Owning Water
Capitalism and its alternatives are vast topics that Sarah and I have been discussing and which I hope to continue in this thread and open for wider discussion.
One particular example that Sarah raised was the Bolivian government's 1999 $2.5 billion, 40-year concession of the water supply in the city of Cochabamba to Aguas de Tunari (AdT), a consortium which was the sole bidder and wherein Bechtel was the controlling partner. Such privatization is part of the conditions of loans from the World Bank, which Bolivia had turned to since its economic difficulties in the 1980s. In accordance with World Bank policies, Bolivia privatized railways, telephone systems, national airlines, tin mines, and in this case Cochabamba's water supply.
The contract guaranteed Aguas de Tunari a minimum 15% return on investment for providing water, sanitation, irrigation, electric generation, completion of the stalled Misicuni dam, and for paying down the $30 million in debt accumulated by Cochabamba's previous municipal water supply SEMAPA. It was legally affirmed by Bolivia's Law 2029 which ostensibly gave AdT a broad monopoly over all water resources in the city, potentially even including those which were independently built and not part of SEMAPA. The breadth of Law 2029 may have even included the collection of rainwater.
Aguas de Tunari quickly imposed a large rate increase averaging 35% (potentially as much as 30% of the minimum wage) and massive protests erupted in 2000, including a general strike that halted Cochabamba's economy for four straight days. Martial law was declared amidst violent conflict between protestors and police. Bolivia eventually withdrew the contract, repealed Law 2029, was sued by and settled with Bechtel, et al., for 30 cents, and the water supply returned to local SEMAPA control. Rates returned to their pre-2000 levels but as of 2005, service remained poor and intermittent.
My first reaction is that this case might be more aptly compared to a government mandated monopoly rather than a good example of capitalism in general. Nevertheless, it is ostensibly a failed attempt to foster a more capitalistic system based upon the loan requirements of the World Bank.
Of course, capitalism exists within some "regulatory" legal framework that protects property and human rights. Sarah points to the illegality of human trafficking and asks, if another human cannot be owned, "Can rain water be private property, owned by a foreign company? Is it ethical? Can the genome of thoroughbreds be patented? Can biological life be patented and become private property?"
I don't think the government should have the right to sell the rain or seize private wells as Law 2029 may have mandated. I also don't think it is immoral to own and sell water, whether it be by individuals, corporations, or cooperatives.
What do you think? Should the essentials of life, such as water, be government owned? If so, how should Cochabamba solve their water crisis?
What lessons should be learned from Cochabamba? Is this exceptional or typical of globalization? Is it an indictment of globalization? of capitalism? of government control?
Beyond water, what should be the moral bounds of capitalism? Should the patent system encompass the creation of genomes?
Kevin
UPDATE: In May 2006, Gary Becker and Richard Posner provided some broader context and brief (and perhaps loose) analysis on Latin America that I found interesting. In particular, Becker makes the sensible distinction between "crony capitalism" and "competitive capitalism".
(1) Moving Left in South America-BECKER
(2) The Left's Resurgence in Latin America--Posner's Comment
(3) Response on Moving Left in Latin America-BECKER
19 comments:
The following is my reply to Sarah's related comment on a previous thread.
Sarah,
Sarah wrote: "I liked the article about Whole Foods a lot, but found the Wikipedia article on Bolivia to be pretty biased (on the neo-liberalist side of economic thought). All of it's sources were American, and reflect the neo-liberal ideology embraced by both parties here in the US (and it looks like perhaps only one of the sources might be peer-reviewed)."
I'm not sure it was biased, but I'm open to the possibility and if you find any facts that are incorrect in my summary, please let me know. I imagine the Bolivian's themselves have diverse perspectives on the situation.
I didn't read into it that "Bechtel was only there to help these poor backward souls" as you did. The Wikipedia article did indicate that AdT did not assess or manage the local realities very well. In addition, AdT was clearly there for their own profit and their apparent collusion with the government to obtain the monopoly reflects that.
Nevertheless, the goal seems to be for their relationship to be mutually beneficial. Do you think that is impractical? If so, how do you suggest that Cochabamba solve their water crisis?
Sarah wrote: "The fact that water problems still persist doesn't vindicate the behavior of the IMF/World Bank and Bechtel"
I did not mention it to vindicate them, but rather to indicate the inherent difficulty of Cochabamba's position. It seems that any sustainable solution will require a significant sacrifice. Hopefully, next time it will be one of their own choosing.
Sarah wrote: "The article mentioned the average income for Bolivians, but left out Bechtel's profits. I found that confusing."
The article did not mention an average income. It did make a couple of vague statements relating the new average water price of $20 to the income of some residents:
(1) "many of their new clients only earned about $100 a month and $20 was more than they spent on food"
(2) "In a country where the minimum wage was less than US$70 per month, many dwellers were hit with monthly water bills of $20 or more."
We can only guess how much of that $20 was "profit". I would be interested in seeing a clear breakdown of AdT's profits and losses to determine if their prices were exorbitant or commensurate with their obligations and guarantees under the contract.
Sarah wrote: "I assume that national autonomy is pretty much impossible for the vast majority of nations at this stage in the development of globalization - especially because of the global market."
I am a newbie on this subject, so I'm curious why the global market precludes nations from striving for autonomy? I think capitalism can be a boon to a country but it depends upon them looking after their own interests in that process. Capitalism isn't magic.
Sarah wrote: "You said (or made the assumption) that government is one big powerful monopoly. A monopoly of what product? What service? What is government's purpose? Which of your liberties do you fear being restricted? I'm not sure that our assumptions are the same on these questions."
In my analogy, the government provides many products and services, such as for the common defense, infrastructure, you mentioned the FDA, etc. We all own part of the government and have a vote to elect its board of directors. However, for some valid reasons, it is like a monopoly in that we all must buy (through taxes) its products and services in their entirety. You can't withhold money from the FDA and say, I'd rather fund Canada's FDA since they do a better job.
Thus, both because it is a monopoly and its authority is theoretically absolute, it seems wise to be careful how much power the government is given. This skepticism is reflected in my opinion of Law 2029 which is that the government should not have the right to sell rain or seize private wells.
Sarah wrote: "I would be a lot more open to your arguments of unfettered capitalism if I could be more trusting. But alas, I am not."
I'm not sure I'm arguing for unfettered capitalism. Unfettered by what, specifically? In terms of capitalism itself, what better alternative are you considering?
I don't think it is that I'm more trusting of corporations, it's just that I'm also distrusting of the government, which has much greater authority.
Sarah wrote: "I totally disagree that rain water that falls in our nation should belong to a foreign company who would charge me 20% of my income for it."
I did not intend to suggest that that is how it should be. Did my statement that people should own the rain they collect lead you to this conclusion? I was referring to individuals. I do not believe the government should have the right to prevent you from collecting rain.
Sarah wrote: "I'm also shocked that you are alright with the patenting of life. Can't agree there."
"Patenting life" is an encompassing moniker. If creating new genetics is valuable, how do you suggest we encourage innovation while also supplying the public domain? As I've stated, I do think the patent system is in need of repair.
One case I recall which seems wrong involved a Canadian farmer who was successfully sued for selling patented canola seeds due to pollination from a nearby Monsanto farm. I don't see how it should be the first farmer's responsibility to protect from such an event. If anything, it seems to be some sort of inadvertent trespassing by the Monsanto farm.
Sarah wrote: "Commerce isn't the end-all-be-all. And the "survival of the fittest" social Darwinism that plagues a lot of arguments on the right vexes me greatly. Check out: http://www.robertreich.org/reich/20051201.asp I don't agree with everything in the article, but there's some interesting food for thought there too."
I agree that "commerce isn't the end-all-be-all". I also agree with the statement in that article that "one's economic status in society is not a function of one’s moral worth". I'm not sure how his sweeping statements should apply to my arguments.
Sarah wrote: "So, what do you think about terminator seeds?"
I don't think very highly of terminator seeds. It seems appropriate that the market and governments have rejected them. As I indicated previously, I think patents should encourage innovation to the benefit of the public domain. To the extent they are not doing that, the law should be changed.
Kevin
Interesting post and even more interesting questions. I'm sure a person could write a PhD dissertations on each question you posted, but I will refrain.
What do you think? Should the essentials of life, such as water, be government owned?
- Yes. Their is something intrinsically different about rain water. Unlike food, rain can't be produced. It is subject to climate, pollution, and geography. We cannot live without it, and for most countries, it is rare. Some have speculated that it will become the new oil in the years to come, especially if it is privatized. Governments are best equipped to protect a country's water supply through environmental regulation, the military, and by being subject to the democratic process. A corporation is subject only to profit and once water rights have been purchased are able to use the judicial process against the government. This is too much power to an unelected body when too much is at stake (human life). I'm sure Robert Kaplen would have a horror story or two to tell about this.
If so, how should Cochabamba solve their water crisis?
- This is a difficult question because it is intrinsically intertwined with geography, politics, international relations and good governance issues. It is beyond the local scope to solve at this time.
What lessons should be learned from Cochabamba?
- International, unelected governments should not be able to dictate to a country what is best for them by using a single outdated model for economic revitalization. The IMF and WTO have got it wrong too many times and drove nations like Bolivia into the arms of Chavez, Castro and the likes for help. The systems need to be changed. The revival of leftist politics in Latin America is partly a result of their dissillusionment with the failure of neo-liberal solutions.
Is this exceptional or typical of globalization?
- I don't know, but it sure does seem like it's typical. :) It really depends on your definition of globalization.
Okay, I have already written too much, I'll stop now.
(Sorry for the length)...
My question is decidedly not: “What alternatives to capitalism could we employ?” Capitalism in general is not problematic for me. I think it serves us well. Rather, it’s the neo-liberal economic orthodoxy of the Washington Consensus and the outcomes that such policies engender which are problematic.
My question is: “How do we manage our capitalism in a socially beneficial way that protects our democratic values?” My beef is not with capitalism as an economic system, but with the unfettered version of super-capitalism promoted by the neo-liberal orthodoxy.
As a Christian, I value people, individual human security, and democracy above monetary gain and even “efficiency” (the sacred cow of modern man, eerily portrayed to the extreme in Aldous Huxley’s Brave New World). This term “efficiency” has been hijacked by the neo-liberals as the universal defense for prioritizing the security of investments and the rights of investors. Investor’s rights are important. But within the greater social discourse of individual human security and democratic social stability, they should not be prioritized to the top of the list. (At least that’s my opinion heavily influenced by readings from the Bible). Besides, we should think of ‘efficiency’ in terms of greater gains for society as a whole (democratically in an egalitarian sense), not just ‘efficiency’ for those who can afford to invest.
According to the Oct. 26th podcast of The Economist, most of the economic gains of the past 25 years in America have gone to the top 15-20% income earners. In the past 6-7 years, most of the gains have gone to the top 1% (This podcast is available on iTunes for free – it’s called “Democracy in America”). This does not bode well for social cohesion and democracy. So how ‘efficient’ is something that has a destabilizing effect? (Also observable in the Bolivian water example).
Another problem I have with the neo-liberal party line is the over-emphasizing of freedoms of corporations, at the expense of freedoms of individuals (the freedom to collect rain water, for example, since it was deemed corporate property). There is an undemocratic element to that kind of logic – it protects the power player at the expense of the individual. Could we incorporate the freedom from want into our understanding of ‘freedom’? Anyone who is familiar with the plight of poverty can tell you this is not a life of freedom.
The next problem I have with the neo-liberal track is the depoliticization of economic policy. The promoters of this economic orthodoxy are trying to promote the idea that economic policy is a technical system that should be protected from political interference. Attempts to remove economic policy from political control, by reducing it to a set of technical prescriptions, imply that economic policy is the territory of experts and should not be subject to democratic debate and participation. Yet, the ever increasing power of financial trade institutions shows that economic policy has actually become THE major form of political action at the global level. This is a major threat to democracy. Production, consumption and savings may appear to be purely economic issues, but they are sustained by ways in which society is organized. Therefore, attention needs to be given to the social dimensions of macro-economic policies.
Which do I value more: democracy or capitalism? I value both, but when push comes to shove, I lean toward the egalitarian ideals of democracy. I only have begun to question the neo-liberal orthodoxy with a critical eye since I began to perceive that this orthodoxy may indeed pose a real threat to my personally held democratic values. I don’t seek an alternative to capitalism. Rather, I seek solutions within the capitalist system that are more democratic and serve to benefit civil society as well as corporate business.
I’m not trying to change the subject here. I look forward to other’s responses to the original post. I just wanted to take a step back and examine neo-liberal assumptions that lead to the situation that occurred in Boliva.
It was the VP of the World Bank, in 1995, who said "If the wars of this century were fought over oil, the wars of the next century will be fought over water."
-Ismail Serageldin
An interesting book on what's already happening:
"Water Wars" By Dr. Vandana Shiva.
I'm going to try to find it at the library...
Kevin, sorry I didn't address your first comment. I had already written my dissertation, so I thought I might as well post it. :)
I'll try to keep it short this time. It sounds like I misunderstood you on several points. Thanks for clarifying. I think I understand and appreciate your position better now.
I found the Wikipedia article to be written in a neo-liberal American tone. Not that facts were necessarily misrepresented, just presented in a certain light from a certain ideological perspective. That's just how I read it - I could be wrong.
You're right. I used language that was a bit too sarcastic and cynical. I'm working on that (seriously, I don't think cynicism is a fruit of the spirit!) Thanks for calling me on that.
I agree with your caution about giving to much power to one player (or institution) in the social arena. I share this caution. We don't want a government that is too powerful (hate Real ID, btw). I am also cautious about going to the other extreme, and thereby over-empowering the corporate/business sector at the expense of citizen power.
By 'unfettered', I mean uninterupted, completely unrestrained. I am talking about the idea that 'the market is supreme' and the faith in the infallibility of 'the invisible hand' of the market. The desire to take all government protections and regulation out of the equation. (And therefore, depoliticize the economy - so no democratic participation takes place). There is a "social contract" that exists between a government and its citizens that doesn't exist between the corporate/business world and citizens. So I don't want to take government completely out of the economic equation.
As far as patents and genetics. This is the argument utilized by many pharmaceutical companies. But it's flawed because it assumes that all innovation (or productivity) is motivated by self-interest (profits) alone. This isn't true in my experience. For instance, there are many dedicated professionals seeking a cure for cancer not so they make a lot of money, but because they genuinely want to save lives and mitigate suffering. There are myriads of innovative, creative and hard-working professionals in fields that don't make a lot of money but come with rewards that are just not quantifiable in monetary terms (teachers, NGO workers in many fields, Red Cross workers, etc). Many personal friends of mine work in these fields. They inspire me...
Anyway, sorry for the delay in answering... (I actually tried to post an answer and lost my whole comment after 30 minutes! So this is the second attempt, and I fear it's not as good... oh well)
Reilly,
Thanks for your comment and welcome to our blog. :)
I did ask large and difficult questions, though clearly opinions exist on the topic and I hope our dialectic will prove fruitful in learning more about the subject.
Neither you nor Sarah have written too much in my opinion. Indeed, I think that even more detail and examples would be helpful.
By "globalization", I meant the push for free trade, including foreign private ownership. One overall question was whether the failure of Cochabamba was a failure of principle or of implementation, in a similar way that the principle of (competitive) capitalism might not reasonably be considered a failure in an implementation of "crony capitalism".
I can imagine cases where water is scarce and best managed by the government, even for security reasons. And in those cases which must run at a loss or where the government can do a better job, I have no problem with their ownership. However, in the general case, due to the lack of competition, it seems less than ideal.
In competitive capitalism, consumers vote through partial ownership and purchases, which can often provide a finer granularity of control and greater options than many of our present democratic processes provide (of course, these processes could be expanded upon, but often are not).
In the case of Cochabamba, the elected government was and is ostensibly unable to provide adequate water service. Presumably due to corruption, they were also apparently unable to serve the interests of Cochabambinos in their deal with AdT.
Of course, AdT was also at fault in the monopoly and for exceeding the tolerances of the Cochabambinos, and the World Bank should modify their policies to advance competition over cronyism and to require local negotiations in deference to national agreements. Due to their own economic losses, I imagine that the World Bank and AdT would be motivated to make these changes.
I agree with Sarah and do not advocate unfettered capitalism. The government has an apt role of not only protecting human and property rights, but also of setting standards and encouraging competition.
Kevin
Sarah,
I hope that my reply to Reilly can serve as a reply to the points you have raised as well since they seem to overlap. If I've missed anything, please let me know. I also hope everyone feels free to respond to any of my posts, even if they are directed in response to a particular person's comments.
I don't think patents assume "that all innovation (or productivity) is motivated by self-interest (profits) alone" (with the stress on "all" and "alone"), but rather that innovation is appreciably enhanced by temporary ownership of one's creations. Furthermore, patents do not preclude non-monetary rewards or releasing ownership, just as capitalism does not preclude non-governmental cooperatives (which may be the best option in many cases such as insurance).
Another reason for patents is the secrecy that develops without them. Patents provide a protection for people to share their ideas rather than trying to use them in secret. This should ultimately serve the public good. Again, as I've said, I think the patent and copyright system needs significant reform, but, at the moment, I'm uncertain that abandoning them is the best option for the public good.
Kevin
Kevin wrote: "In competitive capitalism, consumers vote through partial ownership and purchases..."
Yes, this is the framework we currently have, but where the potential for socially responsible action is greatly underutilized.
Ideally, investors would care about ethical issues, and some do. But I would argue that they are in the minority. Most investors want a high rate of return - no questions asked. Not because they are evil people, but I think mostly because they don't care to know how their profits are increasing, just that they are indeed increasing.
And same with consumers. People want a higher standard of living at a lower cost - no questions asked. I know because I was one of them. It's actually difficult to vote with your dollars, because it requires research and effort. The problem with socially responsible investing and consuming is the battle of greed.
Additionally, the undemocratic or unegalitarian element of this system is that it empowers people according to their financial standing. Investors and consumers have more "votes" to cast since they have more dollars. People who are on the fringes of consumer culture, not by choice, but simply because they cannot afford to participate, have little "voting" ability. And they are forced to "vote" for the WalMarts etc., thereby giving it their stamp of approval (whereas they may not approve with how WalMart has affected their community, but feel like they have little choice to shop elsewhere).
I do not consider myself 'poor' by any means (althought most Americans probably would consider me 'poor'). I try to compare my level of wealth globally rather than nationally, so I know I am quite wealthy. However, I cannot afford to 'vote' with my dollars to support environmentally-friendly home and furniture products as I would like to do.
When we bought our home, the carpets had been destroyed and needed replacing. I would have loved to use bamboo flooring in our home (over the laminate we could afford). I would love to support ecologically sound furniture manufacturers, but *sigh* we just can't afford those prices. (We had no furniture having moved back from Japan). We would prefer to drive a Prius over a Focus, but it's just out of our price range.
I prefer organically grown food for both health and ecological reasons. But this does put a strain on our budget. It costs more, but it's worth it.
All this to say, that the argument sounds good, but in reality, it doesn't always work. Few people care enough, and those that do aren't always in a financial position to "vote" the way they would like to.
Kevin, thanks for the welcome. I don't want to stray too far from water, your original post, but I would like to wander a little and interact on the point you raised about patents. This is a very interesting topic in and of itself.
I have been wrestling with this one in relation to HIV drugs in Africa. It's an interesting example to examine the patent system in a real world case.
The summary of it is: HIV drugs are too expensive for Africans and all 3rd world nations to afford. Even by "western" standards they are expensive, but by African standards they are unattainable. So Bono and the like are trying to convince pharmaceutical corporations to have tiered pricing depending on where people are from.
Yes this is problematic, but so is dying of HIV when someone could help. Where this case really garners my attention is the specific drugs that can prevent HIV from transferring from a positive mother to her unborn child. So to my point... the pharmaceutical companies want to regain their research investment, please their shareholders and make a profit (I am not saying that with a value-laden tone, most people want to be paid for their work, and that is as it should be).
But Africans, who have the highest rates of HIV, can't afford these life-saving drugs. So what is to take precedent, the patent or life? Despite Bono's efforts (along with pressure from political leaders), the pharm companies rejected the tier system. (They argued that Americans would abuse it by flying to Africa to get the cheaper version. But the cost of airfare makes this argument a bit far fetched).
The Brazilian govt. responded to the company's rejection of making their drugs more affordable by threatening to make the drug generically themselves (for their own citizens). Africa doesn't have that kind of leverage yet. (You can check out the debate at the BBC)
I debated with many of my fellow students over this (arguing that these companies need some kind of pay), but I just don't know. Tough questions that I just don't have the answers to...
Reilly,
Tangents are welcome, and that is an interesting and difficult dilemma.
Within the bounds that you frame the scenario, my current thinking is that if in fact those drugs would not exist at this time without the incentive of patents, then it seems reasonable not to appropriate them, because if you did, it would reduce the incentive to create life saving drugs in the future.
In other words, if patents do not have a significant impact on innovation, they should be abolished and appropriating the drugs can be justified. If, on the other hand, patents do have a significant impact on innovation, then appropriating the drugs would saves some lives now at the expense of potentially more lives later.
That being said, matters of life and death makes it all the more important to find the optimum rules and time limits for patents which maximizes innovation while also feeding the public domain as quickly as possible.
In the meantime, I wonder if the existence of the drugs and the patents may serve as a guide in developing similar drugs or using their plant sources in diverse treatment regimens for the disease. Similarly, I wonder if this is truly a dilemma of all or nothing, or if there are other treatments which would also prove helpful.
Regarding Bono's solution, I'm curious what kind of controls would be required to prevent purchase in one area and transportation to another. Even with strict monitoring, it seems like it would be ripe for corruption of their intent.
Kevin
I don't think the argument is against patents per se, but for attainable solutions to health epidemics. Yes, developers of these drugs should be compensated. (The question for me becomes: How much compensation is enough? How much profit is acceptable?) But I don't think the tier system is a bad idea. As far as controls in place to prevent purchase in one place and transportation to another. This is what Customs is for.
Besides, I don't know that I want to rely purely on the laws of supply and demand (market is supreme) when it comes to life-saving drugs. What is the value of saving a life? The demand is extremely high, since life itself is at stake. A mother with AIDS is highly motivated to save the life of her unborn child. If the market alone determines the price, is this ethical? How does our Christianity influence our position on this? What is the heart of Jesus in this matter?
It's interesting to note that because of the pressure from the Brazilian government, the pharmaceutical company caved and agreed to lower their price. I doubt they'll be producing it at a loss.
Sarah,
I think you imply the dilemma: if not the free market, then how do we determine the actual value of these drugs? Some factors in determining that which you elide are, how do we incorporate alternatives?, How and by how much should we fund research and in which directions?, and How will an artificial value impact innovation in the future?
e.g. the price of their drug is likely not very reflective of the cost to produce it, but rather the cost to invent it.
It is sad that people die of starvation and diseases that are even easier to cure than AIDS. Unfortunately, there are competing interests even in our own lives.
Of course, I'm interested in any just change that would sustainably improve and save more lives.
Returning to your previous post, I agree that free market competition does not necessarily result in your having everything you want or contributing to every cause. Indeed, we each have different ideals and competing interests and priorities that we amalgamate within the market to determine actual value.
In the case of consumers being forced to buy from Walmart because they cannot afford anything else, I'm inclined to wonder, how did they survive before Walmart? Walmart does cause problems for local businesses and producers, but ultimately, it is the consumers who prioritize lower prices over alternatives. Is this wrong of them?
I think your purchase examples do not evince "no questions asked", but rather that people are asking a lot of questions and are concerned with more than just the type of "greed" you suggest. Even if one cannot always afford it, the options you mention exist because there is demand, and as the market grows, prices will likely decline.
Supply and demand might also relate to your point that more money can amount to more "votes". Unlike a political vote, every purchase is an exchange for something of value. Rich people may be able to purchase more stuff, but that conversely provides income opportunities for more providers.
Of course, there are goods which are out of range for many people, and I agree that we should help good people who are struggling to attain the bare necessities of life.
Kevin
You've added some interesting thoughts (some "trickle-down" economics, perhaps?). I understand it is the R&D costs that need to be recouped. That understanding is fundamental to the definition of "profit". But that doesn't answer my questions.
I don't feel you have tried to answer my questions. I'm curious to hear your response.
Sarah,
I'm sorry that you feel I didn't answer your questions. I did try and I'll try to address them again more specifically. I'm curious how you would answer your questions.
Sarah wrote: "How much compensation is enough? How much profit is acceptable?"
My meta-answer was that competition in the free market is a reasonably fair way to determine appropriate compensation due to its dynamically accounting for competing interests. I left it to you to provide other means of determining limits on profit that are similarly fair and that better account for the additional factors I mentioned previously which you seem to elide.
I think I also previously mentioned my perspective on patents, which is that they should maximize innovation into the public domain. e.g. I think there comes a point where limiting the duration of a patent (thus implicitly limiting compensation) can actually encourage innovation by feeding the public domain which everyone can build upon.
Your suggestion of a (mandated?) tier system may be useable, but it does not seem to address the fundamental question of determining the "acceptable" value and thus profit. In addition, some obstacles seem to be its potential for lesser innovation and difficulty of enforcement.
Sarah wrote: "What is the value of saving a life?"
That question is broad and complex. If we assume that the value of a single life is monetarily infinite, then we might consider, how does it compare to other lives? Is it worth your life? Is it worth half of your life?
How much are you willing to do or give to save one man's life? Perhaps it is relative to the context and what the man has done or what he will do. In your judgement, is his life more deserving than another's? Is extending one life now more valuable than saving more lives later?
Ultimately, this is a subjective question, but through the value of time and work and resources, the "value" of actually saving a life materializes.
My statement comparing starvation and other diseases to AIDS was meant to lead down this path of evaluating competing interests.
Sarah wrote: "The demand is extremely high, since life itself is at stake. A mother with AIDS is highly motivated to save the life of her unborn child. If the market alone determines the price, is this ethical?"
If you are asking whether an ideal market determines a fair price, I would say yes. In your specific hypothetical, charity may be the ethical choice but this does not affect the "price" of the drug.
Sarah wrote: "How does our Christianity influence our position on this? What is the heart of Jesus in this matter?"
I imagine it would influence all facets to some extent. Perhaps, in a sense, we are balancing our responsibilities to serve others versus not to compel others. However, even without considering the freedoms preserved, it seems reasonable that encouraging innovation may actually save more lives in the future in exchange for saving fewer lives now. Wouldn't Jesus favor this?
Granted, we are discussing huge "what ifs" that would probably be best served through statistical analysis and experimentation, but the principles seem sound to me, and I am not sufficiently confident in the opposite to impose it by government fiat.
Kevin
Kevin, thanks for being more specific. I'm impressed. If the tables had been turned, I would have said something like, "These questions are really difficult and may not have easy answers." Because that's honestly how I feel about it. I don't have all the answers to the questions I posed. (Part of why I ask them, to see what others think). There's some really difficult problems in the world we live in, and some things I would really like to hear from God about, and get some godly wisdom like He gave to Solomon.
I appreciate your faith in the market. I'm not sure yet that I share that faith. I've observed so much abuse in the system, that my faith in it isn't without caution. (But I'm also talking from a global perspective, not just in America). I'm not saying throw the baby out with the bathwater (and get rid of the system), but that we can probably improve it. I don't have all the answers how to do that, but that is a process of discovery that I am in right now.
Maybe I feel a bit like the Czechs in 1968 (the "Prague Spring") who saw the abuses in their system and wished to reform socialism. They called for "socialism with a face". They didn't seek to rid themselves of socialism, but the mere questioning of how it was being carried out was a problem for the Soviet Russians. The tanks rolled in, and that was that. I don't seek to destroy our system, but maybe I want "capitalism with a face". I hope my lack of enthusiasm doesn't threaten your faith in the system. (From your answers, I doubt this is the case, you faith in it seems quite strong).
I respect your right to your opinion, and you strike me both sincere and intelligent. (I don't respect people who think others are 'stupid' for not agreeing with their position. Hence, I respect you a great deal more than someone like... Hannity). I hope neither of us come away from this exchange feeling discouraged that we haven't changed anybody's mind. I have learned more in this process. And that's incredibly valuable.
Regarding "What is the value of saving a life?", I don't know that the gospel includes a measuring stick for "more deserving" or "less deserving" based on actions. Is the life of a murderer less valuable than the life of a martyred missionary? I think the scandal of the cross, the scandal of grace is that the answer is "no." That is a difficult pill for me to swallow, but I'm trying to allow God to conform my opinions to His.
I really like how you answered that question in regards to how much should we value to life of another in comparison with our own. Again, I think the Bible speaks very clearly on that. If we are conformed to Christ's image, we will desire to lay down our life for others. To put others above ourselves. Even Paul said that if giving up his life could save the Jews, he would do it. This is the scandalously unpopular gospel of the Bible. I would argue that it is a foreign gospel here in the west, since we tend to like to hear and preach a gospel of self.
The other thing I appreciated that you brought up is the reality of trade-offs. Because we have limited resources in the earth, and must steward them carefully, we have to be effective in our fight against health issues. (This is why I believe that a preventative stance that seeks to rid our environment of toxins and carcinogens would be more effective than our resources being devoted to seeking a cure for cancer). Pollution and human health are intertwined subjects. This is why I see environmental stewardship as an ethical issue more than a "cause." Sorry if that offends anyone, I lost my own father to cancer. So this epidemic has touched me personally. I also observed his willingness to pay any price to become well, and I feel the medical industry in this country takes advantage of people in desperate situations like his. There's no reason our health care costs should be more than double, sometimes triple those of other countries - for the exact same care. The market has failed to produce a fair price in this industry. (Which is why so many Americans fly abroad for health care).
I guess ultimately, your argument about compelling and freedom may be correct. (But I would argue Jesus purchased us freedom from sin, not political or consumer freedom - otherwise He would have destroyed Rome's rule over the Jews. And I would be cautious in assuming Jesus would endorse our capitalist culture. One could easily use the arguments for socialism to assert Jesus would endorse that system. I think we tend to think of Jesus as a capitalist American, but He is not).
Studies have shown that countries with laws prohibiting abortion do not have lower abortion rates (I think Poland was in the study, not sure of the other countries). I just heard this yesterday, and I didn't like it one bit. My first thought was, "Well, I'd like to know how they conducted their 'study'!" But what if you're right? I suppose prayer for America (and the west - as they represent power in the global arena), for a revival of morality would go a lot further toward "capitalism with a face" than compelling people through the legal system. I'll be honest, I'm still undecided. But I think you might be right. People's hearts have to be changed (and only God can do that) before they will willingly change their behavior.
The following is just me preaching. I have no idea what you are or aren't doing, so it's not personal. Here is what I am sure of: if my neighbor is at risk of contracting a fatal disease, and I have the resource to supply them with the solution, then Jesus wants me to do it (or at least try). This is true whether I'm a Christian executive or a Christian stay-at-home mom. It's easy (we pretend like it's difficult, but it's not)! If every Christian gave sacrificially (not just out of their excess, but so that it meant they sacrificed to do it), how much would the world be changed? How much more credibility would the gospel have in the eyes of unbelievers? How can we call others to the cross, unless we've taken it up ourselves? Amen.
Sarah,
Sarah wrote: "I appreciate your faith in the market. [...] I hope my lack of enthusiasm doesn't threaten your faith in the system. (From your answers, I doubt this is the case, you faith in it seems quite strong)."
I guess I do have some faith in the principles, but I only want my faith to be as strong as the evidence suggests. It may have a simple premise of competing interests (which includes more than just self-interest), but I think that the benefits of a free market can be more difficult to see than those of centralized control.
I think you and I have similar goals and we have been primarily discussing the best means to achieve those goals.
Sarah wrote: "I hope neither of us come away from this exchange feeling discouraged that we haven't changed anybody's mind. I have learned more in this process. And that's incredibly valuable.
I'm very happy to hear that since that is our goal for this blog. I agree and I've learned, too, as our dialectic has challenged me to explore, reason about, justify, clarify, and adjust my own thoughts and opinions.
Sarah wrote: "I'm not saying throw the baby out with the bathwater (and get rid of the system), but that we can probably improve it. I don't have all the answers how to do that, but that is a process of discovery that I am in right now."
That is great. I agree that the system can definitely be improved.
Sarah wrote: "Is the life of a murderer less valuable than the life of a martyred missionary? I think the scandal of the cross, the scandal of grace is that the answer is "no." That is a difficult pill for me to swallow, but I'm trying to allow God to conform my opinions to His."
I agree with you in terms of salvation, but in terms of justice, it seems reasonable to deal with the life of a missionary differently from the life of a murderer. e.g. We may consider scenarios where you can save only one of the two, or even that the death of the murderer alone can save lives.
Sarah wrote: "If we are conformed to Christ's image, we will desire to lay down our life for others. To put others above ourselves. Even Paul said that if giving up his life could save the Jews, he would do it."
I agree, Paul was eager in that regard. But it can be more difficult to live in service to God and do His will than to die or sacrifice as we would choose. (Acts 21:4)
Sarah wrote: "This is the scandalously unpopular gospel of the Bible. I would argue that it is a foreign gospel here in the west, since we tend to like to hear and preach a gospel of self. "
Foreign in the west compared to where? I think there is a balance between caring for yourself and others. Charity itself requires balance. e.g. taken to an extreme, we may give all that we have to "the poor", but then we become poor which can actually decrease our capacity to help others in the future. In other words, it seems that even maximizing our charity involves more complex factors than just giving.
Sarah wrote: "This is why I believe that a preventative stance that seeks to rid our environment of toxins and carcinogens would be more effective than our resources being devoted to seeking a cure for cancer"
I agree. "An ounce of prevention is worth a pound of cure." In light of our preceding discussion on the free market, it occurs to me that that is a prioritization of competing interests.
Sarah wrote: "Pollution and human health are intertwined subjects. This is why I see environmental stewardship as an ethical issue more than a "cause.""
That sounds reasonable. Whether the solution is a class action suit or a government suit against those who pollute with carcinogenic toxins, I agree that it is an ethical issue. I am sorry for your loss of your father.
Sarah wrote: "There's no reason our health care costs should be more than double, sometimes triple those of other countries - for the exact same care. The market has failed to produce a fair price in this industry. (Which is why so many Americans fly abroad for health care)."
I think foreigners also fly here for health care for different reasons, but you raise an excellent point that deserves investigation: Why has the medical free market failed? I started a new thread for discussing this topic.
Sarah wrote: "But I would argue Jesus purchased us freedom from sin, not political or consumer freedom - otherwise He would have destroyed Rome's rule over the Jews."
I'm not sure I understand your argument. Is it that, by not destroying aspects of the world, God shows his indifference to those aspects? Or that political oppression is not a sin?
Sarah wrote: "And I would be cautious in assuming Jesus would endorse our capitalist culture. One could easily use the arguments for socialism to assert Jesus would endorse that system. I think we tend to think of Jesus as a capitalist American, but He is not"
Caution is good and I concede that Jesus was not a capitalist American. :) Given the equality between Jesus and perfect morality, I guess our debate could be viewed as considering which principles we think Jesus would endorse. Of course, he knows for certain, while we know only to the degree that the evidence suggests. I do think that Jesus would endorse individual freedom as a moral principle.
Socialism does emphasize charity and it seems like a good theory if it were voluntary. The problem seems to be that implementations are not voluntary and tend to (perhaps unnecessarily) sacrifice freedom for a fixed mandate of priorities and solutions.
Furthermore, as I mentioned in the poverty thread, it is somewhat disconcerting that the more the government serves as a charity, the more it seems people view their taxes as their charity.
Sarah wrote: "Studies have shown that countries with laws prohibiting abortion do not have lower abortion rates"
I think Stevie also brought that up at one point in our discussions on abortion. It does make me wonder how effectively they measured an illegal activity, too, but it is a fascinating dynamic that seems counterintuitive and highlights that abortion is first a battle of cultures. For that reason, I think that leaving the decision to the states becomes more attractive which, in a sense, might allow the states to compete for optimal outcomes.
Sarah wrote: "But what if you're right? I suppose prayer for America (and the west - as they represent power in the global arena), for a revival of morality would go a lot further toward "capitalism with a face" than compelling people through the legal system. I'll be honest, I'm still undecided. But I think you might be right. People's hearts have to be changed (and only God can do that) before they will willingly change their behavior."
That makes sense to me and the final paragraph of your comment beautfully evinces how we can help change people's hearts, both through our direct aid and through our example. I think yours is a profound image that, in capitalism, we are each the face of charity, with significant implications for personal relationships, gratitude, and responsibility.
Kevin
Thanks for the thoughtful response... I'll try to come back here when I have more time...
Hi again. You're right, competition is the most beneficial for innovation. Where the market may not fill the need for development in certain areas (since no immediate profit is available) and where the government also fails to provide, others from civil society are stepping into the gap. The X Prize Foundation offers monetary prizes to stimulate research and development into several such areas of concern. You can check it out at www.xprize.org.
I think it's a cool idea.
And I agree that our goals are the same...
Sarah,
I agree, the X Prize is a very cool idea.
Notably, I don't think it would be considered to be outside the free market. The free market requires individual freedom to pursue such endeavors and does not restrict the only competing interest to be immediate profit.
btw, I recall your asking about how to create an html link. This link: X Prize is created using this text:
<a href="http://www.xprize.org">X Prize</a>
Kevin
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