# The Costs of Free Speech

The stability of this country is balancing on a wire. I’m really not being hyperbolic when I say that the deepest of American institutions is at stake: that of the competency of the average citizen to participate in the democratic process; in other words, Republicanism (the philosophy; not the political party) and Representative Democracy.

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

-First Amendment, US Constitution, 1791.

The First Amendment is the first item in the Bill of Rights because it’s more important than a well-regulated militia (2A), the historically pertinent issue of martial quartering (3A), and even due process of law (4A-8A) or Federalism (9A-10A). Why it’s an amendment rather than part of the constitution could be considered an oversight by Madison and Hamilton, but that notwithstanding, I would (and will) argue two things:

1. The right to Free Speech assumes several things about the speakers.
2. That right and corresponding assumptions are collectively an indispensable cornerstone of democracy.

Unfortunately, this sacrosanct ideal is facing bipartisan opposition right now. Liberal college students seem to be making a habit out of opposing conservative speakers who come on campus. Meanwhile, numerous conservative legislators are following President Trump’s lead and delegitimizing the media (i.e. free press) and supporting him when he suggests that political opponents should be repressed or that news channels that publish news not flattering to the political incumbent ought to be shut down for political reasons.

Again, I really don’t think I’m being hyperbolic here, and I hope I’m wrong. But neither party seems to remember what the words “Free Speech” really mean. This post is a collection of thoughts and musings about the importance of free speech, and how it is being undermined in the current political climate. I’ll tie most of it together at the end, but this post is intended to read like an essay on ethics. That is, it’s supposed to beg more questions than it answers, and it’s logically cohesive with itself, but introduces ethical conundrums for both the author and the reader.

## Political Repression vs. Social Consequences

The first amendment and subsequent non-discrimination policy ensure that free speech is free from political repression. This is to say that you can’t legally be killed or thrown in prison for espousing ideas that [pick your boogeyman: politicians, the majority, The Man, Evangelicals, The MSM] don’t like. This is not, I repeat, bold, and italicize, not, the same as saying there are no consequences for voicing your views. Some views may win friends; other may influence people; and still other views/opinions/standpoints/ideas/etc. may utterly alienate you from society. As a prime example, former Google employee James Damore sent his coworkers a controversial memo about gender equality and why women are underrepresented in the tech workforce. Damore was not arrested, stripped of voting rights, or otherwise politically repressed. He was, however, fired from his job and written about enough that any future HR interviewer will find his name (or any applicant unfortunate enough to share a name with him) plastered all over the internet. He will likely find freelance work here and there, but his stable, upper-class, bay-area lifestyle is probably gone forever.

Challenging the Zeitgeist can be an extremely valuable activity for society that ought to be encouraged. On the other hand, challenging the Zeitgeist has historically been a capital offense (e.g. Socrates, numerous prominent figures in the French Revolution, Malcolm X). The beauty of Free Speech is that you are (generally) free to say things without being arrested or killed by the State. Free Speech does not mean that others are required to like what you say or that social isolation as a result of one’s free speech is illegal.

## Speech is Public

A corollary of this is that for society to respond to your views, those views must be spoken out loud. That is, Free Speech, properly understood, is inherently public. Anonymous speech is generally referred to as “thought.” We allow free private thought by not having thought police. Regulating thought is (currently, and hopefully forever will be) an utter impossibility, so it need not be spelled out in the constitution. Furthermore, because it is not spelled out as a right, the 9th amendment protects thought.

Unfortunately, the (in)famous Citizens United case completely misses the point on what speech is by making it anonymous. Citizens United declares two things: first that money is tantamount to speech, and second that disclosing speech in the form of donors–that is, saying “speech” out loud–is an infringement of Free Speech (this is, of course, a gross over-simplification of this landmark case, but these are the two points that relate to my larger argument). The first point is controversial in its own right, but it’s also exceptionally complicated, so I’m simply going to say that the latter point depends on the former, and leave it there. The second point, declaring that speech can be anonymous, strikes me as extremely dangerous for democracy. Not because it imbues corporations, labor unions, and 501(c)(4) entities with undue influence (though that is an interesting debate as well), but because it undoes a fundamental ethical assumption that makes Republicanism possible.

## The Ethical Underpinning of Free Speech.

Adam Smith, an intellectual giant of the Scottish Enlightenment, is best known for An Inquiry into the Nature and Causes of the Wealth of Nations (aka ‘Wealth of Nations’). However, in his own mind, he considered his other book, The Theory of Moral Sentiments, to be his magnum opus, and in fact he was revising both books simultaneously. Wealth of Nations made Adam Smith the Father of Modern Economics and Capitalism, but Theory of Moral Sentiments is a necessary, though often overlooked, prequel to Wealth of Nations, and the ideas discussed are undeniably necessary for capitalism to function as described in Wealth of Nations.

Implicit in Smith’s description of markets (Wealth of Nations) is an assumption about human behavior and morality (Theory of Moral Sentiments): “Man naturally desires not only to be loved, but to be lovely.” That is, people want others to regard them with esteem and they want to feel worthy of that esteem. This natural desire drives our social interactions with others around us and causes us to act in such a way that while acting in our own self interest we still respect the interests of others and have a keen moral inclination towards sympathy (harmony) with others. In the context of markets, this means that individuals are generally wont to behave in such a way that increases their social esteem, which is to say treat others fairly.

I obviously can’t do Smith justice in a couple paragraphs, so I highly recommend several other commentaries on Smith’s work:

My point in bringing up Smith (besides pedantic erudition) is to point out that there are certain moral underpinnings to our most sacrosanct political institutions, but those underpinnings are never made explicit in our constitution or other expositions of these institutions. In the minds of the authors of these institutions (e.g. Monroe, Smith, Mill, Friedman, Washington, etc.), these assumptions didn’t need to be made explicit in their writings; they were so obviously necessary that explicitly calling them out in writing at the time would have seemed trite. This is true of markets, and this is absolutely true of the constitution in general and the first amendment in specific.

Everyone is entitled to their own opinions, but not their own facts

Free speech encourages free debate, eccentric innovation, and constructive criticism of the zeitgeist, but it assumes a level of integrity. This assumption has actually been made explicit in jurisprudence, but I believe the corollaries of that decision have not been absorbed into the public psyche. Yelling “Fire!” in a crowded area, when no fire is present, is illegal. That is, lying to provoke panic that can cause measurable harm (lawyer-speak for ‘getting trampled to death’) is illegal. There are “limits” to Free Speech under the First Amendment. I use quotes there because these so-called restrictions just make explicit what was previously implicit: you are free to say anything you want, but we’re assuming you’re mature and virtuous enough to not be a puerile prick about it.

## Summary of Costs of Free Speech

Under the prescience of the First Amendment, speech is “free,” but as I’ve noted above, that freedom only applies to freedom from State oppression. There are still social costs to speaking one’s mind, as there should be. A commitment to truth and integrity is not only implied in the granting of free speech, but it is truly necessary for a sustainable, functional Democracy. In the light of Citizens United this means putting your mouth where your money is. Further, it means listening to people who disagree with you–whether in the news, blogosphere, or on-campus talks. That’s all inherent in free speech. As it should be.

Speech is inherently a public and visible activity. If you’ve ever interacted with another human being, you know that words have meaning and power, and what you say is subject to the scrutiny of the recipient, and that the First Amendment cannot protect you from the consequences of their response–positive or negative.

## These Costs are Worth It

If it’s not clear at this point that I love the First Amendment, then I’m clearly a failure as a writer. There are costs to speaking freely, but this is not in any way to diminish the obvious fact that the benefits of Free Speech exceed these costs by orders of magnitude. That said, the level of current public discourse suggests that we’ve forgotten the moral underpinnings of this right and the cost benefit analysis. What’s at stake if we forget these truths? Well, for starters, the Republic itself.

According to Aristotelian political theory, each form of government had its merits but inevitably devolved into its most oppressive incarnation until it was overthrown. Thus a monarchy would become a tyranny, only to be overthrown by an enlightened aristocracy, which slid into repressive oligarchy until popular democracy overwhelmed the oligarchs, opening the door for anarchy, and so back to the stabilizing hand of monarchy again.

Mike Duncan (taken only slightly out of context)

In fear of sounding like a right-wing platitude, we’ve lost the element of personal responsibility in our discourse. Absent personal responsibilities for the social consequences of our words, we devolve into either guarded bullshit, unwilling to address controversial topics (read: topics that are meaningful and worth discussing) or completely eschewing objective truth in favor of “alternative facts.”

The United States and the world at large are facing deep issues. As one of many examples, we have racial tensions ready to boil over in the US. How are we supposed to have a truth and reconciliation moment when we can’t agree what truth is? It’s politically incorrect to call a spade a spade: e.g. NYT columnist David Brooks calling inner city culture maladapted to modern society and dismissive of education. On any individual point, it’s tough to refute Demore’s assertions. A recent NYT article designed to humanize White Nationalists drew sharp criticism for pointing out the obvious: Nazis are people. I’m in no way defending Nazis or Fascism, both of which I find despicable, but they are people and deserve the same rights as you, Antifa, Donald Trump, and me. Recognizing that fact may humanize them, but it doesn’t normalize that behavior.

People with the aim to incite violence, social unrest, or just general disorder and fear based on false or twisted truths are despicable shells of how God intended us to be. That said, you can’t legislate that people not be dicks, and that’s just something we have to live with. Nevertheless, I would argue that such behavior is not protected under the First Amendment. Stirring up fears over bullshit allegations of terrorism, massacres, or the loss of American society, when all such fears are factually unfounded are morally deplorable. Still, because morality is such a difficult topic and Government cannot (and should not) decide what is or is not factually founded or objectively true, there exists an uneasy amount of ambiguity. But if we were to cede authority of ‘arbiter of truth’ to a semi-accountable body of politicians I can only believe that the result would be disastrous: self-interest turning to selfish ambition in the world of logrolling and realpolitik.

Ben Franklin allegedly quipped that this country is “A Republic, if you can keep it.” Absent a proper understanding of Free Speech, the most foundational of all rights, I’m beginning to wonder if we can keep it. When both sides only support free speech when the speaker agrees with them, we’re at risk of losing that Republic.

# Mathematics of Speeding

## Posing the Question

I’m a nerd. I think that’s pretty obvious from this blog. One thing I do to stay awake on long drives at night is to do math problems in my head; a particular favorite of mine is to calculate how fast I need to drive to arrive at my destination half an hour earlier. The answer is surprisingly bleak: speeding really doesn’t save that much time. But calculating various contingencies and corollaries in my head does tend to keep me awake for 10-15 minutes, so there’s that.

## Question 1: How Much Time does Speeding Save?

Short answer? Not as much as you might think. The longer answer is that the relationship between travel time and speed is an inverse one: $$time=\frac{distance}{speed}$$. You may remember a similar inverse equation from math class: $$y=\frac{1}{x}$$. This is a curve that never quite touches either axis going from $$x=0$$ out to $$x\Rightarrow\infty$$. So we can plot time on the y-axis as a function of speed for a variety of different distances to get a graphic for how long a trip will take at different average speeds: Figure 1.

We can pretty quickly see that at low speeds, going one mile per hour faster will have a pretty sizable impact on total time. However, by the time we reach the highway speed limit (65, 70, or 75, depending on the state), A one mph increase is going make a pretty small change in total change: not zero, but not necessarily substantial. For a better view of this in terms of minutes saved, here’s one of the above lines in table format:

Speed Hours Time
40 1.5000 01:30:00
50 1.2000 01:11:01
60 1.0000 01:00:00
70 0.8571 00:51:00
80 0.7500 00:45:00
90 0.6667 00:40:00

Going from 40 mph to 50 mph will save 19 minutes, but going from 80 mph to 90 mph will only save 5 minutes: Same 10 mph increase, but pretty big differences in time saved. More formally, an increase in speed of X% means a $$\frac{1}{1+\frac{X}{100}}%$$ decrease.

• $$OldTime=\frac{Distance}{OldSpeed}$$
• $$NewSpeed = (1+\frac{X}{100}) * OldSpeed$$
• $$NewTime = \frac{Distance}{NewSpeed}$$
• $$NewTime = \frac{Distance}{(1+\frac{X}{100}) OldSpeed}$$
• $$NewTime = (\frac{1}{(1+\frac{X}{100}})(\frac{Distance}{OldSpeed})$$
• $$NewTime = \frac{OldTime}{1+\frac{X}{100}}$$

The above formula might look complicated, but when put in fraction form rather than percentage form, it’s just a simple reciprocal (assuming the percentage change makes a nice fraction). In fraction form, If my speed increases by 20% (or one-fifth), that means my new speed is $$\frac{6}{5}$$ of my old speed and my time changes by the reciprocal: $$\frac{5}{6}$$. So a 20% increase in speed means only a 16% decrease in time.

## Question 2: How does speeding for one leg affect the overall average speed?

So far, I’ve been talking about speed like it’s a single value, but what I’m really talking about is average speed, because we know that you never drive the same speed for the whole trip. More realistically, I leave my house and drive 10 miles at an average of 30 mph until I get on the highway, then I’m driving 70 mph on the highway for 130 miles before I traffic drops down to one lane because of an accident or construction or something like that, so it takes me an hour to go just 5 miles followed by some slow 20 mph driving for 20 miles. After that it’s smooth sailing at 65 mph, but only for 30 miles before I take my exit and drive on regular streets with a 40 mph speed limit for 25 miles until I get to my destination. In other words, my distance traveled over time looks something like this (with my overall average speed plotted as the dotted line).

So how big of a difference does it make if I drive 90 mph for that 130 mile stretch where I can actually get going and pass people? How much does that accident and rubber-necking-induced slowness negate the benefits of my speeding during the previous or subsequent legs?

In other words, what if our Distance-Over-Time graph looks like any one of these alternatives?

The steeper the leg, the more distance we’re traveling in shorter amount of time; i.e. the faster we’re going. But what do those steeper slopes on the legs mean for steeper slopes of the average speed? Or, more importantly, how much time do I save? If the only difference between Trip A and Trip B is to drive 90 mph instead of 70 mph for that 130 leg.

Trip AvgSpeed TotalDist TotalTime
A 41.72 210 05:01:00
B 45.45 210 04:37:00
Diff 3.73 0 00:24:00
• $$TotalTime = \sum\frac{Distance_{leg}}{AvgSpeed_{leg}}$$
• $$AverageSpeed_A=\frac{220}{\frac{10}{30}+\frac{130}{70}+\frac{5}{5}+\frac{20}{20}+\frac{30}{65}+\frac{25}{35}}$$
• $$AverageSpeed_B=\frac{220}{\frac{10}{30}+\frac{130}{90}+\frac{5}{5}+\frac{20}{20}+\frac{30}{65}+\frac{25}{35}}$$

In other words, speed follows a weighted harmonic average, and that addition in the denominator means we don’t have a nice ratio like we did before. In this case, we have a 8.3% increase from 41 mph to 44.4 mph. $$1-\frac{1}{1.083}=0.077$$ so we have a 7.7% decrease in total time. (Yes,$$\frac{24 minutes}{321 minutes} \approx 7.5%$$ but when not parsing this into minutes the math works out.) See Github for details about the below function.

A = funcList$A$totals ; A
##   distance    hours
## 1      210 5.032967
B = funcList$B$totals ; B
##   distance    hours
## 1      210 4.620269

### Technology

Conspicuously absent from the day-bag list is a laptop. I went back-and-forth on this, but feel I ultimately made the right decision. Instead of bringing a full laptop and charger, I brought my iPad (which I was going to do anyway), bluetooth keyboard, and one of those 3-fold magnetic stands. The stand irritates me and I probably could have found a better, cheaper option, but this was a fairly late-in-the-game decision and it worked well enough for writing (like this blog post, which I’m writing on a ferry) and the occasional youtube video of Seth Meyers to keep up to speed on what’s happening in the insane world of American politics. I also ended up buying an international calling and data plan, which did end up being very useful/needed a few times (where a hotel phone or wifi calling wouldn’t have worked). The data plan was still pretty limited, so it’s not like I was still 100% connected to the LTE grid like I normally am, but it worked in a pinch for downloading new areas in Google Maps (which still works offline), double checking hotel reservation numbers/emails, and looking up schedules and info about the metro system.

• Phones (iPhone5 and Galaxy 6 Edge+) – these were also our only cameras.
• USB Chargers (lightning and mini)
• Outlet converters (x3)
• Portable battery. Since it was sunny, we had the brightness on our phones turned to maximum, which drained the batteries, especially for the Edge+ with the extra large screen, so this came in very useful a few times.

## Saving Money

As so many others have pointed out: minimalism isn’t about deprivation; it’s about intentionality. We spent a lot of money on plane tickets, hotels, restaurants, and other experiences, but it was (almost) all intentional and without any buyer’s remorse (with only a couple exceptions for some of the clothes).

Protip: buy and carry lots of water from the grocery store. In Greece, a 1.5L bottle of water costs 30 cents in the grocery store,€1 from a convenience store/kiosk,€3 from a restaurant, and between €3 and €6 from a ferry or outside a tourist hotspot (though price ceilings do limit the price somewhat). Stocking up on water by the 6-pack and carrying one or two in your day-bag can save you a few Euros on water, but more importantly, it can save you time and money on other stuff. Once you get dehydrated, your decision making abilities go down, so you’re more likely to just buy something (especially food/restaurant) as a mindless response rather than intentionally. Also, if you get really dehydrated, the resultant headache is your body’s way to tell you to go inside, sit down and take a break, which means you aren’t exploring, hiking, enjoying a sunny beach, etc. Even better is to bring your own water bottles and fill them with tap water where it’s safe to do so (not the case on most Greek islands, but it was fine on Western Crete and the Greek mainland).

### Food

There’s nothing wrong with buying a nice meal at a nice restaurant. Fortunately, and this is one of the reasons we chose it, in Greece, even the nicest restaurants aren’t more than 25 euros a plate, and most are substantially less than that. But even eating on the cheap doesn’t mean sacrificing in taste. Street food makes for a yummy meal for about €5, and going to a grocery store (always an interesting experience in and of itself when in a foreign country) and picking up some meat, cheese, bread, and beer makes for a cheap and easy meal from your hotel room. This allowed us to save eating more expensive food for when we were actually in a mindset to enjoy it. I.e. We were intentional about it.

### Souvenirs

I’m generally not a big souvenirs guy, preferring to eat good food, drink good beer, and not have to store anything new when I get home. But there are exceptions, so here are some thoughts on souvenirs.

1. The single most important souvenirs are memories. They are why we travel, and they don’t require storage later.
2. Carry small bags, and your space for souvenirs will be limited. This is a good thing since it literally means you can’t really bring anything back that doesn’t fit in a suitcase with the essentials. Shipping may be doable for some things where applicable.
3. As soon as you get a souvenir “to remember this place by” you’re doing it wrong. Take pictures and tell stories to remember your vacation. You don’t need a shot glass to remember that you went somewhere cool.
4. Like all purchases, you should only buy things that will really add value to your life. When on vacation, try to make sure it’s something unique to where you are, or is at least cheaper there. For example, I bought a new wallet in Greece. It doesn’t say “Greece” or have the Greek flag, but is a unique kind of leather and was much cheaper than wallets in the US. I’ve been looking for a new wallet for the last 6 months (I’m very particular about my wallet), so when I found a great deal on something I was going to get, I bought it in Greece.
5. Get something cultural or unique to that place. Again, you have pictures and memories, but artwork from another country can be a nice addition to your walls and a nice conversation piece. On this trip, we bought some traditional Greek worry beads so the husband will stop fidgeting with everything else, like my stuff and things that hurt when he drops them on you. It’s unique and fun and maybe a little touristy, but we intentionally bought them from an actual dealer/artisan rather than one of the many shops on cruise ship row.
6. Gifts for other people. I don’t think it’s necessary to buy other people stuff just because they didn’t get to join you for your vacation, nor do I think you should be obligated to buy gifts for other people if you don’t want to. That said, vacations, especially in a foreign country, are a great time to start doing some Christmas or Birthday shopping if your family does exchange gifts for these occasions.
7. Focus on the edible and consumable items. We discovered that we love good olives (none of this sliced black olive crap from a can that we get in the US) in Greece, so we bought some duty free olives and olive oil. It’s about the experience and saving these items for a special occasion to share with friends and family.
8. Oftentimes, people are swayed by argument that “well, I’ll only ever be able to get this here” and buy something they think they might regret not buying later. More and more though, that premise just isn’t true, and you can ask the shop for a business card, write down what it was that you were looking at, and then look online later (if you still remember what it was that you wanted so badly at the time). This is an especially useful trick when you’re tired, hungry, thirsty or already decision fatigued.

## Things You can Just Buy There

There are lots of just-in-case items you might be tempted to bring, but not bringing them–even if you need to buy them there–will on average save you money and provide opportunities for new experiences. In our case, we got stuck in the rain and had a fun (albeit a bit uncomfortable) time trying to find an umbrella. After an unfortunate bee sting while hiking, we got to experience a Greek pharmacy trying to get anti-itch medication, and learned about how their pharmacies work. Sunscreen. I’ve said it before, but seriously, if you’re going to a sunny place for more than a couple days, your tiny travel-sized sunscreen isn’t going to cut it anyways, so leave it behind and just buy some there.

## Lessons Learned and Some Buyer’s Remorse

It was a great trip: we had lots of fun, took lots of pictures, saw the main things we wanted to see and do, and we kept the whole 3 weeks–hotel, airfare, and all–well within budget. But there were a few sights we didn’t get to; a few hotels that were better advertised than executed, and some places we wished we had stayed longer or shorter. So it goes. With regards to packing and how we could have made travel easier on ourselves, we also learned some things.

• Always bring enough water. Seriously. If you think you have enough, pack one more.
• Devise a system beforehand for tracking expenses (if you care). Merchant names in Mint usually aren’t obvious, and cash just goes so quickly without any tracking mechanism. We ended up not really tracking spending categories, but wish we had.
• Camping clothes washing detergent is super useful, but use concentrate not tabs. If the tabs get wet–as they are wont to do when you’re washing clothes in a sink and try to grab them with wet hands–they tend to get stuck together or dissolve into the countertop.
• Underwear is a special class of clothes and there is no way around changing that every day, even with athletic or allegedly odor resistant garments. Plan accordingly.
• Things we packed and didn’t really use:
• Bluetooth speaker – I’ve used it a ton since then, but never had the need for it in Greece.
• Waterproof case for phone and a pelican box – used a couple times, but easily could have gone without them.
• Sun hat – I’m just not a hat person.
• City walk sandals (not as comfortable on mile 2 as they were on mile 1) – we were able to return them after the trip since I wore them so little.
• Good After sun care is as important as sunscreen.
• Protip: obviously, an ounce of prevention is worth a pound of cure, so wear sunscreen, but almost inevitably some will get wiped or washed off or you’ll miss a small spot and end up with inverse-finger-shaped spots of sunburn. Good After sun lotion can mitigate the worst effects of that sunburn and get you back on the beach without turning into a lobster. This saves pain and means more time spent roaming or beaching and less time out of commission.
• Linen pants: good for the plane, but left lint on everything, so I haven’t worn them since. In general, make sure you wear everything at least once before bringing it on a trip (if you have time).
• Rental car is not necessarily a good item to go Dutch on. If you’re in a hilly area, something with more horsepower is worth paying for (maybe even an automatic transmission). We had to skip a few monasteries in Paros because our little A-class rental car just couldn’t make it. Combine that with my limited experience with a stick shift car, and we decided to play it safe and not get stuck on a mountain “road”.

## Closing Thoughts

Had we checked bags, we would have spent an additional $75 on checking bags on the planes, an additional$50-60 on cabs, 60-90 minutes baggage claim, check-in, and customs, and had more inconveniences moving around. Having more clothes would have saved us, at most, $20 in laundry and$15 in coffee while doing laundry (though we probably would have gone to the cafes anyway).

I’m very glad–at times I was even a bit prideful–that we did the full three weeks with only our little carry-on bags. We were able to bypass baggage claim, easily navigate busy ferry terminals, and even carry our luggage half a mile when we got lost walking to our hotel (not the most pleasant at the time, but we were the talk of the hotel staff and it makes for a fun story). By the end, our luggage was a little heavier and unbalanced with both souvenirs and lazier packing, but we still made it, unencumbered.

*Full disclosure: we did have to check a hardshell bag for an interim flight from Athens to Crete on RyanAir because it was 3 centimeters too deep and they’re sticklers for that sort of stuff. We didn’t check any bags for international flights or ferries.

# Art, Religiosity, and the Dark Ages

In the United States, when we talked about history, it’s kind of a joke. History in the United States generally goes back at most to 1492 CE, when “Columbus sailed the ocean blue,” and doesn’t really get going until the early-mid 1700s. On the other hand, Greece provides over four millennia of culture, art, and economic progress (or lack thereof) to study the progression of the Human Enterprise. In particular, I want to explore a phenomenon that becomes clear when walking quickly through a museum with a wide breadth of content organized chronologically. Namely, that the quality of art produced (at least that which was saved) really falls off a cliff after the fall of Rome, and it takes well into the Renaissance for art to recover. This decline in quality conspicuously corresponds to a rise in iconography and a shift from secular to religious topics.

In this post, I want to give a brief overview of the phenomenon as I observe it (with pictures, most of which I took myself from various museums in Greece; the rest came from Google Image Search) and explore some possible explanations for the source/cause of this decline.

## A Brief History of Greece (intentionally oversimplified)

From as far back as 3000 BCE or so through until around 1200 BCE, the Minoan civilization was centered in Crete and dominated, or was at least extremely influential, in much of the region between Egypt and modern day Macedonia and Istanbul. As was captured in the original Age of Empires computer game (and real archeology), the Minoans were a seafaring society and were heavily involved in trade throughout this whole area. Frescos in Egypt depict Minoan traders and coins. Pottery, idols, and other Minoan artifacts have shown up all around the Aegean and even further along the Mediterranean.

After the Minoan centers in Crete were overthrown due to “Internal Conflicts” (about which we have little to no information) around the mid 1200s BCE, the Mycenaeans, or ancient Greeks came to the fore. More militant than the trade-oriented Minoans, this is when Bronze Age warfare really comes in and we see the quintessentially Greek bronze armor and helmets showing up in ruins and burial sites. Eventually, the Mycenaeans congealed into the Greek City-States we learn about in school today.

After defeating the Persians at Marathon and Salamis the Greek City-States, Athens in particular, entered the “Golden Age” from about 450-400 BCE. It’s amazing in its own right that “The Classics” of Socrates, Plato, Euripides, Pythagoras, Pericles, etc. all really came from around a 100 year period (which Greek Ministry of Culture has been milking ever since). This is also when the Parthenon was built, which I’ll describe in more detail later.

After the Golden Age of Greece, Alexander the Great heralded in the “Hellenistic” period in the mid-late 300s BCE, which expanded Greek culture and influence through conquest throughout most of the known world. Even after Alexander’s death in 323 BCE, Hellenistic cultural ideals and art permeated what was once Alexander’s Empire. Even while Rome controlled Greece, Hellenistic art dominated, especially under the rule of Emperor Hadrian, and only the subject matter changed (a marked shift from sculptures of Greek Deities to Roman emperors and noblemen).

After Rome falls (repeatedly) to the Goths and Huns, the Eastern half of the Roman Empire, centered in Constantinople (though you can’t go back to Constantinople) gets renamed (by historians at least) as the Byzantine Empire, and Western Europe falls into the Dark Ages and Feudalism. The Eastern Empire threw itself into an endless series of seemingly futile wars with Persians, Saracens, and later Europeans until its downfall to Frankish Crusaders around 1200 and final collapse at the hands of the Ottoman Empire in 1453.

It’s this Byzantine Perdiod/transition that I want to focus on here.

## The Parthenon compared to Byzantine Iconography

### The Parthenon

The Parthenon is a truly spectacular testament to the Greek Golden Age and human ingenuity. If you can’t go to Greece and feel small in it’s shadow (not that it casts much of a shadow anymore in extremely sunny Greece), it’s worth listening to an audio guide or just browsing photo galleries. Beyond just its age and size, there are are several reasons the Parthenon is so amazingly beautiful.

1. Now, it’s a well known fact (at least on architectural circles) that we perceive long horizontal lines as sagging in the middle, even when they aren’t. The Greeks were apparently aware of this phenomenon as well, and compensated by actually building the steps to the Parthenon with a slight curve upward in the middle, thus giving the perception that the steps are horizontally straight.
2. Although it’s a myth that the Parthenon is built around the Golden Ratio, Phi (1.618), it is built around a ratio of 4:9 that shows up in many places around the structure.
3. The sculptures and reliefs that once lined the top of the Parthenon are now in the nearby Parthenon Museum and (much to the chagrin of the museum) in the British Museum. (And the Greek government keeps urging the British Museum to “do the right thing”). But these sculptures, or what’s left of them, are perfect in their idealized realism. They follow more or less the same proportions as DaVinci’s Vitruvian man, depict movement (rather than the purely rigid, motionless statues of the Archaic period), and while obviously embellished and idealized, are remarkably life-like. They are “Fantastically Realistic,” if you will.

### Byzantine Iconography

Contrast this Fantastical Realism with the religious icons created throughout the European Dark ages. These images seem to revert back to the “archaic smile” of the earlier Mycenaeans. The folds in the clothing, if there are any, are unnatural and forced. And most obviously, the proportions are way, way off. Fingers are too thin and too long; shoulders are far too rounded; faces are deadpan and devoid of emotion or movement; there are even paintings with Jesus suckling at Mary’s breast where the breast is coming out of her shoulder.

My point is that in addition to a stall in scientific advancement, technological progress, and the expansion of human liberty, the fall of Rome also signaled a true regression in art. Furthermore, this regression also coincides with a stark transition from the more humanist themes of Roman era art to distinctly sacred, monotheistic themes.

This all begs the question: why did the quality of art decline so dramatically, and was the decline related to the increasing religiosity of both the times and the artistic themes?

## Possible Explanations for this Correlation

### Explanation 1: The Religious Cynic

Christianity (and/or all monotheistic Religions) is inherently repressive. Rather than encouraging, it crushes the flourishing of the human spirit and rewards the banal and prosaic work. Given the religious themes of the Parthenon, it’s impossible to accuse religion as a whole as suppressing artistic creativity, but it’s equally impossible to deny that the Byzantine government was closely associated with the Orthodox Church and acts of state-sponsored religious oppression and terrorism against non-Christians was common, as was the destruction and suppression of statues, which were considered too pagan. Although the historical record is somewhat mixed, it’s a reasonable corollary that the same oppressive apparatus subjugating everyone but the Orthodox Christian priests for the benefit of Church Leadership subjugated and repressed secular art. True artists, unwilling to be censored like that, refused to conform to the Church’s impositions and the only the B-rate artists remained.

### Explanation 2: The Political Cynic

Similar to Explanation 1, but maintains that religion is not inherently repressive. Instead, corrupt regimes routinely co-opt religions, and any religion (monotheistic or otherwise) with a concept of paradise and damnation is easily abused by these despotic regimes. It is this abused, twisted, and blasphemous version of Christianity that is repressive and effective at quelling rebellions and fostering jingoism and expansionist wars. Art and freedom of expression do not feed into this expansionist goal, so it was neutered and channeled into religious iconography that supported the leaders’ bastardized version of Christianity. The result was, like for Explanation 1, that true artists were forced out and only B-rate artists remained.

### Explanation 3: Religion as Opiate

A third possibility is the spurious correlation: both the decline in art and increase in the religious nature of art occurred at the same time because they have a common cause; not because one caused the other. Religiosity was a response to anarchical or despotic regimes and a way to retain self-worth, even if not a decent artistic education. Similarly, high quality artistic training art, as a luxury or non-essential was dispensed with in the face of these anarchical and despotic regimes. The fact that art shifted from humanistic to religious themes was the result of artists losing faith in human leaders; not human leaders repressing artists.

### Explanation 4: The Church as Monopsony Financier

Particularly in the former Western Empire, The Church (soon to be the Catholic/Latin church) acquired huge amounts of land and wealth as a result of good stewardship and management of tithes (early on), passive income from Relics (especially in the lead-up to the crusades), and more corrupt practices (like selling indulgences in the lead-up to the Reformation). As the richest entity around, The Church was one of the few buyers of art and therefore had market power controlling the styles of art that were produced. Furthermore, the Church had such a profound impact on social tastes and preferences, that even private demand for art was almost exclusively ecclesial, and even the handful of aristocratic buyers favored art that was religious in nature. As a monopsony buyer, it only took a couple highly influential leaders to undermine the competitive market of artists and allow the well-connected, rather than the talented, to flourish.

### Explanation 5: Division of Labor limited by supply

Moving from the demand side of the equation to the supply side, we have several more possible explanations for the lower quality. After Rome fell, there was less economic and political stability, more wars–albeit much smaller ones, usually over feudal land holdings in Western Europe or vain attempts to bring previously Roman territories back under Constantinople’s control–and more plagues (with the rise of cities and decline of Roman civil infrastructure) lead to lower global population and lower opportunities for specialization. Artists were part time at best, and teachers of art and art history were all but extinct.

### Explanation 6: Division of Labor Limited by Demand

Going back to 1776, Adam Smith observed that “the division of labor is limited by the extent of the market.” Low demand for art, particularly outside the church, further limited opportunities for specialization. A low population of buyers, a high demand for agrarian workers, and high demand for bureaucratic in Constantinople’s Byzantine bureaucratic structure meant that full time artists just couldn’t make a living, so there weren’t many full time artists (or art teachers).

### Explanation 7: Aesthetics as a Normal Good

Aesthetics are a normal good, meaning demand rises and falls commensurately with income. Lower incomes mean plainer clothes, plainer expectations, and lower demand for fine art. This ultimately feeds back into Explanation 6, but I wanted to call it out separately because we do see a similar “plain-ifying” of fancy clothing (e.g. Wedding dresses) around the 400-600s as well, though given the fragile nature of clothing, some of the proposed renditions seen in museums seem epistemologically suspect. My skepticism aside, if clothes and homes are plainer (as was likely the case for average citizens), then even moderately bright and clean art would seem gaudy and austentatious, clashing with the humble surroundings.

### Explanation 8: Gold as Godliness

In iconography, the purpose of art was no longer artistic expression, but votive or liturgical. To this end, the realism of the art was superfluous, and what really mattered was the value. Value can be easier augmented with gold leaves, rather than accurate proportions, so that’s what they did, and many icons have gaudy gold and silver leafing. The more expensive, the holier and therefore the more likely to influence God’s Will, regardless of how unnaturally skinny and short Christ’s legs are.

### Explanation 9: Shift in Preferences

Beauty is in the eye of the beholder, so while I don’t particularly like the style of 6th century iconography compared to 3rd century BCE marble statues, it could be an avant garde response to the Hellenistic Fantastic Realism. Particularly with a partial or regional monopsony, certain church leaders and prominent aristocrats would have a profound and lasting impact on generations of artists. The modern continuation of producing icons inspired by Byzantine style suggests that at least some people like the style; though I should note that the modern icons in modern icon shops do tend to have much more Renaissance era proportions, even if the faces are still archaic and deadpan.

### Explanation 10: Selection Bias and The Regression to the Mean

For relatively obvious reasons, older stuff is less likely to survive into modernity than new stuff. Even when “newer” is defined as 1500 years ago. Only the highest quality work from older periods (say, 3000 BCE Minoan pottery with compass-drawn concentric circles) survived because only the highest quality work was protected or recognized for what it was: pottery and not another stone. Newer works, by contrast, have had fewer opportunities to be destroyed, and therefore there are more surviving works, including stuff that only a mother would put on the refrigerator, but has now ended up in a museum as “art” even though no one at the time would have accepted it as well done either.

(Pottery shards with 12th century Byzantine Art)

### Explanation 11: Too much Bureaucracy; Too much boring

Previous explanations focused on political turbulence disrupting art production. But a lack of angst has never produced good art. Many great works of literature and art have come from turbulent times, and the shortness of the “Golden Age” suggests that boring stability can only maintain itself for so long.

## Shooting Holes in All of the Above

Instead of introducing and debunking different explanations at the same time I decided to introduce them one at a time and attack and synthesize them with more of a shotgun approach because there was so much overlap.

First of all, all the explanations involving repressive regimes don’t stand up to much scrutiny. Art and creative expression tend to be Antifragile, to use Nassim Taleb’s word. In other words, attempting to repress a certain theme, style, or type of art–whether through criticism or official sanctions–tends to backfire. In spite of–perhaps because of–censorship, the best artists will find a way to express themselves in beautiful and quasi-legal (or at least very snarky) ways. Take The Creation of Adam for example. Michelangelo was commissioned to paint God giving the greatest gift to man: life. However, being a Renaissance man through-and-through, Michelangelo asserted that the mind and the intellect was God’s greatest gift to man; and in a particularly ballsy snub, painted God as seated on a brain-shaped banner.

Secondly, there’s indubitably a subjective/preferential aspect to art in all its forms, but we know from academic psychology that there is some objectivity to beauty (or at least consistent trends across many subjective preferences). We like symmetrical faces. We like consistent ratios (especially 4:9 and phi). We are drawn to movement in drawings (puns intended). Although we don’t have a technical definition of what it means for colors to “clash,” we all know what it means and we intrinsically don’t like clashing hues (in most contexts). Thus, I find it very improbable (albeit not impossible) that the art critics of the day would shift preferences away from Fantastical Realism to poorly proportioned, static icons. Such a shift would fly in the face of modern psychology and the arcs of history as the trends even leading up to the fall of Rome and the Renaissance were overwhelmingly in the direction of either Fantastical Realism.

Thirdly, while there is substantially less secular art as a proportion of art in the Byzantine period than in the Minoan or Mycenaean periods (it’s hard to really draw a line between the religious and secular elements of Greek Religion/Mythology), secular art/design isn’t completely absent. Many pottery decorations appear to be purely decorative in nature with no deeper meaning; concentric circles around the mouth of a carafe, for example. But even in these cases we see a substantial decline in the precision of decorations. Compare Minoan-era pottery to 4th century pottery from (approximately) the same areas. It’s like humanity forgot about the compass. This would tend to support some variant of the “Religion as Opiate” explanation from above, but as previously described, that is still a response to some kind of centralized or systematic oppression (since Byzantine government was a lot of bad things, but not anarchic).

Fourth, even within the strictest of iconography trends, “newer” (Circa 1800) churches have more color and dimension to the paintings in the churches. The deadpan faces become less archaic and more stylized, with clear intentionality. More striking is the woodwork, which is not original, but incredibly intricate.

So what void was religion filling that it became (again) the opiate of the masses after Rome fell? And why did art suffer at the same time? Unfortunately, I don’t think this is something that can be answered without extensive study of the primary evidence from the time. There’s the religious advocate view that true religion made itself known and the Truth and that was why it garnered so much support. Malcolm Gladwell, Tipping Point, and social epidemiologists will point to Constantine’s conversion.

Like most areas, I mostly favor the economic explanation with a twist. There certainly is a degree to which goldliness is godliness, and a degree to which the Orthodox Church suppressed creativity by banning statues in churches because they were too pagan. But the primary driver to the archaifying of icons relative to Greco Roman Fantastic Realism was a lack of artists and artistic training. Most (all?) early icons were done in churches by monks with little-to-no training. Most (all?) modern icons are merely copies of these. Supplies and colors were also limited, again due to the economic forces of supply and demand. This applies to everything from paint colors and brushes to canvases and compasses. Arguably, it’s a form of repression that icons created now must copy the originals, but that could equally be chalked up to a shift in tastes that perpetuates this trend.

In short, all of these explanations probably played a role, but as always, trends like this are necessarily organic, and it’s exceptionally rare that a single person would have such a profound impact on such an important cultural facet; even more rare that a small group of Othodox Patriarchs or Political bigwigs could do so. Individuals are only wild cards in human history, but the invisible hand will reveal our more fundamental priorities in times of scarcity.

# Question

As a millennial born in the late ‘80s, I have a soft spot in my heart for ’90s alt rock, remember a time before smartphones-but not before computers and the internet-and have taken it as a given that the political pendulum swings every decade making it essentially impossible for one party to have more than 3 terms in office (I only vaguely remember the G. H. W. Bush vs. W. Clinton election). So when Donald J. Trump beat Hillary Clinton in November, 2016, I, like most people, was surprised that our electorate had swung that far right as to elect a populist with a xenophobic agenda that was openly supported by the KKK and the so-called ’alt right.’ I won’t pretend that I actually thought Trump would win the presidency or somehow saw this coming, but I did predict (seriously, you can ask some of my friends who I talked to off the record) that if she won, Clinton would be a one-term president. Not because she’s a woman or anything like that, but for the simple reason that since the 1950s, no party has ever held the White House for more than 3 consecutive terms.

My question now, is whether or not this has always been the case. Incumbent presidents still have a 69+/-1% re-election rate, but at least for the last 30 years it seems as the parties’ re-election rate has fallen. Is that really the case? After looking through the empirical data to answer that question, I will close this post with some qualitative context for the quantitative data and a brief discussion of what, if anything, I think this answer means for democracy.

# Data

All data for this essay come from 270toWin (who, in turn, cite Wikipedia for a least some of their numbers). Data were retrieved using readXMLtable from the XML R Package. All source code is available on github.

# How long do parties control the White House?

For want of a better word, how long is the typical party ‘dynasty’? That is, how common is it-going back to 1789-for one party to maintain control of the White House for 2 terms, 5 terms, only one term at a time? There are some recognizable ‘dynasties’ throughout history, most notably the Jeffersonian Democratic-Republicans and most recently FDR’s New Deal Democrats. But in general, 2 terms is the median number of terms for any one party to hold the White House (hereafter WH), and while the distribution is inherently skewed due to the impossibility of negative terms, the average isn’t much higher: ~2.48 terms.

The most recent ‘long dynasty’ of 4 or more consecutive terms within the same party was FDR and Truman (5 terms total), which was over 60 years ago (20% of the nation’s history). Does that mean that long-running party dynasties are over and we’re floundering between electing individuals for two terms in a row and then alternating parties? Maybe. The data tell two stories. First is that the long-term trendline does have a negative slope. The second story is that the slope is barely negative and the confidence interval contains positive slopes because while we have fewer long-running periods with one party retaining the WH, we also have fewer one-term presidents where we swap back and forth between parties like we did in the 1840s and 1870s. That is, the standard deviation for number of terms one party holds before turning over the WH has fallen from a standard deviation of 2.16 terms pre-1900 to a standard deviation of only 1.09 terms since the beginning of the 20th century.

Figure 2 shows the moving averages of the length of political party dynasties. Each ‘dynasty’ is a point on the graph, the blue line is a the ‘noisy’ moving average looking at the average number of terms the incumbent party has been in the WH for the last 5 elections, and the red line is the slightly smoother moving average ‘dynasty’ length for the last 5 periods of uninterrupted party control in the WH. The black line is the trendline for average of the smoother of the two moving averages.

# Discussion

Let’s look at this with a little bit of context. The longest running party dynasty was that of the Jeffersonian Democratic-Republicans, which didn’t end until Andrew Jackson won in 1828 (after an extremely contentious election in 1824 where he won a plurality in the electoral college and popular vote, but lost the majority and was rejected by the House of Representatives) with the newly formed Democratic party (which, at the time, was built on a platform of White Supremacy). In 1884, Grover Cleveland became the first Democrat (again, at the time this was the more conservative party) after a string of 6 Radical Republican terms starting with Abraham Lincoln and promoting a doctrine of equal rights and reunification of North and South after the bitter American Civil War (1861-1865).

In 1912, Woodrow Wilson took advantage of internal divisions in the Progressive Party (Republicans) and captured the White House from Taft after the Republican vote was split between Taft and Teddy Roosevelt. Finally, the most recent political streak ended when Dwight D. Eisenhower became the first Republican (now the political right) to win since FDR Reinvented the Democratic Party with the New Deal.

In other words, dynasties seem to come and then fall alongside dramatic shifts or reinventions in the party. Even adjusting for the fact that the Democratic and Republican Parties switched sides (and essentially became new parties with old names), the longest running party is the Democratic Party from Jackson through Wilson. Second place goes to the existing Democratic and Republican Parties which started with FDR (or Eisenhower or Truman, depending on how you want to count them).

Political Party Name Year of First Presidential Win Year of Most Recent President in Office Age (Years)
Federalist 1789 1800 11
Democratic-Republican 1800 1828 28
Democratic 1828 2016 188
Whig 1840 1852 12
Republican 1860 2020 160

In other words. we’ve had the same parties for a really long time (80 years), and it feels like time for a change. We can see the internal factions clearly within the Republican Party now as they debate how to replace the Affordable Care Act. Because of the first past the post voting system in the United States, a viable third party hasn’t been possible since the mid-1800s, and I don’t see that changing now. But it does seem like we’re entering into a new era.
For the sake of historical record keeping, I really hope we finally dissolve one or both of the existing parties and name the replacement(s) something new. The question that remains is whether it will be the Democratic Party that needs to be reinvented after losing to the least popular, most disapproved-of candidate since we’ve tracked candidate approval ratings, or will it be the Republican Party that can’t seem to pass a comprehensive Health Care bill with majorities in the House, Senate, and control of the WH and 7 years of campaigning on repeal and replace to prepare. Or, we should be so lucky as to institute a parliamentary system or at least one with an alternative vote and viable third parties, but that’s just crazy talk.

# On Exploitation and Thin Markets

Exploitation: a word so overused by the political Left, so ignored by the political Right, and so misunderstood by both sides. A straw-man attack against capitalism that is so often so poorly defended by Libertarians (myself included). That all said, this is an important issue that demands a reasonable response from Capitalists, rather than talking past the often valid concerns (with completely unrealistic solutions) of the Left and attempting to turn the problem around on Government as the exploiter (which can and often is the case, but not in the ways the Right likes to claim). This is an attempt to both consolidate my thoughts about exploitation from an ethical/morality perspective, and also attempt to reconcile my free-market ideology with the fact that unregulated firms can and will find ways to exploit consumers.

# What is Exploitation?

First, we have to start with the basics: What is exploitation? According to Rebecca Kukla at the Kennedy Institute of Ethics, the broadest definition of exploitation is simply one party “taking unfair advantage of someone else” (see her video clip on Exploitation for EdX). She goes on to clarify that exploitation is not coercive. Coercion is something else entirely for the purposes of ethical and economic discussions. Instead, the decision made by the exploited party is voluntary and can still make that party better off, but the available alternatives are themselves very unattractive as well. In the terminology of Dr. Mike Munger (Duke University), the choice is voluntary, but not euvoluntary (or voluntary the way we think of voluntary in common vernacular and economic assumptions). This could be because the exploiter has somehow limited the available choices or not, though there should be some exclusion for natural consequences of poor decisions–e.g. It’s not exploitation for a spouse to make an ultimatum after the other partner was caught in an affair. In any case, the exploiter benefits from the fact that the exploitee has extremely limited/poor available alternatives.

Taking the example of sweatshops, it’s true, as most libertarians like myself are quick to point out, that the workers are free to take other jobs if they can find them and are remaining employed voluntarily. It’s also true that manufacturing, even in the horrible conditions that many manufacturing workers face, can lead to substantial improvements in well-being, particularly in the next generation. And it’s true that the sweatshop owners do not adequately protect their workers, treat them more like capital than people, and continue to pay exceptionally low wages (to keep prices for Americans low) because they know their workers don’t have any better alternatives. In other words, these manufacturers are profiting off the fact that these workers were born in a place with few economic opportunities. Furthermore, they are benefiting disproportionately more than the workers (who are still receiving a perceived net benefit). Therefore, I think it’s fair to say that sweatshop owners are behaving in an exploitative manner.

Although sweatshops in developing countries make for great examples of exploitation, I want to focus on more first world problems, because those are better for highlighting different policy approaches to prevent, or at least mitigate, exploitation.

# First World Problems (That aren’t exclusive to the developed world)

## Low Wages and Benefits

Although Donald Gracchus Trump managed to turn the conversation of the election away from policy and towards his Twitter feed, Bernie Sanders seemed poised to try to make minimum wage a key point in his platform had he gotten more news coverage. By no stretch of the imagination are minimum wage workers in the US being exploited like sweatshop workers in third world countries, but it is true that companies like WalMart, McDonalds, Burger King, KMart, etc. play legal games with part-time vs. full-time employment and other tactics to avoid paying benefits, avoid paying overtime, prevent employees from gaining the needed human capital to get promoted, underhandedly push people out, etc. All of this takes advantage of the fact that most of their entry-level workers don’t have better options; if they did, they probably wouldn’t be working in entry-level retail or fast food. In this way, there is a level of exploitation going on. Proportionality is also something to consider: a high schooler working at minimum wage is gaining valuable experience and resume building beyond just the paycheck; the 30-something single mother is not benefiting from this job as much as that teenager, but needs it more. Therefore I don’t think paying entry-level workers minimum wage and working them part time is inherently exploitative, but it can vary based on the situation and future prospects of the worker. As an aside, while I don’t believe the ratio between CEO salary and entry-level workers is meaningful metric, I also don’t really buy the “maximize shareholder value” argument since economic fundamentals have a very limited role in stock price, and it is true that most of these companies would still be profitable if they didn’t play these employment games.

## Price Gouging

In the wake of storms and other natural (or manmade) disasters gasoline, generators, water, ice, etc. become in very high demand and the supply of these things is either fixed or falls, so Econ 101 supply and demand models suggest that the prevailing market price will spike up to equilibrium. And it typically would, except most states have anti-gouging laws, and Governors and Mayors love to tout their enforcement of these laws in the wake of such an event. Of course, jacking up the price of something right before everyone in town needs it (e.g. Bottled water) does feel like kind of a dick move, and liberals in general tend to have a visceral reaction that this is wrong and exploitative: “what about the people who can’t afford the higher price?”. Take this practice to its logical, even if hypothetical, conclusions, and you can have stores arbitrarily upping their prices the night before a storm (as Russ Roberts does in his book, The Price of Everything) or resellers buying up all the bottled water in an area before a storm and reselling it after the storm for a substantial profit–effectively arbitraging across time. Such price hikes or intertemporal arbitrage can make a very large profit as a result of others’ misfortune, and there’s always something a little ethically uncomfortable about that.

## Captive Markets

In what can be thought of as a very particular form of Price Gouging, we have Captive Markets. In cases where a provider of a service (usually) has a secondary product (usually food or drink), they can create a local monopoly for that product: if you (voluntarily) buy the service they provide and would like to (voluntarily) buy the ancillary product, then you must buy it from the service provider at monopoly prices. For example, after jumping around in a mosh pit at a rock concert, you must buy water from the venue; when seeing a movie, you can only buy popcorn and soda from the concession stand in the theater. Other classic examples of Captive Markets include food/drink on planes, trains, and boats, college textbooks, and food/drink at sports events, or really any place you go to for a reason other than food, can’t leave easily, and can buy food at (but bringing in outside food is banned or discouraged). Captive Markets are localized monopolies, so they tend to charge the monopoly profit maximizing price as opposed to the (much lower) market price. In this case, this is exploitation because your options are very explicitly limited by the supplier of the primary service (even though that primary service is still competitive).

# The Wrong Approach

Exploitation is unethical, and while it can range in severity from degrading human dignity at it’s worst to be merely being a dick thing to do at best, it’s in the interest of society to prevent exploitation as much as possible and provide a legal recourse for the exploited when we can’t prevent it. Unfortunately, most proposals I hear (from the Right and the Left, but mostly the Left), would not, in my estimation, actually work.

## Teach People to be Nicer

This is really more of a general comment about policy, but it’s a good starting place for this conversation. Any solution that relies on people doing the right thing, even the wrong thing (ethically speaking) is more profitable and difficult to prosecute is going to fail. You can wax all you want about how people should be more loving and less motivated by money, but that won’t change the hearts of humanity. To quote Milton Friedman, “I do not believe that the solution to our problem is simply to elect the right people. The important thing is to establish a political climate of opinion which will make it politically profitable for the wrong people to do the right thing.” Even though most people, most of the time, aren’t out to get you, a few bad apples will spoil the bunch and break down the system.

None of the games employers play to avoid paying employees benefits (e.g. Health insurance) are illegal, which is why employers play them. After the ACA mandated that employers offer health insurance for workers who worked at least 30 hours a week, many employees saw their hours cut to 29 hours a week. Many democrats responded by recommending that the threshold be changed to 25 or even 20 hours a week. Most Republicans just ignored the issue or pointed to this as evidence that the entire bill is flawed, but I did hear one congressman (I don’t remember who) actually give an intelligent response: We should increase the cap to 40 because no matter what threshold we set, large employers’ legal teams will find a way around it, but at least if the threshold is 40 instead of 30, hourly workers will get an extra 10 hours of paid work. The specifics of this policy aside, this congressman understood that you can’t legislate that people do the right thing.

## Ban It!

The problem with just outright banning something, is that sometimes things that look like (or maybe even are) exploitation are still justifiable. In an essay on this topic, Munger tells the story of price gouging laws gone wrong. After a storm, there were widespread power outages, which meant that by day 2 or 3, refrigeration was starting to become an issue and food was spoiling in people’s homes and in stores. Two “hooligans” from a neighboring town heard about this plight and saw a business opportunity. They rented a refrigerated truck and some chainsaws, and bought hundreds of pounds of ice. They drove to the affected down–using the chainsaws to clear the roads of fallen trees where necessary–and began selling ice for $12 a bag. This is an extremely high price for ice, yes, but ice was still limited and important to keep medications and the like cool, so the marginal benefit exceeded the marginal cost. However, these two guys were eventually arrested for price gouging. After that, two things happened: the ice was confiscated and not made available to people, and no one else tried bringing ice in from outside. Munger’s larger point is that even while exploitive practices can be unethical, the alternative can be even worse. If we accept the premise that exploitation is non-coercive, then this becomes a tautology: the transaction is still voluntary, so removing the option to make this transaction (that is further limiting the already bad list of options) makes the exploited individual worse off, and is, in fact, exploitive in its own right. This same logic will generally apply to most if not all price control efforts. (Further discussion along these lines). ## Deregulation Equally undesirable is the response from the Right (the previous two proposals usually coming from the Left), which is typically some version of Trickle-down Reaganomics and deregulation. I’m generally a big fan of deregulation, but the whole concept of exploitation implies that one actor has market power, which constitutes at least a partial market failure and therefore justifies measured government intervention. Granted, most government intervention actually makes the problem worse (as shown above), but the kind of “deregulation” usually proposed by the right actually exacerbates the issue as well by giving the exploiter more market power. I don’t say this often, but the above injustices can and should (I believe) be corrected via government action; just not the kind typically proposed. # Reconciling Free Markets and Government Intervention The root of exploitation is the lack of alternatives. This is part of the definition, but I feel it often gets overlooked in favor of blaming/hating the exploiter. Most, probably all, attempts to legislate away the possibility of exploitation away by targeting the exploiters are destined for failure. Though they do stand a slightly better chance if you pull a Henry VI and first kill all the lawyers. The best way to end exploitation is not to stop exploiters, but to give the exploited better options, and we can (in most cases) do that with better market competition. Sometimes though, government is needed to facilitate or allow competition (see Roth for several examples of government designing markets so they become more competitive). Although this is by no means intended to be a complete list, here are some ideas for a market-based approach to the issues listed above. Again, all of these focus not on preventing a firm from exploiting others–workers or consumers–but on giving the exploited parties more/better alternatives. • Low Wages and Employment Law Games • Minimize opportunities for discrimination in the hiring process. For example, initiatives like “Ban the Box” seek to make it easier for individuals with a criminal record to get a job interview and not be immediately eliminated from the candidate pool based on that record. Similarly, we know that white men are more likely to get interviews than women or minorities with identical resumes, so instituting some kind of quasi-standard nameless resume/cover letter could also help even the playing field. • Make it easier and safer to change jobs. THis would include reforming the laws around non-compete clauses in contracts as well as making things like health insurance either easily transferable or not tied to employment in the first case. Although the ACA made this slightly better by ensuring coverage for pre-existing conditions, much of the current Republican Replacement plan (AHCA) would undo many of these gains and make it harder for people, particularly people with illnesses or sick family members to change jobs. • Price Gouging • In some cases, as Munger notes, price increases are desirable to allocate resources based on highest need, rather than order in the queue. While all allocation methods have issues (pricing, queuing, rationing), the price mechanism is organic and therefore adaptable, which is exactly what’s needed in a crisis situation where this would be needed. • Furthermore, the price increases should be evanescent. We as a society have decided (or at least our representatives have) that we want to provide essentials (water, foodstuffs, first aid supplies) to victims of storms, etc. Any price hikes should only last until FEMA comes in and floods the market with water, etc. • Ultimately, if they want to avoid problems the State needs allow for price increases or increase the supply of certain goods to compensate for increased demand and decreased supply. Unless they do that, there will be shortages or price shocks. There is no way around this. • Captive Markets • In cases where the primary service provider is also the ancillary service provider–such as in the case of the movie theater where the theater is providing the primary service of the movie and the ancillary services of popcorn and soda or water sold at Rock concerts–making the provider allow outside food and beverage would lower prices by effectively making the ancillary service compete with all outside providers. • In cases where the providers are different–e.g. A restaurant where a particular tour group stops for lunch–kickbacks from the ancillary to the primary should be banned. Since the primary provider is acting in a fiduciary capacity when they select the ancillary provider, there should be nothing done by the ancillary to influence the primary’s decision (besides compete to provide the best product). Again, this is not, nor is it intended to be a comprehensive list of free market-based interventions to prevent exploitation. The point I’m trying to make is two-fold: (1) market-oriented government interventions for these problems exist (oxymoronic as that phrase may sound) and (2) these interventions are often negative–meaning they prevent some action rather than forcing a firm to comply with some action, such as preventing non-compete clauses or banning outside food/drink as opposed to some kind of (positive) price control. The goal of all these interventions is to make the market “thicker”–that is, to add options. # It’s the Market Structures, Stupid Tying these pieces together, it’s worth reiterating that the problem isn’t with capitalism, or evil corporations or CEOs, or profit maximization or self interest. The problem is that in some cases the market is too thin for competition to be effective, and people engaging in those markets as price takers aren’t going to get a good deal. Rather than trying–usually unsuccessfully–to change how people act in this thin market, the policy response should be to make the market thicker: provide more options, not further restrict the available options–whether directly, as is the case in banning certain secondary markets or indirectly, as was the result of policies like rent control. I don’t favor market-based solutions because I trust businessmen. I don’t; I think most of them are full of shit. I favor market-based solutions because I think most politicians are full of shit too, and I definitely don’t trust them. I want a system where even people who are full of shit can do the right thing by the most vulnerable in society because it’s in their self-interest to do so, and people doing what is in their own, perceived self-interest is one of the few things people will reliably do. # A Brief Commentary on Communication as an Influential Force in Societal Development Enterprise: a project undertaken or to be undertaken, especially one that is important or difficult or that requires boldness or energy Human: a species of bipedal mammal who, as far as humans are aware, is the only species capable of self-aware consciousnessand therefore intentional self-improvement Human Enterprise: the project of all humanity to improve the well-being of one’s self in society and society as a whole by means of self-aware consciousness and initiative Bullshitious: Bullshit, but making it sound fancy[2]or what I do on this blog. In a way, the entire human enterprise is an experiment in communication. It was the human capacity for communication that enabled cooperation, engendering a virtuous cycle in human and social evolution. It was communication and collaboration that allowed humanity to survive despite facing faster, stronger, and fiercer predators and prey. And it was communication, particularly written communication, that laid the groundwork for civilization, a feat that had never been achieved by any other species before or since homo sapiens sapiens (at least not on Earth). I define communication as the act of conveying information or ideas from one party to another. Good communication is communication that achieves this goal: the receiving party received and understood the information or idea as the sending party intended. This applies to both semantic communication: do you understand what I said? As well as to what I’ll call “essential” communication (as in “essence”): do you understand what I mean, how I feel about the topic, and how I want you to view me? The human enterprise, pre-historically speaking, has two components: living in larger groups and adapting to the environment to meet our needs, rather than purely responding to the environment. Both of these uniquely human accomplishments began with the rise of agriculture. By adapting the land—by plowing, weeding, etc.—to our need to acquire food with as little effort as possible humans slowly ceased to be nomads, and settled in a set location. Farmers also specialized and allowed some people to focus their energy on things other than food acquisition and towns formed with proto-economies. We then come to the fabled tale of the Tower of Babel[3]. Babylonians were poised on the great accomplishment of building a stairway to heaven, so they could make a name for themselves and have direct access to God via this stairway. I can only assume that they had already booked Led Zeppelin to play for the ribbon cutting ceremony, but God confused their speech and they scattered before they could finish the project. The question of whether this actually happened like this is, like the rest of Genesis 1-11, completely beside the point[4]. Rather, we get a glimpse from this ancient story about human relationships—with each other and with God. The problem at Babel (besides the self-proclaimed demigod status that so angered God) was that people couldn’t communicate with each other. When Enkidu told Urshanabi that he needed more bricks on the southern wall, Urshanabi didn’t get the message and didn’t bring the bricks. Then Enkidu got pissed off and left to go hang out with Gilgamesh, leaving the southern wall unfinished. There was no semantic communication happening, much less conveying the essential idea that Urshanabi had for a thing he called an “arch” to stabilize the second level. The point is that when we don’t speak the same languages—in the case of Babel, literally, but this applies almost equally as well to the “languages” of development, project management, etc.[5]—we don’t make any progress. Second, the complexity of endeavors in the human enterprise require complex communication. Building a massive tower—or developing a successful application, building and maintaining a highway infrastructure, or mending damaged race relations in a country with a history of slavery or apartheid—requires communicating extremely complicated sets of instructions, goals, and sentiments. This goes far beyond the (still very impressive) proto-language of bees to communicate how far away and in which direction a food source is[6]. Human communication involves conveying abstract emotions and ideas, visions for the future, and perceptions of reality as interpreted by the speaker. Following from this, all of the above endeavors also require that we communicate about the future. Again this is something that other species occasionally show signs of[7], but Humans are unique in that we display this behavior ubiquitously. The human enterprise necessitated the creation of an ever-increasing lexicon and complex grammatical and syntactical structure. It’s ultimately unknowable which came first, the extensible language or abstract thought, but at some point, humans began conceiving of and conveying beliefs about a future state of the world: “I bet if I put this little seed in the ground and pour water on it, a plant will emerge from the ground in a couple months.” Throughout the millennia, the problems facing humanity have changed, and on and off since the times of the Greeks and Romans, we struggle with vague ideas and concepts like “purpose” or “morality” and Eudaimonia. And so the complexity of our language grows in a self-reinforcing feedback loop to match the newer and “higher” needs and goals of the human enterprise. Going back to my opening statement, I want to dive into what I mean by “experiment” in this context. The entire human enterprise is an experiment in communication. An experiment is trying something and seeing what happens, and that’s really what we’ve done as a species. I’m going to begin closing with a series of somewhat disjointed thought experiments and case studies in communication, and then attempt, feebly, to tie it all together for an actual closing. Military conquest The entire concept of war—two leaders disagree about economic matters so they use high-minded rhetoric to send the socio-economically disadvantaged from each side to go kill each other until one side gives up—has always confused me[8]. Nevertheless, war and conflict have been pervasive throughout human history. I’ve always found it fascinating how many factors beyond just skill of the troops affect who “wins” a battle or a war: logistics and supply lines; disease, both for the armies and for the home front populations[9]; terrain and weather; and, of course, lines of communication. There is a probably apocryphal story about Prince Rupert, a cavalry general in the first English Civil War, who received ambiguous orders from the king via a letter that had been written, presumably, a week or more before. Based on the orders in the letter, Rupert attacked the Parliamentarians at Marston Moor, where he suffered a total defeat[10]. Allegedly, Rupert carried the orders from the king in his pocket until the day he died as a challenge to anyone who accused him of making a mistake by attacking at Marston Moor[11]. His instructions from the king were ambiguous at best, and arguably worse than useless given the turns of events taking place between the writing and reading of the letter. Military leaders have succeeded and been defeated based on good or bad intelligence—whether due to luck, dereliction of duty, or outright betrayal—and each campaign is a data point in the “what works in communication” experiment. Different generals with their different styles and temperaments use different modes of communication, and learn over time what works and what doesn’t. What encryption and codes successfully obfuscate meaning from the enemy while still being accessible to your allies? How much lag time should I assume and build into my orders? How should I balance flexibility with structure in my orders to a part of the war I know little about? What is the quickest way to reliably get orders from one side of a battlefield to the other? If we accept (as almost everyone does) that military leaders have shaped history, then we must appreciate the role experimenting with different styles and modes of communication has played in world history. Marketing. Marketing and it’s close friend advertising are where the line between semantic and essential communication becomes at once a critical distinction and a pair of double-Dutch ropes. Beyond telling you what the product is, a good advertisement subtly convinces you that the product is a good one and the producer is reliable and trustworthy. Bad advertisements, like the recent Pepsi Super Bowl commercial that sparked a backlash[12], are bad not because the fail to convey what the product is (semantic communication), but because they fail to paint the producer in a positive light—like Pepsi being tone deaf and really not giving a shit about social justice. And then we come to the more insidious parts of advertising: you will be complete if you buy this. For this message, subtlety is critical as marketers balance making the message easily inferrable without being so blatant as to turn people off. Much as I generally hate this messaging, I can’t deny that when it’s well done it’s brilliant. Every advertisement is an experiment in what motivates humans. That’s not to say that advertising is all there is. On the contrary, vaporware always crashes and burns. Nor is it to say that advertising is the whole of marketing or that all marketing is insidious. It is to say, though, that the firms that grow and last do so because they’ve experimented and found a communication strategy and brand image that works for them. When they gain market share beyond a small critical mass, it’s as much about communication as it is about having a high quality product. Conclusion Throughout history, territory has transferred hands, fortunes have been made and lost, and the expansion of the human enterprise have occurred through competing messages, competing media, and novel ideas put into language. The evolution of language—from the present to the future to the abstract—was inseparably linked with the expansion of philosophy and human intellectual pursuits. The human enterprise, that never-ending attempt to improve the quality of life and epistemological enlightenment for the human population, is only advanced when we interact by sharing ideas. When we communicate with one another. It’s not always advancing, but that’s where the experiment comes in, and when it works, we need to capitalize on that positive outcome and remember the methodology used to create it. And expand eudaimonia. By “self-aware consciousness” I mean awareness of one’s own consciousness, and the act of “second order thought” that, according to St. Thomas Aquinas, sets us apart from other creatures. See Summa Theologica. Genesis 11 For example, crows using traffic to crack nuts or monkeys storing stones to throw at zoo goers. Both of these are real examples that are really exceptions that prove the rule. Animals may be capable of adapting to the environment and doing short term strategic planning, but most of what they do, including migration, appears to be instinctual rather than based on long term planning. And also the genius that is Bill Waterson, https://boscobae.blogspot.com/2012/11/calvin-and-hobbes-on-war.html E.g. the “Germs” part of Guns, Germs, and Steel, by Jared Diamond. https://www.amazon.com/Guns-Germs-Steel-Fates-Societies/dp/0393317552 AKA the “attractive lives matter movement” http://www.businessinsider.com/stephen-colbert-kendall-jenner-pepsi-ad-controversy-2017-4 Or, my personal favorite play on this ad from SNL: https://youtu.be/Pn8pwoNWseM # Comparisons between Health care and Auto Repair ### The Analogy In the United States, cultural and government mandates have tended to place healthcare in its own category, distinct and siloed off from other industries. It’s true that both medical practice and the financing thereof are, in many ways, unlike any other industry, but that’s not to say they need to be treated differently or that Healthcare can’t learn from other industries. Healthcare delivery can learn from the supply chain management of chain restaurants and their ability to deliver consistent quality across locations, time, and people by using standardization (Gawande, Big Med, 2012). Healthcare can learn from the airline industry and power of the checklist in quality enforcement (Gawande, The Checklist Manifesto, 2009). Even though the healthcare silo even delineates between a Master’s in Business Administration (MBA) and a Master’s in Health Administration (MHA), the fundamental principles of business, growth, and management are still more or less the same (Hekman, 2010), even if they’ve tended to be kept separate. Further, I believe that we—patients, citizens, consumers, policy makers—can learn a great deal about healthcare financing by looking at other industries. Health insurance is unlike other types of insurance, but I would argue that this represents a misunderstanding the application of insurance to healthcare, rather than a difference in the fundamental nature and category of healthcare and health insurance. In this case, I believe we could learn a great deal about a better way to implement health insurance by looking at the auto insurance industry. I’ve often made this analogy, but I want to flesh it out, and see how far it really goes. ### Parallels between Healthcare and Car Repair Because many people balk at the comparison initially, I want to start by highlighting areas where these two, seemingly disparate industries are, in fact, quite similar. #### Specialized knowledge of complex system Although the human body is more complex and less well understood than the internal combustion engine, they are both sufficiently complicated as to require specialized knowledge to diagnose and fix/treat. In both cases, therefore, the learning curve of acquiring that specialized knowledge and the costs—money, time, etc.—creates a natural barrier to entry to supply these particular services. The fact that such a barrier exists means that specialization and division of labor is not just advantageous, as it usually is (Roberts, 2010), but truly necessary: self-sufficiency is not an option for anything beyond the most rudimentary oil change or wound care. The fact that the human body is more complicated or that physicians receive commensurately more special training and certifications does not change this fact. It only means that physicians require more reimbursement than mechanics (both in pecuniary form and in prestige), which, in the US, they receive. #### Asymmetric information As a result of the specialized training and knowledge of mechanics and physicians, we have a situation that economists call “asymmetric information,” meaning that one party in a transaction knows something that the other party doesn’t (Arrow, 1963). This includes things on the consumer side where the consumer doesn’t disclose germane information to the provider (mechanic or medical provider), whether due to embarrassment or shame—for example, sexual practices or driving habits (Caine & Tierney, 2015)—or due to not believing that the information is relevant. This informational asymmetry also means that the suppliers have a much better understanding than the consumers of how reliable a diagnostic test is, whether or not a given service is truly necessary. #### Fiduciary responsibility and history of bad actors Because consumers don’t always know better, they tend to trust the experts—in this case, mechanics or physicians—about what services they do or don’t need, and an unscrupulous provider could use that to his or her advantage by recommending services that are not in the best interest of the consumer. Although the trope of the dishonest mechanic who recommends unnecessary parts and services is an old one, the same behavior in physicians—over-ordering unnecessary or low value care due to greed or defensive medicine—has recently come until the public discussion as well (Gawande, 2009; Gawande, 2015). #### Insurance to spread out risk Although we expect to require minor maintenance services for both our cars—oil changes, tire rotations, etc.—and our persons—routine physicals, medications, etc.—we also expect to have larger maintenance needs, but only occasionally. I might need an annual physical an annual tire rotation, but I also expect that there’s a possibility that I will get in a motor vehicle accident and require both medical care and car repairs, both of which will be quite expensive. It’s possible I’ll go through my whole life without a serious accident, but just in case, I’ve bought insurance to cover the costs of that emergency. Furthermore, as of 2014, both health insurance and car insurance are required for almost everyone. New Hampshire and Virginia do not require car insurance and there are some exceptions to the individual mandate portion of the Affordable Care Act (ACA; aka ‘Obamacare’), but in general, insurance is required for everyone with health and/or a car. #### Service is a small part of a critically important outcome Both good health and functioning cars are critically important to the survival and well-being of most people. Obviously, a working car lacks the obvious life-and-death-hanging-in-the-balance mystique of trauma surgery and isn’t critical in densely urban areas, but reliable transportation is a major determinant of health. Our cars get us to and from work, to and from grocery stores, and generally play a role in most aspects of daily living in suburban and rural areas (RHIhub, 2017). However, a mechanic isn’t needed to drive the car, just to fix the car when it breaks; just like a physician isn’t needed to help us perform activities of daily living: health is. But so much of the both our physical health and the “health” of our cars has to do with our environments and our behavior. Salty roads take a toll on the body of a car; and where we live (i.e. how rural) affects how many miles we put on our car. By the same token, where we live affects access to healthy foods and clean air. Our behavior also affects our health and the health of our cars. By some estimates, medical care only accounts for 20% (or less) of health outcomes, and social determinants of health (McGovern, Miller, & Hughes-Cromwick, 2014). I don’t know if anyone has done something similar for automotive outcomes, but it seems plausible to me that this is also the case for cars: regular access to high-quality mechanics account for only 10-20% of vehicle life. #### Market structure Finally, there’s market structure. The majority of mechanics and the majority of physicians are in small, private practices, with a handful of assistants to handle scheduling, billing, etc. Additionally, dealerships and hospitals hire a number of mechanics and physicians, respectively. The prices at dealerships and hospital-owned physician practices tend to be higher, but more reliable. The quality of independent practices tends to vary a lot more, such that you can probably get a better deal on a physical or repair by going to an independent provider, but the transaction costs to identify the high-quality providers can be considerable. ### Where the Similarities End Despite their similarities, auto repair is obviously not health care. Most notably, cars are not sentient beings; they are man-made machines for which we possess a complete blueprint. Thus, the ethical considerations associated with auto-repair are really just commercial/economic ethics, whereas medicine has separate set of ethical considerations apart from economic activity. Several additional differences between auto repair and healthcare exist in the market dynamics of both auto repair and insurance purchasing. With health insurance, the majority of individuals get coverage through their employer or the US government. Auto insurance is virtually entirely private, with individuals purchasing their own insurance. Additionally, price transparency is virtually non-existent in healthcare. While prices still function on an estimate-only basis in auto body repair, the prices are still widely published online and all mechanic shops will provide an estimate in advance at no cost, which cannot be said of medical providers. Nevertheless, the non-ethical differences between healthcare and auto repair are really just differences of degree, rather than fundamental differences in nature of each service. The human body is not fully understood the way cars are, but from the point of view of both the consumer and the mechanic, the result is more or less the same: cars a still a complex system that the individuals don’t fully understand, though the mechanics understand the system better than the customer; the same is true of healthcare, just with a greater degree of complexity in the subject. ### What We Can Learn The point of all of the above was to show that healthcare and auto repair are somewhat analogous, so what can we learn from this analogy? What lessons—successes or failures—from the auto repair industry can we apply to healthcare? #### Lemon Law and Malpractice When a physician orders, say, a total shoulder arthroplasty and the patient survives and is able to move her arm, then the surgery is considered a success. From the perspective of the patient though, the surgery should only be considered a success when it fixes the underlying problem—in the case of a shoulder arthroplasty, the pain or limited motion is resolved. Even if it wasn’t a success and the patient died on the table, the physician would get paid, which is understandable in that surgery is risky and we shouldn’t incentivize physicians to avoid caring for risky patients, but it’s no small surprise that physicians tend to over-order invasive procedures—procedures that other countries avoid due to cost and limited success (Reid, 2010)—physicians see all the benefits with little-to-no risk of a downside. In the rest of the economy, particularly for automobiles, we have “Lemon Laws” that protect consumers—or at least give them a viable recourse—from being taken advantage of by the proverbial used car salesman. Specifically, the Magnuson-Moss Warranty Act of 1975 (MMWA) mandates federal standards for warrantees on consumer products and vehicles, and most states have passed similar, additional laws. MMWA and the subsequent state laws are far from perfect. Warranties are full of legalese and there’s a reasonable argument to be made that such consumer protection laws make us less safe because we all have warning fatigue. Nevertheless, a legal apparatus exists such that warranties need to meet certain standards and are enforceable, and there is a competitive advantage to be gained by having a warrantee or guarantee (Tommy Boy notwithstanding). In medicine, we have malpractice lawsuits, but those are for cases of gross negligence or obvious misdiagnosis; a “successful” procedure that didn’t deliver the advertised results shouldn’t result in a malpractice suit because the physician did everything right in the execution of a given procedure; just not in the advertising and prognosis. Still, physicians should be held accountable for their recommendations, given that they are acting in a fiduciary capacity in an environment of asymmetric information. If they recommend a procedure that empirically has a low rate of solving the problem from the patient’s perspective, they should not receive financial benefits from it, at least not equal to the financial reimbursement they receive when they recommend and perform a procedure that does solve the patient’s problem. Would it be possible to implement a medical warrantee? Politically, the answer is almost certainly no, given America’s history with health reform (Steinmo & Watts, 1995). But such laws have mitigated the negative effects of bad actors acting in a fiduciary role. In the auto industry, false advertising isn’t in the long run financial interest of car salesmen. If we were to implement similar laws in healthcare, we could prevent over-ordering of invasive procedures from being in the long term financial interest of physicians. Such laws wouldn’t penalize physicians with malpractice suits, but they could prevent physicians from being paid as much for doing a procedure that didn’t benefit the patient. For example, rather than being paid the same rate by Medicare whether the patient survives, recovers, or improves, Medicare could pay 100% of current rates for survival (the current standard), 110% for improvement, and 65% for recovery without improvement. Note that while this would seem to incentivize a physician to kill the patient on table (and make it look like an accident) rather than risk a recovery without improvement, I think it’s fair to say that (1) the vast majority of doctors would never intentionally kill a patient and (2) that would clearly fall under malpractice and, if proven, would result in a revoked medical license and possibly criminal charges. #### Insurance Markets Insurance, by definition, disperses risk. For high-cost, low probability events, we disperse the risk such that even in that low probability event, we aren’t wiped out by the cost. For example, home insurance costs less than a dollar a day, but in the unlikely event that your house burns down, you aren’t wiped out financially and left homeless. How insurance is implemented though seems to vary between healthcare and auto insurance. Here are some of the key differences in auto insurance, relative to health insurance, that I believe could be implemented in healthcare to the benefit of patients. ##### Not covering routine services No car insurance covers oil changes, tire rotations, etc. These things are considered givens, and not part of the risk that insurance covers. After all, the probability of needing an oil change is 1, so the actuarial value of an oil change is simply the price an oil change. Similarly, a routine annual physical is an expected expense. There’s no “risk” of having an annual physical—it’s a given—so insurance, by definition, doesn’t make sense. In the auto industry, we follow this definition of insurance, but for some reason, we treat healthcare differently. With very few exceptions, almost everyone can afford a$70-120 annual physical (adjusting for local cost of living), especially with the benefit of health savings accounts to save away \$10 a month. By removing these and other routine medical expenses from the monies insurance are expected to pay, premiums will fall by the expected cost of an annual physical (price * probability an individual in the insurance pool gets a physical) times the overhead markup (about 20% in the US). Furthermore, if individuals are responsible for purchasing their own medical services, demand for price transparency will increase, and competition between providers will drive down prices.

These claims make two assumptions, neither of which are entirely true in the current US healthcare market: competition between insurers, and price transparency of medical services. However, I would argue that both of these unique elements of healthcare are a result of the unique setup of employer-sponsored healthcare, rather than anything fundamentally different about medicine. In both medicine and auto repair, the specifics of the fix will vary wildly by the patient (human or auto), and therefore be more or less expensive, but the fact that most physicians will not, or are unable to, give an estimated cost of services ex ante is more the result of a lack of demand, than an impossibility of doing so. Removing expected services from insurance coverage will, and has already begun to, increase the demand for price transparency in healthcare.

##### Price discrimination

Under the ACA, limits were placed on the premium increase insurers can charge on sicker (read: more expensive) subscribers, relative to healthy subscribers. Specifically, the ACA allows at most a 3:1 ratio between the lowest risk level and the highest (the American Health Care Act, the potential Republican replacement to the ACA, would allow a 5:1 ratio). While this limits the increases unhealthy patients—elderly, smokers, obese patients, sedentary patients, etc.—see in their premiums, less risk stratification also means that healthy patients will pay more for insurance, subsidizing their more expensive counterparts in the insurance pool.

In the market for auto insurance, we can see some evidence of the opposite effect: auto insurers give discounts for things like age (esp. over 25), good grades, driving record, and other negative correlates to getting in a car accident. Granted, these big data algorithms are not without negative social consequences: things like zip code may be highly predictive of an individual’s health and driving record, but also tend to discriminate against the already disadvantaged (O’Neil, 2016). Still, the allowance of such price discrimination, as long as it is done responsibly, can mitigate the negative impacts of an “individual mandate” as seen in auto insurance by minimizing some of subsidy low utilizers give to high utilizers and therefore preventing an insurance “death spiral.” I’m not advocating that this necessarily be a part of health insurance policy, but is worth noting that this has been a successful policy in an analogous market and therefore incentives like this could be a tool to mitigate rising premiums for healthy, young adults.

##### Who purchases insurance?

As previously mentioned, the majority of working-age Americans, get insurance through their employer. This means that health insurance salesmen need to cater to HR managers, rather than directly to patients. Auto insurance, on the other hand, is primarily sold directly to drivers. Health insurance is complicated, but so is auto insurance—many of the terms of insurance like “deductible” and “copay” that allegedly cause so much frustration and confusion in healthcare are still used auto insurance. The difference is that auto insurers like esurance have a strong incentive to make their product more understandable, and, in my experience, they have succeeded in doing so.

The human body is more complicated than a car, so it’s understandable that insurance for health will be more complicated than insurance for a car, but it doesn’t follow that insurance for health should be impossible for the average purchaser to understand, as long as insurers have the incentives to make their policies understandable. Removing employer-sponsored health insurance would increase employee pay (by transferring the portion of insurance that employers pay directly to the workers) and incentivize insurers to demystify some of the nuances of health insurance for subscribers.

##### Individual Mandates

The individual mandate portion of the ACA was highly contentious with voters. Even many (~46%) liberal voters have an unfavorable view of the individual mandate (KFF, 2016). This begs the question: why? We have an individual mandate on auto insurance, why is that not as contentious? My view is that this is primarily the result of a well-executed political theater on the part of conservative politicians and pundits, but given the importance in an individual mandate in preventing a death spiral, liberal politicians would do well to make this comparison. Auto insurance requirements are not contentious, so it’s unclear why similar requirements in healthcare should be so contentious.

### Closing Remarks

#### Political implications

As noted throughout the “what we can learn” section of this post, I believe that treating health insurance more like auto insurance would be beneficial to consumers. I also acknowledge that this is a tall order politically, given the tendency of individuals—politicians, pundits, and voters alike—to view healthcare as exceptional. That’s really the main point of this post: healthcare may be unique by degree, but it is not unique in its fundamentals. Framing the discussion differently and putting health insurance in terms more people understand demystifies the topic and, I believe, increases the likelihood of finding common ground and a consensus.

One of my goals for this year is to write more, and this post is part of that goal. That said, I’m not entirely happy with this post, especially the “what we can learn” section. However, I’ve spent enough time writing this, and believe that done is better than perfect. I would like to come back at a later date to revisit some of these lessons with mathematical models and data where it’s available. But for now, I ask you, my readers, to not focus on the specific lessons learned, but rather on the main point: healthcare may be unique by degree, but it is not unique in its fundamentals. The lessons are more of examples than specific recommendations.

### References

Arrow, K. J. (1963). Uncertainty and the Welfare Economics of Medical Economics. The American Economic Review, 53(5), 941-973.

Caine, K., & Tierney, W. M. (2015). Point and Counterpoint: Patient Control of Access to Data in Their Electronic Health Records. Journal of General Internal Medicine, 30(S1), 38-41. doi:10.1007/s11606-014-3061-0

Gawande, A. (2009). The Checklist Manifesto. Henry Holt and Company.

Gawande, A. (2009, June 1). The Cost Conundrum. The New Yorker. Retrieved from http://www.newyorker.com/magazine/2009/06/01/the-cost-conundrum

Gawande, A. (2012, August 13). Big Med. The New Yorker. Retrieved February 13, 2017, from http://www.newyorker.com/magazine/2012/08/13/big-med

Gawande, A. (2015, May 11). Overkill. The New Yorker. Retrieved from http://www.newyorker.com/magazine/2015/05/11/overkill-atul-gawande

Hekman, K. (2010). Curiosity Keeps the Cat Alive. Holland, MI: Trillium Arts Press. Retrieved from http://www.lulu.com/shop/kenneth-m-hekman/curiosity-keeps-the-cat-alive/paperback/product-10910381.html

KFF. (2016, December 1). Kaiser Health Tracking Poll: November 2016. Retrieved from KFF.org: http://kff.org/health-costs/poll-finding/kaiser-health-tracking-poll-november-2016/

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