Subject: Re: Distributive Justice in a Pure Service Economy

From: [email-masked] (ASP-Disc)
Date: Mon, 31 Oct 1994 17:16:32 -0500

From: Paul Hsieh <[email-masked]>

[In an excellent post describing a service-based economy],

Bryan Douglas Caplan <[email-masked]> writes:

> To make this clearer, consider the case of a trained surgeon
> in such an economy.  He spent many years in study to acquire his
> skills; but of course his raw talent and intelligence played
> a big part too.  Now this surgeon finds that his labor is extremely
> valuable; he has the power to save lives.  People will pay an
> enormous amount for the value of his services.
 
> It is not difficult to see that this surgeon is going to be
> extremely rich because of his special talent.

> And the question will naturally arise: Does justice permit,
> or even require, that the surgeon be forced to provide free
> services for others, or give some of his payment back to the community?
> Either choice commits us to forced labor: either the doctor
> must be forced to toil, or else his patients must be forced to
> give some free labor services up as a "tax" every time they
> pay him.
> 
> But suppose that we recoil from this notion of forced labor.
> Where are we then?  Quite simply, we are left with a libertarian,
> free-market economy

> And yet it is _very_ difficult to abandon the intuition that
> the surgeon cannot morally be forced to give free services to
> the needy, or even to reduce his prices to the slightest degree.

     I am most definitely not a statist.  However, I can envision 
mechanisms that would allow a non-libertarian to practice redistributive 
"justice" and mask the true nature of the forced labor/slavery involved.

     Let's take the example of the surgeon that Bryan mentioned:

     A government might first declare that medicine is such an important 
skill in the "public interest", that it must be licensed and regulated by 
the state.  In other words, no one could just study medicine through the 
free-market education system, hang out a shingle, and let the market 
determine which patients came to him.  Instead, the government would set 
up mandatory accreditation standards for medical schools, and devise 
various exams and other hoops for young physicians to jump through prior 
to being allowed to practice.  Only someone who went through this process 
and acquired a government license would be permitted to practice 
medicine.  Anyone else would be charged with "practicing medicine without 
a license" and thrown into jail.

     So far, no one is being forced to work.  In fact, if anything, the 
government has placed impediments to working in this sector of the economy.

     Next, the government might declare itself the middleman for 
transactions involving physician-delivered medical services.  Someone who 
wanted an operation had to pay the government, who in turn would 
reimburse the physician.  Fee schedules would be set by "negotiation" 
between the government and various medical organizations.  Although this 
would introduce some market distortions, they couldn't be too far out of 
line from the natural prices.  If the fees fell too low, young physicians 
would decide that they wanted to become computer scientists or physicists 
or science-fiction writers, instead of surgeons, and drop out of the 
system.  In general, the government would be (at least dimly) aware of 
this, and wouldn't regulate the fees in too draconian a fashion.

     Finally, the government declares health-care a "right".  If 10% of 
the population currently do not see a doctor because they can't afford 
to, they are allowed to become free riders on the health-care system.  
All of the fees paid out by the government to the doctors are reduced by 
10%, to accomodate the 10% increase in demand for services, while still 
preserving the balance of payments.  In essence, the doctors are forced 
to give a mandatory 10% discount on services to the paying patients in 
order to subsidize the non-paying patients.

     Here, the problem is that a physician doesn't necessarily know if a 
particular patient is a paying patient or a free rider.  Hence, he will 
end up delivering more-or-less equally good quality care to everyone.  If 
he could distinguish the payers from the non-payers, normal human nature 
might tempt him to give the payers better quality service, while being 
somewhat less conscientious towards the nonpayers.  But if this 
information is withheld from the physician, he wouldn't be able to act in 
such a fashion.  (Although perhaps he might be subtly demoralized, and 
therefore treat *all*patients with less care and thoroughness than if he 
were working in a completely free market.)

     The slavery here is more subtle.  No one person is extracting a 
specific act of labor from the doctor.  The forced labor is distributed 
throughout the entire system.  And that is what makes it so insidious.  
Since a doctor cannot practice without a government license, he is forced 
to abide by the conditions the government sets if he wants to work in his 
field.  If all it involves is a mandatory 10% discount ("just a small 
amount of your already bloated salary, doctor"), many non-physicians 
probably would not object.  This would be especially true if they could 
be sold on the idea of health care as a "right", rather than as any other 
necessity that must be acquired through the market (like food, clothing, 
or shelter).  Even many doctors would be willing to accept those terms 
rather than quit the field -- after all, the profession is still 
inherently fascinating, money is still pretty good, etc.

     The US health care system has not gotten to this point (yet).  I 
don't know enough details about Canada's or Britain's to be able to 
comment on how accurate this picture is.

     But my main point is that the apparent clarity of the injustice that 
Bryan demonstrated can be (at least partially) concealed, if the statists 
are sufficiently clever.  It is their ability to muddy the waters and 
mask the true nature of their actions that permits people to believe in 
the morality of this form of redistribution without recognizing the 
implicity slavery.

     [Paul now climbs down from his soapbox...]

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From: Alan Eaton <[email-masked]>

What was the value that was placed on the surgeons education, or on the
tools of trade for the musicians (instruments, sound systems,
roadies...).

It would seem to me that the providers of services (education) to those
persons who will subsequently be able to request large labour transfers
(the surgeons) should also be able to make a significant case f
If this is the case then the surgeon will be significantly indebted to
his educators. So, some sicko need only go to the educators to request
medical services and then the educators will reclaim an appropriate
amount of the surgeon's debt.

The problem with such services as surgery is that it takes a long time
to
become proficient enough to be able to ch.^nything. During that time
the future surgeon will not be able to participate in labour transfers
as
he will have neither the time nor the skills to provide anything. And
this is on top of his education expenses.

Not being educated in the ways of economics - supply and demand etc -
this seems right to me: if someone is going to get filthy rich from your
services you will probably want a piece of the action.

So, distribution of services will still happen and everyone can stay
equal. (although i am sure there would be loopholes somewhere)

It might also be the case that the morals of such a society might change
their emphasis. Sure, it is morally wrong to force labour from someone.
But, isn't it also mora+ wrong to ignore those in need? (what is the
drive behind the voluntary relinquishment of both services and materials
to the starving millions?).

Those persons who choose to ignore such morals may find themselves just
as shunned as those who renige on labour transactions. Even worse, they
may be judged morally deficient and so those who are not thus will feel
oblidged to force the deficient ones into correctional institutions or
to
suffer some other form of morall correction.

Again i am treading on unknown terrritory here. I am willing to bow to
those of you with superior morals (or understandings of :).

---------------------------------+----------------------------------------
Alan Eaton                       | sometimes words have the wrong
meanings
[email-masked] |