buying toilet paper in bulk at Sam's, it's like everyone deciding to go to the local gas station to purchase small packs). I imagine price controls are an argument for another day, but I'm not confident that everything will be hunky-dory if we implement them. Let's keep in mind that the argument from the left has been that we can:

Give every person coverage

Do it in a way that is cheaper than what we have now

In a way that does not harm innovation

BTW, far be it from me to deny that conservatives, and particularly politicians and corporate hacks, talk out of both sides of their mouth at times, but my understanding of the argument in favor of competition is that it has to do with private companies, which do not have the coercive power to tax, or to print money. Don't get me wrong, I don't think there's anything inherently malevolent about government, (or inherently magical about corporations) but it doesn't seem like the comparison is apples to apples, and so it also doesn't seem like quite the gotcha so many seem to think it is.

As for barriers to entry, just about every economist on the right that I've seen is in favor of removing government regulation preventing competition across state lines.

EDIT: If price controls are what's going to do the trick, fine, then we could have a whole other conversation about price controls. But the main argument that I have heard is that the increased consumer pool will allow drug companies to make just as much money as before *while lowering prices*, on account of the increased volume of purchases. Now, my understanding is that an increased demand will cause prices to go up. If the companies are missing out on poor people right now because they're too busy selling their drugs to the rich, then what will make them want to start dropping their price to sell to the poor, especially since insurance companies will be paying for the bulk of it? They can either keep selling to the rich, or get the insurers to pay for the poor, it seems. Either way, I don't see the price dropping, at least not w/o price controls.


PreppyMcPrepperson 10-07-2009 04:20 AM

Re: One-Handed Applause (Josh Cohen & Brink Lindsey)
 
Quote:

Originally Posted by Stapler Malone (Post 132783)
I think that is what he's saying (or at least that's what I read him to be saying when I agreed with him and expanded upon his point)

It's a little more complicated than that. I agree with the basic premise, that reform as structured is going to threaten pharma innovation but it's not a simple question of their having less profit because of prices falling to invest in R&D.

It's that the structure of the reform is going to lead to more bulk purchases of drugs, especially for the very sick who will be government subsidized. And the inclination of a system like that is to cover Wonderdrug 1 from Company A (say Prozac) but not Wonderdrug 2 from Company B (say Zoloft). Clinically, they are more or less the same, so there's no reason to cover both--it's inefficient because you end up buying in less bulk. That's why, when you go to a single-payer country, you'll find they tend not to do duplicates like that.

But the thing is, when you have those head-to-heads, Viagra vs. Cialis, Claritin vs. Zyrtec etc, the incentive on pharma is not simply to go for big breakthroughs to tackle whole new problems, but to make marginal tweaks to the drugs they have. And if you look at the way the new big drugs get developed, they often emerge from these incremental tweaks in existing drugs out of the motivation to make something just different enough from your competitors.

This is especially crucial as we start tackling more immune system diseases, where there's some research to suggest we'll need more diversity in our drugs because they'll have to be targeted to gene pools.

Stapler Malone 10-07-2009 04:28 AM

Re: One-Handed Applause (Josh Cohen & Brink Lindsey)
 
Quote:

Originally Posted by PreppyMcPrepperson (Post 132788)
the inclination of a system like that is to cover Wonderdrug 1 from Company A (say Prozac) but not Wonderdrug 2 from Company B (say Zoloft). Clinically, they are more or less the same, so there's no reason to cover both--it's inefficient because you end up buying in less bulk. That's why, when you go to a single-payer country, you'll find they tend not to do duplicates like that.

This is similar to the point McMegan made when she colorfully compared Mark Schmitt to a socialist pamphleteer decrying "wasteful competition." I have to admit, it's a very valid criticism, and I'm not sure there is a good way around it. I found it quite persuasive when Megan brought it up (as well as here in your iteration).

PreppyMcPrepperson 10-07-2009 05:19 AM

Re: One-Handed Applause (Josh Cohen & Brink Lindsey)
 
Quote:

Originally Posted by Stapler Malone (Post 132789)
This is similar to the point McMegan made when she colorfully compared Mark Schmitt to a socialist pamphleteer decrying "wasteful competition." I have to admit, it's a very valid criticism, and I'm not sure there is a good way around it. I found it quite persuasive when Megan brought it up (as well as here in your iteration).

Good point--wish I'd remembered that and had the energy to go in search of the dingalink, too tired now. I'm not sure how to get around it either, and I'm someone who, like Brink, is inclined to allow smart government interventions in providing health care. This is one thing that really worries me, and that isn't being talked about because the whole debate's gotten mired in 'death panel' hysteria.

johnshaplin 10-07-2009 07:45 AM

Re: One-Handed Applause (Josh Cohen & Brink Lindsey)
 
"Health Care does not operate in an open market; if you draw a supply-and-demand diagram for health care there is no quantity to put on the horizontal axis and no price to record on the vertical axis.It is not a commodity that is bought and sold at a given price on an open market. Proposals to introduce market forces in health care are largely concerned not with the provision of health care itself but with the provision of health insurance.

The intrinsic costs of providing insurance are relatively low. There are no expensive inputs to purchase, no uncertainty of design or technology to be concerned with. The major inputs are personnel and computing capacity. There are few major issues of innovation; unlike the rapid changes characteristic of medical practice, the service of providing insurance to pay for them does not evolve rapidly. A successful private insurance company follows an ancient formula; it stratifies its clientele by risk class and charges premiums adapted to each class. The most successful companies are generally those that manage to exclude the riskiest clents.

Public universal health insurance schemes like Medicare do not evaluate risk. Since they are universal, they do not need to. Therefore, they save the major cost of providing private health care insurance. They pay their personnel at civil service salary scales and are under no obligation to return a dividend to shareholders or meet a target rate of return. Insurance in general is therefore intrinsically a service that the public sector can competantly provide at lower cost than the private sector, and from the standpiont of an entire population, selective private provision of health insurance is invariably inferior to universal public provision.

Private health insurance companies would not exist except for their political capacity to forestall the creation of universal public systems, backed by their almost unlimited capacity to sow confusion among the general public over the basic economic facts. Liberals who support anything less than a common, public insurance pool have no argument. They are simply tugging their forelocks and bending their knee before the bastion of private power...not even offering another another glass of the proverbial liberal small ."

James K. Gailbraith, "The Predator State"

Starwatcher162536 10-07-2009 10:40 AM

Health care reform, misses the point?
 
If our goal is to improve the general health of our populace, perhaps health care reform is not where all the potential gains are. I suspect that programs that subsidize the more expensive healthy foods, over the cheap unhealthy foods, may be more effective both in the absolute health gained, and in the amount of health gained per dollar.

Or, perhaps giving everyone a free gym membership would, in the long run, be cheaper then having a million obese diabetics (Tax incentives for people that hit the gym twice a week?).

I realize this is more intrusive then people would prefer, more then I would prefer really, but I don't see how it is avoidable, considering how much the gov't is involved in health care.

Edit:
What happened to that soda tax they were talking about anyways?

Jay J 10-07-2009 11:33 AM

Re: One-Handed Applause (Josh Cohen & Brink Lindsey)
 
And thank you Stapler Malone, for that thoughtful response. There does appear to be much to be 'epistemologically humble' about. I'v gotta run and do, you know, life outside of message boards. But in due time, I'll consider your points and check out that podcast you linked to.

nikkibong 10-07-2009 11:59 AM

Re: One-Handed Applause (Josh Cohen & Brink Lindsey)
 
Since when does BHTV have re-runs?

look 10-07-2009 11:59 AM

This is only a test
 
Quote:

Originally Posted by kidneystones (Post 132769)
Presidenting is difficult. On that much differing parties can agree. Brink is looking for new friends. Given his distaste for David Frum, it's easy to understand why Brink might want to play a duet on Josh's shiny, black piano artfully framed in the background. Love the lighting on those stairs, Josh. And the black sweater/shirt? Elegant and understated. Simply screams: I'm one of the people.

...of my mental health. Did you edit out "something you just threw on?"

nikkibong 10-07-2009 12:01 PM

Re: This is only a test
 
Quote:

Originally Posted by look (Post 132802)
...of my mental health. Did you edit out "something you just threw on?"

He definitely did. I recall chuckling about it last night.

Ray 10-07-2009 12:14 PM

Re: One-Handed Applause (Josh Cohen & Brink Lindsey)
 
Quote:

Originally Posted by Jay J (Post 132774)
But Brink Lindsey's point was not that what's important about innovation is that U.S. drug companies are more innovative, his point was that the U.S. market, being what it is - large and *relatively* unregulated - is the driver behind pharmaceutical innovation

What innovation?

I don't see why everyone's so concerned with drug innovation. It's virtually meaningless.

All of the big, civilization-changing innovations in medicine happened fifty, sixty years ago: vaccines.

Since then, the only medical knowledge that has had an impact on health on the largest scale is: stop smoking. Maybe 'eat better and exercise', too.

Most new drugs don't work, and those that do have health outcomes that are irrelevant on the level of the nation-state. And this discussion concerns policy on that level.

look 10-07-2009 12:39 PM

Re: This is only a test
 
Quote:

Originally Posted by nikkibong (Post 132803)
He definitely did. I recall chuckling about it last night.

Bless him.

kidneystones 10-07-2009 12:52 PM

This old thing?
 
Something he just threw on? Oh yes.

look writes...[...]

Interesting background, yes? Bookcases are so 20th century. Republicans sit before books and plaques. (hope you're taking notes, nikkibong)

I could add something about the beard-stroking, but won't. I trimmed back the commentary on demeanor etc. to stay within the comment guidelines; and as a tribute to Josh's refined 'less is more' composition. Good eye.

bjkeefe 10-07-2009 01:26 PM

Re: This old thing?
 
Quote:

Originally Posted by kidneystones (Post 132810)
I could add something about the beard-stroking, but won't.

But just did.

Quote:

Originally Posted by kidneystones (Post 132810)
I trimmed back the commentary on demeanor etc. to stay within the comment guidelines ...

... and then added it back anyway:

Quote:

Originally Posted by kidneystones (Post 132810)
Something he just threw on? Oh yes.

[...]

Interesting background, yes? Bookcases are so 20th century. Republicans sit before books and plaques. (hope you're taking notes, nikkebong)

But who's counting.

bjkeefe 10-07-2009 01:28 PM

Re: One-Handed Applause (Josh Cohen & Brink Lindsey)
 
Quote:

Originally Posted by Ray (Post 132805)
What innovation?

You forgot about Poland!!!1! I mean, Viagra!!!1!

bjkeefe 10-07-2009 01:29 PM

Re: One-Handed Applause (Josh Cohen & Brink Lindsey)
 
Quote:

Originally Posted by nikkibong (Post 132801)
Since when does BHTV have re-runs?

Oh, since near the beginning.

claymisher 10-07-2009 01:46 PM

Re: One-Handed Applause (Josh Cohen & Brink Lindsey)
 
Lindsey's in the lead for the humane libertarian prize. Not much competition though.

"The Predator State" is an excellent book. I can't agree with every word written in it, but it's definitely worth a read if you're interested in public policy and economics. It's full of facts and ideas I'd never encountered before.

bkjazfan 10-07-2009 01:48 PM

Re: One-Handed Applause (Josh Cohen & Brink Lindsey)
 
The healthcare debate is beyond my expertise. The one Brink would like to see, consumer oriented, is similar to David Goldhill's proposal in "Atlantic" magazine a couple of months ago.

I think the monkey on the Presdent Obama's back for sometime to come will be the economy. In some states the unemployment levels are getting quite high. Regardless of what the stock market is doing unless these numbers come down the Democrats will not have the wind at their backs no matter how distasteful the Repubicans are to many.

John

look 10-07-2009 02:34 PM

Re: This old thing?
 
Quote:

Originally Posted by kidneystones (Post 132810)
I could add something about the beard-stroking, but won't. I trimmed back the commentary on demeanor etc. to stay within the comment guidelines; and as a tribute to Josh's refined 'less is more' composition. Good eye.

Yes, I thought of that too late. But I think a man who so carefully considers his background (is that a Persian rug?) can take a little ribbing. Love ya, Josh.

OTOH, is Brink trying too hard?

AemJeff 10-07-2009 02:41 PM

Re: One-Handed Applause (Josh Cohen & Brink Lindsey)
 
Quote:

Originally Posted by Jay J (Post 132780)
AemJeff,

I'm not sure where to start.

Umm, first, I guess I'll say, I'm not sure who has the burden of proof. I think the argument is that because of the size and relatively unregulated nature of the U.S. market, it is more profitable for drug companies to sell to, or develop in the U.S. market compared to smaller and/or relatively more regulated markets. Of course, that something looks right on paper like this, does not mean it is true, but I think the plausibility of the argument should be acknowledged. If we can't discuss things at this point, then I imagine we can't discuss very much at all (and of course I'm open to hearing other claims that appear very plausible as well, but simply saying you don't have the burden of proof doesn't seem to accomplish anything).

As to your argument asking how I know that increased access and better health prices wouldn't outweigh the "marginal effect" the innovative U.S. market has, that you hypothetically allow is possible, for argument's sake:

Well, there are a couple of ways for me to read this. One is that you are trying to help me look at the overall benefit of reform, by pointing out that increased access and better prices are a good, and that this good may outweigh the good of innovation. If this is what you're saying, well, OK. But first, I said nothing at all about the overall topic, only the subtopic of innovation. Second, I don't see how denying that increased access and/or better prices outweighs innovation is less rational than saying the opposite. I won't say whether there is a fact of the matter of whether better prices/increases access is a sufficient substitute for our current pace of innovation, because I'm morally ambivalent and philosophically undeveloped on that question. But I don't see how anyone can confidently say, right off the bat, that one or the other moral position is more "rational" than the other.

Now maybe I've misread you, if so, please forgive me. The only other way I can imagine your statement here being interpreted is that you are making a direct argument that somehow innovation would be unharmed because of better prices/increased access. Is that what you're saying, or was I on the right track in the paragraph above?

As for your last sentence:



Talk about unhelpful..

Jay, I don't know if the American market has a measurable effect on "innovation" or not. I definitely don't see anything backing up the argument except a feeling, an intuitive sense that it must be true, on the part of people like Brink. When somebody raises an argument with such a flimsy basis, and then frames it such that we're assuming its unproven consequences, that feels to me like sleight of hand.

I've also seen the "innovation" argument used before, in other contexts. Microsoft used it as a general defense during its anti-trust troubles. Corporate innovation is a slippery notion - Microsoft's successes, for instance, were all ideas taken from other sources (in some cases, it can easily be said they were stolen - ask about the relationship between MS-DOS and CP/M if you're interested) and in many cases the real technological innovators were forced out of the market by Microsoft's sheer mass suddenly becoming a force in what had been a relatively flat playing field. So, I'm pretty skeptical of the very notion as it's generally expressed by big players in massive markets.

Cain 10-07-2009 02:55 PM

Re: One-Handed Applause (Josh Cohen & Brink Lindsey)
 
I have been indoctrinated with enough neo-classical economics to view the notion that the U.S. market subsidizes pharmaceutical research as intuitively plausible. Raising the potential for profits increases investment. If 90% of men inexplicably went bald in the next two months, then companies would become more interested in finding a cure for baldness. Libertarians often cite some European country that paid regular citizens to paint. No supply and demand -- just creating a painting would get you a flat fee. Well, of course it increased art (or "art") production because... that's where the money is. This seems utterly basic.

The problem is really a question of how much and what kind of innovation we want. We do not want innovation for the sake of innovation, especially if it comes at the expense of welfare. One obvious way the government compels innovation (contra the free market) is by granting temporary monopolies on ideas. One obvious way the government could increase innovation is by making those monopolies permanent instead of temporary. And therein lies the problem: what are the welfare effects of granting permanent monopolies?

Brink Lindsey, fast becoming my favorite libertarian (or liberaltarian), makes a significant concession. Perhaps he still favors a freer market than I do, but our values are fundamentally the same: improving overall outcomes. The problem with too many libertarians is that they are doctrinaire in their beliefs, and here I'm talking specifically about the fools whose beliefs find some Randian/Bastard Lockean version of natural rights as axiomatic. In those cases any sort of empirical investigation is a secondary consideration, if one at all. (It's no surprise the two classical liberals favorably mentioned in this diavlog are economists.)

Agreeing on what I think are basic moral values, we can have an adult discussion. The strongest argument in favor of keeping big pharma's profits sky high is that by innovating more people in the long run will benefit, even if at the expense of the American public. And I just don't buy it.

Too often libertarians and conservatives overlook the public sector's critical role in subsidizing basic research and development. Finally, there's always the problem over what the free market values -- and it's ability to pay. There's more money to be made in anti-aging, hair loss, and boner pills than malaria. What you have are huge anti-human distortions, where the cosmetic afflictions of first world countries demand more investment and attention than deadly diseases in the third-world.

Jay J 10-07-2009 03:09 PM

Re: One-Handed Applause (Josh Cohen & Brink Lindsey)
 
Quote:

Jay, I don't know if the American market has a measurable effect on "innovation" or not. I definitely don't see anything backing up the argument except a feeling, an intuitive sense that it must be true, on the part of people like Brink. When somebody raises an argument with such a flimsy basis, and then frames it such that we're assuming its unproven consequences, that feels to me like sleight of hand.

I've also seen the "innovation" argument used before, in other contexts. Microsoft used it as a general defense during its anti-trust troubles. Corporate innovation is a slippery notion - Microsoft's successes, for instance, were all ideas taken from other sources (in cases, it can easily be said they were stolen - ask about the relationship between MS-DOS and CP/M if you're interested) and in many cases the real technological innovators were forced out of the market by Microsoft's sheer mass suddenly becoming a force in what had been a relatively flat playing field. So, I'm pretty skeptical of the very notion as it's generally expressed by big players in massive markets.
AemJeff,

I think you're being *very* uncharitable when you say that the view that innovation could be harmed by universal health care is backed up by nothing but a "feeling" or "intuition." You make it sound as if the argument is analogous to "I have intuited that the Rolling Stones have more artistic value then The Beatles, therefore we should stop the production of Beatles albums." OK, at worst, the claim you're objecting to is a 'synthetic, a priori' statement with empirical implications. If you're going to exclude these kinds of arguments, then I don't at all see how you could have any opinion whatsoever on the matter, one way or another. If you aren't going to dismiss these kinds of arguments out of hand, then it doesn't really matter that it *feels* like a sleight of hand; you should engage the argument on its terms, something Stapler Malone was/is willing to do.

As for your innovation comparison, that's just really not impressive. So someone somewhere used the word innovation in a way you didn't like? I mean, talk about vague, ya know? In any case, I'm not a big market player, and neither is Brink Lindsey. If you wanna say that he's carrying water for corporations, fine, then you're not participating in the discussion, just dismissing your interlocutors. If you're not simply dismissing your interlocutors, then I'm not sure why you would bring up your suspicion to the occasional use of the word innovation (my understanding of its use here is that the relatively large profit motive in the U.S. spurs investment, which spurs new and more effective drugs/treatments/technologies. This could be a misunderstanding of reality, but it's clear enough).

jcohen57 10-07-2009 03:40 PM

Re: One-Handed Applause (Josh Cohen & Brink Lindsey)
 
well, the rug very nicely covers the coffee and dogshit stains....

and the elegant black shirt....well, it is a maroon waffle shirt....good for california 8AM (pre-breakfast, not postmodern)...

:)

Stapler Malone 10-07-2009 03:48 PM

Re: One-Handed Applause (Josh Cohen & Brink Lindsey)
 
Quote:

Originally Posted by jcohen57 (Post 132826)
(pre-breakfast, not postmodern)...

I think I'd like this to be my personal blurb from now on, maybe get it on a business card...

AemJeff 10-07-2009 04:01 PM

Re: One-Handed Applause (Josh Cohen & Brink Lindsey)
 
Quote:

Originally Posted by Jay J (Post 132822)
AemJeff,

I think you're being *very* uncharitable when you say that the view that innovation could be harmed by universal health care is backed up by nothing but a "feeling" or "intuition." You make it sound as if the argument is analogous to "I have intuited that the Rolling Stones have more artistic value then The Beatles, therefore we should stop the production of Beatles albums." OK, at worst, the claim you're objecting to is a 'synthetic, a priori' statement with empirical implications. If you're going to exclude these kinds of arguments, then I don't at all see how you could have any opinion whatsoever on the matter, one way or another. If you aren't going to dismiss these kinds of arguments out of hand, then it doesn't really matter that it *feels* like a sleight of hand; you should engage the argument on its terms, something Stapler Malone was/is willing to do.

As for your innovation comparison, that's just really not impressive. So someone somewhere used the word innovation in a way you didn't like? I mean, talk about vague, ya know? In any case, I'm not a big market player, and neither is Brink Lindsey. If you wanna say that he's carrying water for corporations, fine, then you're not participating in the discussion, just dismissing your interlocutors. If you're not simply dismissing your interlocutors, then I'm not sure why you would bring up your suspicion to the occasional use of the word innovation (my understanding of its use here is that the relatively large profit motive in the U.S. spurs investment, which spurs new and more effective drugs/treatments/technologies. This could be a misunderstanding of reality, but it's clear enough).

What I'm trying to say is that the argument is being treated as if it has more heft than I think it deserves. It is a "'synthetic, a priori' statement with empirical implications." I don't think it should be excluded from a serious discussion on the merits of policy choices; but, its status within such a discussion ought to be related to its strength as an argument. Even if we assume the effect exists, we have no way to reliably quantify it or compare it to the benefits of policy ideas that might adversely affect it. I fail to see how Brink or anybody else shows that this is a particularly compelling argument.

Broad, abstract nouns like "innovation" can be read to mean any damn thing somebody wants to read into them. Microsoft's use of the term was particularly bad because the real world implication of that language was the opposite of the sense of it that they wanted to convey. In that particular case there's a strong argument that the direct result of Microsoft's near monopoly status as a software developer was a significant reduction in actual innovation. I take from that (among other things) a distrust of the use of that sort of language, and that word particularly, because it can be so easily abused.

Brink didn't invent the argument he's putting forth here. Saying that the language he's using, borrowed as it is from conservative think tanks - who can be definitively said to be carrying water for corporations - implies that he, too, is a water carrier, goes too far, I think.

Most of the energy for innovation, as far as I understand it, involves making near copies of molecules - already proven by competitors to provide the basis for blockbuster drugs - that are just different enough to be patentable, and applicable in parallel offerings, thereby cannibalizing existing revenue streams. That sounds a lot like what I accused Microsoft of doing.

Jay J 10-07-2009 05:39 PM

Re: One-Handed Applause (Josh Cohen & Brink Lindsey)
 
Quote:

What I'm trying to say is that the argument is being treated as if it has more heft than I think it deserves. It is a "'synthetic, a priori' statement with empirical implications." I don't think it should be excluded from a serious discussion on the merits of policy choices; but, its status within such a discussion ought to be related to its strength as an argument. Even if we assume the effect exists, we have no way to reliably quantify it or compare it to the benefits of policy ideas that might adversely affect it. I fail to see how Brink or anybody else shows that this is a particularly compelling argument.

Broad, abstract nouns like "innovation" can be read to mean any damn thing somebody wants to read into them. Microsoft's use of the term was particularly bad because the real world implication of that language was the opposite of the sense of it that they wanted to convey. In that particular case there's a strong argument that the direct result of Microsoft's near monopoly status as a software developer was a significant reduction in actual innovation. I take from that (among other things) a distrust of the use of that sort of language, and that word particularly, because it can be so easily abused.

Brink didn't invent the argument he's putting forth here. Saying that the language he's using, borrowed as it is from conservative think tanks - who can be definitively said to be carrying water for corporations - implies that he, too, is a water carrier, goes too far, I think.

Most of the energy for innovation, as far as I understand it, involves making near copies of molecules - already proven by competitors to provide the basis for blockbuster drugs - that are just different enough to be patentable, and applicable in parallel offerings, thereby cannibalizing existing revenue streams. That sounds a lot like what I accused Microsoft of doing.
I think our understandings are probably just too divergent to come to any sort of understanding at all, (even the kind with disagreement left over). See I do not see conservative think tanks as the inventor the language of innovation, I see neoclassical economics as that inventor. I know very smart people poo-poo neoclassical economics, but some very swart people swear by it. That leaves us pretty much nowhere, but I bring it up to carve out some rhetorical space that hopefully you won't be able to dismiss out of hand based on the origin of the concept (and I'm not using the concept as a knock-down argument, the tone of your original post to me in this thread not withstanding).

On to more direct talk of innovation, I said in my post most recent to this one, that I think innovation means that better/more effective treatments/drugs/technologies are produced. I don't think it needs to be said, but it would follow that treatment of disease (for those who have access to care) would improve over that time. Of course, there may be a lag, with treatment pulling up the rear, but the idea is that if innovation slowed down, improvement in technologies/treatments/drugs would slow as well. I don't think my understanding of the use of the word in this context is so different from the way people like Brink Linsey use the word, and I fail to see how there's any slippery, vague, or mysterious notions imbedded here (but I am open to direct arguments showing me where I'm wrong). Again, talking about how Microsoft behaved may be very analogous to your suspicious take on the use of the word now, but all you've done is matched your suspicions.

I also think all but the most uncharitable interpretation would show that the kind of innovation being discussed is the kind that leads to improvement of care (even though it may be possible that many kinds of dead-ends or strictly speaking "superfluous" innovations may contribute to the bottom line, which isn't always a bad thing). The claim is that improvements in treatments/technologies/drugs will slow, and there are economists who believe they have data to show that the U.S. market is subsidizing the world in this area, and they also believe they have correlated the relatively unregulated nature of markets with investment, making the claim that the nature of the US market is responsible for the bulk of health care improvements quite plausible.

So while I myself am not an expert on this, (and don't claim to be), I'm not sure why you're so confident that the kind of claim I am pointing out is "unquantifiable."

Jay J 10-07-2009 05:53 PM

Re: One-Handed Applause (Josh Cohen & Brink Lindsey)
 
Cain,

Serious question:

What is the mechanism that will shift research dollars away from "anti aging, hair loss, and boner pills" and into malaria research, and will this change have no adverse impact on the bottom line of the pharma companies?

I ask because we have a couple of different claims running.. one is that the profits of big pharma will be OK, so no need to worry about innovation. Another is that the government can step in and fill the gap (I know you only made one of these claims, but I'm trying to keep track of them all).

Just so I'm clear, the claim is that the government can step in and subsidize innovation, and continue to subsidize the world's innovation? And this is as plausible as the claim that the private US market now subsidizes the world?

My home base is philosophy (not that I'm expert in that either) and I try to understand economics.. perhaps I just need to see some of the steps laid out.


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