www. Radical New Thoughts .com

Playing With Principles

Make health insurance illegal? It's a radical proposal which I would oppose, but I can show you in a moment a huge benefit it would have. More importantly, we'll look at how playing with principles can lead to this and many other ideas, some of which might be very useful.

Definition of principle: "A basic generalization that is accepted as true and that can be used as a basis for reasoning or conduct." Playing with principles to generate new ideas involves both a creative process and later an analytical one. The creative part is essentially three steps:

1. Identify or "extract" a principle.
2. Test the validity of the principle.
3. Generate ideas based on the principle or its alternatives.

1. Identifying Principles

My neighbor Henry takes his kids to the doctor for every little thing. Why? Because he has a great insurance policy to pay for everything. It's really no surprise that those who don't pay directly for medical care have more of it. We think twice about heading to the doctor for a headache if we have to pay with our own cash.

In fact, many people who would shop for days to find a cheaper computer or MP3 player won't even ask the price when they visit the doctor or hospital. Why? Because they have insurance or government help. The result is no real price competition among providers, since customers are rarely shopping based on what the service costs. It is easy to imagine this leading to inefficiencies and constantly rising costs. Meanwhile computers and MP3 players have gone down in price.

There is a principle here. It is that health insurance, by taking away normal market incentives, results in more expensive health care.

2. Testing Principles

One way to test the validity of a principle is to look at it in action, or test it in real life. In this case, we could gather statistics on the percentage of people directly paying for health care in various countries. If our principle is valid, we would expect to see the costs rising faster in countries where fewer people pay directly (where more have insurance), unless there are laws holding prices down.

Want to avoid the research? Fortunately, many principles can be "tested" by imagining them at there extremes. For example, imagine if everyone had health insurance which covered any type of care anywhere they wanted it. Demand for health care would certainly rise. We can also see that providers would have no incentive to develop cheaper alternatives. Why should a doctor find a cheaper way? To attract new clients? Not if nobody price-shops because they don't pay.

Clearly, with even a little bit of such mental testing, we can see that health insurance does cause less concern about costs because it creates an environment where customers don't shop based on prices. The general principle that health insurance can drive up health care costs is validated without any need for extensive research.

3. Generating Ideas

Considering the above, a "crazy" idea comes to mind: If health insurance causes costs to rise, why not make it illegal! Costs would probably drop in half. (Note: there are some new clinics catering to the uninsured in less-regulated areas of health care, and yes, they are typically charging half or less of what doctors and hospitals charge.) Of course, this isn't necessarily a good idea, but we'll cover critical analysis of new ideas in the next lesson. (I am generally against any laws that limit our freedom to choose.)

In the meantime, let's look at how to glean some value from an idea that may be unworkable but is still interesting. With no insurance, people are more likely to ask about and pay attention to prices. Clinics, hospitals and doctors then would have to compete to find better, cheaper ways to provide care, to win those potential customers. Now, we can take these insights and work with them to generate more useable ideas. Lately there have been various proposals for universal health care, so lets apply these thoughts in that direction.

The observations here suggest that it is crucial for such a system to have a direct cost to the user, so the normal development of better, more efficient and cheaper care isn't destroyed. I have a few proposals in this area, laid out in my article "One-Eyed Universal Health Care." Essentially, the idea is that people need insurance coverage to have access to health care without going bankrupt, not to have access without budgeting, so why not provide coverage for the large unexpected costs only? This keeps all citizens interested in prices, and so creates a competitive health care system that looks for ways to cut costs and create better care, while not excluding those without money from costly procedures.

More On Testing Principles

The three step process then, is to extract a principle, test it, then use it or its alternatives to generate new ideas. Now lets look at another way to test principles, by using simplified examples of them.

Public funding of education is widely accepted as appropriate. Those without children may not feel the same way, however, so let's identify at least one of the principles used to justify it. We can argue for the value of educating children, and most would agree, but what about the way we pay for it? This is based on the principle that if most people in a society value something, it is okay to force all people to pay for it.

Now, to understand this principle, we create a simplified example. Bob goes to the neighbor with a gun and steals money to pay for his kid's schooling. This offends our sense of justice, but is it somehow different as a matter of principle just because Bob and others get together and vote for armed thugs (government) to do this for them? Not really. (Is the "gun" analogy fair? I think so. In reality, many people only pay their taxes because government agents come with guns if they don't.)

The moral implications of this suggests a radical and simple idea: Why not have those with children pay for public education? The moment two people have a child, assigned them a slightly higher tax rate for the rest of their lives. All children will be educated, and those who pay for it get to do so spread out over a lifetime.

This proposal solves the moral dilemma: We want to educate all children, yet it seems unfair to make those without children pay for those who choose to have them. You may prefer proposals which involve others paying for your choices, rather than ones like this, which require you to pay for your own choices, but let's get back to the real point here: Creating simplified examples of principles is a quick way to test their validity, or suggest their possible limitations, and lead us towards new ideas.

Partial Truths

Rhonda Byrne, in her book "The Secret," lays out the following principle: "The only reason any person does not have enough money is because they are blocking money from coming to them with their thoughts." We can certainly create a simple and plausible example of a person with all the right thoughts who still doesn't have enough money, showing this principle, as stated, to be nonsense.

Notice the clause, "as stated." A principle may be nonsense in the way it is stated, yet based on some valid idea. In this case, we can look at the more general principle that "our thoughts affect how much money we have," and easily verify this based on our experience and our observation of others. What Byrne does is take a very reasonable idea and creates an extreme version of it that becomes silly.

This is common among popularizers of various theories and philosophical ideas. They take a good idea and make it into an extreme "universal" principle. For example, a scientists demonstrates that we each see things differently according to our expectations and beliefs. A self-help guru takes this to mean "Scientists have proven that reality is entirely our own creation!" I actually just saw this claim, and I could accept it as a metaphorical statement, but it was meant to be taken as a direct description of the truth.

In the case of these kinds of principles, we have to separate the value from the nonsense. In doing so, we can come upon ideas that are more useful. For example, if our thoughts do determine our level of income, what kind of thoughts are best, and why does this idea fail at times? There are some potentially great insights to be gained in exploring this.

Playing With Principles - An Exercise

Choose one of the subjects below, and apply the three-step process to see what new ideas and insights you can come up with.

1. Identify or "extract" a principle.
2. Test the validity of the principle.
3. Generate ideas based on the principle or its alternatives.

Apply it to one of these:

- How children are disciplined.
- Defending a country.
- Designing furniture.
- Writing a novel.
- Investing in the stock market.

The creative process outlined here is just half of the larger process of developing good ideas that can actually be useful. It just generates a lot of ideas. Then you have to apply critically analyses those ideas and refine them into something better. That will be the subject of next week's lesson.

Until then,

Steve

www.RadicalNewThoughts.com