Historical Determinism

First a short rebuttal of a point Marco made:

Friedman specifically attacks medical organizations for limiting entry into the professions through caps on the number of students accepted into medical schools and the number of schools accredited. Personally, while I disagree with caps, I’m not convinced that lowering the standards for doctors is a sound idea, even if it means there’ll be more doctors around. If this were to happen, you would see a stratification of the medical industry where only the richest would have access to decent doctors. While some might argue that the poor currently have no access, period, we can’t overlook government sponsored clinics for the disadvantaged. I feel it’s better and more ethical to have the government subsidize decent medical care for the poor than to have the poor treated by the least qualified individuals, which they can afford.

Marco's basic argument that the current level of competition to get into medical school and make new doctors is absolutely necessary to maintain quality in the medical profession is completely misguided. Unfortunately, Marco too has succumbed to the propaganda of the doctoring guilds (the American Medical Association and the American Association of Medical Colleges). While the United States population has basically doubled in the last 50 years--from 150 million in the 1950s to 300 million today--not a single new medical school has been founded since the 1950s, and the medical schools have expanded their enrollment very little. To explain, if Marco's argument basically means only the top 5 percent of our population is smart enough to become good doctors, and we had sufficient medical schools in 1950 to educate them all. Then by definition, today, we must not be letting some people into medical school that are smart enough to be good doctors. I suppose it would also be possible to argue that the top 5 percent of the population today is not as smart as the top 5 percent in 1950--only the top 2.5 percent today are that smart--but that argument seems unlikely, unless you buy Hernstein's argument that there is a systematic dumbing of society.

In any case, the quality argument does not even play out in practice. Today, one third of all new doctors come from overseas. If restricting the number of people coming out of US Medical Schools is so important for quality control, then why are we so willing to pick up doctors from abroad of lower quality? Maybe it is because there is a shortage of doctors. Oh wait, it because there is a shortage of doctors. Marco says, "we can't overlook government sponsored clinics for the disadvantaged." Well guess what Marco? No one did overlook it. It is just that now, because there are not enough doctors, government agencies have to raise and raise the salaries offered for doctor positions to attract them to the work. This drives up the prices in the market as a whole, creating an ever-ballooning price bubble in which doctors get paid more and more, but the country receives less and less care, eventually driving the United States to the state we are in today, where we have by far the highest prices in health care in the world, and certainly not the best care. This is not to mention that, as I explained earlier, the rigidly limited U.S. doctor licensures and the massive price incentives that result from them are drawing the best doctors away from the poorest country of the world where they are needed most. In Infections and Inequalities, Paul Farmer explains that while Haiti has a medical school, less than ten percent of its graduates in the last 50 years have actually stayed working in Haiti--the rest have gone to Europe and the U.S. where salaries are higher and there is demand due to rigid licensure structures.

Although, I suppose in retrospect this rant is not so much against the idea of licensure for doctors overall. Plenty of other countries have licensure, but have pricing problems that are not as bad as the U.S.. The rant is really against letting professions control their own licensure processes, as they work for the benefit of those in the profession--as Friedman argues--rather than the public as a whole.

Turning away from Marco, I want to say that the kind of historical determinism in The Road to Serfdom for some reason reminded me of Cannibals and Kings from last year. You know, in C & K, Harris argues that cultural structures are a necessary result of the need to control population in a given environment. Hayek argues that totalitarianism is the necessary result of socialism--more or less. I suppose they aren't that similar except in the fact that they are both deterministic--although they both claim to not be deterministic, citing their own desires that someone will read their books of genius and break these horrid cycles.

In any case, reading Hayek is a little funny from the prospective of today. As a book written in 1944, it has the totalitarian fears of 1984 and Brave New World written all over it. I remember reading these books in high school, and asking my Dad, "so why did totalitarianism never take over?" I remember him distinctly saying, "Well, no one really anticipated the 60s."

While my Dad may have had a point, I am not sure that is the main point in regards to why centrally planned economies failed to prevail and eventually yield to totalitarian dictatorships. In the end, it seems Milton Friedman has the true answer as to why totalitarianism did not take hold: the power of market competition. As Hayek points out, the United States was at a different stage in this determined developmental cycle than the USSR or Germany. While centrally planned services were rising in the United States, it was nowhere near the levels in these other countries. As a result, when it came to it, and the world was divided into two great superpowers, by luck of history--I suppose--the United States found itself less centrally planned than the USSR. This meant that the United States was able to adapt to market considerations and develop economically in a much more effective way than the USSR. In the end, the USSR simply could not compete with the United States under the centrally planned totalitarian model, and it fell in a cold war of soft power. The fall of the USSR fortuitously led the world to realize the pitfalls that Hayek warns us of 40 years earlier. Not so much that socialism inevitably leads to totalitarianism--but that socialism is simply less effective than capitalism and thus should not be pursued.

One last note: it is interesting to think about whether Hayek would view the more socialist countries of Europe today as walking down "the road to serfdom," or whether in light of our current historical situation, he would see the possibility of a fully planned economy eliminated in the wake of the fall of the Soviet Union--any ideas anyone?