Economics as Values

Back in the 1970s, I read a copy of a magazine named Technocracy. It advocated having society run by engineers. I think it was influenced by Thorstein Veblen. The magazine had a question and answer section about Technocracy. One of the questions was whether under Technocracy a man would be able to buy underwear for his wife. The answer was "No" because since he was a man, he would not be allowed to buy feminine clothing. I thought that was coercive, but didn't think much about it. Later, in the 1980s, I saw a documentary on television about transvestites. That reminded me of the Technocracy article. I wondered "What if the man was a transvestite?" Still later, I read that in Communist countries there were always long lines for women's underwear. The reason was that the central planners would order the same quantity of men's and women's underwear. The problem was that in free market societies, women's underwear would outsell men's by 3 to 1.
This illustrates a broader problem. A lot of freeways now have High Occupancy Vehicles (HOV) lanes that are reserved for cars with 2 or more (or 3 or more) occupants. Why not call them premium lanes? Those lanes should be open to anyone willing to pay the fee. The reason they aren't is that the people in charge want people to car pool.
A few years ago I was web surfing and came across a list of sayings. One of them was: "Which is more important, a medical clinic of a knickknack shop? The only reason this hasn't been addressed is that the question hasn't been asked." That argument sounds reasonable, but it implies that we shouldn't have knickknack shops (or any other stores) until we have built every possible medical clinic. In other words, we shouldn't have anything except medical clinics. That makes it a perfect paradox: a seemingly reasonable argument that leads to ridiculous conclusions. After thinking about it for a while, I came up with this resolution.
Suppose a man is dying of cancer. The doctors tell him that with aggressive treatment he would live 6 months. On the other hand, with just palliative care, he would live only a month. The problem is that with aggressive treatment (e.g. chemotherapy) he would be nauseous and couldn't leave the hospital. Now suppose he likes going to the opera. With palliative care, he could spend his last month doing that. Which should he choose? The answer is that it depends on the person. Some would choose one way, others the other way. Now suppose that instead of opera, he prefers jazz. That produces the same result. What if likes rock? What if he would rather go to strip clubs? How about going to knickknack shops? The point is that once you agree that it is reasonable to trade off life expectancy against something else, you have to agree to trade it off against everything.
This can be extended to all medical treatment. Suppose someone could use an operation which would extend his life for a year, but it would cost $100,000. Should the government pay for it? The obvious answer is that it would be worth it if the man himself is willing to pay for it. The objection is that he may not have the money. So, suppose he were given the choice of receiving $100,000 or getting the operation. He could spend the money on anything. If he picks the money, then the operation would be a bad idea. The objection to that analysis is that patients aren't given that choice: they don't get the opportunity to receive the money. But the principle still holds. If the patient would be unwilling to pay for the operation if he were given the money, then the government shouldn't pay for it either.
The leads us to the broader point. People in government, who hold power and can spend taxpayers money, will always try to impose their values on the rest of society. This conflicts with the diversity of humanity. Some people want to spend their money living as long as possible, others would rather drive faster, others would go to strip clubs. What none of them needs is for the government to say: "We figured out what you should really want, so we're going to spend your money for you."

Posted 2004/Oct/24