Wednesday, March 15, 2017

Plans, Trains, and Automobiles

By Kevin D. Williamson
Wednesday, March 08, 2017

To a visitor from the late 19th century, a modern passenger train would be familiar enough. Even the wi-fi on Amtrak would be within the realm of his imagination, at least if he was already familiar with Mr. Marconi’s radiotelegraphy experiments. But even if he was familiar with Karl Benz’s petrol-powered automobile (the first of them was built in 1886), much of what is on the road in 2017 would have to seem to him like magic. Imagine trying to explain to him how the self-driving features in a Tesla or Mercedes sedan work, or even how the sensors that make such technology possible work. “Well, Mr. Wells, in the front bumper of the car are eight cameras that understand what they’re seeing, with electronic brains that solve math problems at the speed of light . . . ”

Progressives love trains and despise cars — remember Arianna Huffington’s daffy campaign against the SUV? — along with “car culture.” This is a consequence of the fact that our politics are rooted in our aesthetics, that “politics is downstream from culture,” as Andrew Breitbart memorably put it. Progressives prefer urban life to suburban or rural life (if you dislike car culture, chances are you’ll truly hate truck culture and gun culture) and desire to live in communities that are scaled to pedestrians rather than scaled to the Santa Monica Freeway. Lots of people who are not politically on the left prefer that sort of life, too: TriBeCa really is a more interesting and pleasant place to foot around in on a Saturday afternoon than is Houston, if that’s your thing.

Trains are the preferred mode of transit if your ideal is central planning. Automobiles are the preferred mode of transit if your ideal is spontaneous order. It is in the nature of trains that they tell you where to go; it is in the nature of automobiles (for the time being, at least!) that you tell them where to go. If you have ever lived in New York and relied on the trains to get around, then you understand both the virtues and defects of the planning model: If everything goes according to plan, the system works pretty well. When the plan breaks down — which it always does — it is a mess, often a mess that leaves you with no choice but to go outside the system for an alternative. (That fellow from the 19th century would probably think Uber is pretty nifty.)

Likewise, if you’ve spent much time in Houston, Atlanta, Los Angeles, or any American city that got most of its growth in the post–World War II era, then you appreciate the virtues and defects of the spontaneous-order life: The price of gasoline is unpredictable, traffic is terrible in some places (although here there is a bit of central planning to blame, too, in the form of Dwight Eisenhower’s ill-considered federal highway system), the cost of owning and maintaining a car is very burdensome for some people and introduces an unwelcome degree of financial uncertainty into their lives, some people insist on driving their F-350 Super Duty trucks 87 mph while swerving from lane to lane, suburban sprawl, etc.

Transit, like most everything else in life, is about trade-offs. There are many roads that lead to home and subways that will take you to the office, but there is no train to Utopia.

Question: Do we want our health-care system to be more like the spontaneous order that produces both awesome cars and terrible traffic, or do we want it to be more like the New York City train system, a system that works well enough when it is working — which isn’t often enough?

The passage of the Affordable Care Act was a vote for trains, and the House Republicans’ recently unveiled and remarkably modest attempt at reforming it is a vote for a train system with a slightly different fare structure and schedule.

We should think a little bit about why cars — and not just cars for the rich — are so much better than they used to be.

The short answer, of course, is competition. Competition is a spur to innovation, and it is a spur to — more important — investment. What transformed Karl Benz’s first primitive automobile into the wondrous machines we see before us on the road every day was the massive deployment of capital. If you think not only of all the machinery, financial assets, and human ingenuity that are at work making automobiles today but also of all the machinery, financial assets, and human ingenuity that have gone into the incremental development of the modern automobile over the centuries (many of the technologies that make a modern car run far precede the first automobiles) — it is beyond comprehending.

Of course that has happened with trains, too — modern trains really are superior to their 19th-century counterparts — but in a very different economic context, one with markets driven not by individual consumers but by governments and large enterprises working not from changing individual preferences but from various kinds of central plans, a market in which new equipment is purchased not every few years but every few decades. At the high end of the automobile market are buyers who get a new car every other year — and who want something new and better every other year.

That part is key. There is something egalitarian about trains and other forms of mass transit, but it is in the individualistic automobile market that we really see a massive transfer of wealth that no one ever notices. In cars as in mobile phones and many other consumer goods, new technologies, new materials, and new concepts are developed most often at the high end of the market, with the associated costs borne — enthusiastically — by early adopters and high-end purchasers. Things like cruise control and automatic windows begin as luxuries for Rolls-Royce owners and Cadillac drivers, but end up as everyday conveniences for working stiffs with Hyundais, who enjoy an invisible subsidy from the high end of the market.

But that model implies that there will be periods of time during which some nifty and useful things will be available to Mercedes owners but not to Chevy owners. We understand that situation and endure it without complaint when it comes to automobiles, but not when it comes to health care. For reasons that are by no means irrational or less than humane, we want health care to be an all-Lamborghini market rather than a market with Lamborghinis and Fords and Hondas (and bicycles and eccentric guys who walk everywhere and the government-subsidized bus for those who cannot afford a car of their own). The coverage mandates in Obamacare are essentially a set of rules that makes that outlook a matter of federal law.

As long as government remains the central player in health care (acting largely through the instrument of health insurance) and there is no truly robust, individual consumer market both for health-care services per se and for health insurance (these are separate enterprises: health care means medical services, while health insurance is a financial service), then the competition, innovation, and massive investment that are necessary to put the medical business on the same better-and-cheaper-every-year trajectory as the mobile-phone business or the automobile business are simply not going to happen.

But allowing a market to work means accepting some realities that we wish we could ignore: There will be inequality in access and inequality of outcomes; there will be uncertainty; some people will make bad decisions with results that we will not like; there will remain a need for government-funded services for those who cannot provide for themselves. Americans will eventually have to get used to the fact that they cannot enjoy X level of health-care consumption while paying < X, no matter how many shells we have in the shell game.

A better first step than what has been offered would be working to jailbreak Americans out of their employer-based plans and letting them loose in a market in which they can choose plans not only across state lines but across national borders, too. (Surely there are some firms in Switzerland or Singapore that would like to be dealt into this multi-trillion-dollar game.) It is all good and fine to say “Let markets work,” but that requires a market — a market with real prices — which does not really yet exist. Tweaking the ACA here and there, while needful, will not get that done. If Republicans are in fact telling the truth that this is only the opening round in an iterative process of health-care reform, that’s fine: Trying to do everything at once is usually a recipe for failure or chaos. But majorities aren’t forever, and if Republicans are going to get moving in the right direction, they had better get moving quickly. Eventually, that train will leave the station.

No comments: