Sunday, June 28, 2009

Health Care

Greg Mankiw, George Will and others of the economic right are very worried about the inefficiencies that partial socialization of health care will introduce. Paul Krugman notes that they are ignoring important theoretical evidence in their arguments.

Let me just add that the evidence of many years experience in nearly every other advanced country offers little or no support to the fears of the right.

Krugman:

Um, economists have known for 45 years — ever since Kenneth Arrow’s seminal paper — that the standard competitive market model just doesn’t work for health care: adverse selection and moral hazard are so central to the enterprise that nobody, nobody expects free-market principles to be enough. To act all wide-eyed and innocent about these problems at this late date is either remarkably ignorant or simply disingenuous.

I'll take ignorant and disingenuous for George Will.