Senator Edward Kennedy

Frederic Sautet

Americans like heroes and to many people Senator Kennedy was one. It is not the place to judge the deep motives for his actions, I leave that to others. The reaction to his death is telling, however, of the situation in which the country stands – I mean as far as the battle of ideas is concerned. For a country that was founded on the precept that political power is dangerous as it can lead to corruption and totalitarianism, it is strange that its politicians are often revered as gods. I do not know if Senator Kennedy was ignorant of the teachings of economics, but his lifelong fight in favor of universal health care and various other socialistic legislations paved the way to impoverishment and social disaster. Like many in politics, he stood for ideas that seemed noble and beautiful to the ignorant mind, but were truly destructive of the social order.

Instead of worshiping politicians, we should wake up to the current situation. Since the fall of the Roman Empire, nations and civilizations have fallen because of two things: fiscal recklessness and inflation. This is because bad policies are rarely reversed. Instead, politicians attempt to mitigate the consequences of their stupidity through fiscal expansion and inflation. The U.S. was born under the “Old Time Fiscal Religion,” as Richard Wagner and James Buchanan put it. For decades, fiscal prudence and low inflation were the mantra. Not anymore. So let’s be honest, while Senator Kennedy may have been well-intentioned (and I leave that to God to judge), he has promoted the expansion of government and the establishment of socialist policies in the United States. With others, he has pushed ideas that have made fiscal and individual irresponsibility acceptable. Is this what being a true American hero is about?

This goes to show that it is nearly impossible to be a libertarian politician. Few would praise someone who fought all his life for small (or no) government and opposed all laws that favored the poor (or any body else for that matter). There is no glory in opposing the silent tyranny of socialism. But this is the road the true saints have to follow. “Being in this world but not of this world” is not an easy thing to do, but it is, in my view, our calling. Austrian economists do precisely this: speaking truth to power and seeking glory not in this life but in the next.

And for those of you who are catholic and are revolted by the praise Senator Kennedy has received from the Church, read Fr Thomas Euteneuer’s article (thanks Eileen for the pointer). With all this said, I pray that Senator Kennedy’s soul may rest in peace.

Comments

[Peter Boettke]

One of the issues that have really been clarified for me over the last few years is that what could be termed the Horwitz point --- Ought doesn't imply can --- can be reversed and -- Can doesn't imply ought. Yet in politics, the way Senators and Congressmen and Presidents talk is all about whether they "can" pass a piece of legislation. Oren Hatch the day after Ted Kennedy was on Fox news talking about the virtues of Ted Kennedy because he could work with him to get things done --- they could work together to get the votes to pass legislation. Hatch didn't stop to ask whether they "ought" to pass. He even ended the interview by saying that it was too bad that Senator Kennedy's time ran out because he was sure they could have worked together to get a health care bill passed.

This penchant for "Yes we can" along with statist values and the lust for power (and in Kennedy's case a rather ugly personal history which has been swept under the rug) really does not speak well for the fate of the US economy and a politics fitting of a free people.

[Barkley Rosser]

Hmmm. Kennedy's "lifelong fight in favor of universal health care" led to "impoverishment and social disaster"? Really? The US is the only high income country that does not have that, and many of the nations that have such health care are not impoverished nor social disasters (although some are).

I would remind folks that at least earlier in his career, Friedrich Hayek supported national health insurance. Much of this discussion gets really hysterical.

BTW, this is picky, but "catholics" are a larger set than "Catholics."

[Sinclair Davidson]

"while Senator Kennedy may have been well-intentioned (and I leave that to God to judge)"

Why? If you think he was a grub, say so. The head note at the top of chapter five of The Constitution of Liberty sums it all very nicely.

"It is doubtful that democracy could survive in a society organised on the principle of therapy rather than judgement, error rather than sin. If men are free and equal, they must be judged rather than hospitalized."

[Sinclair Davidson]

Barkley, I'm really stuggling to understand the point of your comment. Are you denying that social legislation ALWAYS leads to 'impoverishment and social disaster', or that it CAN lead to 'impoverishment and social disaster' or that it has EVER lead to 'impoverishment and social disaster'. Can I suggest that rather than pontificate from the comfort of the US that you undertake a field trip to, say, remote aboriginal settlements in Australia and see for yourself the impact social legislation has had on local communities? See for yourself how goverment intervention has 'improved' peoples lives. After that perhaps you could visit some of the people in the waiting lists for so-called 'elective' surgery. It is simply extraordinary how much human pain and suffering and misery is subsumed into the term 'elective surgery' as if these people are choosing to have otherwise unnecessary medical proceedures.

[Current]

Barkley,

I am a European, I'm insured by not one but two national governments, the UK and Ireland. And I have private health insurance. Why do I have private insurance? Because the state systems are slow motion train wrecks.

Sadly, Ludvig Von Mises was right about calculation. My fellow Brits are in the process of learning that.

[Current]

See the comments on healthcare here...

http://www.countingcats.com/?p=4110

All entirely correct. They have being all being in the UK recently.

[Rafael Guthmann]

Barkley Rosser, well the fact is that in America the state pays about 50% of the medical bills of the population. That was in part influence of kennedy.

[Current]

"They have being all being in the UK recently."

I meant to say "They have all being in the UK headlines recently."

[Sukrit Sabhlok]

Does anyone have an opinion on whether Austrian economics is useful in making oneself personally wealthy? Many Austrian-influenced investors such as Ron Paul (a millionaire, partly due to gold holdings), Peter Schiff, Jim Rogers and Chris Leithner have written books about the topic.

I'm told that What every Investor should know about Austrian economics and the hard-money movement (1988) by Mark Skousen is a must read.

[Roger Koppl]

I think Barkley makes a good comment on getting hysterical. If Kennedy's "lifelong fight in favor of universal health care and various other socialistic legislations paved the way to impoverishment and social disaster" how can it bethat "we're all getting richer"? (http://austrianeconomists.typepad.com/weblog/2009/08/more-evidence-that-were-all-getting-richer.html)

[Barkley Rosser]

Sinclair,

I am denying your first statement. Certainly social legislation can lead to problems. I do not think what goes on with aboriginal populations in Australia is remotely relevant to whether or not there should be some sort of national health insurance in high income countries, something, I repeat, that was supported for quite some time by Hayek.

Probably not the time or place to get too far into a health care debate, but, yes there are lines for elective surgery, whereas in the US we have people simply not even getting in lines for more serious problems and not getting them taken care of. Again, we have the spectacle of not only paying for more for health care than any other counry by a wide margin, but having lousy life expectancies and infant mortality rates (and some of the other countries also have lots of minorities and immigrants), but actually paying a higher percent of our GDP for medical care.

Regarding "impoverishment," well, thousands of people a year in the US declare personal bankruptcy because of inability to cover medical bills, indeed, I think it is the #1 reason for such declarations. The numbers in UK, France, and Germany? A big fat zero. Of course there are people involved in the medical industry who are not impoverished, with doctors' time now so valuable tha they can no longer visit the sick in their homes, as they did when I was a kid in this country, and which they still do in some other countries, such as France.

I also note on the impoverishment issue, that the high cost of medical care has become a major problem for many US businesses compared to their foreign competitors.

Also, the medicare part of the health care system seems to run fairly well, although its costs are soaring. Clearly, getting costs under control are something we need to do, but a lot of other countries are able to do it with larger portions of their medical system controlled by the state than in the US.

Regarding "rationing," it is done here by "do you have insurance"? or "can you pay"? with people in fact dying from being turned down by private insurance companies for treatment. The cases are legion. There are people in Canada and UK in pain for waiting for elective surgery, but they are waiting for elective surgery, not life-saving surgery, and it is precisely because of such things that we have such lousy life expectancy numbers despite all the money we pay.

And, once again, for any of you who wish to apply knee jerk slogans and arguments without thinking too carefully, ask yourselves why Friedrich Hayek supported national health insurance for so long.

[Sinclair Davidson]

Barkley - this is where you've been sucked in "elective surgery, not life-saving surgery". Elective surgery is any surgery for a condition that is not immediately life threatening. (So people can and do die while on the waiting list - it took me a long time to realise that point). I can think of arguments for national health INSURANCE that do not involve the kind of national health systems that many high-income economies have. For example I have to make a 1.5% tax payment for Medicare (but that does not cover the full cost of the Medicare system that is really paid for out of general revenue) AND I have private health insurance (that is mandated by government for individuals who have an income greater than A$50,000). There are several models that are available that are not the European model.

So long story short - I agree 'ALWAYS' is probably a strong term, too strong. But given a choice I think a lot of people would like the US system (bearing in mind that I'm not convinced that the US outcomes are necessary as bad as you seem to suggest - perhaps we are both suffering from the greener grass fallacy).

(sorry the CAPS but I don't think this blog supports html codes)

[Jim Rose]

Hi Frederic,

To be fair to Kennedy, and as David Henderson and others have noted, he was heavily involved in the Senate in the deregulation of airlines and trucking. I have never seen a good explanation of why given his general outlook on the virtues of government. This 1978 reform started a global movement.

London's Independent on Sunday has an excellent summary of his life titled "The Fixer". His pampered rise, drunken fall and later redemption are all openly discussed. Kennedy was a political entrepreneur of the left. After 47 years in office, you would expect him to have developed some level of skill at pushing his legislative agenda.

As for Catholicism and left wing politics, Murray Rothbard’s memo in May 1960 on Catholicism and Capitalism is to the point. There is no official and specific Catholic position on capitalism and “papal pronouncements on social questions are generally highly vague and take on a consciously eclectic hue.” Rothbard noted the enormous differences among Catholics on political and economic questions; and that Catholics are to be found among left-wing anarchists, socialists, middle-of-the-roaders, fascists, and ardent free-enterprisers and individualists.

cheers,

Jim Rose

[Steve Horwitz]

Barkley,

You know it's possible that Hayek was wrong about some things. ;)

[Lee Kelly]

"You know it's possible that Hayek was wrong about some things." - Steve

Heretic.

[Roger Koppl]

Barkley,

How confident are you that Congress is capable of passing something that improves healthcare? As you probably know or guess I'd like to see some sort of national program for health insurance. I think I said so in print in David Colander's 2000 volume on teaching complexity. I'm pretty worried, however, about what this Congress might really do. The version of the House bill that I found on the web

http://edlabor.house.gov/documents/111/pdf/publications/AAHCA-BillText-071409.pdf

has a "limitation on new enrollment" (p. 16). So isn't all the condescending Democratic babble about how this bill does not take away anyone's health insurance is bit off the mark? Yes, if you don't change, you're grandfathered in. But the bill as written sure looks like it's pointed toward a single payer system. Now, the August "town meetings" have probably killed the "public option." My point, though, is to express doubt that this Congress in this country today can pass something that's actually better than the lousy unfair system we have today. How do the odds look to you? How do you respond to my worry?

[Mario Rizzo]

I never liked any of the Kennedy brothers. Hypocrites all. They were *never* adherents of Catholicism when it came to extra-marital sexual activity. The Teddy K. was against firm Catholic teaching that Catholic politicians should not advocate legal abortion. He divorced his first wife and then "remarried" (Catholic snare quotes). And then there was the never fully explained death of Mary Joe Kopechne (whose family was not powerful and rich like the Kennedys).

Ok. So then he tries to redeem his life by advocating state compulsion to achieve possibly good ultimate ends. But the means contained all sorts of bad consequences like his advocacy of the minimum wage. And then he concludes his life with a letter to the pope touting all of his own good deeds (under the guise of asking for prayers -- did he not know the Catholic doctrine that God hears the prayers of powerful and powerless alike?). I wonder if it is a part of the Catholic doctrine that at the immediate Judgment all of your errors become clear to you, even when they are well-intentioned. In any event, it relieves me that he is gone. We just have to get over the excessive political ruling-class period of mourning. This too shall pass.

[KW]

Point taken on the Kennedys Mario, but one question for everyone:

It is alleged that JFK signed an executive order, # 11110, which effectively stripped the FED of it's powers by delegating the authority to print silver certificates to the Tres. Secretary.

note for some references: http://en.wikipedia.org/wiki/Executive_Order_11110

Does anyone know of any reliable literature addressing this matter?

[pilot232]

KW,

While I have no desire to reinforce your hijacking of this comment thread, the wikipedia article you cite is both inarticulate and incomplete in its explanation.

Take a gander at this research paper from the Congressional Research Service (an arm of the Library of Congress):

http://home.hiwaay.net/~becraft/FRS-myth.htm#hd16

Or this:

http://mcadams.posc.mu.edu/weberman/jfk.htm

[KW]

Thanks. That is why I asked for reliable literature..

[Current]

I notice that folks supporting state healthcare in the US such as Barkley seem to treat the existing system as free market. But that's a long way from the truth isn't it?

For example, the current system allegedly causes a lack of availability of PCPs. But, here in Ireland GPs (which are almost the same as PCPs) are private businesses as they are in the US, and there is no shortage of them, appointments are easy to get and quite cheap. So, where is the evidence that the market is to blame?

[Roger Koppl]

I've posted a semi-defense of Kennedy at Thinkmarkets:
http://thinkmarkets.wordpress.com/2009/08/31/ted-kennedys-contributions-to-freedom/

I don't have an opinion on his overall career. It's hard to do the counterfactual. But I think he has more in the plus column than many ("classical") liberals have given him credit for.

[Barkley Rosser]

Sinclair,

There is no such thing as "the European model." UK has physicians as employees of the state, full-bore socialized medicine introduced in 1946 by Atlee. Some have Canadian-style single payer (government insurance) systems where doctors work for themselves and customers freely choose them. Others, such as Germany and France have mixed systems, with France's evolved over a period of time and rated best in the world a few years ago by the WHO.

Roger,

I fear that you are right that hopes for reforms that might improve things are now looking dim for a variety of reasons.

Current,

Sure, but some of the most cost-raising parts of our system are in its purely private part, such as the administrative expenses private insurance companies engage in to carry out their death panel decisions regarding who gets covered for what and who does not.

[Current]

Barkley,

Can you show that the private part creates such expenses though?

How is health insurance different from other industries?

[Barkley Rosser]

Current,

These expenses are minimal in countries where health insurance is either provided by non-profits or by the state, meaning all other high income countries.

[Current]

There are four problems with this

* That difference isn't the only difference between countries though is it? There are many others.

* Where are the statistics to show that these unnecessary administrative expenses are a major factor in healthcare cost? What evidence shows that they are unnecessary

* Even if they are unnecessary given the amount of regulation in the healthcare sector it is quite possible that they are an outgrowth of that.

* If you are right about the above why should non-profits or the state act differently in the long run? How are their motivations really different. When he was Taoseach (Prime Minister of Ireland) Bertie Ahern accused the health insurance provider BUPA of putting profits before people. BUPA are a non-profit organization.

[Barkley Rosser]

Current,

I just googled "administrative costs health care." I got that such costs are 14% in private insurance and 5% in government run programs in the US. The reason they are so much higher in the US private health insurance companies than in all those countries where there is universal coverage by one method or another is very simple: the private insurance companies are looking for reasons not to pay for peoples' care (their role as the actually existing death panels), whereas there is no need to do this and it is not done in a system with universal coverage.

So, the whole thing is quite backwards from your argument. Sorry.

[Zac Gochenour]

There is little difference between the clerics of the Catholic Church and politicians like Kennedy. Both seek power where they can find it, and manipulate people through demagoguery. They appeal to the worst in people - they are, quite simply, evil. They are concerned with power and control - of spreading their beliefs and imposing their will on others. They preach their slave morality from their high pulpits and expect the world to fall in line.

I agree with Sautet that it is nigh impossible to be a libertarian politician. Once you realize this it is simple to realize that it is just as difficult to be a libertarian Christian - a religion that preaches salvation gained by prostating before the teachings of "wise" men and the imaginary god they worship. Believe without question and without reason, they ask, and forsake the pleasures of this world for a higher calling. Is it not plain that the voices are one in the same?

So long as men bow down to gods and kings they remain in chains of their own design. They may find themselves content, but they will never find themselves free.

[Sam]

"Once you realize this it is simple to realize that it is just as difficult to be a libertarian Christian"

Or, it's difficult to be a Christian and not a libertarian. Salvation is achieved individually, so the Church should just provide information about how to achieve this (according to Christian doctrine). There is no place for power or forcing people to be Christian or not to sin.

[max]

Ok, to put europe a bit into perspective. Europe's health care is actually pretty divers, which is something often forgotten by media and commenters alike.

While GB and Canada went the way of nationalized healthcare and rationing, France and Germany went the other way. They instituted one or multiple state-backed health insurance companies and left the market open for private companies alike. However, unlike GB they let costs rise and took over those costs before starting rationing. The difference is quick service with low waiting time and excellent hospitals at the price of unsustainable debt.

About 10 years ago, they started to ration in Germany and in France with mostly focusing on wages and only partial-repayment of medicine by health insurers. However, the guiding principle is still "no rationing in health care services" to limit queuing.

I think this is what makes France and Germany different from, say, Canada.

As long as costs are non-critical, this will be viewed as the best system, because everyone gets good healthcare with low waiting times. However, for special procedures Germans and French like to come to the US, because this is where you get high-tech care from the best of the best. Germany and France have medical teaching institutes that are the best (especially france if nobel prices are an indication). Many of their graduates however like to go to the US, because salaries are better there and they don't have to do 24 h shifts...

[Current]

Barkley,

This isn't the sort of answer I expect to get on this blog. I can't believe I'm actually talking to an economist.

Barkley: "I just googled "administrative costs health care." I got that such costs are 14% in private insurance and 5% in government run programs in the US."

Clearly that doesn't mean that if private insurance were abolished then the remaining government run programs would have 5% costs. How do you think the government run programs avoid costs? How do they make prices?

Consider also that the administrative cost of many unsuccessful nationalized industries has been low. Whenever I meet a socialist one of the first benefits he trots out is the reduction of administration costs that bringing a whole industry under central control would bring. Second would be the economies of scale.

If the failure of communism should have taught us anything it's that these improvements do not overcome Mises and Hayek's calculation arguments.

Barkley: "The reason they are so much higher in the US private health insurance companies than in all those countries where there is universal coverage by one method or another is very simple: the private insurance companies are looking for reasons not to pay for peoples' care (their role as the actually existing death panels), whereas there is no need to do this and it is not done in a system with universal coverage."

My car insurance company doesn't want to pay out on my car insurance. My ISP would rather not supply me with an internet service since it costs them money. All businesses that don't sell goods are "looking for ways not to pay". Does this mean we should nationalize car insurance and all the other service industries (including labour)? Logically it does, it's an argument for communism.

Of course there is a need for this in nationalized systems. They can't provide every service available. There must be something like NICE in the UK.

[Web Design Kent]

A truly great man, great family, a man who cared about the little man or woman a champion of the poor and those that were not as lucky in life as he and his family, who dedicated himself to be the best that is the United States of America. He was a great man and this is a tremendous loss to the entire nation, my heartfelt condolences to the Kennedy family. This is a very sad day for our country.