Ideas Kill

Ideas have consequences and one consequence is that, when implemented, certain ideas can kill.

Two recent stints of sitting six-plus hours in the emergency room of a local hospital stimulated thoughts on the state of socialized medicine today. As a marketing professor, the first sarcastic comment that came to mind was just how little the hospital staff cared about their paying customers who were sitting agonizingly in those oh-so-comfortable chairs. Beyond this, I had to ask, “Where is the excess capacity—of doctors and examining rooms—to be called upon to meet high demand?” Supermarkets, after all, promptly open additional registers when more than three customers are waiting in line to check out. Of course, this last just as promptly usually generates from the medical profession the indignant response “We’re not a business! How dare you!!”

The answer to my question is that, by design, there has been no excess capacity in medicine since at least the mid-nineteenth century. The goal of the licensing monopoly created by the American Medical Association (1, 2) in 1847 was to restrict supply in order to increase the income of a certain type of doctor. The 1910 Flexner Report (1, 2) led to a further restriction of the supply of medical schools. Regulation and taxation of for-profit hospitals throughout the twentieth century drove most out of business, leaving such institutions to be taken over either by an arm of the government or by government-sanctioned and protected nonprofit organizations. That is to say, to be taken over by those idols of customer service, the bureaucrats.

Nonetheless, the system has not been as bad as it is today. In the 1950s, when I was a child, our family doctor made house calls and twice, once after a bang on my head and the second time after I suffered a baseball in the eye, the doctor met my father and me at the hospital where more resources were available than in the doctor’s office. There was no wait when we got to the hospital and my father paid for all of this out of his pocket—we had no medical insurance. And, oh yes, my father was not wealthy. He worked as a clerk in the post office. The connection between seller and customer was direct and the market performed relatively smoothly.

What has happened in the years since is the solidification of medical bureaucratization that began at its point of inflection during the wage and price controls of World War II.* Health insurance that businesses could deduct from their taxes was the only way wages could be increased. This began the slippery slope of putting the government-regulated cartel of insurance companies between doctors and patients. Medicare in 1965 iced the government takeover of medicine with strict price controls. Skyrocketing costs, shortages, and the charade of billing as much as five times what is actually paid for medical procedures have become the norm.

What kills, in the form of long waits, is price-control-caused shortages and other regulations that restrict innovation and supply. People die waiting to get appointments with doctors, waiting for surgeries, for transplant organs, for drug approvals from the FDA. Think Canada and the UK. One doctor estimates that 80,000 men over a three-year period died in the US awaiting the approval of a prostate cancer drug that was already in use in Europe.

Our adventure in the hospital that I began this post with ultimately had a happy ending, but in the intervening hours of waiting a parade of doctors looked at our daughter offering diagnoses ranging from tendonitis to viral infection to (the correct) bacterial infection, a possibly serious problem if not caught early. The range of diagnoses could only make me think of Jerome Groopman’s book on How Doctors Think, where Groopman points out that 10-15% of diagnoses are wrong. The likely issue in my daughter’s case is that the doctors are so frazzled by lack of time to listen to or take a full patient history that they cannot consider all alternative explanations of the symptoms. The doctors are caught in a bureaucratic web spun by the advocates of socialized medicine. The doctors, as a result, have become no better and no worse than college professors at a state-run university. That is to say, they have become bureaucrats just like me. Some are better than others. The challenge is to find the good ones.

Even before these two visits to the ER, the state of the system had become personal to me. Some twenty months ago I had a date with the cardiologist. My response, therefore, to those who want more government involvement in medicine is simple: “You would have me dead. With your ideas in place twenty months ago, with the increased shortages and waiting time those ideas cause, I might not be here today. Your ideas kill.”


*The seeds of socialized medicine go back to Prussia’s Bismarck. And, according to Melchior Palyi (chapter 4), Bismarck just governmentalized ideas that were plentiful during the medieval guild era.

The Ethics of Accreditation

Educational accreditation is unethical because it is government-initiated coercion to control the production and distribution of education. In the United States the control is indirect; in most other countries it is direct. Accreditation also infringes academic freedom, though that concept itself is a mixed product of government involvement in education.

Accreditation is the process of certifying a minimum level of quality in schools and colleges. A first, simple question arises. Who accredits the accreditors? Who certifies the certifiers? Or, as Ayn Rand and others have put it more generally: who protects us from our protectors? The statist assumption is that experts in the government know what is best for us because they are not motivated by the selfish profit motive. As consequence, they should have the final say on quality. This ignores that Adam Smith’s invisible hand metaphor applies equally, albeit inversely, to bureaucrats who proclaim their goals as serving the “public interest” when in fact the behavior invariably is led “as if by an invisible hand” to benefit the special interests that lobby them.

The first one hundred years of American public education were dominated by one special interest, white Anglo-Saxon Protestants, at the expense of Catholics, Jews, African-Americans, and, often, women, plus other ethnic groups and religious and philosophical persuasions. Today, public education is dominated by the special interests of political correctness. And it has always been dominated by the premise that the omnipotent government knows best.

Who determines quality in the free market? The market! That is, all the people who participate in the process of producing, buying, and selling goods and services. Ultimately, it is determined by the value judgments of consumers through their repeated buying of products they like and abstention from buying of products they do not like. Entrepreneurial competition and the pursuit of selfish profit over time leads to better and better products that better meet the needs and wants of consumers. The same would apply in a free market in education, if such existed.

Accreditation at the university level in the United States consists of seven “natural monopolies” that regulate higher education in a particular region of the country and many specialized agencies that govern specific programs, such as health or business education. Accreditation is “voluntary” (and therefore indirect) in the sense that no school or program is required to go through the approval process, but not having such approval severely restricts the availability of government money for student loans and other uses. All accrediting agencies must be approved by the US Department of Education. This is what puts them into the government-initiated coercion category. “Cartel” and “licensing monopoly” are appropriate descriptions that come to mind. That most education is provided by the government reinforces the ethical issue. Privately funded and controlled education in other countries is extremely rare, if non-existent altogether.

In contrast, the Good Housekeeping Seal of Approval originated in the late nineteenth and early twentieth centuries as a market-based means of validating the quality claims of the magazine’s advertisers. Very early, however, the Seal of Approval came under the watchful eye of government oversight. Similarly, Underwriters Laboratories began as a market-based testing and certifying organization, but today its operations must be approved by the Occupational Safety and Health Administration.

Academic freedom is a pretense at protecting free-speech rights. In a free-market—in education or anything else—the entrepreneur has the right to hire and fire at will anyone he or she disagrees with. The fired employee is then free to hang out his or her own shingle to start a new business. In the practice of government-owned and -controlled educational institutions, academic freedom means the freedom to speak and write within the narrow confines of what the government approves. Accreditation contributes to this narrowness by specifying the requirements of “academic qualification,” such as the possession of certain degrees or diplomas and the publication of a certain number of papers within a certain period of time. That the entire process is one of bean counting and hypocritical is readily acknowledged. That it ignores that science does not progress strictly through one flawed form of publication, such as the peer-reviewed journal article (1, 2), or in five-year cycles is shrugged off as irrelevant.

In practice accreditation is a good ol’ boy network of deans and retired professors. Universities court them, produce enormous mounds of paper every five years, and jump through hoops to win their anointments. Being accredited keeps the government money flowing. That is what accreditation is all about.