In vogue these days are people who accuse others of being economic
ignoramuses, and yet do not explain the theories they pretend to espouse. Or if
they take the trouble to explain; they sound like a caveman trying to explain
rocket science.
And so, in the interest of having a more meaningful debate on
economics, we should start with the most fundamental of principles. That is,
let's not start with Economics 101 but Economics 001. To this end, we imagine
two adjacent islands in the middle of the ocean; each inhabited by a hundred
thousand people or so. They lived for generations on fishing, hunting small
animals, catching birds and doing a limited amount of farming.
Given that these activities require the effort of every able-bodied
individual to lend a hand, both economies remained stagnant during all that
time. But then one day a small tsunami hit one of the islands, causing some
damage to the meager installations on which the people depended for their
survival. This forced the labor force that used to go fishing at sea, to stay
home and work on fixing the resulting damage. The force also worked on
constructing a barrier made with blocks of granite, to prevent future tsunamis
from causing a similar damage.
But in building that structure, the workers unintentionally
created an estuary that would fill up with seawater and fish at high tide.
Hours later, when the low tide happened, the water would escape through the
small spaces between the blocks, while the fish would remain trapped in the
estuary, ready to be scooped up with the minimum of effort, and taken to
market.
The resulting effect has been to provide the island with three
times more fish than when the fishermen used to go out to sea. In addition, the
island found itself blessed with a surplus of labor that can be deployed in
other sectors of the economy. This prompted the island elders to get together
and discuss the ways by which to distribute the freed labor force. When all was
said and done, they had planned for the improvement of the housing situation,
and for expanding the hunting and farming industries.
A year later, a delegation from the island that was spared the
tsunami went to visit the island that was stricken. Instead of seeing
devastation, members of the delegation witnessed the marked rise in the
standard of living of an island that used to look like their own, but now looks
distinctly wealthier. And so, the members wanted to know how this was achieved.
They asked questions, and the elders of the now wealthy island explained it to
them. What follows is a summary of what they said:
To create additional wealth for your society, you must have three
ingredients: A need for goods or services, the knowledge to make them, and the
manpower to produce them. When you have all these in place, the way you manage
them will determine how much growth, if any, will be added to your standard of
living.
We now turn our attention to the Americans who debate economics.
The lesson they should draw from the story of the two islands, is that when the
three ingredients for economic expansion exist, what counts as relevant is the
discussion about how to manage those ingredients. And what's irrelevant would
be arguments concerning how to pay for a given project. In fact, this question
is such a bogus and destructive consideration, it must never be allowed to
enter the discussion.
In America, like everywhere else in the world, there is a need for
healthcare. No one doubts that the country has the knowledge and the manpower
to provide that service. With these ingredients available, what keeps the
project from being implemented, is the fake question as to how it will be paid
for. The reality is that it is paid for right now ... in fact, it is paid for at
a rate that is higher than necessary for the simple reason that the project is
badly managed. How so?
What is painful for the debaters to admit, is that at the root of
many contemporary American problems, lies a fundamental transformation of the
culture. It happened in every profession, form the basest kind such as crass
politics to the loftiest kind such as the medical arts. In the old days, people
were guided by morality, and driven by a sense of duty as well as pride in
their profession. What drives them today is greed, which they satisfy by shamelessly
and openly coercing and milking those with whom they do business.
These people know that to succeed, they must have — here is the
big word — leverage. And there is no leverage more powerful than what's in the
hand of the healthcare practitioners and the middlemen who insure the practice.
They are the people that have the means to hold as hostage the lives and
well-being of the entire nation. The sad part is that they are using that
leverage to make unreasonable and greedy demands.