House of Eratosthenes

1. an authoritative decree, sanction, or order: a royal fiat. Synonyms: authorization, directive, ruling, mandate, diktat, ukase.
2. a fixed form of words containing the word fiat, by which a person in authority gives sanction, or authorization.
3. an arbitrary decree or pronouncement, especially by a person or group of persons having absolute authority to enforce it: The king ruled by fiat.

Every now and then an industry is identified according to some good or service which is, or is seen as, crucial to the continuing survival of the people who live in our or evolving society. A narrative starts up that there is an untenable difficulty involved in acquiring the commodity in question, which endangers peoples’ lives and health, and we need some more rules.

The rules, in turn, introduce greater difficulty involved in acquiring the commodity in question than any difficulty they manage to obliterate or obviate or circumvent and, annoyingly, it seems nobody notices. Quite to the contrary: A new narrative starts up that capitalism has completely bolluxed things up and we need a second wave of rules. And then a third, on and on it goes.

Our smaller regions are divided up into laboratories, and the rules are refined further at that lower level. The laboratories with the more stringent rules suffer from the greatest discomfort with regard to the identified problem. And, annoyingly, again nobody seems to notice.

We’re having a friendly inter-family spat about whether one of our senior members would be well-served by taking an extended holiday from “hate radio.” I should add that I can see the merits in the argument presented by the other side — the senior member offers a lengthy history of distraction, and some failure at modest efforts, which seems to arise from distraction — but I’m seeing the proposal as…oh, let’s see, what was the metaphor one of my old bosses used: “unable to generate the lift to overcome the drag.” Because 1) the senior member is gonna do what he’s gonna do, so who cares what anyone else says, 2) this looks to me like a matter of taste and an exercise in micro-management, and 3) to be forward and frank about it, I have become leery and cynical of the attitude of superiority felt by people who don’t pay attention, over those who do.

Anyway, our e-mail exchanged drifted to some vague generalities about fine, precise details. No details in particular, just a high-level suggestion, unfounded, that some low-altitude navel-gazing and financial planning would change my attitude about government-managed health insurance. I replied:

I’m losing my interest in this specialized knowledge. I’ve come to look at it as a gimmick. I’m more interested in viewing things from a high level. Zooming out. Here’s an example of what I mean:

Imagine a spreadsheet five rows tall, six counting the header. Down the side, label the rows based on industries that have been, to some extent, nationalized. To make sure everybody can have everything they want when they want it. Those evil capitalists have been removed from these markets, or isolated from them. I think of five things: Education; health care; oil/energy; legal services; rents.

Across the top let’s identify some problems. Problem one in col. B: Suppliers cannot reach consumers, and at the same time, consumers cannot reach suppliers.

Problem two in col. C: The commodity price is vastly greater than it was a generation ago. And it can’t be chalked up to inflation.

Problem three in col. D: People don’t really know what it costs to provide the product…they don’t have a clue.

Problem four in col. E: When people do pay for their consumption of the product (or produce some coverage for it)…in actuality, what they’re paying for is somebody else’s consumption of it. And nobody cares. In other words, the market is saturated with freeloaders and we’ve managed to adapt…by not giving a fig about what things really cost.

Problem five in col. F: Nobody wants to start a practice of providing the commodity. If a student is exceptionally talented and can order up his own meal ticket, he probably won’t graduate into this field. In other words, the field no longer attracts the more desirable candidates.

Five rows high, five columns wide. This matrix is COMPLETELY FILLED IN.

Meanwhile, crap I just buy for myself, I know what it costs, I pay what they used to pay plus a reasonable rate of inflation. For that money, I attract the most talented practitioners that can be found. Buying paper clips. Putting new tires on my car. Magic of the free market…but in all these industries the government has “fixed,” all five problems abound…it’s gotten to the point that I should just expect to run into them. All five. That says something.

So, without bothering to read up on the particulars, yes I do consider myself an expert on what has gone wrong. It really doesn’t take much study. Just take in the information, recognize what it means, think on it logically.

I’m pretty sure food is next.

The five have it in common that the profits associated with them, have been identified as some persistent evil that must be banished from our society, and these efforts to so banish have failed. True, we have installed some very complicated machinery. But the profiteers remain. Where people make a profit from health care, legal services, education/tuition, rents/mortgages and oil, the tendency is that they make huge, enormous profits. The only people in these industries who maintain some more rustic standard of living here, are the ones who are positioned closer to the work that actually helps people. The ones who score the fatter paychecks are the ones less dedicated to the industry itself. It seems the biggest names are of the “hatchet men” who drift in to reorganize some agency or company, and wouldn’t know the thing being provided by the company from a hole in the ground. Except for the education/tuition one I suppose…prestige is important in academia. But the people at the top of the rent-control scam are not landlords. The people at the top of the health care food chain are not doctors. The people at the top of the oil monstrosity are bureaucrats and speculators. They may never have seen a drop of oil in their lives.

But my main point is: Access has not been improved by these rules. Quite the opposite. There is a new crisis associated with the access to the product, measurably exacerbated from the situation as it existed before. That is true of all five. Every two, four or six years our politicians run for re-election pledging to “fix” the problems associated with our access to these services. And again. And again.

Meanwhile, if I want a tube of toothpaste I know where I can go to get it, and I’ve got a pretty good idea what I’m going to pay for it. If someone tries to charge me double that, or provide an inferior tube of toothpaste, I’ll just go buy the damn thing somewhere else. So they better not screw with me. Coffee, toilet paper, milk, plumbing services…oh, people do need these things, and it’s pretty often you hear about someone paying more for them than they’d like to.

But you’re not going to travel back twenty years in a time machine and tell the people there “I had to pay $3.54 for a gallon of milk” and really make their jaws drop on the floor. What year was that, future-man? Twenty twelve? Yeah, uh huh…that sucks. But whatever. Two-fifty in our time, three-fifty in yours, that’s about right.

But tell ’em what’s going on with any of the big five, and their eyes will get as big as dinner plates.

Our counterproductive habit of fiat-izing and nationalizing the industries upon which we depend the most, has completely filled in my 5×5 matrix, it is twenty-five-for-twenty-five. The bureaucracy is like a lawnmower making tall grass into short grass, in that you can tell where it’s been by way of a simple glance. But it leaves in its wake not short grass, but chaos and wreckage. We don’t seem to notice or care. There is a discernible difference between the experience involved in buying milk, and the experience in buying legal services or gas: People bitch about the price of all these things, but nobody is truly terrified of complete and total financial devastation, arising from the need for milk.

Thing I Know #408. You can’t aspire toward success if you won’t spot the fails.

A thing which conservatives get, and which leftists and the uninformed (who are functionally the same) do not get, is that a price is simply information.

We’ve been saturated by years of submarxoid propaganda in schools, so we have a tendency to think that an item’s price has something to do with the labor associated with the production of that item. This is wrong. It can be seen most clearly in things like modern art. You read about some hideous lump of spraypaint that cost about a buck fifty and ten minutes to make being sold for $5 million, and you realize that five mil number measures nothing but prestige — there is some subset of morons m who wish to communicate to other members of the set that they’re sophisticated; $5 mil is the surcharge for that communication.

The information that a rational price structure should communicate in something like healthcare takes the supply side into account — doctors get paid a lot because medical training is expensive, both in tuition and in years of sunk opportunity costs (7-12 years of med school plus residency leaves very little time for anything else, including families); drug prices include millions in sunk r&d, etc. Instead, though, we only care what some pill costs when it’s not covered in our insurance — “how can it be,” we gripe, “that this antibiotic costs $10 for a three-month supply and that one is $89 a pill? Profiteering!!!!”

[This, incidentally, is why leftists are so enamored of the value-added tax. When something suddenly costs 10% more at the register and you can see the tax bite right there on the receipt, people start thinking about the size and scope of government. If goods are mysteriously 10% higher tomorrow and there’s no tax line on the receipt, though… it must be profiteering! A fat cat conspiracy! We need to tax “the rich” more].

For a hilarious send-up of all this, check out the section on Russian economics in P.J. O’Rourke’s Eat the Rich. He describes the problems of the old Soviet command system thusly [paraphrased from memory]:

Factory managers had to hit their gross output targets no matter what, so the actual needs of citizens were the first to go. Ordered to make 2,000 pairs of shoes, a Soviet factory manager would turn out 2,000 pairs of baby shoes, since they were the smallest and easiest to manufacture. Ordered to make 2,000 shoes of various sizes and styles, the manager would produce 1,998 baby shoes, a pump, and a wingtip. If ordered to produce 2,000 pounds of shoes, the factory would crank out an enormous pair of concrete sneakers.

Welcome to the brave new world of “free” healthcare, where everyone, from chemo patient to croup sufferer to schizophrenic, gets issued two aspirin and told to call me in the morning. Prices exist for a reason.
- Severian | 09/26/2012 @ 08:03
I would argue that food is “next” in the sense that it’s already heavily-influenced by the fiat mechanics you describe: increased land-use legislation, higher transportation costs, and farm subsidies come immediately to mind.
- nightfly | 09/26/2012 @ 11:05
Subsidies are a first step. They by themselves are not enough to bring about this complete disaster, they merely de-couple the supply and demand of the commodity from the signals sent by the market.

There is more to be done after that though. Corn is subsidized. Sugar is subsidized. There’s no reason to live in fear of personal bankruptcy caused by a need for corn or sugar. Also, if I buy an ear of corn I’m not directly paying for people who “need” corn and can’t afford to pay for theirs.
- mkfreeberg | 09/26/2012 @ 11:42

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On the Five Fiat IndustriesWednesday, September 26th, 2012

On the Five Fiat Industries
Wednesday, September 26th, 2012