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Nogometna lekcija o paradoksu vjere u slobodno tržište

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Početnu rečenicu Komunističkog manifesta o bauku koji kruži Europom se toliko izlizalo proteklih tridesetak godina, što parafrazama što neutemeljenim ljevičarskim optimizmom, da joj treba povijesni odmor do nekih sretnijih vremena. No, teško je odoljeti još jednoj aktivaciji njene efektnosti kad se pročitaju silne reakcije na najavu uspostave europske nogometne Superlige. Prirodu tih reakcija možda najbolje […]
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nikolap
219 days ago
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Zagreb, Croatia
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The Muddled Speech of Numbers: Blood clots, COVID-19 vaccines, and statistical risk

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Earlier this week, the CDC paused the roll-out of the Johnson & Johnson COVID-19 vaccination after 6 women experienced serious blood clots. Their caution has merit, given that the FDA has been approving vaccinations in advance of the typical large-scale evaluations because speed is seen as so crucial. Reasonably, there is a desire to know more about these blood clots before more might appear. Yet, there was also sheer frustration from many in the medical community because the choice to pause the roll-out suggested that there was a serious issue, that the vaccine was dangerous. In a context in which vaccine hesitancy is likely to undermine herd immunity, any suggestion that the vaccine might have consequences can be twisted and contorted. 

Across many mailing lists and Twitter streams, I kept seeing data points trying to ground the seriousness of the blood clots in the J&J vaccine. Most referenced the frequency of blood clots that women experience while taking the birth control pill, roughly 1/1000. People also highlighted how common blood clots are for those who are in the throes of COVID-19. These were meant to highlight just how rare and statistically insignificant blood clots are when taking the J&J vaccine. 

Yet, as these attempts to ground the conversation unfolded, a different kind of outrage formed. A handful of people highlighted women they knew who had died of blood clots most likely related to birth control. Many more women who took hormonal birth control expressed frustration that they had no idea that they were at increased risk of a blood clot. Sure, it’s part of the fine print of that printout you get from CVS when picking up your pill, but this wasn’t something doctors emphasized. Unlike the J&J vaccine situation, the relationship between birth control and blood clots – or even COVID-19 and blood clots – hasn’t been front page news.

As I was processing the back-and-forth about statistical risk and who was responsible for sharing what with whom, and at what level of amplitude, I couldn’t help but think about all of the scholarship into the politics of numbers. We’re living at a time when politicians are simultaneously espousing the need for “evidence-based policymaking” and working to diligently undermine, contort, or weaponize evidence. This is what scholars of “agnotology” mean when they talk about the manufacturing of ignorance through the seeding of doubt. Or what other scholars highlight as the “weaponization of transparency.” 

I couldn’t help but feel empathy for the scientists at J&J and the FDA who have been working around the clock trying to make a vaccine available to the public, trying to be responsible stewards of information and statistical risk in a context where their desire for caution can be turned on its head to undermine the legitimacy of their work. I also found myself feeling empathy for journalists who recognize the importance of reporting on this development, even as they know that their reporting is easily evolving into misinformation that’s undermining the vaccine roll-out. Working with numbers is itself political.

To work in the world of medicine and science, statistics and probabilities is to grapple with trade-offs at a macro level, which present ethical conundrums even in the best of times. After all, that one terrible death from a blood clot could perhaps have been prevented by not taking the vaccine. But this is where we enter into the world of trade-offs, of unknowns, of morality. Without a vaccine rollout, many more people will die of blood clots from COVID-19. Had that woman been infected with COVID-19, she might have still succumbed to a blood clot. Medicine alters the dimensionality of risk. So how do ethics get negotiated? And by whom? This is the story of public health. 

Those complexities underpinning the advancement of science are complicated further by a politicized context such as that which surrounds the COVID-19 vaccine. Each act of communication can be twisted and contorted to convey different agendas, different values, different goals. Amplified transparency of risk is itself a political act. Sprinkle in the expectation in our current society that individuals are expected to make informed decisions for themselves, their families, and their communities, and we have a recipe for disaster. This is what the production of ignorance – aka misinformation, information disorder, agnotology, etc… – looks like in practice. The very acts of scientific transparency, which are intended to help inform decision-making, are twisted on their head, serving to undermining the legitimacy of scientific work and the coordination of a public that must work together to address a deadly disease. 

I keep wondering what it will take for the public to trust scientific information. But, perhaps, a better question might be: What kind of information is needed to help a fragmented public work together to solve societal-level challenges?

Note to the reader: These are questions that I’m struggling with. If you have thoughts, ideas (or even reading recommendations!), don’t hesitate to reach out: zephoria [at] zephoria [dot] org.

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nikolap
219 days ago
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Zagreb, Croatia
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The Sophist and The Magician

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If you locked Harry Houdini in a trunk, he would probably not be able to get out of it. If you sealed Harry Houdini in a milk can and threw it in the water, he would suffocate and die, even though one of Harry Houdini’s signature acts was escaping from a sealed milk can that had been thrown in the water. This isn’t strange, though. Harry Houdini was known as an “escape artist” but he was also an illusionist.

Part of his act involved really escaping from things—he was great with handcuffs and straitjackets—but part of it involved tricking you into thinking he was doing things that he wasn’t actually doing. The brilliance of Houdini was that he was able to seamlessly mix the things he was really doing with the things he wasn’t in order to give the impression that he was somehow superhuman. 

Houdini in his milk can.

So, for example, Houdini’s “water torture cell” was a stunning feat in which Houdini’s feet were locked in stocks and then he was lowered into a tank of water. A curtain was pulled round, then drawn back, and Houdini had escaped. But the cell was an illusion. A trick. It had been specially built to allow Houdini to escape. In fact, Houdini was perfectly safe. Likewise, his milk can looked like a real milk can, but it wasn’t. It was a specially-designed milk can that could be opened from the inside. Substitute a real one, and he would have been screwed. 

A great deal of Houdini’s art, then, was fakery, pretending to do great escapes. A brewery challenged Houdini to escape from a sealed barrel full of their beer. He did it. But he didn’t. They had collaborated with Houdini to design a trick barrel. It was fantastic PR for both the brewery and Houdini. Houdini would often pretend to struggle with something for much longer than it would actually take him to escape it, because the escape itself was easy. While he did, in fact, know how to escape from lots of kinds of handcuffs, sometimes the handcuffs were fake. Sometimes he had tricked the person who had cuffed him locked him in them into letting him look at the key beforehand, giving them back a fake key and pocketing the real one. It was a mixture of fact and illusion: the straitjacket escapes were real, the product of a great deal of practice. Other escapes were based on concealing critical information from the audience.

There can be a sense of disappointment when we realize that much of what Houdini did wasn’t “real.” But there shouldn’t be. In fact, Houdini was a genius, and his act was brilliant. He was secretly a great inventor who could design all kinds of things that looked inescapable but were actually engineered precisely so they made escaping a cinch. He didn’t want anyone to know he was an inventor, though, because that would have destroyed the whole act. He wanted people to think of him as someone with bizarre, physically impossible powers of escape. 

A magician does things that seem like they cannot be done, that defy our understanding of the rules by which the world operates. This means that the magician’s art involves deceiving people, because obviously whatever they are doing can be done somehow. A magician pulls a rabbit out of an empty hat. Empty hats, by definition, do not contain rabbits, so the magician did not, in fact, pull a rabbit out of an empty hat. Something has happened, then, that we have not noticed. It is not a miracle. It’s a trick. In an important sense, there is no such thing as magic. That is, it is not possible to do the impossible. Only the possible is possible. The magician’s art is making things that are possible look like they’re not. But if the thing you’re seeing is actually clearly impossible, then something must be going on that you don’t understand. 

When you watch an incredibly good magic act, it can feel as if you’ve seen something that literally cannot have happened. Nothing in your understanding of the rules by which the universe operates permits the thing you have seen to be true. For example, here’s magician Eric Chien doing seemingly impossible feats with cards—turning them from red to black, making them disappear and reappear, and even changing the color of his own clothes in an instant. When you discover how it was actually done (there is a YouTube explainer video), though I will not link to it), it goes from seeming impossible to seeming obvious, and you can never see the “magic” again.

This is why magicians are very reluctant to tell anybody who is not an aspiring magician how their tricks are done. The moment you know, the trick is ruined for you. It seems unimpressive (ah, it was just in his jacket). They shouldn’t tell you the answer, because your job is to figure it out yourself, not to cheat. 

But even though there is a certain disenchantment that occurs when you learn the mundane reality of what looked so miraculous, there can be a re-enchantment when you realize everything that has gone into making the trick go right. You start to appreciate the skill and ingenuity that goes with trying to come up with and execute an action that defies human beings’ understandings of the laws of the universe. 

If you learn how a few magic tricks work, and come to appreciate how simply and brilliantly they can fool very smart people, you realize how much at risk we all are of believing things that aren’t true, or being unable to grasp what is going on “behind the curtain.” Each of us sees a small sliver of reality, and from that observed sliver it can be impossible to figure out what it is we’re not seeing. 

Karl Marx said that even ordinary commodities had “magic and necromancy” surrounding them, in part because, as with a magician’s trick, we do not see what is going on under the surface to create the thing we hold in our hands. I do not see the labor that goes into making the items I consume. The wider economy and the conditions under which things are produced are made invisible.

I see “rhetorical magic tricks” occurring all the time, too, the use of the selective presentation of information to convince people that something false is real. I consider PragerU to be master illusionists, for instance, because they carefully conceal and reveal little pieces of information in order to get viewers to believe a totally false picture of the world. They will display a shocking statistic, for instance, and decline to tell you how it was made. If you knew the secret behind the manufacture of the statistic, it would cease to seem impressive, because you’d know exactly how you were being manipulated. 

There are good magicians and there are evil magicians. The good magicians are the ones who tell you they’re putting on a show, and encourage you to think critically and not to believe they have superpowers. Good magicians help debunk the frauds who try actually actively deceive the public into believing false things—Houdini, James Randi, and Penn & Teller have all been famous “skeptics” who have exposed charlatans who trick people into thinking they’re able to communicate with dead relatives and such. The good magicians teach you how to think critically. 

My friend Katie Fernelius recently wrote an essay about magic for this magazine. Her father is a magician who could “make coins spill out of my ear, produce felt balls under copper cups, teleport a card from the middle of the deck to the top, and tear safety pins through a handkerchief without leaving holes” and Katie talks about what it is like to grow up in that “church of the peculiar” that is a magician’s household. Katie’s article got me watching videos of magicians, particularly the wonderful TV show Penn and Teller: Fool Us, in which some of the world’s best magicians try to stump Penn and Teller—themselves two of the most well-regarded magicians in the world. If Penn and Teller, who between them have over 100 years of experience performing magic, cannot figure out how a trick is done, the magician contestant wins a trophy. The fact that Penn and Teller, who both know as much about magic as you probably can know, are still consistently fooled by other magicians, shows that absolutely nobody is so smart that they can’t be deceived by appearances. 

Like Katie, I quickly became hooked on the show, because you get to try to figure out what is going on and what you’re missing. It’s a bit like a detective show. You watch some astonishing thing, and then spend ages puzzling over how it must somehow make sense. For example, here’s a trick that fooled Penn and Teller, in which the magician swiftly locates a particular packing peanut in a giant crate overflowing with them. The magician himself later revealed the secret of the trick in a YouTube video—or at least part of it. Once you see his explanation, you may smack yourself on the forehead. But before the fact, it’s damn hard to figure out—and extremely fun to try.

Real-life trickery and illusion is not always explained in helpful YouTube videos. It takes a critical intelligence to try to unravel how the appearance of things differs from the reality of things. Watching videos of magic tricks, I thought about Barack Obama, Bill Clinton, George W. Bush, and Donald Trump, all of whom succeeded in convincing audiences to believe in an image of themselves far different from the reality. There are indeed “magic words” that can be used to manipulate perception. 

And oftentimes to win us to our harm
The instruments of darkness tell us truths
Win us with honest trifles, to betray us
In deepest consequence—
— Shakespeare, Macbeth

Have you ever heard of “paltering”? It means lying with facts. That is: no fact you have presented is false, but you are still lying. At first, it can be difficult to grasp how this is possible. A fact is, by definition, true. A lie is, by definition, false. So if everything you’ve said has been true, how can it also be false? Surely this is a paradox. 

It’s not a paradox. I’ve written before about how Alan Dershowitz does it. He will report one true fact, but leave out another critically important fact that provides important context. (For example, reporting on violence by Palestinians without discussing its motivation or what it arises in response to.) The most skilled “palterer” in the world is probably Bjorn Lomborg, who writes books of climate change skepticism that use real facts but present them incredibly selectively in order to present a false picture of environmental reality. It’s very deft, and it drives scientists nuts, because you have to be pretty well-educated in the subject matter to actually notice how the trickery is being done. 

We know how omissions can mislead. Consider the following exchange:

Q:

Are you rich? 

A:

I do not consider myself rich. I do not own a home. I do not own a car. I have given 90 percent of what I earned away. I still eat egg McMuffins for breakfast. I still own the same pair of blue jeans I had in high school. Certainly, I have spiritual wealth. In that sense, I am rich.


Every fact in the statement is perhaps true, but the person answering might still be a multi-billionaire. I recently interviewed former health insurance industry executive Wendell Potter, who described the ways that his industry’s PR flaks would carefully massage the truth, so that they were neverlying in the most literal, technical sense but were fundamentally deceiving people about the nature of healthcare systems. 

This is one reason why, when people like Dershowitz say, “I challenge you to find a single false fact in what I have said,” it means nothing. You can simply pluck out the facts that favor your conclusion and leave out the ones that disfavor it, and every fact is true even though the conclusion is false. It’s magic! 

I performed the first actual magic trick of my life recently. As a child, at one point I had been given a magic kit, but I hated it. I was impatient and didn’t think anyone would be fooled and knew I wasn’t quick or dextrous enough to do any “sleight of hand.” This time I picked a trick that didn’t involve any technical skill on the part of the performer;      you just had to set it up correctly and follow the steps exactly. (It helps to be good at bullshitting a covering story, which fortunately is a skill of mine.) And it worked: the person I did it for was impressed and didn’t know how I did it. 

I was elated, of course, because I never thought I could do a magic trick, and realizing you’ve been able to disguise reality from someone gives you an incredible sense of power. But it’s also a little disturbing, because you know that you were able to successfully conceal the truth and that even intelligent people might not be able to know how you did it. 

I felt the same often in law school. I came to see how a good sophist could produce arguments that looked extremely persuasive even though they were ultimately totally wrong. As someone who has studied arguments and knows how the tricks work, I could see how people were being manipulated, but it’s often hard to spot the deceptions without experience. I’m consistently impressed when I read books by people like Dinesh D’Souza at how deftly they produce pseudo-logic that can seem sensible but isn’t at all. It’s scary to realize that without a citizenry that has cultivated its critical faculties and developed a cautious skepticism toward the claims of pundits and politicians, ill-intentioned people may manage to make the destruction of democracy (or even humanity itself) look reasonable.

Learn to analyze magicians’ tricks then. In the case of stage magic, don’t spoil the fun by looking up the techniques, unless you want to try them on someone yourself. But every person should at the very least develop an awareness of how easy it is to be fooled and how what we see before our eyes may be nothing but an illusion.

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nikolap
329 days ago
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Zagreb, Croatia
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The Amish Health Care System

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I.

Amish people spend only a fifth as much as you do on health care, and their health is fine. What can we learn from them?

A reminder: the Amish are a German religious sect who immigrated to colonial America. Most of them live apart from ordinary Americans (who they call “the English”) in rural communities in Pennsylvania and Ohio. They’re famous for their low-tech way of life, generally avoiding anything invented after the 1700s. But this isn’t absolute; they are willing to accept technology they see as a net positive. Modern medicine is in this category. When the Amish get seriously ill, they will go to modern doctors and accept modern treatments.

The Muslims claim Mohammed was the last of the prophets, and that after his death God stopped advising earthly religions. But sometimes modern faiths will make a decision so inspired that it could only have come from divine revelation. This is how I feel about the Amish belief that health insurance companies are evil, and that good Christians must have no traffic with them.

And Deists believe that God is like a watchmaker, an artisan who built the world but does not act upon it. But by some miracle, the US government played along and granted the Amish exemptions from all the usual health care laws. They don’t have to pay Medicare taxes or social security. They aren’t included in the Obamacare mandate. They can share health care costs the way they want, ignoring any regulations to the contrary. They are genuinely on their own.

They’ve ended up with a simple system based on church aid. Everyone pays tithes to their congregation (though they don’t call it that). The churches meet in houses and have volunteer leaders, so expenses minimal. Most of the money goes to “alms” which the bishop distributes to members in need. This replaces the social safety net, including health insurance. Most Amish go their entire life without needing anything else.

About a third of Amish are part of a more formal insurance-like institution called Amish Hospital Aid. Individuals and families pay a fixed fee to the organization, which is not-for-profit and run by an unpaid board of all-male elders. If they need hospital care, AHA will pay for it. How does this interact with the church-based system? Rohrer and Dundes, my source for most of this post, say that it’s mostly better-off Amish who use AHA. Their wealth is tied up in their farmland, so it’s not like they can use it to pay hospital bills. But they would feel guilty asking their church to give them alms meant for the poor. AHA helps protect their dignity and keep church funds for those who need them most.

How well does this system work?

The Amish outperform the English on every measured health outcome. 65% of Amish rate their health as excellent or very good, compared to 58% of English. Diabetes rates are 2% vs. 8%, heart attack rates are 1% vs. 6%, high blood pressure is 11% vs. 31%. Amish people go to the hospital about a quarter as often as English people, and this difference is consistent across various categories of illness (the big exception is pregnancy-related issues – most Amish women have five to ten children). This is noticeable enough that lots of health magazines have articles on The Health Secrets of the Amish and Amish Secrets That Will Add Years To Your Life. As far as I can tell, most of the secret is spending your whole life outside doing strenuous agricultural labor, plus being at a tech level two centuries too early for fast food.

But Amish people also die earlier. Lots of old studies say the opposite – for example, this one finds Amish people live longer than matched Framingham Heart Study participants. But things have changed since Framingham. The Amish have had a life expectancy in the low 70s since colonial times, when the rest of us were dying at 40 or 50. Since then, Amish life expectancy has stayed the same, and English life expectancy has improved to the high 70s. The most recent Amish estimates I have still say low seventies, so I think we are beating them now.

If they’re healthier, why is their life expectancy lower? Possibly they are less interested in prolonging life than we are. R&D write:

Amish people are more willing to stop interventions earlier and resist invasive therapies than the general population because, while they long for healing, they also have a profound respect for God’s will. This means taking modest steps toward healing sick bodies, giving preference to natural remedies, setting common-sense limits, and believing that in the end their bodies are in God’s hands.

The Amish health care system has an easier job than ours does. It has to take care of people who are generally healthy and less interested in extreme end-of-life care. It also supports a younger population – because Amish families have five to ten children, the demographics are weighted to younger people. All of these make its job a little bit simpler, and we should keep that in mind for the following sections.

How much do the Amish pay for health care? This is easy to answer for Amish Hospital Aid, much harder for the church system.

Amish Hospital Aid charges $125 monthly per individual or $250 monthly per family (remember, Amish families can easily be ten people). Average US health insurance costs $411 monthly per individual (Obamacare policies) or $558 monthly per individual (employer sponsored plan; employers pay most of this). I’m not going to bother comparing family plans because the definition of “family” matters a lot here. On the surface, it looks like the English spend about 4x as much as the Amish do.

But US plans include many more services than AHA, which covers catastrophic hospital admissions only. The government bans most Americans from buying plans like this; they believe it’s not enough to count as real coverage. The cheapest legal US health plan varies by age and location, but when I take my real age and pretend that I live near Amish country, the government offers me a $219/month policy on Obamacare. This is only a little higher than what the Amish get, and probably includes more services. So here it seems like the Amish don’t have much of an efficiency advantage. They just make a different tradeoff. It’s probably the right tradeoff for them, given their healthier lifestyle.

But remember, only a third of Amish use AHA. The rest use a church-based system? How does that come out?

It’s hard to tell. Nobody agrees on how much Amish tithe their churches, maybe because different Amish churches have different practices. R&D suggest families tithe 10% of income, this article on church-based insurances says a flat $100/month fee, and this “Ask The Amish” column says that churches have twice-yearly occasions where they ask for donations in secret and nobody is obligated to give any particular amount (“often husbands and wives won’t even know how much the other is giving.”) So it’s a mess, and even knowing the exact per-Amish donation wouldn’t help, because church alms cover not just health insurance but the entire social safety net; the amount that goes to health care probably varies by congregation and circumstance.

A few people try to estimate Amish health spending directly. This ABC story says $5 million total for all 30,000 Amish in Lancaster County, but they give no source, and it’s absurdly low. This QZ story quotes Amish health elder Marvin Wengerd as saying $20 – $30 million total for Lancaster County, which would suggest health spending of between $600-$1000 per person. This sounds potentially in keeping with some of the other estimates. A $100 per month tithe would be $1200 per year – if half of that goes to non-health social services, that implies $600 for health. The average Amish family earns about $50K (the same as the average English family, somehow!) so a 10% tithe would be $5000 per year, but since the average Amish family size is seven children, that comes out to about $600 per person again. So several estimates seem to agree on between $600 and $1000 per person.

One possible issue with this number: does Wengerd know how much Amish spend out of pocket? Or does his number just represent the amount that the official communal Amish health system spends? I’m not sure, but taking his words literally it’s total Amish spending, so I am going to assume it’s the intended meaning. And since the Amish rarely see doctors for minor things, probably their communal spending is a big chunk of their total.

[Update: an SSC reader is able to contact his brother, a Mennonite deacon, for better numbers. He says that their church spends an average of $2000 per person (including out of pocket).]

How does this compare to the US as a whole? The National Center For Health Statistics says that the average American spends $11,000 on health care. This suggests that the average American spends between five and ten times more on health care than the average Amish person.

How do the Amish keep costs so low? R&D (plus a few other sources) identify some key strategies.

First, the Amish community bargains collectively with providers to keep prices low. This isn’t unusual – your insurance company does the same – but it nets them better prices than you would get if you tried to pay out of pocket at your local hospital. This article gives some examples of Amish getting sticker prices discounted from between 50% to 66% with this tactic alone; Medicare gets about the same.

Second, the Amish are honorable customers. This separates them from insurance companies, who are constantly trying to scam providers however they can. Much of the increase in health care costs is “administrative expenses”, and much of these administrative expenses is hiring an army of lawyers, clerks, and billing professionals to thwart insurance companies’ attempts to cheat their way out of paying. If you are an honorable Amish person and the hospital knows you will pay your bill on time with zero fuss, they can waive all this.

But can this really be the reason Amish healthcare is cheaper? When insurance companies negotiate with providers, patients are on the side of the insurances; when insurance companies get good deals (eg a deal of zero dollars because the insurance has scammed the hospital), the patient’s care is cheaper, and the insurance company can pass some of those savings down as lower prices. If occasionally scamming providers meant insurance companies had to pay more money total, then they would stop doing it. My impression is that the real losers here are uninsured patients; absent any pressure to do otherwise, hospitals will charge them the sticker price, which includes the dealing-with-insurance-scams fee. The Amish successfully pressure them to waive that fee, which gets them better prices than the average uninsured patient, but still doesn’t land them ahead of insured people.

Third, Amish don’t go to the doctor for little things. They either use folk medicine or chiropractors. Some of the folk medicine probably works. The chiropractors probably don’t, but they play a helpful role reassuring people and giving them the appropriate obvious advice while telling the really serious cases to seek outside care. With this help, Amish people mostly avoid primary care doctors. Holmes County health statistics find that only 16% of Amish have seen a doctor in the past year, compared to 54% of English.

Fourth, the Amish never sue doctors. Doctors around Amish country know this, and give them the medically indicated level of care instead of practicing “defensive medicine”. If Amish people ask their doctors to be financially considerate – for example, let them leave the hospital a little early – their doctors will usually say yes, whereas your doctor would say no because you could sue them if anything went wrong. In some cases, Amish elders formally promise that no member of their congregation will ever launch a malpractice lawsuit.

Fifth, the Amish don’t make a profit. Church aid is dispensed by ministers and bishops. Even Amish Hospital Aid is run by a volunteer board. None of these people draw a salary or take a cut. I don’t want to overemphasize this one – people constantly obsess over insurance company profits and attribute all health care pathologies to them, whereas in fact they’re a low single-digit percent of costs (did you know Kaiser Permanente is a nonprofit? Hard to tell, isn’t it?) But every little bit adds up, and this is one bit.

Sixth, the Amish don’t have administrative expenses. Since the minister knows and trusts everyone in his congregation, the “approval process” is just telling your minister what the problem is, and the minister agreeing that’s a problem and giving you money to solve it. This sidesteps a lot of horrible algorithms and review boards and appeal boards and lawyers. I don’t want to overemphasize this one either – insurance companies are legally required to keep administrative expenses low, and most of them succeed. But again, it all adds up.

Seventh, the Amish feel pressure to avoid taking risks with their health. If you live in a tiny community with the people who are your health insurance support system, you’re going to feel awkward smoking or drinking too much. Realistically this probably blends into a general insistence on godly living, but the health insurance aspect doesn’t hurt. And I’m talking like this is just informal pressure, but occasionally it can get very real. R&D discuss the case of some Amish teens who get injured riding a snowmobile – forbidden technology. Their church decided this was not the sort of problem that godly people would have gotten themselves into, and refused to help – their families were on the hook for the whole bill.

Eighth, for the same reason, Amish try not to overspend on health care. I realize this sounds insulting – other Americans aren’t trying? I think this is harsh but true. Lots of Americans get an insurance plan from their employer, and then consume health services in a price-insensitive way, knowing very well that their insurance will pay for it. Sometimes they will briefly be limited by deductibles or out-of-pocket charges, but after these are used up, they’ll go crazy. You wouldn’t believe how many patients I see who say things like “I’ve covered my deductible for the year, so you might as well give me the most expensive thing you’ve got”, or “I’m actually feeling fine, but let’s have another appointment next week because I like talking to you and my out-of-pocket charges are low.”

But it’s not just avoiding the obvious failure modes. Careful price-shopping can look very different from regular medical consumption. Several of the articles I read talked about Amish families traveling from Pennsylvania to Tijuana for medical treatment. One writer describes Tijuana clinics sending salespeople up to Amish Country to advertise their latest prices and services. For people who rarely leave their hometown and avoid modern technology, a train trip to Mexico must be a scary experience. But prices in Mexico are cheap enough to make it worthwhile.

Meanwhile, back in the modern world, I’ve written before about how a pharma company took clonidine, a workhorse older drug that costs $4.84 a month, transformed it into Lucemyra, a basically identical drug that costs $1,974.78 a month, then created a rebate plan so that patients wouldn’t have to pay any extra out-of-pocket. Then they told patients to ask their doctors for Lucemyra because it was newer and cooler. Patients sometimes went along with this, being indifferent between spending $4 of someone else’s money or $2000 of someone else’s money. Everything in the US health system is like this, and the Amish avoid all of it. They have a normal free market in medical care where people pay for a product with their own money (or their community’s money) and have incentives to check how much it costs before they buy it. I do want to over-emphasize this one, and honestly I am surprised Amish health care costs are only ten times cheaper than ours are.

I don’t know how important each of these factors is, or how they compare to more structural factors like younger populations, healthier lifestyles, and less end-of-life care. But taken together, they make it possible for the Amish to get health care without undue financial burden or government support.

II.

Why look into the Amish health system?

I’m fascinated by how many of today’s biggest economic problems just mysteriously failed to exist in the past. Our grandparents easily paid for college with summer jobs, raised three or four kids on a single income, and bought houses in their 20s or 30s and never worried about rent or eviction again. And yes, they got medical care without health insurance, and avoided the kind of medical bankruptcies we see too frequently today. How did this work so well? Are there ways to make it work today? The Amish are an extreme example of people who try to make traditional systems work in the modern world, which makes them a natural laboratory for this kind of question.

The Amish system seems to work well for the Amish. It’s hard to say this with confidence because of all the uncertainties. The Amish skew much younger than the “English”, and live much healthier lifestyles. Although a few vague estimates suggest health care spending far below the English average, they could be missing lots of under-the-table transactions. And again, I don’t want to ignore the fact that the Amish do live a little bit shorter lives. You could tell a story where all of these add up to explain 100% of the difference, and the Amish aren’t any more efficient in their spending at all. I don’t think this is right. I think the apparent 5x advantage, or something like it, is real. But right now this is just a guess, not a hard number.

What if it is? It’s hard to figure out exactly what it would take to apply the same principles to English society. Only about a quarter of Americans attend church regularly, so church-based aid is out. In theory, health insurance companies ought to fill the same niche, with maybe a 10% cost increase for profits and overhead. Instead we have a 1000% cost increase. Why?

Above, I said that the most important factor is that the Amish comparison shop. Everyone needs to use other people’s money to afford expensive procedures. But for the Amish, those other people are their fellow church members and they feel an obligation to spend it wisely. For the English, the “other people” are faceless insurance companies, and we treat people who don’t extract as much money as possible from them as insufficiently savvy. But there’s no easy way to solve this in an atomized system. If you don’t have a set of thirty close friends you can turn to for financial help, then the only institutions with enough coordination power to make risk pooling work are companies and the government. And they have no way of keeping you honest except the with byzantine rules about “prior authorizations” and “preferred alternatives” we’ve become all too familiar with.

(and as bad as these are, there’s something to be said for a faceless but impartial bureaucracy, compared to having all your neighbors judging your lifestyle all the time.)

This is a neat story, but I have two concerns about it.

First, when I think in terms of individual people I know who have had trouble paying for health care, it’s hard for me to imagine the Amish system working very well for them. Many have chronic diseases. Some have mysterious pain that they couldn’t identify for years before finally getting diagnosed with something obscure. Amish Hospital Aid’s catastrophic policy would be useless for this, and I feel like your fellow church members would get tired of you pretty quickly. I’m not sure how the Amish cope with this kind of thing, and maybe their system relies on a very low rate of mental illness and chronic disease. A lot of the original “hygiene hypothesis” work was done on the Amish, their autoimmune disease rates are amazing, and when you take out the stresses of modern life maybe a lot of the ailments the American system was set up to deal with just stop being problems. I guess my point is that the numbers seem to work out, and the Amish apparently remain alive, but when I imagine trying to apply the Amish system to real people, even assuming those real people have cooperative churches and all the other elements I’ve talked about, I can’t imagine it doing anything other than crashing and burning.

Second, I don’t think this is actually how our grandparents did things. I asked my literal grandmother, a 95 year old former nurse, how health care worked in her day. She said it just wasn’t a problem. Hospitals were supported by wealthy philanthropists and religious organizations. Poor people got treated for free. Middle class people paid as much as they could afford, which was often the whole bill, because bills were cheap. Rich people paid extra for fancy hospital suites and helped subsidize everyone else. Although most people went to church or synagogue, there wasn’t the same kind of Amish-style risk pooling.

This makes me think that the Amish method, even though it works, isn’t the method that worked for past generations. It’s an innovation intended to cover for health care prices being higher than anything that traditional societies had to deal with.

Why did health care prices start rising? I’ve wondered about this a lot before – see here, here, and here. Looking into this issue, I noticed glimpses of a different possibility. The increase started around the same time that health insurance began to spread. In one sense, this is unsurprising – of course health insurance would become a thing around the time care became unaffordable. But I’ve never seen someone really try to tease out causality here. Might the two trends have been mutually self-reinforcing? The price of care rises due to some original shock. Someone invents health insurance, which seems like a good idea. But this creates a series of perverse incentives, which other actors figure out how to exploit (eg the Lucemyra example above). Insurance-based-health-care becomes less efficient, but hospitals can’t or don’t internalize this to the insured patients – they just raise the price for everyone, insurance or no. That makes even more people need health insurance, and the cycle repeats as prices grow higher and higher and insurance becomes more and more necessary. This syncs well with some explanations I’ve heard of rising college prices, where once the government made easy loans and subsidies available to everyone, prices rose until they consumed all the resources available.

I have no idea if this is true or not. If it is, the Amish succeed partly by successfully forcing providers to internalize the costs of insurance to insurance patients. Sometimes they do this by literally asking hospitals for better prices because they are not insured (eg the “honest customer” example above). Other times they flee the country entirely to reach a medical system that doesn’t deal with insured patients (eg Tijuana). This seems to work well for them. But their reliance on church alms and Amish Hospital Aid suggests that their care is still more expensive and burdensome for them than past generations’ care was for them. They’ve just learned ways to manage the expense successfully.

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nikolap
559 days ago
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Zagreb, Croatia
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The Problem is Capitalism

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It is a weapon pointed at the living world. We urgently need to develop a new system.

By George Monbiot, published in the Guardian 25th April 2019

For most of my adult life, I’ve railed against “corporate capitalism”, “consumer capitalism” and “crony capitalism”. It took me a long time to see that the problem is not the adjective, but the noun.

While some people have rejected capitalism gladly and swiftly, I’ve done so slowly and reluctantly. Part of the reason was that I could see no clear alternative: unlike some anti-capitalists, I have never been an enthusiast for state communism. I was also inhibited by its religious status. To say “capitalism is failing” in the 21st century is like saying “God is dead” in the 19th. It is secular blasphemy. It requires a degree of self-confidence I did not possess.

But as I’ve grown older, I’ve come to recognise two things. First, that it is the system, rather than any variant of the system, which drives us inexorably towards disaster. Second, that you do not have to produce a definitive alternative to say that capitalism is failing. The statement stands in its own right. But it also demands another, and different, effort to develop a new system.

Capitalism’s failures arise from two of its defining elements. The first is perpetual growth. Economic growth is the aggregate effect of the quest to accumulate capital and extract profit. Capitalism collapses without growth, yet perpetual growth on a finite planet leads inexorably to environmental calamity.

Those who defend capitalism argue that, as consumption switches from goods to services, economic growth can be decoupled from the use of material resources. Last week, a paper in the journal New Political Economy by Jason Hickel and Giorgos Kallis examined this premise. They found that while some relative decoupling took place in the 20th century (material resource consumption grew, but not as quickly as economic growth), in the 21st there has been a re-coupling: rising resource consumption has so far matched or exceeded the rate of economic growth. The absolute decoupling needed to avert environmental catastrophe (a reduction in material resource use) has never been achieved, and appears impossible while economic growth continues. Green growth is an illusion.

A system based on perpetual growth cannot function without peripheries and externalities. There must always be an extraction zone, from which materials are taken without full payment, and a disposal zone, where costs are dumped in the form of waste and pollution. As the scale of economic activity increases, until capitalism affects everything from the atmosphere to the deep ocean floor, the entire planet becomes a sacrifice zone: we all inhabit the periphery of the profit-making machine.

This drives us towards cataclysm on such a scale that most people have no means of imagining it. The threatened collapse of our life support systems is bigger by far than war, famine, pestilence or economic crisis, though it is likely to incorporate all four. Societies can recover from these apocalyptic events, but not from the loss of soil, an abundant biosphere and a habitable climate.

The second defining element is the bizarre assumption that a person is entitled to as great a share of the world’s natural wealth as their money can buy. This seizure of common goods causes three further dislocations. First, the scramble for exclusive control of non-reproducible assets, which implies either violence or legislative truncations of other people’s rights. Second, the immiseration of other people by an economy based on looting across both space and time. Third, the translation of economic power into political power, as control over essential resources leads to control over the social relations that surround them.

In the New York Times on Sunday, the Nobel economist Joseph Stiglitz sought to distinguish between good capitalism, that he called “wealth creation”, and bad capitalism, that he called “wealth grabbing” (extracting rent). I understand his distinction, but from the environmental point of view, wealth creation is wealth grabbing. Economic growth, intrinsically linked to the increasing use of material resources, means seizing natural wealth from both living systems and future generations.

To point to such problems is to invite a barrage of accusations, many of which are based on this premise: capitalism has rescued hundreds of millions of people from poverty – now you want to impoverish them again. It is true that capitalism, and the economic growth it drives, has radically improved the prosperity of vast numbers of people, while simultaneously destroying the prosperity of many others: those whose land, labour and resources were seized to fuel growth elsewhere. Much of the wealth of the rich nations was – and is – built on slavery and colonial expropriation.

Like coal, capitalism has brought many benefits. But, like coal, it now causes more harm than good. Just as we have found means of generating useful energy that are better and less damaging than coal, so we need to find means of generating human wellbeing that are better and less damaging than capitalism.

There is no going back: the alternative to capitalism is neither feudalism nor state communism. Soviet communism had more in common with capitalism than the advocates of either system would care to admit. Both systems are (or were) obsessed with generating economic growth. Both are willing to inflict astonishing levels of harm in pursuit of this and other ends. Both promised a future in which we would need to work for only a few hours a week, but instead demand endless, brutal labour. Both are dehumanising. Both are absolutist, insisting that theirs and theirs alone is the one true God.

So what does a better system look like? I don’t have a complete answer, and I don’t believe any one person does. But I think I see a rough framework emerging. Part of it is provided by the ecological civilisation proposed by Jeremy Lent, one of the greatest thinkers of our age. Other elements come from Kate Raworth’s doughnut economics and the environmental thinking of Naomi Klein, Amitav Ghosh, Angaangaq Angakkorsuaq, Raj Patel and Bill McKibben. Part of the answer lies in the notion of “private sufficiency, public luxury”. Another part arises from the creation of a new conception of justice, based on this simple principle: every generation, everywhere shall have an equal right to the enjoyment of natural wealth.

I believe our task is to identify the best proposals from many different thinkers and shape them into a coherent alternative. Because no economic system is only an economic system, but intrudes into every aspect of our lives, we need many minds from various disciplines – economic, environmental, political, cultural, social and logistical – working collaboratively to create a better way of organising ourselves, that meets our needs without destroying our home.

Our choice comes down to this. Do we stop life to allow capitalism to continue, or stop capitalism to allow life to continue?

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nikolap
943 days ago
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Zagreb, Croatia
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Quantomania

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Neoliberalism promised to save us from bureaucracy. Instead, it has delivered a mad, semi-privatised authoritarianism

By George Monbiot, published in the Guardian 10th April 2019

My life was saved last year by the Churchill Hospital in Oxford, through a skilful procedure to remove a cancer from my body. Now I will need another operation, to remove my jaw from the floor. I’ve just learnt what was happening at the hospital while I was being treated.

On the surface, it ran smoothly. Underneath, unknown to me, was fury and tumult. Many of the staff had objected to a decision by the National Health Service to privatise the hospital’s cancer scanning. They complained that the scanners the private company was offering are less sensitive than the hospital’s own machines. Privatisation, they said, would put patients at risk. In response, as the Guardian revealed last week, NHS England threatened to sue the hospital for libel if its staff continued to criticise the decision.

The dominant system of political thought in this country, that produced both the creeping privatisation of public health services and this astonishing attempt to stifle free speech, promised to save us from dehumanising bureaucracy. By rolling back the state, neoliberalism would allow autonomy and creativity to flourish. Instead, it has delivered a semi-privatised authoritarianism, more oppressive than the system it replaced.

Workers find themselves enmeshed in a Kafkaesque bureaucracy, centrally controlled and micromanaged. Organisations that depend on a cooperative ethic – such as schools and hospitals – are stripped down, hectored and forced to conform to suffocating diktats. The introduction of private capital into public services – that would herald a glorious new age of choice and openness – is brutally enforced. The doctrine promises diversity and freedom, but demands conformity and silence.

Much of the theory behind these transformations arises from the work of Ludwig von Mises. In his book Bureaucracy, published in 1944, he argued that there could be no accommodation between capitalism and socialism. The creation of the National Health Service in the UK, the New Deal in the US and other experiments in social democracy would lead inexorably to the bureaucratic totalitarianism of the Soviet Union and Nazi Germany.

He recognised that some state bureaucracy was inevitable: there were certain functions that could not be discharged without it. But unless the role of the state is minimised – confined to defence, security, taxation, customs and not much else – workers would be reduced to cogs “in a vast bureaucratic machine”, deprived of initiative and free will. By contrast, those who labour within an “unhampered capitalist system” are “free men”, whose liberty is guaranteed by “an economic democracy in which every penny gives a right to vote.” He forgot to add that some people, in his capitalist utopia, have more votes than others. And those votes become a source of power.

His ideas, alongside the writing of Friedrich Hayek, Milton Friedman and other neoliberal thinkers, have been applied in this country by Margaret Thatcher, David Cameron, Theresa May and, to an alarming extent, Tony Blair. All of them have attempted to privatise or marketise public services in the name of freedom and efficiency. But they keep hitting the same snag: democracy. People want essential services to remain public, and they are right to do so.

If you hand public services to private companies, either you create a private monopoly, that can use its dominance to extract wealth and shape the system to serve its own needs, or you introduce competition, creating an incoherent, fragmented service, characterised by the institutional failure you can see every day on our railways. We’re not idiots, even if we are treated as such. We know what the profit motive does to public services.

So successive governments decided that, if they could not privatise our core services outright, they would subject them to “market discipline”. von Mises repeatedly warned against this approach. “No reform could transform a public office into a sort of private enterprise”, he cautioned. The value of public administration “cannot be expressed in terms of money”. “Government efficiency and industrial efficiency are entirely different things”. “Intellectual work cannot be measured and valued by mechanical devices”. “You cannot ‘measure’ a doctor according to the time he employs in examining one case.” They ignored his warnings.

Their problem is that neoliberal theology, as well as seeking to roll back the state, insists that collective bargaining and other forms of worker power be eliminated (in the name of freedom, of course). So the marketisation and semi-privatisation of public services became not so much a means of pursuing efficiency as an instrument of control. Public service workers are now subjected to a panoptical regime of monitoring and assessment, using the benchmarks von Mises rightly warned were inapplicable and absurd. The bureaucratic quantification of public administration goes far beyond an attempt at discerning efficacy. It has become an end in itself.

Its perversities afflict all public services. Schools teach to the test, depriving children of a rounded and useful education. Hospitals manipulate waiting times, shuffling patients from one list to another. Police forces ignore some crimes, reclassify others and persuade suspects to admit to extra offences to improve their statistics. Universities urge their researchers to write quick and superficial papers instead of deep monographs, to maximise their scores under the Research Excellence Framework.

As a result, public services become highly inefficient for an obvious reason: the destruction of staff morale. Skilled people, including surgeons whose training cost hundreds of thousands, resign or retire early because of the stress and misery the system causes. The leakage of talent is a far greater waste than any inefficiencies this quantomania claims to address.

New extremes in the surveillance and control of workers are not, of course, confined to the public sector. Amazon has patented a wristband that can track workers’ movements and detect the slightest deviation from protocol. Technologies are used to monitor peoples’ keystrokes, language, moods and tone of voice. Some companies have begun to experiment with the micro-chipping of their staff. As the philosopher Byung-Chul Han points out, neoliberal work practices, epitomised by the gig economy, that reclassifies workers as independent contractors, internalise exploitation. “Everyone is a self-exploiting worker in their own enterprise”.

The freedom we were promised turns out to be freedom for capital, gained at the expense of human liberty. The system neoliberalism has created is a bureaucracy that tends towards absolutism, produced in the public services by managers mimicking corporate executives, imposing inappropriate and self-defeating efficiency measures, and in the private sector by subjection to faceless technologies, that can brook no argument or complaint.

Attempts to resist are met by ever more extreme methods, such as the threatened lawsuit at the Churchill Hospital. Such instruments of control crush autonomy and creativity. It is true that the Soviet bureaucracy von Mises rightly denounced reduced its workers to subjugated drones. But the system his disciples have created is heading the same way.

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nikolap
955 days ago
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Zagreb, Croatia
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