The Center for
Economic and Policy Research (“CEPR”) is an economic think tank. It was co-founded in 1999 by economists Dean
Baker and Mark Weisbrot. They tend to
have somewhat of a liberal perspective, but to define them as “liberal” is
inadequate. The guys have unique
perspectives on a lot of issues which is why I frequently visit their website. Weisbrot spends a lot of time on Latin
American countries. Dean Baker had been
predicting the residential real estate bubble years before anyone suspected
there might be a bubble. But he’s not
right about everything.
Dean has been
incessantly promoting the idea that the United States should actively seek to
have qualified medical doctors immigrate to the country. Dean
claims that the medical profession has influenced the Federal government to
impose barriers on the immigration of foreign born doctors thereby limiting
competition thereby boosting the salaries of affected medical
professionals. Dean believes that permitting
foreign born medical professionals to practice in the United States would
reduce medical costs in the United States.
In a recent
column http://tinyurl.com/k5kvbsf, Dean writes:
“We can use trade
agreements to open our economy to foreign doctors. Our doctors get paid more
than twice as much as the average for doctors in other wealthy countries. The
pay gap with doctors in developing countries is even larger. There are hundreds of thousands of smart kids
in countries like Mexico, India, and China who would be happy to train to U.S.
standards and work as doctors in the United States for half the pay our doctors
receive.”
And he’s
right. Not only will the immigration of
more doctors reduce doctors’ salaries and reduce costs of medical care in the
United States, it will make more medical care available. Dean thinks it would be a good idea for
doctors from Mexico, India and China to come to the United States to provide
care for Americans. That would be good
for America.
The only
problem is that it won’t be so good for other countries.
Dean has
considered this. Dean thinks it’s
“silly” to discuss how this will hurt the quality of health care in developing
countries. That’s right. He thinks it’s silly. We should encourage a doctor in India to
leave his malaria and leprosy patients behind and come to the United States to
treat soda sipping obese Americans who spent over $10 billion on cosmetic
surgery last year.
It brings up
the issue of free trade. Most economists
believe that free trade increases economic growth and raises living standards. Studies of economies over the years have
almost unanimously confirmed this belief.
Free trade and free markets are also the best way to allocate resources,
theoretically. People in Brisbane are generally willing to pay more for
surfboards than people in Nebraska. This
is because surfboards are of more use in Brisbane. Therefore, surfboard manufacturers ship their
product to sell them in Brisbane where they will get more money. The surfboards are used for their intended
purpose in Brisbane instead of occupying a shelf in the garage in
Nebraska. The free market system works
so that the surfboards are put to their most beneficial use to society. There’s no debate.
The problem
that I have is that free trade and free markets do not always allocate resources
efficiently. If a doctor treating
children for cholera in Haiti moves to Los Angeles and sets up a liposuction
and bariatric surgery practice, this will benefit the doctor who will be able
to earn more money, and his family will be able to live a better
lifestyle. It will benefit those in Los
Angeles seeking liposuction and bariatric surgery because they will have more
options and probably lower cost service.
But what about the kids in Haiti?
Is this situation really the best allocation of resources? Is it best for society as a whole for a
doctor to treat lazy-assed fat bastards in Los Angeles than to save the lives
of children?
Dean Baker
considers this discussion to be “silly”.
