The smart critique of Soviet communism was that the state monopoly on information couldn't spread important economic knowledge as quickly as free markets.

In a few years this will no longer be true. Improvements in econometrics and modelling will allow states to comprehend the economy better than free-market informatics.

Why? Because there's lots of junk information in a free-market society. Take medicine. In the US, consumers spend billions each year on meds that don't do anything for them.

In Europe, state health monopolies observe the US health market and bulk-purchase meds that work most of the time, ignoring those that do not.

This is why Europeans have much better human-development indicators than Americans while spending much less on healthcare. This is the "new communism", one based on observing free-market systems and then improving them in a state-centric fashion.

1) Our government regulates the sorts of medicines that you're talking about anyway, at a cost of hundreds-of-billions of dollars to us. So, the truth would appear to be exactly the reverse of what you say: the market knows that some drugs are useless, and the State regulators seem not to.

2) Government financial regulators failed to make mention of any "mortgage crisis" until a year-and-a-half after the USA Today published the first story that shows up on a Lexis-Nexus search about the bad policy and dangers represented by sub prime lending. The market, then, was light-years ahead of the government on one of the primary economic occurrences of our day.

3) Government interpretation of the data they see is only as good as the bureaucracy they've developed and the economists they've hired. Lack of efficiency in the bureaucracy will almost necessarily offset any better access to information a government might have (if such exists). The "me too" thinking that most professional economists adhere to, given their similar educations (Ricardo, Veblen, Smith...names from a different economic world that most economists still use to justify idiotic and destructive actions such as giving away a nation's manufacturing sector in exchange for value added plastics), indicates that the government doesn't have the capacity for descent that's necessary to anticipate economic change. Private business and investors anticipate, and government is always reactionary.

4) While Europeans spend less on healthcare, they get a worse result (which is perfectly reasonable). For instance, U. S. cancer patients outlive Europeans. We, too, could spend less money if we wanted European-like results.

Starting with:

4) We Europeans outlive you Americans by some distance. See here for a blow-by-blow account.

3) This result is achieved via state health bureaucracies which spend less money than America's vast HMO industry.

2) I'd have thought the subprime crisis was a pretty clear example of markets trading in junk information - trying to pin the blame on the regulator is like blaming the police for the LA riots.

1) British NHS regulators often deny patients drugs available in the US because they are not suitably effective. Your government doesn't like this much.

Talking about the overall life expectancy accounts for any number of variables (including murder, which is by far more common in the U. S.). That's why I was specifically looking at the efficacy of the medical system, which as I showed, seems to be more effective at extending the lives of patients.

Further, the study you cite notes that infant mortality is higher in the U. S. than other developed countries. While the study doesn't give a reason for this, some of theorized it's exactly because the U. S. is better at pre-natal care than other nations are. Pregnancies in England, for instance, that would end in miscarriage, come to term in the U. S. as premature babies. The death rate of premature babies is higher in any country than those brought to full term.

Now, then, this is interesting: "One of the main problems faced by the US, says the report, is that one in six Americans, or about 47 million people, are not covered by health insurance and so have limited access to healthcare." This is pure conjecture. And purely wrong. Very, very few Americans really don't have access to health insurance. Most of the uninsured are so by choice, not because they have no options. By some estimates, 95% of the uninsured in America could either buy it but choose not to, or already qualify for assistance and fail to take advantage of it.

"I'd have thought the sub prime crisis was a pretty clear example of markets trading in junk information “ And, of course, you'd have thought wrong. I'm not sure how it worked in Europe (where, of course, the English have more consumer credit problems than we do. Bless their hearts.), but here you could see in 2001 that people were getting 5 year interest only ARM loans. That meant that a guy who made $30,000 a year could by a $120,000 for around $500 per month for five years. Of course, at the end of five years the rate would go to whatever the market rate was at the time. Given that we had just seen 19% interest rates in the mid-1980s on mortgages, there was no reason to believe rates would always be 4%. When the ARM adjusts up to 8% or 9%, and the borrower has to pay back interest + principle, they payment goes from $500 per month to around $1100 per month. They only made $2500 per month. It was bloody obvious to anybody with a brain that this wasn't going to work out. There was no "junk information", there was greed. Poor people wanted to live like middle class people, and the middle class wanted to live like rich people.

Of course, the U. S. bans drugs that are allowed in Europe. The fact that we get different drugs says nothing at all. Over-excited regulators in France just allowed the sell of Red Bull energy drinks today, after spending 5-years and who knows how much money to determine that taurine wasn't dangerous.

Keep in mind as well that the growth potential in Europe is damaged by all of this spending. With your 5% inflation and 12% unemployment, high tax burden and bloated social programs, European governments are cutting costs at every turn. Your model is unsustainable. That's always been the problem with socialism.

Regarding the approval of 'effective' drugs in Europe, GreenwichJ notes that the EU gov'ts monitors the US market and bases their decisions for bulk purchases on market results.

This means they are using the free market approach without the accompanying costs.

schizoidman_21:

This means they are using the free market approach without the accompanying costs.

Thank you! So where is all this useful information going to come from if the U.S. changes to Euro-style medicine? The somewhat free-market U.S. system falls short in many ways, undoubtedly, but a lot the success in the socialist-type systems comes from free-riding on the information and options that the U.S. allows for. I.e., Canadians can get really cheap drugs because the U.S. market has already paid the development costs. Canadians can come here and get surgeries months in advance of the waiting lists at home. I don't even quibble with the borrowing, but what if there was no "here" here anymore to borrow from? Then *everyone* suffers.

Liberal ideas are almost always fraught with these unintended consequences. Take 30% of the population off of the Federal tax roles through the EITC, and the Federal budget grows exponentially. Become dependent on foreign oil by passing which prevent drilling, and the cost of energy climbs. Raise taxes on investments to increase revenues, and investing activity declines. Increase welfare payments, fewer people look for jobs. Cut the size of the military, and find the military stretched to its limits when it's engaged in combat.

Liberal ideas are always rather simple and intuitive. They make sense even to those who have little expertise in economics, public policy, and so on. That's exactly the problem. If you're not an expert in economics, for instance, then you may as well assume that there's more going on that you're aware of, and if something makes intuitive sense, then perhaps you need to look a little deeper.

You people are right to note that Europe uses American healthcare consumers as guinea pigs - you effectively transfer to us a massive hidden subsidy each year. It's likely that if the US switched to a "socialised" health system this hidden subsidy would disappear - as, quite possibly, would much of the financial incentive to develop new medicines. (A point made by a US official in the second link on my second post, interestingly).

FaxMeBeer, you assume that I'm a liberal. I'm not. In fact, Great Britain - a Christian state where we pray in school, have little political correctness, no equivalent of San Francisco or Boulder, and have no left-wing political parties - is universally enthusiastic about our National Health System, an enthusiasm that transcends partisan politics. It's a lovely feeling to know that you will still receive medical treatment even if you lose your job...

In England, Barack Obama would be a Conservative. You may not consider yourself a Liberal, but the policies of your country are quite liberal, indeed. The fact that you don't see that only illustrates how liberal you are compared, at least, to American Conservatives. Of course, American Conservatives don't hold a candle to, say, Italian right-wingers. It's all relative.

By the way, unemployed people have excellent access to government assistance in America. We all pay the Medicaid taxes which are there to provide insurance for those who really can't afford it. The debate in America is really about people who'd rather spend their money on big screen TVs or new cars than pay for their own insurance.

Funny, because working in America I saw some of the poorest white people I've seen in any country on earth.

America is more left-wing than the UK, despite your received wisdom. Not only do we not separate church and state, or have affirmative action, or frequent strike action by screenwriters and what have you, but we've consistently supported the Bush foreign policy and are eager for intervention in east Africa. London has overtaken New York as a financial centre by cutting taxes for the rich to almost zero, and no one here talks about protectionism against China.

I could go on. OK, we ban firearms, but that's not a left-right issue, it's just that we don't like lone nuts picking off entire classrooms (hard to do with a knife). And we tax more, but then we're more homogeneous than the US, and people don't mind redistributing to people of their own religion and ethnicity.

You saw the richest white people you've seen in any country on earth, too. We're certainly a nation of extremes. I'm not sure where you were, but unless you were doing volunteer work in Appalachia or some such, then you likely didn't see real poverty. But, of course, it is here. You have poverty as well -- perhaps you just avoid those people at home?

Affirmative action is a greatly misunderstood issue, even in the U. S.. Private business doesn't have to hire anybody for any specific reason. The only area in which affirmative action is an issue is within the government, or if your company does work under government contract. In other words, you can choose whether or not to operate under affirmative action, and choice is the foundation of real conservatism.

Screenwriters can strike because they aren't important. Air traffic controllers cannot strike, because they're important. Our laws regarding unions have made all but the most essential workers "at-will employees", which means that even as members of unions they enjoy no real protections, and certainly none if they strike.

From the American standpoint there are only three truly conservative issues: Taxes (they should be low), government (it should be small), and guns (they're important to us mostly as a hold over from the time we had to kick your asses out). The religious zealotry is not really a conservative issue, as demonstrated by the Bush presidency, in which he was quite helpful to the so-called religious right, but alienated the conservative base by growing the government by 30% and being overall quite fiscally irresponsible.

On the other hand, our liberals only want to be more like you. Higher taxes, more wealth redistribution, less gun rights, less property rights, more socialized medicine, more importance placed on environmental issues than economic issues, et. cetera.

All of the European nations combined barely equals the US in all intellectual-economic categories combined: GDP (PPP), employment figures, technological innovation, research papers generated, medical advances, drug patens and so on, proves all of Europe – combined - is inferior to one nation. Furthermore, Europe has been inferior the US for over one hundred years now and counting…

Every nation does the same thing as this Euro-idiot. He cherry picks data that confirms his nation is better because of this one small category: "Our nation is better because we have more nurses; our school-aged children are better at soccer, and whatever irrelevant category."

Europe is over. Go to Asian nation and see how European influence is non-existent. Anyone who had any degree of intelligence or ambition has already moved to the New World.

Our concern is that the US is becoming too much like Europe and will likewise become unimportant too. The European welfare state and progressive socialism, has made Europe non-competitive in perpetuity. In stead of looking back to former European greatness, we should move further away, reject socialism and head towards Laissez-faire.

My biggest fear is that we too will become passive socialist sheep, and will someday recall that America was once a great nation too, but was destroyed by Marx, Lenin and Keynesian ideology. We should only look at Europe as the failure that we wish to avoid.

Europe is moving towards the right, while America moves left. Ireland already has lower tax rates than do Americans. Europe generally has lower corporate tax rates than the US to keep businesses from outsourcing, coupled with higher personal tax rates to fund their welfare state. We advocate for lower taxes and regulations for all persons and all sectors of the economy.

Except for the Friedman–Reagan-Thatcher capitalist revolution, Europe has always been the example of what not to do with an industrialized economy. While Europe is still inferior in most ways, we need reject polite suggestion from British bloggers, and attack socialism-cancer in every package it comes wrapped up in.

For example, despite the overall harm socialism does to our economy, many immigrants move into America and vote themselves socialist redistribution. With the exception of disgruntled black and aboriginal minority groups, Americans have confidence in the capitalist system. Legal skilled educated immigrants from Asia (especially China), Cuba and from the former soviet block, tend to be better at endorsing the free market. The children of illegal skilled immigrants from Latin America hold contempt for the American system and vote themselves more socialism. Illegal immigration must be kept in check to mitigate encroaching socialism. Once Americanized – even the most victim-oriented immigrants come to appreciate the superiority of the free market. We are very pro-immigration, therefore, we are arguing for increasing selective immigration, while decreasing unskilled immigration.

So state spending is bad. Apart from the military. Oh, and roads - you still need those right? What about airports?

Or education? Necessary? Or should it be reserved only for those willing to pay for private schools? It's like that in Brazil. Gangs of street kids roam around the major cities, sometimes being exterminated by police death squads. Not like in the namby-pamby, left-wing US.

Or pensions? Maybe those pensioners should be told to get off their asses and be a bit more enterprising, rather thanm suckling at the federal teet. After all, pension payments were three-times welfare in the last budget.

Which of these things would you cut back on?

Infrastructure, education, defense, law enforcement, and a few other programs are legitimate functions of Government. Insurances: health, unemployment, social security and so on are proper free-market applications in a capitalist society. We are against socialized everything else. We would privatize social security and pensions. A conservative indexed fund would bring more dollars to poor people than social security. We would cut discretionary spending by about 70%. Likewise we would lower tax rates on every individual and every sector of the economy. While I am a libertarian, we do not advocate chaos; we want a more efficient smaller government. We want more reliance on the market and less reliance on inefficient Government.