Among the issues most commonly discussed are individuality, the rights of the individual, the limits of legitimate government, morality, history, economics, government policy, science, business, education, health care, energy, and man-made global warming evaluations. My posts are aimed at thinking, intelligent individuals, whose comments are very welcome.

"No matter how vast your knowledge or how modest, it is your own mind that has to acquire it." Ayn Rand

10 June 2008

Richard Rahn: Manslaughter by Politicians

Richard Rahn published an article called "Manslaughter by Politicians" in the Washington Times on 4 June 2008 which is a good read. Commonly, politicians find reasons to pass many thousands of pages of new legislation every year that affect our ability to perform work and to produce goods and services. The greater part of this legislation imposes great costs, which few people stop to consider. They simply accept whatever intended purpose for the legislation the politician offers up as being the only important result of the legislation. If it seems it might be nice to reduce the amount of CO2 emitted into the atmosphere by the human use of energy, then why bother to calculate the cost of using less energy, of developing and using new forms of energy which emit less CO2, or figuring out what human activities will have to be given up to pursue the goal of reducing CO2 emissions. The same is true with respect to many other things that seem good to people, such as OSHA requirements for workplace safety. When do we ever calculate the actual cost of nice sounding legislation against the expected benefit of that legislation? Almost never, and when we do, the calculation is simple-minded and biased toward proving that the legislation was necessary, since it is usually the government that is funding the research study.

Economics is the study of the use of limited resources and all resources are limited and finite, especially perhaps that of human life hours. We are all constantly faced with the decision to do this or to do that. Often, we cannot do both and if we can, we still often have to decide which action we will take first. So, if we are spending more of our money to buy gasoline because the government will not allow oil and gas companies to drill for oil in the United States, then we will have less money to spend on our medical needs. If we must pay more for food because the government is requiring the use of a large fraction of all US corn to make ethanol for gasoline fuel mixtures and driving up the costs of food production with crop subsidies, then again we will be able to spend less on medical care. Since worldwide food prices have doubled in the last year, many poor people around the world are suffering increased malnutrition, which leads to shortened lifespans. There are reasons why the average life expectancy is highly correlated with the per capita income of a society and why income growth is correlated with economic freedom.

Rahn cites a study by Frank Lichtenberg of the National Bureau for Economic Research that found that the medical expenditure needed to gain one life year in the US is about $11,000 and the pharmaceutical R&D expenditure needed to gain one life year is $1354. Consequently, when the politicians proposed allowing Americans to buy their prescription drugs in Canada, where a national health system puts pressure on pharmaceutical companies to sell their drugs at prices below those sufficient to fund the development of new drugs, the necessary expenditure to buy one year of life through pharmaceutical developments becomes impossible. So, does it make sense to save some money now on drug purchases at the expense of not further extending American lives in the future? Few people ask and think about this question, yet it is a central question.

When politicians fail to ask such questions and to weigh them rationally, they are committing manslaughter. When dealing with manslaughter, we have a serious responsibility to name the crime, even if it does not seem to be the nice thing to do in a non-confrontational society. But, it is better to force a confrontation and examine the consequences of the actions we force upon others carefully, then to unthinkingly bury the bodies as they pile up.

No comments: