12 August 2009

Health Care And Trust

I just saw this passage, quoted from a supporter of nationalized health care, over at Just One Minute:
What we're seeing here is not merely distrust in the House health-care reform bill. It's distrust in the political system. A healthy relationship does not require an explicit detailing of the "institutional checks" that will prevent one partner from beating or killing the other. In a healthy relationship, such madness is simply unthinkable. If it was not unthinkable, then no number of institutional checks could repair that relationship. Similarly, the relationship between the protesters and the government is not healthy. The protesters believe the government capable of madness. There is no evidence for that claim, which means that there is no answer for it, either.
In my field, we divide trust into three different types (Barney & Hansen, 1994). The first, called weak form trust, results from two parties in a relationship not being vulnerable to each other. This is really more indifference than trust. The second, semi-strong form trust, is where two parties to a relationship trust the other party to do what they have agreed to do; this is the trust of contract law, enforced by formal governance and law. Strong form trust, the third form, is where the parties have the power to act opportunistically, but trust each other not to. We see this mostly in very good friendships and strong marriages. Arguably, just having a joint checking account is strong-form trust.

There are Americans who don't trust the government at all. But I think the main stream American attitude towards the government -- which is to say, towards our fellow citizens -- is to trust the government to do what it is legally bound to do, and no more. It is inconceivable to me that many Americans could have strong-form trust in the government; that many Americans believe that, in situations in which it can act opportunistically, that shifting set of coalitions we call a government will act in their own best interest. Of course, that I believe that strong-form trust in the government is inconceivable is likely tied to my preference for limited government.

Given my semi-strong form trust in government, nationalized health care seems like a bad joke. There are two many situations that will occur that we haven't, and can't, tie the government's hands. There are too many ways that the government, or the controlling coalition of the day, can act opportunistically and little chance that it won't. We need only look at the public schools -- where opportunistic choices are routinely made for the benefit of the teachers and administrators -- to understand my worry about a decision to (strong-form) trust the government with my family's health care and 14% of the economy.


Susan's Husband said...

The final sentence, "there is no evidence for that claim" is so bizarre one wonders how this person functions well enough to have typed it in. One might also wonder how Klein viewed trust in the federal government in the 2001-2008 period. Let's look --

It's become a truism among liberals that you can't rule out any Bush administration actions based on the formerly useful analytical strategy of "doing that would be $^%&# nuts."

Not seeing the trust there. Can we use this as Exhibit A to explain to Klein why that mistrust might exist?

Harry Eagar said...

'in situations in which it can act opportunistically [someone] will act in their own best interest.'

Why can't you believe this about government? You believe it about business.

Anonymous said...

"There are Americans who don't trust the government at all."

I trust the government to the extent it deserves in different areas, but what I don't trust at all are the public-sector unions. I am 100% convinced that the one and only reason why the Dems are pushing the health-care bills is because they will create vastly more SEIU members whose dues will be funnelled to the Democrat party.

David said...


No, I don't. At best, I have semi-strong form trust for businesses. In fact, I think that businesses are obliged to act opportunistically when they can; whereas government isn't really supposed to, but will anyway.

Harry Eagar said...

Why are businesses obliged to act opportunistically? Or, more precisely, why are they obliged to seize short-term opportunities when a more considered judgment would suggest forgoing certain immediate chances in order to protect long-term opportunities?

In other words, do you think businesses are obliged to sell the seed corn when the price of feed corn goes up?

(This is, by the way, not metaphor. Iowa farmers did exactly that a few years ago. The market turned on them, as markets will, and they found out they would have done much better to have farmed for the long term.)

Maybe governments aren't supposed to act opportunistically, but in a democracy constituencies will.

So where do you go from there?

Susan's Husband said...

"Iowa farmers did exactly that a few years ago. The market turned on them, as markets will, and they found out they would have done much better to have farmed for the long term."

You're treating a rather varied class in an excessively monolithic manner. Some farmers did, some didn't. I watched the same scenario play out when I was young and living in the middle of a MidWest farm community. I knew the farmers involved in person (heck, SWIPIAW is related to about 40% of them in the local area). This was during the "Farm Aid" period. Some of the farmers had borrowed lots of money to buy more farmland during the boom and were crushed when it collapsed. Other farmers (such as SWIPIAW's kin) farmed for the long term, using the boom to buy new equipment which then required less maintenance during the lean times.

I think it's a fundamental misapprehension on your part to think so monolithically. If that's how people really were, then free markets wouldn't be of much use. It is precisely because different people, different companies, react differently to the same situation that gives markets their power.

David said...


I said "opportunistic," not "stupid."

As it happens, I'm very skeptical of the idea that American capitalism is too "short term." I suspect that, instead, American capitalism understands discounting to present value and that a dollar today is worth more than a dollar next year and a lot more than a dollar 10 years from now.

Actually, my sense is that complaints of short-termism have fallen off dramatically since the Japanese economy tanked 20 years ago (but just wait, in 2020 the Japanese are going to be walking all over us, or at least those Japanese still young enough to walk unaided). Nowadays, short termism has become the reserve of the left, when they want American business to do something insanely expensive now with no obvious payback tomorrow. Because, just wait, once we get over the planning horizon this'll just be a gusher (see, e.g., renewable energy, green jobs, agw, government-run health care, etc.).

Harry Eagar said...

SH, that's a good example, but not the one I was thinking of. I was thinking of the southeast Iowa farmers who saw a rising market, sold their stored corn and shorted the futures market, which failed to fall.

David, I give you Sam Zell and the newspaper business generally. The newspaper business has lots of problems (primarily due to the shrinking size of the US household), but marking to market in the early 21st century and, even worse, putting people who know nothing about the business in charge, has been disastrous.

The guys who walked off with the big payouts are not complaining. But that is not quite the same thing as managing.

Susan's Husband said...

Mr. Eagar;

So, you agree that your original point ("businesses in America must act opportunistically") is discredited? Or that in your example every single farmer in southest Iowa sold off their seed corn?

Harry Eagar said...

'must act opportunistically' was not my point, that was David's, but I don't get where you think it was discredited.

If you followed the southeast Iowa story -- you should have, it was one of the most bizarre failures of market management I have ever witnessed -- you would know that, yes, pretty much ever farmer in the area participated, because it was done through the co-ops.