Showing posts with label social cost. Show all posts
Showing posts with label social cost. Show all posts

Wednesday, May 23, 2012

Ask whom the mandate tolls

Einer Elhauge, the legal scholar who dug up the health insurance mandates imposed on ship-owners, sailors and militiamen by U.S. Congresses and presidents in the 1790s, and economist Kevin Caves have placed the "individual mandate" in the Affordable Care Act in an arresting new frame:
Ronald Coase won the Nobel Prize in Economics for showing that social costs are symmetrical. In The Problem of Social Cost, Coase invoked the example of a farmer whose crops are trampled by the neighboring rancher's cattle. Before Coase, it would have been common to view the rancher as the culprit responsible for imposing costs on the blameless farmer. Coase pointed out that no matter which way the legal rights were allocated, one was imposing costs on the other. If the law forces the rancher to keep his cattle fenced in, the farming imposes fence-building costs on the rancher. If the law gives the rancher the right to let his cattle roam free, then the farmer bears the social cost....