Diagnosing Krugman

By W.W. | IOWA CITY

SOMETIMES people believe something so patently ridiculous, so detached from evidence and good sense, that it is more useful to diagnose itthan to debate it. For example, the New York Times' "Room for Debate" forum has been featuring an interesting discussion of the psychological principles underlying the widespread conviction that Barack Obama was not born in the United States, despite ample evidence to the contrary. While "birthers" are in my opinion richly deserving of such treatment, this sort of psychologising diagnosis of strong political conviction often serves as a cheap, supremely condescending trick for pathologising and thus dismissing those with whom we disagree. A good deal of work on the psychology of conservatism is like this. The motivating question, "What the hell is wrong with these people?" takes it for granted that there is something wrong with "these people", and thus that disagreement with them is based not on a reasonable difference of opinions among intelligent people of good will, but rather on some sort of deep-seated defect of character or cognition in the "other" insusceptible to correction through civilised discourse.

It is in this dismissively diagnostic spirit that I would like to approach Paul Krugman's latest column. He writes:

Here's my question: How did it become normal, or for that matter even acceptable, to refer to medical patients as “consumers”? The relationship between patient and doctor used to be considered something special, almost sacred. Now politicians and supposed reformers talk about the act of receiving care as if it were no different from a commercial transaction, like buying a car—and their only complaint is that it isn't commercial enough.

What has gone wrong with us?

Let us ask this, instead: What has gone wrong with this celebrated economist such that he has come to believe that something "has gone wrong with us" if we have come to conceive of those who buy medical services from those who sell them as "consumers", which is what they are?

Now, I'm sceptical of the idea that the business of "receiving care" is now more commercial than ever. As many economists are glad to tell you, the astronomical American level of health-care spending is largely a function of "price insulation"—of the fact that, um, "care receivers" are, by dint of the nature of typical health plans, prevented from taking costs much into account. We have arrived at our present unsustainable situation because we have moved health care into a liminal zone away from the market discipline of the cash nexus, but not all the way toward the bureaucratic discipline of socialism, such as it is. The most curious thing about Mr Krugman's quasi-religious squeamishness about the "commercial transaction" is that it is normally the economist's lot to explain to the superstitious public the humanitarian benefits of bringing human life ever more within the cash nexus. Yet Mr Krugman has chosen to reinforce rather than fight taboos against trade as if he were a benighted, harrumphing scold, or a sociologist.

In any case, let's examine Mr Krugman's implicit premises. First, that "special, almost sacred" relationships cannot be "commercial". This is a familiar canard, but not as interesting as Mr Krugman's further implied assumption: that a transaction thoroughly mediated by the state is not desacralising. That is to say, whatever is crass and profane about patients exchanging money directly for doctors' services is avoided if the patient-doctor relationship is brought within the matrix of politics. This seems odd to me, but then I am odd, as recent work on the moral psychology of market exchange has helped me see.

In an important paper on "Taboo trade-offs, relational framing, and the acceptability of exchanges", Peter McGraw and Philip Tetlock, psychologists at the Universities of Colorado and California, Berkeley, find that:

Ideology...has a moderating influence on the perceived appropriateness of transactions. Whereas liberals and conservatives find efforts to monetize babies, body parts, and basic rights and responsibilities of democratic citizenship abhorrent, we find that among libertarians the objections to these types of transactions wane. Moving left on the political spectrum toward socialism increases the tendency to find not only surrogate motherhood unacceptable but also the buying and selling of borderline controversial commodities such as medical care and legal representation as well as currently uncontroversial commodities such as houses and food. Devout egalitarians tend to see such exchanges as inherently inequitable because they put the poor at a profound disadvantage (and because they seem to carry the implication that the lives and rights of the poor are worth less than those who can pay large sums for doctors and lawyers).

I am one of the libertarian types to whom few transactions seem especially problematical. Anything that's peaceful! In contrast, Mr Krugman would appear to be one of those "devout egalitarians" to whom it seems wrong to leave the protection of basic rights, such as the right to health care, to the vagaries of the market. But there's more to it than this. It's not just that buying and selling certain things is creepy or gross; it's that there is something inherently ennobling and honourable about government providing or assuring the provision of these same things. Messrs McGraw and Tetlock suggest to me an egalitarian mental model that helps make sense of Mr Krugman's complaint about health care as a merely commercial concern. It goes a little something like this.

Market exchange is fine, in it's place. But there are some things to which we are entitled as human beings and/or citizens, and putting those things on the market dishonours our rights and diminishes our dignity as persons and Americans (or whatever nationality you may be). In contrast, government guarantees elevate and sacralise the goods and relationships implied by our entitlements. But why? Because the state is the institutional embodiment of our unity and solidarity as a people. One function of government is to deliver the goods, sure. But it is also an expressive institution that affirms and embodies ideals of equality and mutual respect by delivering the goods as a mandate of the collective will. If patients are not consumers, what are they? Free and equal citizens getting their due.

This is a pretty picture, but it's also a problem—a problem economists generally help us to see through. The policies that publicly express good will and mutual respect—that successfully broadcast that we care about one another—often are not the policies that would actually deliver the goods—the policies you'd favour if you cared more about people than signaling that you care about people. The policies that would actually deliver often would do so by enabling and encouraging consumer choice and entrepreneurial discovery and innovation in competitive markets. If the deep worry about certain forms of market exchange is that they put the poor at a disadvantage, we can address the worry by making certain that means-tested transfers are generous enough to ensure sufficient market power for all. But we can't address concerns about market inequity in this way if market-based policy is preemptively ruled out of bounds by a misguided public theology of markets and politics. Widespread public commitment to a vocabulary of moral and political symbolism according to which "merely commercial" transactions and relationships are seen to be profane, while political transactions and relationships are seen to be sacred, is a significant impediment to improving human welfare with policy that harnesses the power of markets. One task of the liberal intellectual isto chip away at taboos that cause preventable suffering by limiting the range of politically-feasible policy. Isn't this the opposite of what Mr Krugman is doing?

(M.S. responds here. Photo credit: AFP)