> The reason Nordics stick with the system is because they can see that they come out ahead—not just as a group, but as individuals.
Everyone cannot "come out ahead." Surely, there must be some people who are paying more into the system than they are getting out. The rest are voting away the dollars of the others. Moreover, economics is about "what is seen, and what is not seen." What might this money be doing otherwise? That can't be answered. But it stands to reason that the owners of the money would be attempting to put it to profitable use.
Everyone can come out ahead if the system is more efficient. Health care that cuts out the parasitic middlemen and mountains of paperwork of the insurance industry, for instance.
The author acts as if all people get more out of welfare programs than they put in. In fact, she goes so far as to say that people pay taxes for "selfish" reasons.
Nothing could be further from the truth. If this were true, then taxes would need not be compulsory, as it would be in an individual's best interest to pay them. Let's be honest. These programs benefit /some/ people and take from others. It is essentially the majority voting to appropriate resources from the minority.
And how can the author claim that these services are "high quality"? Does she know how much it would have cost in the free market? What if a the same "high quality" medical check-up would cost $5 in the free market and $50 in Finland? It should have been at least 10X better than the one in the free market in order to be deemed "high quality". I'm not saying it's not better, I am just saying that she can't claim such things without knowing the data.
Further, I would much rather have lower taxes than a year of paid leave. If the average person works 40 years and is taxed at a mere 25%, then they might as well have had 10 years of unpaid leave, and no taxes. I realize that there are other reasons to pay taxes, but my point is that, out of 40 years, a paid year off is equivalent to only a 2.5% decrease in taxes for that individual. And if someone actually did get more out of taxes than they put in, even ignoring the incentives and efficiency of government, it is still because they are taking that money from somebody else.
I could go on about the rest of this article, but I think I'll stop here...
> If this were true, then taxes would need not be compulsory, as it would be in an individual's best interest to pay them.
In the prisoners dilemma, it is in both prisoners' best interest to defect, but that outcome is undesirable for both of them. In the same vein, it usually isn't in an individual's best interest to invest in their community, because they could gain more individual wealth by not sharing it with the people around them. But that is a great way to create a few very rich people and a lot of very poor communities.
So do Scandinavians pay high taxes for selfish reasons? Obviously they don't think that paying higher taxes for universal health care will make them richer than their neighbor. Say you vote to lower the tax rate and dismantle universal healthcare. Suddenly you have a few extra thousand to invest in the market each year. That move was certainly in your best interest. And then your house is foreclosed because a purely random onset of cancer cost you two hundred thousand dollars in medical bills. The definition of "best interest" has changed quite a bit.
People are really bad at making long term decisions, about themselves[0] and their community[1]. Compulsory, high, and progressive taxes certainly sound like "we know what to do with your money better than you do" and that is hard to swallow. But when you consider them in the context of game theory, it's more like "we can achieve more together than alone".
That being said, it will always depend on the trustworthiness and efficiency of the government, and that is a very difficult thing to achieve. Fortunately for the Scandinavian countries, they seem to have it pretty well figured out.
How is that outcome undesirable for both of them? On the contrary, the option of collusion in the prisoner's dilemma is desirable for neither of them.
The prisoner's dilemma only serves as an example to prove that there exists a situation in which collusion can yield an optimal result for a given metric (i.e. aggregate jail time). Nobody denies this. You have yet to make the case for how this applies towards any of the topics discussed. Are you saying that aggregate utility/welfare/health is optimized by having universal health care? If so, what specific metrics are optimized and by how much? What about the costs associated with doing this? Are the benefits greater than the costs? If so, how is this determined? If you want to make these claims, the burden of proof is on you.
As for your hypothetical, I am not advocating that Scandinavian countries suddenly abandon universal health care. I am simply refuting the points made in this article. If you want to have a discussion about the how the less fortunate would have health care in a free market, I am happy to oblige.
The double defection outcome is undesirable because they each serve 2 years. The double collusion outcome is desirable because they each serve 1 year. The other two options are more desirable for each prisoner, but would never happen. Either they can't trust each other and both defect, or they can trust each other and both collude.
Likewise, taxes paid for selfish reasons cannot necessarily be optional, as you suggested. If the tax is optional, you cannot trust your fellow citizens to pay it, and therefore you won't pay it. But a compulsory tax removes that distrust.
My point is mainly that you can be selfishly motivated but still require consensus. The author supports Scandinavian policies not (entirely) because it helps everyone else, but because it helps themselves. Yet they still recognize that everyone must participate for it to help anyone at all.
I'm not trying to make any claims about how efficient a socialist system is. Simply arguing against the point you made about paying optional taxes.
Actually we do know how much it costs in the free market, by looking at the prices for medical care in the United States. The pricing of healthcare in the free market was so exorbitant that a bill had to be pushed through, because the majority of the population was priced out of healthcare.
Now, we have two exhibits to compare from: ours, which we know did not work, and Nordic, which we also can see works. Taking these two exhibits into consideration, logic tells me that the Nordic system should be implemented in the United States, yesterday.
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[ 5.1 ms ] story [ 47.2 ms ] threadMore people live in the San Jose/San Franciso/Oakland metro area than live in Norway, Denmark, or Finland.
Everyone cannot "come out ahead." Surely, there must be some people who are paying more into the system than they are getting out. The rest are voting away the dollars of the others. Moreover, economics is about "what is seen, and what is not seen." What might this money be doing otherwise? That can't be answered. But it stands to reason that the owners of the money would be attempting to put it to profitable use.
Nothing could be further from the truth. If this were true, then taxes would need not be compulsory, as it would be in an individual's best interest to pay them. Let's be honest. These programs benefit /some/ people and take from others. It is essentially the majority voting to appropriate resources from the minority.
And how can the author claim that these services are "high quality"? Does she know how much it would have cost in the free market? What if a the same "high quality" medical check-up would cost $5 in the free market and $50 in Finland? It should have been at least 10X better than the one in the free market in order to be deemed "high quality". I'm not saying it's not better, I am just saying that she can't claim such things without knowing the data.
Further, I would much rather have lower taxes than a year of paid leave. If the average person works 40 years and is taxed at a mere 25%, then they might as well have had 10 years of unpaid leave, and no taxes. I realize that there are other reasons to pay taxes, but my point is that, out of 40 years, a paid year off is equivalent to only a 2.5% decrease in taxes for that individual. And if someone actually did get more out of taxes than they put in, even ignoring the incentives and efficiency of government, it is still because they are taking that money from somebody else.
I could go on about the rest of this article, but I think I'll stop here...
In the prisoners dilemma, it is in both prisoners' best interest to defect, but that outcome is undesirable for both of them. In the same vein, it usually isn't in an individual's best interest to invest in their community, because they could gain more individual wealth by not sharing it with the people around them. But that is a great way to create a few very rich people and a lot of very poor communities.
So do Scandinavians pay high taxes for selfish reasons? Obviously they don't think that paying higher taxes for universal health care will make them richer than their neighbor. Say you vote to lower the tax rate and dismantle universal healthcare. Suddenly you have a few extra thousand to invest in the market each year. That move was certainly in your best interest. And then your house is foreclosed because a purely random onset of cancer cost you two hundred thousand dollars in medical bills. The definition of "best interest" has changed quite a bit.
People are really bad at making long term decisions, about themselves[0] and their community[1]. Compulsory, high, and progressive taxes certainly sound like "we know what to do with your money better than you do" and that is hard to swallow. But when you consider them in the context of game theory, it's more like "we can achieve more together than alone".
That being said, it will always depend on the trustworthiness and efficiency of the government, and that is a very difficult thing to achieve. Fortunately for the Scandinavian countries, they seem to have it pretty well figured out.
[0] http://www.forbes.com/sites/maggiemcgrath/2016/01/06/63-of-a...
[1] https://en.wikipedia.org/wiki/Flint_water_crisis
The prisoner's dilemma only serves as an example to prove that there exists a situation in which collusion can yield an optimal result for a given metric (i.e. aggregate jail time). Nobody denies this. You have yet to make the case for how this applies towards any of the topics discussed. Are you saying that aggregate utility/welfare/health is optimized by having universal health care? If so, what specific metrics are optimized and by how much? What about the costs associated with doing this? Are the benefits greater than the costs? If so, how is this determined? If you want to make these claims, the burden of proof is on you.
As for your hypothetical, I am not advocating that Scandinavian countries suddenly abandon universal health care. I am simply refuting the points made in this article. If you want to have a discussion about the how the less fortunate would have health care in a free market, I am happy to oblige.
Likewise, taxes paid for selfish reasons cannot necessarily be optional, as you suggested. If the tax is optional, you cannot trust your fellow citizens to pay it, and therefore you won't pay it. But a compulsory tax removes that distrust.
My point is mainly that you can be selfishly motivated but still require consensus. The author supports Scandinavian policies not (entirely) because it helps everyone else, but because it helps themselves. Yet they still recognize that everyone must participate for it to help anyone at all.
I'm not trying to make any claims about how efficient a socialist system is. Simply arguing against the point you made about paying optional taxes.
Now, we have two exhibits to compare from: ours, which we know did not work, and Nordic, which we also can see works. Taking these two exhibits into consideration, logic tells me that the Nordic system should be implemented in the United States, yesterday.
http://en.wikipedia.org/wiki/Wallenberg_family