I am interviewed by Russ Roberts. The topic is health care economics, based on my book Crisis of Abundance.
The interview was slightly censored. In trying to explain how we ended up with third‐party payments for health care, I suggested this analogy:
Suppose we were 20‐year‐old guys who hung out together, and one of our friends was down on his luck with women. He’s really depressed about it. We decide–not necessarily the brightest idea–to hire him a prostitute. We don’t want him to know she’s a prostitute, so we all chip in and pay her, tell her to meet our friend at a bar, and make him feel better about himself.
Next morning, we ask him how it went. He says, “Great. I really feel better about myself. In fact, I’m going to see her again tonight.”
As friends of the guy, we look at each other and realize that he will be devastated if he learns the truth. So we chip in again and pay the prostitute to make our friend feel better about himself. This keeps happening day after day, and eventually maintaining our friend’s illusion about his love life gets to be really expensive.
Similarly, free health care is an attractive illusion. It’s just gotten to be really expensive to maintain the illusion.
Even though that analogy was cut, I hope the podcast is interesting.