When Ignorance Goes Viral

During the heated debate of the Health Care bill, I ran across this many times on the internet. Googling "Diary Entry of a Conservative," will show you that it's appeared on many political blogs, either as entries by the author or as sarcastic comments to thunderous applause from supporters. It lambastes those that decried the health care bill as 'socialist' and reveals their apparent duplicity. (I do not know if the video or text came first, or who authored it-- as is the case with most viral material on the internet). It was e-mailed to me by liberal friends who knew that I questioned the Democrats' health-care plan, since opposing it obviously indicates that one wants poor people to die of Typhus whilst he admonishes their laziness from the hospital waiting room. This, they must have thought, will show me my hypocrisy. What it in fact shows is a fundamental misunderstanding of market theory. Putting aside all debate on health-care (which never got me really worked up), the astounding ignorance of both socialism and the viewpoint of most fiscal conservatives, ignorance that many people found both hilarious and insightful, unsettled me. Even some of the less intense Libertarians would acknowledge the need for the state to supply public goods. And that's precisely what this list mentions, time after time. Clean water, safety standards, public roads, on and on it goes with basic examples of public goods any student of economics would come across in the very first discussion of the topic. In private markets goods like this would be lacking as individuals have incentives to understate the benefit derived from them, and thus the goods are underprovided if provided at all. A possible solution to this allocative inefficiency is for the state to publicly provide them. I could not know certainly, but it's unlikely that everybody who believes this video's message lives benightedly. There are doubtless highly intelligent people that assert there is hypocrisy in believing one can drive on a public road and that the government should not provide goods whose benefit is largely private (admittedly there are positive externalities to health consumption, but it's still far more private than, say, the Food and Drug Administration). You can argue that health-care should be publicly provided, or that even these public goods mentioned could be adequately supplied by private organizations. You can point out that by this logic that prisoners must love prison since they eat the prison food provided to them (a common rebuttal). But it disturbs me when many intelligent people commit such an obvious fallacy in trying to combine seamlessly the two types of goods while demonstrating a powerful unawareness of multiple economic theories, and believe they've done something clever.

Frat Externalities

This 2002 editorial in the Cav Daily argues the University is right to subsidize fraternities (in the form of loans). The argument is essentially that fraternities bring so much good to the University community, that the University really ought to do everything possible to maintain an extensive greek system. Here's an excerpt:

The fraternity system’s contributions to the University community reach far beyond the undergraduate level. The fraternity experience trains men for success, making an impact that continues to be felt as an alumnus. With the Greek system at heart and the University as a backdrop, fraternity alumni continue to be integral supporters of the school through time, energy and financial donations.

Without using the economic terms, the author is arguing that fraternities produce positive externalities for both the University and the community, even though their primary output is apparently training "men for success." Hmmmmm. Are these the only externalities from fraternities? And what IS the primary output of fraternities?