On Sunday, former Bush administration economist Greg Mankiw wrote in The New York Times that economists should adopt medicine's Hippocratic Oath and draft policy prescriptions that first and foremost "do no harm":
In some ways, economics is like medicine two centuries ago. If you were ill at the beginning of the 19th century, a physician was your best bet, but his knowledge was so rudimentary that his remedies could easily make things worse rather than better. And so it is with economics today. That is why we economists should be sure to apply the principle "first, do no harm."
This principle suggests that when people have voluntarily agreed upon an economic arrangement to their mutual benefit, that arrangement should be respected. (The main exception is when there are adverse effects on third parties — what economists call "negative externalities.") As a result, when a policy is complex, hard to evaluate, and disruptive of private transactions, there is good reason to be skeptical of it. [New York Times]
And he is right. Economics remains a relatively limited science. Economists can't accurately foresee what the economy will look like in six months, let alone six or 60 years, the way that astrophysicists can predict the trajectory of asteroids and planets in space. The Hippocratic Oath is a useful idea, because above all it forces the physician (or economist) to try to really think about whether their actions are harming the patient.
But Mankiw thinks that ObamaCare and raising the minimum wage are two examples of policies that violate the principle of doing no harm:
As I see it, the minimum wage and the Affordable Care Act are cases in point. Noble as they are in aspiration, they fail the do-no-harm test. An increase in the minimum wage would disrupt some deals that workers and employers have made voluntarily. The Affordable Care Act has disrupted many insurance arrangements that were acceptable to both the insurance company and the insured; these policies were canceled because they deviated from lawmakers' notion of the ideal. [New York Times]
This seems to be a rather strange interpretation of the concept of harm, though. Should harm in economics really be defined as disrupting agreements that were acceptable to both parties? What about real hardship, like not having access to medical care, or not having enough money to feed yourself or your family? What about the harm of employers exploiting workers to work for an unlivably low wage?
The Hippocratic Oath applies as much to omissions as it does to actions. If your patient is bleeding to death, and you neglect to stanch the bleeding, then you have caused harm by omission. It's why the modern version of the oath warns against "the twin traps of overtreatment and therapeutic nihilism."
So if Mankiw and other critics of the Affordable Care Act truly want to do no harm, they should tell us what they are going to do about the people who are sick and don't have insurance.
Yes, before the Affordable Care Act there were programs like Medicaid that insured the very poorest. But many fell through the cracks. Forty-four million people didn't have any insurance at all! And yes, emergency rooms were obliged to treat them in an emergency. But that wasn't a help for the third of the uninsured who suffered from chronic conditions and long-term health issues.
These are cases of wide-scale hardship, which the Affordable Care Act seeks to fix by expanding health-care coverage, requiring insurance companies to cover people with pre-existing conditions, and making it illegal for insurance companies to cancel insurance just because someone has become sick. Yes, that means some economic redistribution, from the richest to the poorest.
But if we really aspire to a system that first does no harm — and that allows for individual economic freedom — we should aspire to a system that doesn't leave egregious holes in the social fabric. Having millions of uninsured people with chronic illnesses does serious harm, not just to them, but to society. Chronic illnesses shorten life spans, reduce the capacity for work, and result in more emergency room visits for which the taxpayer picks up the bill. And they reduce economic opportunity: How can you start a successful business or build a successful career if you're an uninsured person plagued by a treatable chronic illness?
And this is all especially embarrassing given that the overwhelming majority of Western countries offer universal health care.
That doesn't mean that we should assume ObamaCare will be an unqualified success. For such a large-scale and long-term reform, that can only be judged in time. Many criticisms — such as problems with the website — have proven hollow in the long-term. But there are still some serious concerns. For example, there are questions about whether the employer mandate could result in a decrease in the availability of full-time jobs, and suggestions that the whole law is so unnecessarily complicated that insurance companies are taking advantage of the confusion to hike premiums.
But similar schemes of universal health care based on an individual mandate in Switzerland and the Netherlands have succeeded at achieving near-universal coverage, lower costs than the United States, and high popularity with users. In the long run, ObamaCare has every chance of doing the same.
Clearly, then, we cannot just dismiss ObamaCare as a violation of the principle of first doing no harm. So what is Mankiw really up to?
I'd venture his long record as a defender of economic inequality is pretty indicative of where his priorities lie: As long as economic redistribution is avoided and the interests of the rich are defended, then no harm, no foul.