There is one aspect of this that bothers me, though.  Early on in the dialog, Shirky says that if we, “… start thinking of [our free time] as a social asset that can be harnessed, it all looks very different. The buildup of this free time among the world’s educated population—maybe a trillion hours per year—is a new resource.”  Of course he’s right.  It’s a wonderful new resource that is already being harnessed.  As they mention, this “cognitive surplus” is being used to create serious open source projects like Linux and Apache, great resources like the Wikipedia, and even all the dumb Youtube movies and LOLcats you could ever want to see.

Still, I’m wary of thinking of our free time as a “resource” for achieving new levels of productivity.  Shirky says of free time:

People have had lots of free time for as long as there’s been the industrialized world.  But that free time has mainly been something to be used up rather than used, especially in postwar America, with the rise of suburbanization and long commutes. Suddenly we no longer lived in tight-knit communities and therefore we spent less time interacting face-to-face. As a result, we ended up spending the bulk of our free time watching television.

This observation wouldn’t bother me at all if Shirky were bemoaning the loss of tight-knit communities and face-to-face interaction, but instead he seems to be advocating converting all of that television-watching time Wikipedia-editing time.  There’s something disturbing in this.

Does this mean that, when we’re done with a full day’s work, we’re supposed to come home and ignore our communities while working for several more hours, this time for free?  Is it too much to expect a few hours of rest and socializing?

In fairness, I haven’t yet read either of their books, so I don’t know if they address this problem better.  Still, I think this is connected to the niggling question I was trying to put together in my last post: Shirky seems eager to exploit the resource of free-time, but doesn’t seem to ask the question, what does this mean for our work-time?

Our society tends to take for granted that we must all suffer the sometimes absurd effects of economic inequality, and we accept this because using money as a motivator is the only way to create a productive society.  Shirky and Pink argue that money is often a terrible motivator and can actually have adverse effects on productivity, and then they continue on as though they haven’t noticed that they may have knocked out our society’s underpinnings.

Here’s my parting thought: Clay Shirky presents Ushahidi.com as a triumph of “cognitive surplus” because it was made by developers in their spare time.  Might it instead be a shortcoming of our economic system that these developers were forced to do such important work in their spare time?

(Sorry if this is muddled, but this is a product of my cognitive surplus, and not of my work life– i.e. I’m tired.)

Edit: I suppose I’m not arguing with anything Pink/Shirky are explicitly saying.  I’m worried that people might be looking at these discoveries about human motivation and thinking, “This is great!  You mean, not only can we get people to work their normal crappy 9-to-5 job, but we can use new motivational tricks to get them to go home and keep working for free.  Now, if we could only keep people from sleeping, people could work 24 hours a day!”

To me, the story shouldn’t be “people will work for free” but instead “coercing people to work under threat of homelessness and starvation might not be necessary.”

This might seem like a strange claim– we have private insurance systems, so how could that be socialist? First of all, the government already subsidizes the healthcare industry, including health insurance companies. The reason we commonly get our health insurance policies through our employers is that money spent on health insurance is classified as an expense for your employer, and therefore is not taxed. It’s also not counted as income for the employee, and so it’s not taxed there either.

Now a tax break like this is a funny thing, because in one sense tax breaks are simply the government taking less of your money. However, if you start from the supposition of a flat tax, then every targeted tax break could be viewed as a subsidy. Some people find this hard to understand, but imagine a store which is selling an item at full price, and then providing an immediate $20 refund at the cash register. If you’re paying with cash, you get cash back. If you’re paying with credit, $20 gets credited to your credit card. Now is that any different than the store simply selling the item for $20 less? Effectively, no. In the same way, there’s not a significant difference between viewing a tax structure with deductions as being the same as a flat-tax system with subsidies. Essentially, the government is subsidizing everything that they’re allowing tax deductions for.

Once you consider this, you realize that by not taxing health insurance, the government is essentially subsidizing your employer’s purchase of health insurance, and thereby subsidizing the health insurance providers themselves. And it makes sense, because who would buy health insurance if it were not subsidized? It’s the nature of insurance that the average cost to the policy holder must be more than what they receive back from the insurance company. If this weren’t the case, the insurance company could have no operating budget. Because of this, insofar as health insurance pays for regular care (checkups and medication), healthy people will generally pay more into the system then they receive back in terms of care by the amount of their share of the operating costs and profit of the insurance company.

So just making numbers up on the spot, imagine 10 million healthy people all buy insurance from the same company, each person spending $2,000/month. That means the health insurance company receives $240 billion per year. Now let’s say that it takes $100 million per year to run the insurance company, and they expect a $20 million annual profit. That means the customers can only get an average of $1,999 per year in coverage. Now that’s not too bad to only lose a dollar, but it’s not gaining you anything.

Now imagine half of those 10 million people get sick, and need an average of $3,000 in care one year. That means that healthy people are only able to get $999 worth of coverage for their $2,000 expense. It’s not a great value for the healthy people, but that’s how insurance works. So in another sense, health insurance itself is a socialist system already, even without the government subsidy. It is a method of socializing the costs of health treatment rather than expecting each person to pay for their own health care costs.

Of course the problem is that, in a free market, health insurance wouldn’t work. People who believe themselves to be healthy generally wouldn’t buy health insurance because it’s not a good value for them. In my made-up example, they have to pay $2,000 for $999 worth of services. However, if you look at what happens to my example when the healthy people leave the system, suddenly everyone is paying for $2,000 for average of $3,000 worth of coverage, which cannot possibly be profitable for the health insurance company. They’ll have to raise their rates. Now the healthier portion of the sick people are no longer getting a good value, since the same model prevails and the people with cheaper care are subsidizing those with more expensive care, so they might very well drop out of the system too. The likely outcome is that, if health insurance would exist at all, it would be only for catastrophic coverage and would be no more common than life insurance or maybe renter’s insurance. That is to say, some people might buy it, but many people wouldn’t.

And this is why the government subsidizes health insurance through tax breaks, so that people get health insurance because they think it’s very cheap, when in fact it’s only cheap because we’re subsidizing it with tax dollars. Because of all this, I think it’s fair to claim that our current healthcare system is socialist– after all, it’s funded by the government with the goal of distributing costs, to take money from everyone and use it to provide for those who are in need.

What’s more, even if you look at those who can’t afford health insurance, their health care is still paid for by the rest of us. In some cases, the services are provided more directly by the government through systems like Medicare, but even in other cases the costs are still distributed among the rest of us. If someone without health insurance gets very sick, they go to the emergency room and simply don’t pay for the services they receive. This increases the operating costs of the hospital, which makes it necessary for the hospital to charge health insurance more for services provided to those who have health insurance. These increase in charge to the health insurance company in turn is passed to their customers, which we all pay for. We pay for it through our premiums and copayments and through our tax dollars which are used to subsidize health insurance. None of this comes free.

I find it interesting when opponents to reform, claiming to be in favor of free markets, also claim that we already have the best healthcare system in the world. Given that our system is already socialized, wouldn’t that mean that the best healthcare system in the world is a socialist healthcare system?