Why grand social changes frequently fail - Island of Sanity

Island of Sanity



Liberals & Conservatives

Why grand social changes frequently fail


Something old and something new

People often propose some social or political change, making it sound so much better than what we are doing now.

But frequently, what makes the new way sound better than the old way is that they are comparing the ideal of the new way to the reality of the old way. They describe what the new way would be like based on the unstated assumption that the people carrying it out will all be intelligent and honest and hard-working, and compare this to the old system, with all its greed and laziness and incompetence. Of course under any comparison like that, the new way is going to sound so much better.

Let me take two recent examples, one from the left and one from the right.

From the Left: National Health Insurance

Our present health care system, the argument goes, is filled with unfairness and inefficiency. Giant hospital corporations and drug companies are only interested in money, so the poor and the uninsured get second-rate care. Insurance companies bog the system down in endless paperwork and have books of rules that people must meet or they deny coverage. The system is complex and incoherent.

So their solution is: Let's have the government take over the medical care system -- to one extent or another, depending on the plan. The government will pay all the bills, so rich and poor alike will get the same care. Insurance companies will not have the power to decide who gets care and who doesn't. So people will just walk into a doctor's office or hospital and get whatever medical care they need, quickly and efficiently and for free. Care will be determined by the patient's need and not money or insurance company rules.

And I can only say: You are living in a fantasy world. Do you honestly believe that a government-run program would obviously and inevitably be more efficient and caring than a private system? Surely the reasonable expectation is that government-run health care would combine the compassion of the IRS with the speed and efficiency of the motor vehicle bureau.

Yes, insurance companies have books of rules. But government agencies always have even bigger books of rules. If the government takes over medical care, people won't just walk in and get whatever care they need. They will walk in and sit and wait, meet a government case worker, sit and wait, fill out forms, sit and wait, be told they didn't fill out the correct form, sit and wait some more, and so on. And, I might point out, if you don't like your insurance company's rules or the hospital's rules, there is at least the possibility that you can try a different insurance company or hospital. If the government runs it all and you don't like the government's rules, you're pretty much out of luck.

True, doctors and hospitals can be greedy, and give little or no care to poor or uninsured patients. But it is not clear how a government take-over will eliminate greed. Doctors and hospital staff will surely still be paid. Some will be paid more than others, based on experience, specialty, location, or whatever factors. And medical personnel will decide which patients to treat based on what they believe will advance their careers. That is, some patients will get better care and some worse based on what brings the doctor the most money. The favoritism may not be the same. Instead of favoring rich people it may favor people with "trendy" diseases. Oops, no, however the system is designed, it will favor rich people. They will be the ones who can afford lawyers to find loopholes in the rules, or give big campaign contributions to get politicians to intervene for them.

From the Right: Fair Tax

Our present income tax system is full of unfairness and waste. People are forced to spend incredible amounts of time figuring out complicated tax regulations and forms. Businesses make investment decisions based not on what is economically productive, but on what gives them the smallest tax liability. The rich and powerful get special tax breaks written into the law that benefit them. And the whole system is so complicated that even the people who write the laws don't understand them any more.

So their solution is: Dump the entire income tax system, and replace it with a national sales tax. Instead of all the complicated forms and deductions and credits and exemptions, there would be a single flat rate that would apply to all purchases. There will be no favoritism as everyone will pay the same rate. There will be no complexity because there will be one simple rate applied to all products.

And I can only say: You are living in a fantasy world. If a "fair tax" bill is ever seriously debated in Congress, I guarantee that there will be numerous amendments proposed to impose a higher tax rate on products that the government wants to discourage, like cigarettes perhaps, or on luxury goods, like boats and caviar; and to impose a lower tax rate on products that the government wants to encourage, like ethanol, or on goods deemed necessities, like food and medicine.

True, the rich and powerful manage to manipulate the present system to get tax breaks that benefit them. But it is not at all clear how switching from an income tax to a sales tax would make these people suddenly become advocates of fairness and equity. They would simply switch from asking for income tax breaks to asking for sales tax breaks. That wouldn't even take a lot of imagination.

Honest Comparisons

The fair comparison is to look at the present system, with all its flaws and all the problems caused by human folly and corruption, and compare it to the proposed new system, with the flaws it is likely to have given human folly and corruption. We may not be able to predict exactly how greedy people will figure out how to take advantage of the system, or exactly how stupid people will manage to mess it up, but we know they will.

Oh, sometimes the advocates of some social change will reply by saying, "But with my proposed system, we will change human nature, we don't have to allow for people being stupid or greedy because this system will make all people generous and caring and wise." In real life, I am hard pressed to think of many social changes that have truly changed human nature. Such extraordinary claims require more solid evidence then the speaker's assurance that he's pretty sure it will happen.

Side note

The fact that claimed benefits are exaggerated does not, of course, prove that there are no benefits at all. But a discussion of whether national health insurance or the fair tax are good ideas even after peeling away the hype is another subject.

© 2007 by Jay Johansen


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