October 14, 2007

Philosophical Illiteracy Watch

Eduardo Porter, in today's New York Times, discusses Radiohead's choice to release a new album for whatever price you choose to pay. Average customers have paid $8.*

Porter notes that this is irrational from the economists' point of view, quoting Greg Mankiw on economists' inability to account for tipping, and Dani Rodrik who concludes that Radiohead is not bonkers. "But," Porter adds, " those who are paying for the download may truly be nuts." He then goes on to a speculate about the utility that we do get by paying for the CD -- because there must be some utility that outweighs the money we pay.**

Missing from this discussion is any hint that economists' notion of rationality might not be right, or that philosophers might have something to say about the subject. Perhaps Cristina Bicchieri or David Gauthier or Thomas Scanlon would have had something interesting to say about social norms of fairness and reciprocity, or about living up to implicit contracts, or about the Humean farmer? Bicchieri has even done experiments on this that are scientifically designed; unlike (no offense to Rodrik) the "experiment" of Rodrik's that Porter cites, which involves a self-selected group of readers of an economics blog. Perhaps there is a way of treating rational action that does not reduce it entirely to trading off one utility for another.

Quiggin and Yglesias have more on the general subject. Philosophers are probably somewhat at fault here; we (or those of us who do rational choice stuff, namely, not me) should perhaps be letting journalists know that we have something to say about these subjects. But I also think that the idea that utility maximization is the only kind of rationality is part of a pernicious picture of economics and rationality that grips too many people -- the sort of thing that lets people say that more markets are better in health care, in the face of overwhelming evidence about which health systems actually work.

*I was going to pay 3 pounds, but when I found that I had to sign up for the e-mail list I knocked it down to 2.
**As an added bonus, Porter treats altruistic motives as clearly irrational. It's not just that it's irrational to want to give money to Radiohead, who are already rich -- I grant that -- but he introduces the very possibility of altruism by saying "One could argue that rationality isn’t everything."

Posted by Matt Weiner at October 14, 2007 01:13 PM

"...lets people say that more markets are better in health care, in the face of overwhelming evidence about which health systems actually work."

Sorry, I just happened across your blog, and was just curious...does the "overwhelming evidence" you're referring to come from a Michael Moore movie?

Posted by: Josh at December 19, 2007 03:27 AM

No, I haven't seen that movie. It's more this sort of thing.

Posted by: Matt Weiner at December 19, 2007 08:47 PM

Ok, if you are going to label your post "Philosophical Illiteracy Watch," it would probably be a good idea to not be philosophically illiterate in your own post. Here is the Commonwealth Fund's mission statement.

The Commonwealth Fund is a private foundation that aims to promote a high performing health care system that achieves better access, improved quality, and greater efficiency, particularly for society's most vulnerable, including low-income people, the uninsured, minority Americans, young children, and elderly adults.

Of course a liberal think tank like the Commonwealth Fund whose purpose for existence is to promote the cause of health care for the poor is going to favor countries that have universal health care systems. I would hardly call a biased report like that overwhelming evidence. (And if you honestly think it's not biased, I would encourage you to do a little bit of open-minded research…here’s a good place to start (http://featurepage.creators.com/opinion/john-stossel/another-bogus-report-card-for-u-s-medical-care.html), and I think your mind would be changed. If not, then you really should not be talking about philosophically illiteracy at all.)

The Heritage Foundation published a study that the death penalty deters crime and saves lives (http://www.heritage.org/Research/Crime/tst082807a.cfm). So would I be justified in claiming that there is overwhelming evidence which supports the fact that the death penalty is good because it is a deterrent? Of course not, the Heritage foundation is a conservative think tank, it is to be expected that they will produce studies which support their beliefs.

There might be some evidence or good arguments that universal health care systems are better than free market systems, but to state that this is what overwhelming evidence suggests is completely ridiculous. Especially if much of the evidence you are refering to comes from sources like the Commonwealth Fund.

Posted by: Josh at December 20, 2007 03:55 AM


a) Thank you for giving me the opportunity to post the 2000th comment on this blog! Woo hoo!

b) Ok, if you are going to label your post "Philosophical Illiteracy Watch," it would probably be a good idea to not be philosophically illiterate in your own post.

First of all, don't be a jerk. Second of all, try to figure out what the philosophical issue is. This post is about conceptions of rationality. If you think I'm wrong about the facts about health care, that's one thing, but you haven't established that there's any philosophical illiteracy involved here at all.

c) If you're going to complain about biased sources, don't cite Stossel. Besides his ideological preconceptions is a journalistic fraud.

d) If you think that's an ad hominem fallacy (it isn't -- you should be less likely to believe analysis from an untrustworthy source unless you've checked everything yourself), consider Stossel's arguments. Many of them are totally unresponsive. Consider this passage: The Commonwealth Fund ranked the U.S.
last in "equity": "Americans with below-average incomes were much more likely than their counterparts in other countries to report not visiting a physician when sick, not getting a recommended test, treatment or follow-up care ... because of costs." But how much of that is due to the government's increasing the cost of care and insurance through mandates, a tax code that encourages reliance on expensive insurance and bureaucratic red tape?
That is to say, the Commonwealth Fund is right about the flaws in U.S. health care, and Stossel chooses to blame it on insufficient marketization; on what evidence? None that I can see.

This is also sweet: "Finally, the study penalizes nations for having large numbers of patients who spent more than $1,000 on medical care out of pocket, as if third-party payment is somehow superior." Is he trying to say it's not a problem when someone has to pay $1000 out of pocket? But even on his own terms, the U.S. government actually pays as much per capita on health care as other governments do; the out-of-pocket expenses are in addition to the third-party spending.

e) But Stossel makes my own point; the evidence for the failure of the U.S. system doesn't just come from the Commonwealth Fund, it also comes from the WHO study that he's complaining about. Or you could look at "It's the Prices, Stupid" by Gerard Anderson et al., and the references therein (such as the McKinsey study). (Yes, this was associated with the Commonwealth Fund, but it's by real scholars who have other jobs and maintain their reputations; as opposed to your Heritage link, which is by someone who works for the foundation and has to maintain his place there.)

There's lots of sources out there if you choose to look. Eventually you have to ask yourself: Why do so many sources that aren't explicitly on the political right agree that the U.S. health care system is relatively ineffective? Maybe they aren't the ones who are biased?

Posted by: Matt Weiner at December 20, 2007 02:26 PM

Anyway, your whole premise is flawed. The Commonwealth Fund is promoting health care for the poor especially -- that's not the same as government-run health care, unless you assume that the market is ineffective at providing health care for the poor. And if you assume that, why are we having this discussion?

So there's no reason for the Commonwealth Fund to be biased against the U.S. system unless the U.S. system is bad at providing health care for the poor.

Posted by: Matt Weiner at December 20, 2007 02:54 PM
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