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April 03, 2006

Charles Murray Returns

Inourhands In the coming weeks, you're going to hear a lot about Charles Murray's new book, In Our Hands.  Murray, you'll remember, is the crackpot conservative responsible for The Bell Curve, the racist, IQ-obsessed tract from the mid-90's that turned out to be little more than the thinking man's eugenicism.  He was, as Jason DeParle once described him, a social science pornographer: the Larry Flynt for a new breed of smut that that legitimized his audience’s most poisonous suspicions about race, class, and sex by wrapping them in a veneer of sober scientism.

The question has always been why folks take his ideas seriously.  The best I can come up with is the Murray discovered and skillfully exploited a fairly foundational flaw among journalists -- their generalist nature.  Most commentators are not wonks, and they're definitely not statisticians.  Therefore, when faced with one of Murray's opuses, they're dazzled by the array of statistics, multivariate regression analyses, and other impressive techniques he uses, the flaws of which the reviewers are often ill-equipped to assess.  Murray incapacitates them by talking over them, and few writers want to risk a humiliating display of ignorance by engaging his dense substance.  So there’s a lot of ambivalence as to his conclusions, but much enthusiasm for his boldness and intellectual courage, virtues that self-important commentators feel well-equipped to identify.

Murray's newest is a grandiose plan to liquidate the welfare state -- Medicare, Social Security, welfare, everything -- and plow the savings into $10,000 checks for every adult American.  This will, he argues, solve all our problems, from the purely economic dangers that loom on the Congressional Budget Office's projected horizons to the existential angst that afflicts our souls and hollows out our communities.  I'm not kidding, as you'll see if you read my
review of Murray in the latest New Republic (which I'm writing this post in large part to plug).

I do, however, want to use my blog's blissfully unlimited space to go into some added detail on Murray's policy mistakes.  The base assumption of his plan is that he can halt the growth of health spending -- the primary driver of budgetary inflation -- by restoring all power to the individual, who will then bargain with private insurers and demand better care, lower cost, and snappier service.  His basic premise is that given the trillions floating around our government, the concept that we have any problems at all is absurd, and it must mean that government waste is subverting America's abundance.

The problem is, our country’s entitlement programs are models of bureaucratic efficiency.  Social Security spends less than one percent of its budget on administration; for Medicare, it’s two percent.  Compare that to the private health insurers, who blow about 14 percent on administration. Indeed, if you imposed the Plan immediately, it would cost staggering $355 billion more than the government currently spends.  Some efficiency.

Murray replies that the costs of entitlement programs will rise, while costs of the Plan won’t (save for those imposed by population growth). Therefore, by 2011, the Plan will be cheaper. But this is a trick. What’s driving entitlement costs is health insurance, and what’s driving health insurance is technological advancement.  Murray may think that “except at its frontier, health care should be getting cheaper,” but he doesn’t realize that when the frontier becomes standard, more people utilize it, and spending increases.  MRIs haven’t gotten a whole lot cheaper since they were introduced, but that have become a whole lot more widespread.

Murray’s answer is that the Plan will stop health care inflation, ushering in a consumer’s utopia of choice, competition, and rationalized end-of-life care.  “When health care is subjected to the same choice that people make about everything else in their lives – ‘Is it worth it to me?’ -- the health care industry will respond in the same way as other industries constrained by market forces, with better products and lower costs.”

But such starry-eyed free marketeering is belied by the fact that health care is not a normal market.  Take Avastin, a widely deployed colon cancer drug that’s been recently approved as a critical weapon against breast and lung cancer.  Its makers, Genentech, plans to charge $100,000 for it – double what they charge colon cancer users, even though the additional cost of producing the higher dosage is trivial.  They’re doing so because the market – because the patients, who have to pay much of the cost out-of-pocket -- will bear it.  They’re doing so because there’s no centralized bargaining authority that can tell them to stop.

In health care, an unfettered market is a cost driver, not a containment strategy, as it places extraordinary power in the hands of suppliers and, in the short-term, ailing patients need them more than they need patients.  What health care consumers lack are large bargaining authorities that can act as countervailing powers against the suppliers.  Murray seems to forget that, in other markets, its not consumers, but retailers, like Wal-Mart, who drive prices down.  In other countries, the government plays that role in health care.  But America is a suppliers market, and individual buyers suffer for it.

The numbers back up the contention: Private health spending has been rising faster than Medicare or Medicaid’s, and America spends more than twice as much -- per capita -- on health costs as any other system in the world, despite having no better health outcomes.  The Veteran’s Health Administration, which is fully socialized, provides the finest care in the country and does so at the lowest cost. They pay up to 80 percent less for pharmaceuticals than the new Medicare Drug Benefit, which is barred from bargaining except through private insurers. Get less, pay more – it’s become the American way, and Murray is nothing if not a patriot.

He's also a bit crazy, and I address his loopy attempts to sell the plan as a cure-all for American ennui over in my
review, which you should all read.  In any case, as he reenters the media stream over the next few weeks, don't be fooled.  Murray's a charming guy -- I've talked with him -- and he's masterful in crafting an air of authority and a tone of reasonableness, but bad ideas are bad ideas, even when otherwise sane people don't know better than to take them seriously.

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Comments

Do us non-subscribers to TNR have any hope of reading your review? 'Cause I'd like to if I can, and since 'ought' implies 'can' I'd like to think that there's a way.

Posted by: Blar | Apr 3, 2006 11:59:30 AM

bugmenot.com has logins that work.

Also--your TNR article says admin costs for Medicare are 2%, but you say 3% here.

Posted by: Matt F | Apr 3, 2006 12:19:31 PM

It's 2 percent -- my bad.

Posted by: Ezra | Apr 3, 2006 12:24:52 PM

Sorry, Ezra, but I refuse to pay for a TNR subscription, given their loathsome past (support for the Iraq War, pro-Republican stances, Michael Kelly, Andrew Sullivan, etc., etc., ad nauseam). Maybe I'll try the link suggested above.

Posted by: Rebecca Allen,PhD,ARNP | Apr 3, 2006 12:40:42 PM

Sounds hilariously like the Townsend Plan of the early 1930s. In that scheme, each person over 60 would get $200 a month that had to be spent within one month. Similar rationale--eliminate need for welfare systems, etc.

Posted by: HBinBoston | Apr 3, 2006 12:57:15 PM

He was, as Jason DeParle once described him, a social science pornographer: the Larry Flynt for a new breed of smut that that legitimized his audience’s most poisonous suspicions about race, class, and sex by wrapping them in a veneer of sober scientism.

This is a wonderful quote, and just exactly right.

And Ms. Allen, above, leaves out the sin most relevant to this discussion: Elizabeth McCaughey's dishonest attack on the Clinton health plan. Helping torpedo the Clinton plan was certainly one of TNR's low points.

Posted by: Tom Hilton | Apr 3, 2006 1:53:50 PM

The thing to remember when talking to Murray is that he's not actually any good at math in the conventional "apply good tools to explore the truth" social-science manner. He is a progenitor of the "torture the data until they confess" partisan-hack style of which John Lott is the apotheosis.

If Murray prints anything but a totally mainstream result table in a paper or a book, your first impulse should always be to look for the trick.

And if Lott should tell you the sky is blue, check your wallet. Murray isn't as bad.

Posted by: wcw | Apr 3, 2006 2:21:12 PM

Well it is (was) nice of TNR to invite you to do a review for them (and looks good on the resume too). But, like others, I can't/won't get to read it, since I've put TNR beyond the pale when it comes to my cash.

I do think you've hit on a great way to explain the importance/necessity of having an intermediate purchaser between the consumer and the producer when it comes to health care and drugs.

I'd be completely incompetent to decide what is a reasonable charge for most of the health care services I receive, and even if I knew the real cost/value, I see no way that bargaining is possible. Bargain with who? The administrators who send the bills? They have zero authority to do anything. The service-providers? They don't know what the services are priced at either (except Dentists, who do know what everything costs the patient, for some reason).

The US is way, way oversold on 'free markets'. Unbridled capitalism has no self-restraint or sense of shame either.

What passes as freedom to bargain really is, at base, only the freedom to buy or not buy. You don't bargain with Walmart or Safeway or Payless Shoes or Target. You either pay their price or leave without goods.

Leaving without the goods isn't really an option for health care or drugs (in most cases). Why can't conservatives accept this reality? Or do they understand the reality and just ignore it because it interferes with with their policy preferences?

Posted by: JimPortlandOR | Apr 3, 2006 2:27:30 PM

I haven't read the book, but...Isn't the most striking fact about the book the fact that a libertarian is endorsing a universal basic income? That is, giving everyone enough money to live on without having to work. And that coming as a part of being a citizen, and not through a patchwork of social programs. It is a very odd convergence of the egalitarian left and the libertarian right.

I haven't read UBI proposals in detail, but one of the perceived benefits is the increased transparency and simplicity of social programs.

Clearly the proposal with respect to health care is crazy. But it is interesting that what had once been a lefty pie in the sky idea is now part of the mainstream of the kinds of arguments that conservatives have to consider. Maybe in 10 years we'd actually see such a thing.

Posted by: Isaac | Apr 3, 2006 8:33:17 PM

That is, giving everyone enough money to live on without having to work.

I strongly encourage you to try living on $10,000 a year without working. The only way I could imagine that possibly working would be if someone were married to a wage-earner, had no kids, and owned a house already.

Posted by: andrew | Apr 3, 2006 11:37:53 PM

Andrew:
Well, sure $10,000 ain't marvelous, but considering that a full time minimum wage job would give you about that and people value leisure, it sure comes close (the main objection to Murray's proposal on these grounds is that there ought to be money for people under 21, 'cause a family costs more than an individual; but there are obvious reasons he doesn't support this).

For a full-on discussion of universal basic income see Philippe Van Parijs.

Posted by: Isaac | Apr 4, 2006 3:10:11 AM

Please provide some support for the following Diet Coke spitting onto my computer screen inducing statement:

"The Veteran’s Health Administration, which is fully socialized, provides the finest care in the country and does so at the lowest cost."

Posted by: Matthew Ladner | Apr 4, 2006 12:41:33 PM

Matthew Ladner - The Jan/Feb '05 issue of Washington Monthly had an excellent article by Phillip Longman about the VA, which unfortunately isn't online. But, hey - libraries are wonderful things. The article provides all the support necessary.

Posted by: JohnM | Apr 5, 2006 11:29:48 AM

Ezra, I know that hyperbole is an occupational hazard of wonkery, but it shouldn't descend to slander. Murray is a genuinely brilliant, wise, and caring man. People take Murray seriously because he is a rare man of substance who deserves to be taken seriously. Your eagerness to motivate people to ignore his ideas, and your rather reactionary scramble to defend the status quo dispensation, gives off a whiff of desperation. (The subtext seems to be that if the debate were on Murray's terms, you would lose, so Murray must be denied or desroyed.)

It is rank nonsense to call The Bell Curve racist. Have you read it, Ezra? Was Losing Ground, which helped precipitate welfare reform, racist? Was Murray wrong that the Johnsonian welfare state was broken, and was harming the people it was meant to help? Was Clinton "harebrained," a decade later, to recommend Murray style reforms? And you want us to wonder why a man who makes this big a contribution deserves to be taken seriously?

To call Murray a "social science pornographer" is beneath contempt. It is true that Murray systematically chips away at left wing shibboleths about race, class, and sex. Clearly you wish to preserve them, and ensure that people cannot feel free to think openly about race, class, and sex, but instead feel bound by "the tyranny of the prevailing opinion and feeling," to use Mill's phrase. It is true: without their shibboleths, opinion journalists have no leverage.

Murray cares more, and more sincerely, about these issues than you and I could ever hope to. Judging from the cheap character assassinating tone of your post, he has thought about these issues far more deeply and intelligently than you aim to. But I know better than to judge from the tone of your post, and I know you do aim to do better, and to be better, than this.

Posted by: Will Wilkinson | Apr 6, 2006 11:10:53 AM

I think the problem is that too many people think that government should serve the people when our government was actually designed to protect the people's right to serve themselves. I like Murray's outline because it pushes the line more toward self-serve and away from government slave.

Sure, the details can be nit-picked for lack of initiative to change the sates quo; some find this activity far preferable to actually addressing the fact that our foray into socialism will eventually fail under it's own weight as all in the past have done.

Funny when someone challenges a paradigm, defenders of the paradigm tend to attack the messenger rather than to take proactive steps based on the content of the message.

So long as a majority of our citizens perceive wealth redistribution programs as levers of control over the behavior of their neighbors, the current trend towards socialism will continue.

As usual, crisis, not reason, will be the catalyst for a much needed economic flush.
Jahfre the libertarian

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