Limits to the NHS: which healthcare spending should be free?

I shall be sad if the British National Health Service dies from deliberate starvation of resources, and passes into history — a lofty and "once successful" product of the human spirit. (See e.g. /https://labour.org.uk/page/nhs-crisis/). 

     However, I think the death of the free-for-all-at-point-of-use health service comes partly from the failure of the medical professionals themselves; their understandable failure to limit their costs.  The Hippocratic concept does not have space for rationing. 

     The valiant committees of the institute for health and care excellence (NICE), make recommendations that limit the way public money is spent, to maximise value for money. But perhaps not quite enough to dispel the vague notion we all share that the NHS is a bottomless money-pit. Their spending cut-off point is a sensitive matter of judgement, and may drift in time. 

     For example, I would point to the case of in vitro fertilisation (IVF), which is limited to a few rounds of implantation, and to a certain age range (see:https://www.theguardian.com/society/2018/jan/19/would-be-parents-moving-house-to-get-free-ivf-on-nhs). But we are in a badly over-populated world. And babies are not an "inalienable human right", given by providence to all. We are coming to the point where, to introduce one more life is, in effect, to introduce one more death; and incrementally intensifies the tensions and rivalries we see all around. 

     I, though over seventy myself, see some grounds for limiting free healthcare of the elderly to palliative care only.  

Carillion: for and against PPI

Mainly Macro (namely Simon Wren-Lewis) has written a good piece on the collapse of the large bulding firm (Carillion) that won contracts to build for the government. Not only are the points clear, telling, and fair; the writing is unusually free of the blemishes of hasty, late-night, blogging.

He fairly sees advantages as well as disadvantages in letting private firms compete for contracts. Competition holds down prices. But private firms seem to needs more supervision than they tend to get; supervision of quality and of management ethics. Furthermore, lending to private firms is riskier than lending to Government, and so interest rates are higher.
    https://mainlymacro.blogspot.mx/2018/01/what-carillion-tells-us-about-public.html

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Ebeling on the virtues of Austrian and the fallacies of Keynesian Macroeconomics

Dr. Richard Ebeling posted a piece on the Cobden Centre website on 10th January contrasting Austrian with Keynesian economics. 

On the one hand Ebeling criticises the widely accepted `Keynesian´ approach to macro economics on the grounds that it deals with aggregate quantities (average prices, average wages); quantities that "have no real existence", using an approach that overlooks all the individual prices and wages of specific products and skills. On the other hand he praises the 'Austrian' way of looking at macro economics (as expounded by von Mise, Hayek, Rothbard and others) for its refusal to consider such aggregates, and its insistence that the economy will adjust itself far better if left alone than when tampered with by ill-informed government intervention.

I think it is ridiculous to view these two approaches to macroeconomics as though they are in conflict; as though one must be `wrong´if the other is `right´.

Of course there is an average wage and an average price level. They do not exist, but they are determinable quantities.  Keynesian theory does not interfere with the prices of individual items nor the wages of particular operatives, any more than the Austrian theory does; they are of course left to market forces, by both theories. If the average price level rises (or is raised) a few percent relative to appropriate wages, individual productions will become profitable one after the other in the same general(#) way on the Keynesian theory as with the Austrian theory.

The Austrian theory does not require aggregates because it is not going to advocate any government interference. It is simply going to watch while the business cycle works its way through the economy, bankrupting firms and depriving families, until entrepreneurs once again find that there are too few skilled workers, and start to hire `foreigners´. It explains, but does not intervene. 

Non-intervention is better than bad intervention, and that is the virtue of the Austrian school. But is it better than good intervention? I think not, and that is the weakness of the Austrian school. I think that it is morally impossible to sit back and watch capitalism at work. I mean impossible for a moral conscience. It is too easy for the wealthy to exploit the poor, the clever to cheat the foolish. And I think western civilisation has come to the same conclusion over the last thousand years, instituting taxes and charities, encouraged by a predominantly Christian view of heaven and hell.

But if that is the weakness of the Austrian School, what of its strengths? And do governments effect more harm that good? 

It is undoubtedly a weakness of democracies that they find it hard to raise sufficient revenue in taxes. Who, for example, campaigns for votes by offering to raise taxes? (Only in Scandinavia where, one suspects, it is for predominantly climatic reasons.) So, I suggest that the fact that governments seem to get it wrong more often than right, may not be solely down to their (governmental) stupidity. As for the newspapers and the voters, that is another matter, and I suspect that ignorance plays a considerable part.  I like to think that, since 1936 when Keynes published his General Theory, governments have, occasionally, mitigated the severity of the business cycle on the populations in their care, by providing relief, or work on infrastructural projects. 

However, tinkering with bank rate has its limitations, and I am not yet convinced of the benefits of quantitive easing, except benefits for the bankers, for I am skeptical of the extent of trickle-down.

(#  I realize that the order in which businesses become profitable one after the other will be slightly different when the price rise is general (as it might be if government intervenes) compared with the diverse price rises that pure market forces can devise. The Keynesian result will not be identical to the Austrian result.)