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    « Bat Mitzvah Speeches | Main | Eulogies »
    Monday
    May122008

    Unintended Consequences

    Someone I know cannot get a job. Potential employers simply never ever respond to his submitted resume. To protect this individual’s privacy, I will not divulge his name here, except to say that it’s me.

    This has been happening for years, so it may not be the result of our current economic downturn. Something else is probably going on and there are numerous possibilities. It might be my unpopular ideas, though how would most potential employers know? It might be because I have basically been unemployed for decades, for I have been running my own companies since 1983. It might be that I am unqualified for contemporary software engineering jobs. Though I like to think a degree from MIT with a perfect GPA should count for something, even if it was thirty years ago. It might even be that I am over qualified for most software positions, because I also have a Harvard MBA and most MBA’s aspire to manage. It might be few managers can envision themselves working with some smart aleck who bandies about terms like Harvard, MIT and perfect grades. Finally, it might be age discrimination, since I am 53 years old when almost all programmers are in their twenties or maybe thirties.

    I have a feeling that age discrimination is at least a contributing factor, but not the way you might assume. My theory is that the law against age discrimination is the problem. Ironically, age discrimination may be the unintended consequence of laws against age discrimination.


    Laws

    Bugs in Our Legal System

    You might think a liberal critic like myself would strongly support our legal system. After all, laws restrict our liberty and liberty is the root of liberalism, at least in language. I do favor strong uniform application of our laws. Laws should be for us all and not handed down by an elite that knows what is best for the unenlightened. Nor should our laws apply only to “bad” people and be ignored by basically “good” people who might believe lawmakers did not have them in mind (and indeed the politicians may not have have had such “good” citizens in mind, unintended legal consequences being what they are). Here is a little known fact: everyone believes that he or she is basically a good person.

    But on another level, I am opposed to most laws because I believe they usually do more harm than good. Complex systems are difficult to engineer so that they work as planned. And our modern legal system is definitely complex. The result is that most new laws have grave unintended consequences. We can usually live with old laws, since we have long since paid the price of adjusting to them. But most new laws cost society more than they are worth. As a conservative, I favor a strong but simple legal system that we can all understand, a stable system that changes only slowly in small steps.

    Take age discrimination. Having laws against it sounds like a good idea, since we must all earn a living. It sounds like an especially good idea in the modern welfare state that attempts to care for the elderly, since such laws should help older citizens to provide for themselves rather than feeding at the public trough. And it sounds as if the law would especially benefit me now that I keep getting AARP solicitations. But what if the law against age discrimination makes it more difficult to find employment? What if its effect is the exact opposite of the intended one? That would be the ultimate unintended consequence, right?

    Here is how that just might happen. Suppose you are a potential employer. Either you are biased against older workers or you don’t much care about age. Without laws against age discrimination, you won’t hire older workers if you believe they are not as good. But you might hire some older workers if you are among those who don’t much care about age. After all, most Americans change jobs fairly frequently. So chances are that average turnover is much shorter than the expected life span of even a sixty or seventy year old potential employee.

    Now let’s consider how you as a potential employer might behave with a law against age discrimination. In addition to being either biased or unbiased against the aged, I think we must consider another division. Either the job applicant talks with you or he submits a “blind” application where he cannot be sure you received it because you are not obligated to respond. If you communicate with the applicant, then you may have to hire him if he or she is older, whether or not you are biased against age. That’s because he may claim age discrimination if he does not get the job. You had better have an iron-clad proof that age did not enter into your deliberations, which is difficult given that most employment decisions are fairly subjective. So if you interview an older applicant, you had better have a very good reason for not hiring him. And even if you do, he can still prosecute and who wants the hassle?

    Whoops

    But what about “blind” applications? After all, that is how it works these days over the Internet. If you are biased against age, your best course is to simply ignore applicants if you guess they are older. That is unless you are uncommonly altruistic. The applicant cannot know how many resumes were reviewed, with the Internet it may have been thousands. He cannot even be sure you received his email. So claiming age discrimination becomes much more difficult and employers are relatively safe.

    Further, I claim that unbiased employers, the ones that might have hired older workers without age discrimination laws, are also wise to ignore anonymous Internet applications if they can guess the applicants are older. The reason is the same. If you interview older applicants, you must have a very good and very objective reason for not hiring them. Gut feelings may not be sufficient. Given that most employers interview at least a handful of people for an opening, they normally don’t “like” at least four out of five applicants. But if you interview an older applicant, you had better like him or be able to prove he is inferior by some objective non-age measurement. Who can be sure of that before the interview? Even if you think you might like him, why risk the possibility that your gut reaction to him turns out to be negative, leaving you open to discrimination charges? After all, there are other safer applicants, so even a fairly promising older applicant is probably not worth the risk. Probably the best course is to pretend you never saw the application.

    Of course, potential employers don’t know I am the kind of conservative that would never sue, especially over a law I think ill conceived. (Though I suppose they may now. Isn’t it great when communication works on multiple levels?) Indeed, libertarian principles mean I accept your right to be biased against me. People must be free to make their own decisions. (I do not extend this license to those who seek to take my life or possessions. But more on that below.) Plus it is quite difficult to define “bias” in a way that clearly distinguishes it from “wisdom” or “unpleasant truth”. I don’t like mass murderers and avoid them whenever possible. Am I biased or wise? Here’s a harder one: I don’t like potentially contagious sick people and avoid them whenever possible. Am I biased or wise? Regulating prejudice usually involves some form of “thought police”, an institution that seems both unworkable and morally vile. We can say, “You must hire older workers.” (Though we should not because that would have unintended consequences.) But we cannot say, “You must not fail to hire older workers because you think being old is bad.” Our thoughts are our own, and even if they were not, thoughts are quite difficult to legislate.

    So my guess is that most potential employers are wise to completely ignore my resume, given they can guess I am in my fifties. And they can, since there are dates on my resume. Leaving the dates out pretty much proves you are old too. Such silence is exactly what happens in my experience. No employer has ever interviewed me or even responded. The few responses have been from recruiters who are not subject to the same age discrimination risks, since the employment decision is not ultimately theirs.

    So there you have it. A well intended law that may make things worse, possibly much worse. I believe that most laws work that way, though of course the unintended consequences are usually more complex and subtle. Even if a law works fairly well, things change and complex regulations cannot keep up. For example, I bet semi-anonymous Internet job applications were never envisioned by the authors of our Age Discrimination Act of 1975. Complex systems are hard to debug and difficult to support or modify. The best policy is to keep things simple. Fewer laws are better laws.

    Universal Health Care

    Of course unemployment is nothing compared to the potential unintended consequence currently brewing in Washington, which is death. Our health care system is expensive and not very fair, so it is time for the government to step in and fix things, right?

    Wrong. As I’ve said before, the government can make things more fair, but usually only by making things worse for nearly everyone, often a lot worse.

    Sure health care is expensive, but that is because we value our lives so much. Sure hospitals and HMO’s are (literally) a pain in the ass, being big, bureaucratic and inefficient. But not nearly as big, bureaucratic and inefficient as your typical government program. Sure drug companies are making way too much money. Or were, since I don’t think things are going quite so well for them in recent years. It seems that fewer and fewer great new drugs are being discovered. What better way to guarantee that fewer and fewer great new drugs are discovered than to, 1. force drug companies to jump through ever higher hoops for FDA approval (which we have been doing for years), and 2. legislate away most of their profits in the name of fairness (which we may be about to do)? In any case, existing patent law already limits drug profits by putting drugs in the public domain after about twenty years (and there is usually much less time left after patented drugs win government approval). Sure, there are not enough health care providers in many areas, often because increased malpractice premiums cut into most of their earnings. Depending on your viewpoint, rising malpractice costs and subsequent doctor shortages are either the result of the unintended consequences of our tort system or the rightful result of health care mistakes. Either way, do you really think more government management can fix the situation? All that the government can do is basically draft physicians. Would you place you life in the hands of a more or less involuntary draftee?

    Ask yourself whether you want your health care delivered by the local Department of Motor Vehicles? Sure the DMV can sometimes be almost okay to deal with, at least for a government agency. But would you place your life in their hands? Because that is pretty similar to what you will ultimately experience, once we head down the universal government health care path.

    The worst of it is things probably won’t even get more fair. All doctors and especially hospitals already provide free care for patients that cannot afford them. This altruism has something to do with the Hippocratic Oath and is also probably the result of government and community pressure. So wealthier patients are already subsidizing health care for the poor. All that government mandated universal health care can accomplish is provide greater inefficiency to the process so that more of our health care dollars get siphoned off by bureaucrats. Plus of course making life so difficult and unprofitable for private innovators that there will be fewer and fewer life saving new discoveries and more quasi federal enterprises churning out the safe treatments of yesteryear.

    So it is my strong belief that death is the probable unintended consequence of most proposed heath care “reform”. The poorest among us will probably get about the same level of care, though it might be worse even for them. But things will really go downhill for the rich and the middle class, who will very probably no longer be able to get the kind of care they desire and could afford.

    Big Brother

    Could that be the unstated idea? What if we as a society are spending too much of our wealth on health care? It makes sense that we would, since who cares about wealth if you are no longer among the living? Health care is worth a lot to most of us because life is the dearest of all possessions. So you might argue that society would be better off if we prevented people from spending so much on their health care. Which is just what national health care would probably do. After all, people will all die anyway and a lot of them will die even in the short run, whether or not they have the best possible care. With government health care, they cannot burn through their wealth when dying, so much of that money goes to the common weal in the form of high inheritance taxes.

    Thus universal government health care might have some logical appeal, especially if you are not old like me, and especially if you enjoy the kind of “big brother” police states that have historically been associated with totalitarian government both on the left and on the right. And very especially if you are that “big brother” or one of his employees.

    The only trouble is that most ordinary people, both rich and not so rich, will probably not be living quite as long as they would under private health care. Who cares what is better for society of we must personally pay such a high price? And who knows better than you how to spend your money most wisely?

    Most important, who among us has the wisdom to decide who shall live and who shall die? That is a decision which should never be placed in human hands. But that is exactly what government health care does, given what I’ve heard from Canada, Great Britain, and Russia, countries with a long history of socialized medicine. Such places often have formalized rules for who gets what care. In such systems, you can forget about treatment if you have an expensive disease and are past some cutoff age. After all, there is only so much money and those with the most years left deserve better care, right? I admit that US health care already does this to some degree, since most hospitals and HMO’s are bureaucracies too. But I bet things could and probably would get much worse.

    Singapore Care

    At least under universal government health care, the rich will no longer have an unfair life-and-death advantage, right? Actually, while the middle class would suffer, I am not so sure about the wealthy. That is because of what I might call “Singapore Care”.

    People currently come from all over the world to experience the wonders of US medicine. Well off Canadians come here when their government decides they are too old to be treated. Or more often when they would otherwise wait years for treatment due to scarce resources. Government intervention always causes scarcity and long lines. Think of the gas “crisis” in the early 1970’s (if you are old enough), which was mostly the result of our own government’s ill advised oil price controls. I would bet that health care “exports” are a significant positive influence on our trade balance and the destruction of that export industry is yet another probable unintended consequence of health care “reform”.

    What happens when the US is no longer the place to get the latest medical treatments? Will there be nowhere left to go? Probably not, since some more entrepreneurial nation would probably fill the demand. I am not sure it would be Singapore, but it might be since I understand they are both technically advanced and quite open to the joys of capitalism. So yet another probable unintended consequence of government health care here is the creation new overseas meccas where the wealthy among us can get whatever care they can afford.

    Of course, we could deal with that problem with another law forbidding our citizens from going overseas for medical care. Or better, since we prefer our socialism with a sugar coating of capitalism, we could enact a big tax on flights to Singapore. So you would still be able to get whatever care you want, as long as you also pay tax for it here, both for your unused American health care and also for whatever excise taxes we might enact to discourage “Singapore Care”. For the rich, private health care would probably be similar to private schools today, with double payment (once to the school and once to the government for your “free” education), so that you effectively pay for the service twice. To a much greater degree, private health care along with private education would become something that only the very rich can afford, and would no longer be available to other citizens. Which probably counts as another unintended consequence.

    Medicare’s Unintended Consequences

    Of course as far as I can tell, Medicare already pretty much mandates federally funded care for senior citizens. As far as I can tell, since I’ve been trying to ignore the issue as I passed the age of fifty. Plus my wife is a physician and though she does not currently practice (mostly due to sky high malpractice premiums), I could probably continue to sponge off of her expertise and connections even under mandated federal care. But I’ve heard that other less well connected souls are pretty much required to use Medicare once one reaches a certain age, because private insurance is no longer available to you. Whether this is by government decree or insurer choice, I don’t know, though of course I suspect the goverment has something to do with it.

    But I do know that Medicare already leads to interesting unintended consequences, such as being a boon to collection agencies. My mother died over a year ago of lung cancer and Medicare had little to do with that. But nearly a year before she died, she was treated for another form of cancer and of course Medicare took their time paying her large day-surgery bill. I know that even private health insurance can be quite difficult. But while HMO’s may take months to pay, the federal government apparently takes years. Because my mother was nine months gone when treatment was finally reimbursed so that her doctor could balance bill. For 18 months before that, the medical practice sent statement after statement with $0 “Patient Due”. So when they finally decided she owed a some hundreds of dollars for what Medicare did not cover, it was far too late for her and even for her money, which had long since passed through probate to her heirs (which happened not to include me). After all, invoices with nothing due mean there is no debt to list for the probate court. Sure enough, the invoices eventually started arriving with non-zero balances, though I had long since stopped opening them, no longer having control of her money. There is only one solution when things get that messed up, and it’s a collection agency, which has recently been calling me.

    I do not yet know many of the other unintended consequences of Medicare and other mandated universal health care. That’s okay since this article is already long enough and since we may all get to study this subject soon in intimate detail.

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    Reader Comments (2)

    Your points about the danger of large government corporations, especially in light of Health Care, are certainly extremely convincing and valid, but I don't believe they are the only option. Certainly, running a country that consists of 300 million citizens and 2 billion acres of land mass is never an easy task. Large country therefore large government therefore large problems. However, difficulties of our largeness, and hence inaccuracy in law-making aside, America, though it certainly is turning more social with the election of Obama for president, is not yet ready to let go of its capitalistic leanings.

    The likely result of a combined social-capital political-economic system, at least in terms of Health Care, is not mass government control. Instead, perhaps we should consider the combination of private and public/government-controlled Health Care. Since the divide over universal Health Care is great, I see no reason why some people in this country shouldn't see a way to make buck or two by opening their doors privately. In Great Britain, 10% of citizens use private Health Care to access better facilities, duck waiting lines, or gain services not covered under the national system there. Similarly, 65% of the Canadian citizens, 13% of Spanish citizens, 43% of Irish citizens, 86% of French citizens, 18.2% of German citizens, and 15.6% of Italian citizens hold private health insurance in their respective countries. As a comparison, the United States currently lists 71.9% of the population holding private insurance. (Numbers generated by the OECD Private Health Insurance Report of 2004)

    Though those numbers range widely, the point is that there is no reason that Health Care should be black and white. Furthermore, WHO has more than once reported that private health care insurance is on the rise and is predicted to be in the 40-60% range by 2010-2012.

    Given the split attitudes over health care in this country and our tendency towards capitalism, I predict that our private health sector, even under a universal health care system, will still thrive. Sure, the government could certainly make things difficult for the private sector. That could be a nightmare that might take years to work itself out, but eventually, capitalism usually wins.

    May 13, 2009 | Unregistered CommenterAnonymous

    Were is our oracle? Its been many months since he last spoke.

    September 22, 2009 | Unregistered CommenterEggHead

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