Prepare for drug shortages

The Globe and Mail reports that,

Provinces will begin bulk-buying several different generic drugs as part of the first steps Canada’s premiers are taking to make health care less costly and more efficient for Canadians.

This means that the monopsony model used for provincial health insurance plans will now be used for generic drug purchases. It's unclear whether provinces will be providing the drugs through provincial insurance plans or simply re-selling them to pharmacies.

Once this policy goes into effect, there will be more shortages of certain types of generic drugs. Worse, you'll end up paying more on average for those drugs that suffer shortages. If provinces let generic drug prices fluctuate, the price of drugs that suffer shortages will rise consistent with increased demand. If provinces fix the prices of generics, then you will have to pay for the more expensive brand names when generics experience shortages. This, however, is better than our provincial health insurance plans for doctor and hospital services. Because provinces ban private delivery, when shortages occur (i.e. waiting-lists), your only option is to wait.

The reason there will be shortages of certain types of generics is that monopsonies are a form of central-planning and therefore suffer from the knowledge-problem. When there is one purchaser in a market, they need to know what everyone will need in the future. This is impossible because they cannot gather knowledge of 'time-and-place' -- i.e. the circumstantial knowledge of particular people in the economy. In healthcare, this would be a patient's knowledge of his or her particular ailments and the doctor's knowledge of how different kinds of people react to different treatments. This type of information can only be transmitted through prices that arise from a market with multiple buyers and sellers. One buyer can drive down the price, but they do so at the expense of the efficient aggregation of information.

There are market-failures in health-care, which I have addressed elsewhere, but ceteris paribus, the allocation of prescription drugs in Canada is about to get worse.

Guns and violence

The disorder that this Globe and Mail editorial decries is part of a society that guarantees the final protection against tyranny: civilian arms.

The idea that allowing civilians to possess arms is insane and indifferent to killings is, in truth, a value judgement that better protected liberty is not worth additional disorder.

This is a value judgement that is not applied in other areas. Legal rights and due process similarly increase disorder by seeing criminals go free on rights violations. Yet, we tolerate this disorder knowing that legal rights and due process protect the liberty of the innocent. And we value the liberty of the innocent more than increased order.

So why permit disorder for legal rights and due process but not guns? The assumption is that Western liberal-democratic states can be entrused to protect liberty but that they could never turn tyrannical and deny it. The idea that liberal democratic states will never stop being liberal reflects an obedience to authority that is far scarier than the American willingness to let the people, not just the rulers, be armed.

Natural-rights help the nanny state

Natural-rights thinking contributes to nanny-state restrictions for the simple reason that weighing of rights is not possible. Many petty restrictions are seen as justified because they prevent a small number of people from harm or death. Smoking bans, seat-belt laws, gun-control, etc.

I suspect natural-rights libertarians will object that this is because the rights in question aren't rights. None of these violate property-rights, which are the only natural-rights. Even if it's true that these restrictions don't violate property-rights, it means that that natural-rights thinking is only valuable in arguments against petty restrictions in an ideal society where everyone recognises that our natural-rights consist only of property-rights. That makes natural-rights libertarians' thinking pretty limited in our modern context of value-pluralism.

The alternative doesn't have to be a utilitarian framework where odd rights violations follow, e.g. society is justified in executing curmudgeons because no one likes them around. (That said, I think that overall, utilitarianism would lead to more a liberal society under value-pluralism than natural-rights.) Rather, a contractarian society can allow for weighing of rights without utilitarianism's bizarre rights-violations. The reason is that it permits probability calculations in its thought. In a contractarian framework, you can say, for example, that gun-rights will be permitted even though more people will be injured or die because the deaths will only affect a few people and chances are it won't be you. Alternatively, many will receive additional utility from the option of owning and enjoying firearms and chances are that will include you.

A quick thought on Mill and liberty

Is John Stuart Mill responsible for most nanny statism even though he wanted to create a new sphere of individual liberty against the civil societal majority above and beyond that enjoyed against the state?

I don't have in mind the usual conservative objection that a civil societal sphere of liberty requires a welfare state, the idea that people free from customs will necessarily suffer consequences that only societal alms can remedy.

I mean many petty restrictions on liberty are defended by recourse to harm to others. If by contrast we justify all restrictions by recourse to Hobbes' concept of peace -- lack of a known disposition to contend by force -- I think the remaining liberty is closer to what most liberals have in mind.