What Do Socialism and Capitalism Mean to You

[Emily Lake]

Do consumers drive the bus, or marketers?

Marketers are the psyops in both socialism and capitalism. Just a matter of different messages.

 

[bilby]

This assumes all surgeons are exactly equal

No, just that their inequality cannot be assessed solely by looking at their schedule of fees.

Things aren't necessarily better just because they cost more.

I really shouldn't need to point this out to a grownup, but Americans in particular seem to struggle to grasp it.

 

[bilby]

Your triage systems leave urgent patients waiting.

1) I was talking about the UK, which is as far from where I live as you can get without joining the space program. This description would be as reasonable as me describing the Chinese system as "your system".

2) No, they don't. Really. They absolutely don't. You are being lied to by professionals, but your choice to believe them speaks poorly of your willingness to check facts before regurgitating them.

 

[bilby]

And yet, nobody says the possibility of their sister dying and leaving them with three unexpected kids is a good reason for cars to be issued to people by the government based on what car experts decide they need. In most areas of life people are expected to decide how much risk they can stand to bear, make their own decisions of how much to pay to mitigate it, and eat the costs themselves if it turns out they didn't take enough precautions.

And yet, almost everyone accepts that it's a good thing for the government to set a minimum skill level and to issue licenses (without which citizens may not drive unsupervised), that depend on demonstrating that they meet that minimum skill level, both prior to being issued a license, and on an ongoing basis whereby repeated and/or severe misbehaviour may result in the withdrawal of the license.

I don't care if you can afford to compensate me if you kill my sister; I still don't want you behind the wheel if that's a foreseeable consequence of your ineptitude as a driver.

The government is right to be able to define not only whether you can operate a vehicle on public roads, but also to define what broad categories of vehicle you may operate - you need a different class of license to drive a vehicle above a certain mass, or size, for example.

The decision about which light vehicle you use is yours; The government doesn't mandate whether you drive a Smart FourTwo or a Ford F-series ute, but they do get to say whether or not you're fit to drive at all, and they do get to limit you to light vehicles unless and until you meet the higher standards required to demonstrate your ability to safely operate heavy trucks, buses, and other specialist vehicles; And to require special licenses for certain use cases - for example, you can give your friends a lift to town, but if you start running a business transporting people around, you're likely going to need further licensing above and beyond your standard drivers license.

The details, of course, vary depending of your jurisdiction.

But the principle is certainly widespread that the government can, should, and does dictate to people what vehicles they can and cannot drive; But that the details of the choice is left to the consumer, as long as they choose within the specifications of their licences.

The consumer gets to choose what car he drives, but if he wants to literally drive the bus, he needs special permission from the government.

In my jurisdiction, that's in the form of two separate licenses above and beyond the standard driver's licence: one to operate heavy vehicles (those with a GVM greater than 4.5 tonnes); and the other to carry more than 12 people and/or to carry passengers for "hire or reward" - ie to operate a part of a business. (note that if you want to carry more than 12 people in Queensland you need a Driver Authorisation even if you are driving a light vehicle and are not being paid to do so.) The "DA" certifies that you are medically fit and requires you to pass a stringent medical examination at least every five years, and every year if you are over sixty years of age; You also need to pass a criminal record check to obtain one, and to have a good traffic violations history. If you've ever been fined for DUI, or if you've been fined for speeding or red light violations more than once in the previous five years, you can forget about getting one. They're a lot easier to lose for violations than a driver's licence, too.

TL;DR: Oh yes they do. Just in a fairly limited way.

Which is the whole point of a mixed system. Neither extreme would be better than the mixed system.

 

[Loren Pechtel]

This assumes all surgeons are exactly equal

No, just that their inequality cannot be assessed solely by looking at their schedule of fees.

Things aren't necessarily better just because they cost more.

I really shouldn't need to point this out to a grownup, but Americans in particular seem to struggle to grasp it.

I find the notion that surgeons are all stamped out by a cookie cutter ludicrous. Now, determining who is good or not isn't the easiest thing and you can't use fees as evidence of ability. That doesn't mean there aren't differences.

I have had no experience with surgeons, but I have seen different docs in the same specialty and I have seen differences even as a patient. When the problem is obvious it doesn't really matter. When it's not you can see big differences.

 

[Loren Pechtel]

Your triage systems leave urgent patients waiting.

1) I was talking about the UK, which is as far from where I live as you can get without joining the space program. This description would be as reasonable as me describing the Chinese system as "your system".

2) No, they don't. Really. They absolutely don't. You are being lied to by professionals, but your choice to believe them speaks poorly of your willingness to check facts before regurgitating them.

The problem comes with the ones where the urgency isn't clear-cut. Is this cancer?

And all the UHC systems have the problem, just with varying degrees of rot. (And, yes, that includes the UHC systems in the US. Recall the scandal a few years back about the VA faking the data on how long veterans had to wait for treatment?)

 

[bilby]

I find the notion that surgeons are all stamped out by a cookie cutter ludicrous.

Then why did you originate it? I certainly didn't say it.

 

[Bomb#20]

Generally speaking, insurance is not very capitalist at all. It's redistribution of risk, it's one of the earliest types of communistic endeavors. Everyone shares the cost up front for an essentially unpredictable scenario with very low likelihood and very high cost.

I mean, insurance in and of itself is a very good idea... I just don't think it's something that can be considered "capitalist" in nature.

If it isn't capitalist, how did Warren Buffett make so much money selling it? It's not like his customer is the government and he's paid from taxes. No, not everyone shares the cost up front. Only those who make a bargain to have their risks covered share the cost up front. If everyone paid and everyone got covered whether he wanted to or not, that would be a communistic endeavor.

It isn't sharing that makes something communist rather than capitalist. Capitalists share all the time -- it's why the portions of the capital they own and the profits they collect are called "shares". What makes something communist is compulsory sharing.

The insurance business is a garbage disposal business, like Waste Management, Inc. Economically, risk is just another kind of garbage -- it's something people have and don't want so much that they'll pay somebody who's less averse to it to take it off their hands. Just as the widget business consists of trading a widget from people who like one less than the widget price to people who like one more than the widget price, the garbage disposal business consists of trading garbage from people who like it less than paying the disposal fee to people who like it better than losing out on the disposal fee, and the insurance business consists of trading risk from people who like it less than paying the premium to people who like it more than losing out on the premium. The economic difference between a normal widget business and a garbage/insurance business is merely the minus sign in front of the price people are willing to pay for the item being sold.

The concepts behind capitalism inherently rely on a free market system (nowadays let's settle for free-enough). It relies on market forces of supply and demand to produce an equilibrium price for the good or service being traded.

Insurance doesn't work that way. Insurance disrupts the supply-demand relationship. The supply is provided by the doctors and hospitals, not by the insurer. The demand is being provided by the consumer, not the insurer. The insurer's position as a redistributor of risk results in the actual price of supply being masked from the consumer - the consumer no longer has a clear idea of what the prices of the service are. That doesn't mean it's not a good idea - the value at risk for insurable services is waaaaaay too high for an individual to bear, even if it's incredibly unlikely. It also doesn't meant that people can't make money off of it.

It isn't insurance that masks prices from the consumer; it's the provider's decision to refuse to tell. The healthcare industry is not normal insurance-based business, in oh so many ways; when I get my car repaired after an accident the fact that my insurance policy will pay most of the bill doesn't cause the mechanic to refuse to tell me his prices.

Post ACA, it really doesn't make a lot of sense to even call the plans people buy "insurance policies" any more -- they're not about pricing risk. They're just another component of the arcane falangist way the U.S. government has chosen to control the healthcare industry, and they're still called "insurance" only for historical reasons.

I think it's also worth noting that your own analogy seems to undermine your argument. In almost every part of the US, waste management is a non-competitive business. They're almost always municipal services, even if they're outsourced to a private company. They are monopolistic, but they're generally natural monopolies, and competition wouldn't bring the costs down.

I contract for garbage disposal directly from a private company that competes with the county service. The competition doesn't bring the costs down but it sure as heck makes the service better. (The company picks it up at my house -- the county expects me to haul my garbage half a mile to the end of the road!)

They're also services that are communally necessary - we truly can't have a portion of citizens "opting out" of waste removal, because that presents a health hazard to the entire community.

And cue...

This song is called Alice's Restaurant, and it's about Alice, and the Restaurant ...
...Havin' all that room, seein' as how they took out all the pews, they decided that they didn't have to take out their garbage for a long time. ...
... We took the half a ton of garbage, put it in the back of a red VW Microbus, took shovels and rakes and implements of destruction and headed on toward the city dump. Well we got there and there was a big sign and a chain across the dump saying, "Closed on Thanksgiving." And we had never heard of a dump closed on Thanksgiving before, and with tears in our eyes we drove off into the sunset looking for another place to put the garbage. ...
... And we decided that one big pile is better than two little piles, and rather than bring that one up we decided to throw our's down. ...
...we got a phone call from officer Obie. He said, "Kid, we found your name on an envelope at the bottom of a half a ton of garbage, and just wanted to know if you had any information about it." And I said, "Yes, sir, Officer Obie, I cannot tell a lie, I put that envelope under that garbage." ...
... we was both immediately arrested. Handcuffed. And I said "Obie, I don't think I can pick up the garbage with these handcuffs on." ...
... but when we got to the scene of the crime there was five police officers and three police cars, being the biggest crime of the last fifty years, ...
... And we was fined $50 and had to pick up the garbage in the snow, but that's not what I came to tell you about. Came to talk about the draft. ...
... That was horrible. If you want to end war and stuff you got to sing loud. ...​

It's not that we can't have a portion of citizens "opting out" of waste removal -- as long as Alice was storing the garbage in her disused church, there was no issue. It's that we can't have people externalizing their costs onto their neighbors. There's no need for a monopolistic municipal garbage service to prevent that -- all it takes is a police department willing to dig down to the bottom of the pile and find the envelope, because littering is the biggest crime they've had to deal with in the last fifty years.

 

[Bomb#20]

I also think this is one of those areas where the technical definition of "capitalism" and the functional usage of "capitalism" cause a pretty big disconnect. The academic question of who owns the means of production has very little to do with how things function in the real world.

Agree.

Aaand furthermore, each state government directly controls who is required to get insurance, what the reasonable rates are, what market it can go to, and which insurance companies get to do business in that territory.

So yeah, seems a little wonky to call a completely government controlled market a good example of capitalism.

What I said was that fire insurance is an excellent example of a product for which capitalism is spectacularly well fitted. The point was to refute bilby's unsupported claim that got us started on this subtopic, not to rathole about the specific details of how uncapitalistic US state governments have gotten. Government choosing to regulate the capitalism out of existence in some market doesn't really bear one way or the other on whether that market is something capitalism would be good at. Legislatures control markets not just for economic reasons but also because of political demands, as well as straight-up bribery. A lot of state governments directly control which black girls are allowed to do business braiding one another's corn rows in their territory -- including California until twenty years ago -- and no sane person would infer from this that hair-braiding is a service for which capitalism is poorly fitted.

 

[Bomb#20]

Flood insurance is already predominantly covered solely by the federal government (NFIP). Typically, it's a separate flood policy, but even if you have coverage through your carrier, the flood portion is 100% reinsured by FEMA. (absolutely no capitalism there). The reason for this is that the insurance industry as a collective determined that flood was an uninsurable risk given the volatiliy of events.

Why? Insurance lives and breathes volatile events. Insurance got its big start insuring against shipwrecks. Your house getting wiped out in a flood is small change compared to a merchant ship going down in a storm. Risks are normally uninsurable if insuring them is illegal, or if the insurance company has no way to calculate the possible loss, or no way to calculate the probabilities, or the risks are too highly correlated with its other exposures.

A Look at Uninsurable Risk

"An uninsurable risk is a risk that insurance companies cannot insure (or are reluctant to insure) no matter how much you pay. Common uninsurable risks include: reputational risk, regulatory risk, trade secret risk, political risk, and pandemic risk."

So what makes flood uninsurable? Did regulatory agencies enact some asinine rule saying if you write anyone a flood policy on her house you're required to also offer a flood policy on every other house in the same flood zone?

 

[laughing dog]

Flood insurance is already predominantly covered solely by the federal government (NFIP). Typically, it's a separate flood policy, but even if you have coverage through your carrier, the flood portion is 100% reinsured by FEMA. (absolutely no capitalism there). The reason for this is that the insurance industry as a collective determined that flood was an uninsurable risk given the volatiliy of events.

Why? Insurance lives and breathes volatile events. Insurance got its big start insuring against shipwrecks. Your house getting wiped out in a flood is small change compared to a merchant ship going down in a storm. Risks are normally uninsurable if insuring them is illegal, or if the insurance company has no way to calculate the possible loss, or no way to calculate the probabilities, or the risks are too highly correlated with its other exposures.

A Look at Uninsurable Risk

"An uninsurable risk is a risk that insurance companies cannot insure (or are reluctant to insure) no matter how much you pay. Common uninsurable risks include: reputational risk, regulatory risk, trade secret risk, political risk, and pandemic risk."

So what makes flood uninsurable? Did regulatory agencies enact some asinine rule saying if you write anyone a flood policy on her house you're required to also offer a flood policy on every other house in the same flood zone.

The answer to your question was already answered by

The reason for this is that the insurance industry as a collective determined that flood was an uninsurable risk given the volatiliy of events.

From your own link
Therefore, when the probability of loss is too high or the claims costs are too high on a particular risk, the insurance company may consider it uninsurable and exclude it from the policy.

So, a capitialist industry decided for capitalist reasons to not insure flood damage.

But why read and reason when one can kneejerk fling blame to a regulatory agency?

 

[Loren Pechtel]

I find the notion that surgeons are all stamped out by a cookie cutter ludicrous.

Then why did you originate it? I certainly didn't say it.

Either there are differences and some are better than others, or they are all the same. This is a binary set, you can't claim it's something else.

 

[Loren Pechtel]

So what makes flood uninsurable? Did regulatory agencies enact some asinine rule saying if you write anyone a flood policy on her house you're required to also offer a flood policy on every other house in the same flood zone?

Fundamentally, insurance is about averaging out risk. However, floods don't average out--typically, almost nobody floods or a whole bunch of people flood. They would have to maintain huge reserves to deal with it--it's this reserve cost that makes flood insurance prohibitive for the private marketplace.

Earthquake is similar--some places mandate it be offered but the insurance companies respond by pricing it at a rate far in excess of expected loss * expected chance of that loss.

 

[Bomb#20]

Why? Insurance lives and breathes volatile events. ...

The answer to your question was already answered by

The reason for this is that the insurance industry as a collective determined that flood was an uninsurable risk given the volatiliy of events.

From your own link
Therefore, when the probability of loss is too high or the claims costs are too high on a particular risk, the insurance company may consider it uninsurable and exclude it from the policy.

So, a capitialist industry decided for capitalist reasons to not insure flood damage.

But why read and reason when one can kneejerk fling blame to a regulatory agency?

Stop being deliberately obtuse. Reciting the claim does not qualify as an explanation. Why is the probability of loss too high, when other insured losses are more probable? Why are the claims costs too high on a particular risk when much more expensive things are routinely insured?

And while we're at it, what in the name of god does "a capitalist industry decided" mean? How does an "industry as a collective" determine anything? Individual business executives decide. By extension, the individual companies they lead decide. But each capitalist company decides for itself, unless either (a) they're illegally colluding to restrain trade, or else (b) the government is putting them up to it. If the response from the government was to set up a whole new social program rather than to launch antitrust prosecutions, that kind of points to (b).

In any event, this is all a counterfactual hypothetical. As Judge Judy would say, it doesn't make sense and if it doesn't make sense it isn't true. Flood isn't uninsurable. Private non-FEMA flood insurance is available; it accounts for about 15% of the flood insurance market.

Private Flood Insurance Companies - NerdWallet

Private flood insurance companies offer an alternative to policies from the National Flood Insurance Program. See whether it’s right for you.

www.nerdwallet.com

FEMA appears to dominate the market largely because it's subsidized by the taxpayers. It isn't supposed to be, but NFIP is billions in debt to the Treasury.



In any event, watch the video -- John Oliver is priceless!

 

[Bomb#20]

So what makes flood uninsurable? Did regulatory agencies enact some asinine rule saying if you write anyone a flood policy on her house you're required to also offer a flood policy on every other house in the same flood zone?

Fundamentally, insurance is about averaging out risk. However, floods don't average out--typically, almost nobody floods or a whole bunch of people flood.

And...

They would have to maintain huge reserves to deal with it--it's this reserve cost that makes flood insurance prohibitive for the private marketplace.

... hence my question about regulations. No, they wouldn't have to maintain huge reserves to deal with it, unless there's an asinine rule in place forcing them to insure a whole bunch of people in the same flood zone. The rational way to deal with the "nobody or a whole bunch" problem is for each of a hundred different insurance companies to each insure a hundred homes in some valley where they're apt to flood all at once. Then when ten thousand people lose their homes all at once, a hundred companies face perfectly manageable fifty million dollar losses. But if the government doesn't like that solution and wants an easier-to-regulate market with one company insuring all ten thousand homes then when there's a flood that company will face a five billion dollar loss, and will have to maintain a huge reserve to deal with it.

Earthquake is similar--some places mandate it be offered but the insurance companies respond by pricing it at a rate far in excess of expected loss * expected chance of that loss.

Earthquakes are perfectly insurable. I have an earthquake policy -- and my house is pretty close to the epicenter of a recent massive quake.

 

[Jarhyn]

jut off of a casual google, I pulled up this:

17% of adults with health care debt declared bankruptcy or lost their home because of it. 66.5% of bankruptcies are caused directly by medical expenses, making it the leading cause for bankruptcy. As of April 2022, 14% of Americans with medical debt planned to declare bankruptcy later in the year because of it.Aug 30, 2022

This garbage "research" needs to be nuked from orbit.

It doesn't say what you think it says, it was done in a very deceptive way to make reporters think it said this.

Rather, what it really said was that most bankruptcies include medical debt, not that they were caused by medical debt.

The real number is more like 5%--and even there half of those are retirees overspending their assets, the bankruptcy was inevitable and the medical stuff was simply the straw that broke the camel's back.

Causal factors cause, even if they are not the final cause.

It is a contributory cause. This is, however one of the reasons contributory causes are so hard to track and discuss.

Just because the element is a contributory cause rather than complete cause makes it no less contributory.

It is like lead in the environment: It didn't cause crime all on its own, but it certainly gave a push so MORE crime happened, days resolving them WILL decrease The things it causally contributes to.

 

[Jarhyn]

So what makes flood uninsurable? Did regulatory agencies enact some asinine rule saying if you write anyone a flood policy on her house you're required to also offer a flood policy on every other house in the same flood zone?

Fundamentally, insurance is about averaging out risk. However, floods don't average out--typically, almost nobody floods or a whole bunch of people flood.

And...

They would have to maintain huge reserves to deal with it--it's this reserve cost that makes flood insurance prohibitive for the private marketplace.

... hence my question about regulations. No, they wouldn't have to maintain huge reserves to deal with it, unless there's an asinine rule in place forcing them to insure a whole bunch of people in the same flood zone. The rational way to deal with the "nobody or a whole bunch" problem is for each of a hundred different insurance companies to each insure a hundred homes in some valley where they're apt to flood all at once. Then when ten thousand people lose their homes all at once, a hundred companies face perfectly manageable fifty million dollar losses. But if the government doesn't like that solution and wants an easier-to-regulate market with one company insuring all ten thousand homes then when there's a flood that company will face a five billion dollar loss, and will have to maintain a huge reserve to deal with it.

Earthquake is similar--some places mandate it be offered but the insurance companies respond by pricing it at a rate far in excess of expected loss * expected chance of that loss.

Earthquakes are perfectly insurable. I have an earthquake policy -- and my house is pretty close to the epicenter of a recent massive quake.

... Or we could offer government based flood insurance taxes and let the overage be handled by the fact that the government has infinite capacity to absorb momentary losses and a guarantee of future.

Or a government guarantor on the act of running the actuarial.

Or any number of situations where deficit operation as an insurer is available.

The requirement of profitability leads to a specific outcome: maximization of premiums on a minimization of payouts..

 

[Gospel]

Capitalism - Bullshit that humans made up.
Socialism - Bullshit that humans made up.

 

[lostone]

Capitalism - Bullshit that humans made up.
Socialism - Bullshit that humans made up.

Much truth lies in that brief summary

 

[Jarhyn]

Capitalism: PVP economics.
Socialism: PVE economics.

The question is whether or not you wish to view other people as "players" or "environment".

PVP: Player vs Player
PVE: Player vs Environment.

My thought is that the environment is evil enough without the players adding more to that.