Umar Haque — Americans Are Dying For Healthcare

Yet there’s a logic — however absurd — to it. It’s a case of income maximization gone extreme. Repealing healthcare will maximize incomes for healthcare providers, Congressmen, lobbyists, pharmaceutical companies. And repealing healthcare will maximize incomes for households, by lowering taxes. Never mind that it shrinks life expectancy, which is to say: never mind the long-term benefits of such investments — in this paradigm, all that matters is income, right now.

Thus, the overarching paradigmatic goal — increasing GDP , which is the underlying and understated assumption of all the above — will be accomplished. GDP doesn’t care if you don’t have healthcare — in fact, the more you pay for healthcare, the higher GDP rises. If we all break each other’s legs, GDP rises, because now we have to pay for healthcare — and if there’s only one doctor in town, who charges us a fortune, so much the better, because we’ll have to pay more. (And if you want to get political, of course we can trace slavery and segregation back to the idea of maximizing income at the expense of life, too).

If all that sounds bananas, that’s because it is. It’s all a tiny case study in just how broken the old paradigm of human organization is, which suggests the sole purpose of all life on the planet is maximizing the income we can wring out of it this nanosecond. Now let’s ask: what happens when a society obeys that paradigm in every sphere of life?
Well, you get the thoroughly weird and tragic situation America’s in today: its economics appear to be grossly fine— but its eudaimonics are dismal, declining, and failing. By “eudaimonics”, I mean whether lives are flourishing or not.

The is the problem with equating value with price and measuring utility (satisfaction) based on prices as an reliable indicator of preferences.

This is amplified by assuming macro to be scaled up micro and viewing macro in terms of aggregates rather than in terms of systems and networks.

The result is economics as fantasy intellectually, and, worse, the result is a horror show in actuality.

If there’s a recipe for how not to create eudaimonia, this old, busted paradigm — maximize income at the expense of life itself — is it.

Like I keep saying, capitalism is about putting ownership first and socialism is about putting society, you know, all the people, first. Capitalism is naturally suited to oligarchy of the plutocratic sort. Socialism in naturally fitted to democracy as government of the people, by the people, and for the people.

It's matter of getting priorities straight. Letting economic liberalism dictate social and political liberalism is a fool's errand.

Incidentally, viewing "capitalism versus socialism" as being black and white falls into the fallacy of the excluded middle. There are many forms of capitalism and socialism along the range between the extremes. However, much of the discussion assumes an excluded middle. This is unsound reasoning, usually for persuasion rather than being based on inquiry using methods of creative and critical thinking.

Designing Eudaimonia —The Art of Creating Better Lives

Americans Are Dying For Healthcare

Umar Haque

Marshall Auerback — Higher GDP Growth Does Not Equate To Greater Social Well-Being And Happiness

For rich, developing, and transition countries, whether pooled or analyzed separately, there is no time series evidence that a higher economic growth rate increases the rate of improvement in life satisfaction. Doubling the rate of economic growth does not double the increase in life satisfaction; rather, the evidence is that it has no significant effect at all.

If there is any less developed country for which one would expect a positive impact of economic growth on SWB it is China, whose growth since 1990 from an initially very low value has been at the highest rate ever recorded, a four fold multiplication of real GDP per capita in two decades (Heston, Summers, and Aten 2012). Household appliances such as refrigerators and washing machines – quite rare in 1990 – are now commonplace in urban areas. Color television sets currently average over one per household. By 2008, almost one in ten urban households owned a car and China had become the world’s leading automobile producer, according to the OECD.

Yet, the combined evidence from six separate surveys is that life satisfaction in China has not improved, and, if anything, may have declined somewhat, according to Richard Easterlin, a Professor Emeritus at USC, who has made a lifetime study of the phenomenon…. 

Macrobits by Marshall Auerback
Higher GDP Growth Does Not Equate To Greater Social Well-Being And Happiness
Marshall Auerback

While psychologists have long used surveys of reported well-being to study happiness, economists only recently ventured into this arena. Early economists and philosophers, ranging from Aristotle to Bentham, Mill, and Smith, incorporated the pursuit of happiness in their work. Yet, as economics grew more rigorous and quantitative, more parsimonious definitions of welfare took hold. Utility was taken to depend only on income as mediated by individual choices or preferences within a rational individual’s monetary budget constraint. 

Even within a more orthodox framework, focusing purely on income can miss key elements of welfare. People have different preferences for material and non-material goods. They may choose a lower-paying but more personally rewarding job, for example. They are nonetheless acting to maximize utility in a classically Walrasian sense. 

The study of happiness or subjective well-being is part of a more general move in economics that challenges these narrow assumptions. The introduction of bounded rationality and the establishment of behavioural economics, for example, have opened new lines of research. Happiness economics – which represents one new direction – relies on more expansive notions of utility and welfare, including interdependent utility functions, procedural utility, and the interaction between rational and non-rational influences in determining economic behaviour.…