Monday, March 16, 2015

Free drugs for all

The incremental socialists are at it again.  Their target this time? A national pharmacare system. As Eric Hoskins, health minister in the Wynne government asked why should the poor have to choose between food and medicine? Don't we all deserve access to the same standard of care? Isn't health care a human right and aren't prescription drugs a key component of fighting illness and disease? And to hear proponents of this plan such as Dr. Danielle Martin tell it, the whole thing can be done without a net cost to the state.  Golly!

The cost of prescription drugs is an important issue. But is the high cost of these products a result of a limited supply brought upon by production costs or is the supply kept artificially low because of the patent system? And even if we accept the rational and likely premise that some people can't afford to purchase medicine which is necessary to their health, is the answer really to impose a bulky program on the totality of the industry or couldn't we handle the problem with targeted, voluntary relief? After all many people are already covered under private drug plans supplied by their employer.

For those of us who are hesitant to expand the already overwhelming scope of the state some lingering questions remain. Will this new program be funded through the imposition of higher taxes, and if so what will be the consequences to economy which is already performing tepidly? Or will the available pool of capital be tapped even further when politicians decide that it will be more popular to simply borrow the necessary funds? Either course of action will mean our nation is less prosperous as a result. And what happens to this program when politicians recognize that raising taxes is politically unfeasible? They will then turn back to the solution which they have imposed on our health care system, namely rationing. We will be taxed in order to pay for the drugs and then denied them in the name of expediency, just as now so many people languish waiting for hip surgeries or for an opportunity to see a specialist.

There are also certain moral hazards attached to this program. Already prescription drug abuse, specifically that of opiate based pain killers such as oxycotin, is an epidemic in our society. What will happen once these drugs are not only widely available but also free to the end user? We live in the high time preference society. Everyone is looking for a quick fix instead of hard work. We already rely too much on drugs and treatment instead of focusing of prevention. While there is certainly a role for drugs in the treatment of disease isn't it far better to live a healthy lifestyle and avoid the disease in the first place? A lot of drugs have very dangerous side effects. Since all demand curves are falling the lower a price the more of a good will be purchased. By eliminating the cost to the end user we are going to encourage more people to take possibly unnecessary drugs, which in turn will lead to less favourable health outcomes.

There are problems with the present market in pharmaceuticals, absolutely. There is an incentive issue with the regulatory process. When a drug is approved and it has disastrous side effects and ends up killing people then there is a backlash and the bureaucrat involved in the approval may lose their job. On the other hand when a drug is not approved, or it is delayed, and the people who could have been saved for it are not, nothing happens. So an overly cautious mentality is fostered at the expense of the general public. The best person to make a particular risk / reward analysis about the utility of a potentially dangerous drug is the person in question, in consultation with their doctor. Who is the state to deny a potentially life saving drug from a terminal patient simply because it is untested and risky? How is some far removed bureaucrat in a better position to make this decision for thousands or millions of people they will never meet than these people themselves? Instead of a byzantine process of regulatory approval we should scrap the entire process. Those who are critical of the safety or efficacy of a new drug need not take it; but those who are desperate for a cure for their disease should not be kept from medicine which may save their life.

Price controls have also predictably led to shortages of drugs and, counter intuitively, to higher prices given the way that the price controls work (the price of related drugs are tied together, making it much less profitable for a company to lower it's prices than it would otherwise be). Eliminating these price controls is the obvious and simple solution. Over two thousand years of failed experiments in price controls should surely be enough to convince planners of their ineffectiveness.  It's time to abolish the Patented Medicines Prices Review Board.

Reforms are needed in the pharmaceutical industry, but the solution is not a government takeover; it is de-regulation and the removal of unnecessary nanny state controls imposed by well meaning but short sighted do-gooders.

Thursday, March 5, 2015

just say NO! (to the transit tax)

Invoking the much despised specter of congestion Metro Vancouver politicians have been working over time to promote their latest tax hike, in this case a .5% bump in the PST. Allegedly the money will be allocated towards transit which will alleviate the endemic gridlock which motorists so despise. The actual cause of gridlock is the fact that there is no price associated with road travel. Normally in a market when you have too much demand and too little supply price increases until supply meets demand. There are no shortages. But with socialism chronic shortages and uneconomic allocation of resources are endemic. Ironically the very politicians who create these problems then benefit by campaigning about them and the gullible public soaks it all up and pays the bill. Le sigh.

Many well meaning but stupid people have praised sales taxes but let us be clear - there is no such thing as a good tax. Savings isn't per se better than consumption. It's not our place to tell other people how they should be living their lives or spending their money. While it's true that savings are crucial for long term economic growth each individual's value scales are completely different, based upon the various ends they wish to achieve with their limited means. Only the person in question is qualified to say how their money should be spent. There is no such thing as a good tax. Be it on sales, incomes, imports or oil all taxes are bad and all taxes should be opposed.

Higher taxes and more spending on transit will not alleviate congestion. The best long term solution is to privatize the entire system of infrastructure, transit, roads, sky train, the whole kit and caboodle. Then you will see routes designed on the basis of consumer demand. Competition between firms will mean ever improving quality and costs will be contained. Road travel pricing will mean higher prices during peak times, which in turn will solve the problem of traffic jams. This would also mean innovation in road safety, as various infrastructure firms would be able to compete by advertising their improved safety records.

Sunday, March 1, 2015

there's no justice like vigilante justice

On January 3rd, 2013, on a reserve in Manitoba, Cody Schmidt, armed with a rifle, came to the rescue of his brother, Zach Mosseau, who was being subjected to a brutal baseball bat oriented gang beating. His brother's assailants fled in a vehicle and were fired upon. One of them, Dean Alan Frank Unrau, died as a result. Another, Michael Unrau, was severely injured. While vigilante justice is widely condemned in our society who but the victim of a crime or their kin is in a better position to both identify the perpetrator and mete out their deserved retribution? Who else has as much a stake in seeing justice carried out as the individual who was hurt or those who are close to them? Or an agent they have contracted with.

Which isn't to say, necessarily, that Schmidt is in the clear. The facts of the case are still murky and a good deal of the commentary must be speculative at best. We don't know what slight or offence prompted the gang beating. Perhaps the initial violent assault was provoked by some other incident; perhaps it was a petty dispute over drugs, money or housing. This we do not know. All we can offer is conjecture. But the point of analyzing this case is not to arbitrate the events of that night, finally and forever, but rather to consider the broader moral issues which it brings in to question. But just because an assault on his brother occurred doesn't mean necessarily that Schmidt is justified in using lethal force. A key component of a libertarian legal system is proportionality. A group of men beating someone with a bat could very well end in a fatality but it didn't. The exact line of how much force can be used in retribution for an aggravated assault is an interesting question and in this case the answer is unclear but certainly an attack does create the right of the victim or someone else on his behalf to strike back, not only in self defense but also as punishment for the crime.

The point of a legal system is to protect person and property. Unfortunately our collective conception of jurisprudence has devolved over the years. There is a great body of law which not only fails to protect property rights but actually infringes upon them. It is as Bastiat said, in 'La Loi' La loi pervertie! La loi — et à sa suite toutes les forces collectives de la nation, — la Loi, dis-je, non seulement détournée de son but, mais appliquée à poursuivre un but directement contraire! Law has become perverted, from a tool for preserving the right to property into an instrument of plunder. Our entire system is corrupt. The law today is less about what is right and more about how can someone profit at another's expense. 

In 1765 English jurist Sir William Blackstone enunciated one of the tenets of the modern legal system, saying Better that ten guilty persons escape than that one innocent suffer. Critics of vigilantism claim that mob justice will  lead to innocents suffering and in defense rof the legal status quo today it's true that someone who has not committed a malum prohibitum offencee is unlikely to be convicted, because of the legal protections afforded to them it's also true that many people who have done nothing which is malum in se suffer needlessly. But isn't Blackstone's dictum true on both ends? Shouldn't it be wrong to let 11 guilty people escape rather than one innocent suffer? Or at least there should be some point where you accept that you will occasionally get it wrong so that the rest of the time you can get it right. And it is from this perspective that vigilantism excels, in ensuring that criminals are in fact brought to justice. Unfortunately our society coddles those who commit acts of aggression against others (even elects them to it's highest offices). There is not enough emphasis on the victim and far too much compassion for those who harm others.