Log in
Keynes: “It is not true that individuals possess a prescriptive ‘natural liberty’ in their economic activities.” Or: Hayek: The economic question is “how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know.“ About the Course In this eight-lecture course, Professor […]
Comey retained another former leak recipient as an attorney, raising the question: Is there anyone on his defense team he wasn’t leaking to?
Suppose you’re crafting a Noble Lie to motivate people to defend democracy. What will you tell them?
First, that actually-existing democracy is wonderful.
Second, that democracy faces an existential threat.
If you convincingly and charismatically spread your Noble Lie, listeners won’t just be motivated. They’ll be hysterical: “We’re in heaven, yet hell is at our gates.” Sure, a few strange listeners who combine gullibility and cynicism will shrug, “That’s terrible, but my personal ability to sway the outcome is trivial, so I’ll just keep my head down and hope for the best.” But most people who fall for your Noble Lie will live in a state of panic — and unless they’re extremely introverted, they’ll spread their panic to others.
The main problem with pushing Noble Lies is that skeptics will start asking obvious questions. Most notably: “How wonderful is actually-existing democracy, really?” and “Does democracy actually face an existential threat?” If you lack good answers to these questions, the Noble Liar’s best response is to simultaneously dodge and beg the question: “That’s the mentality that’s going to lead to the destruction of our wonderful democracy!”
It’s possible, of course, that actually-existing democracy really is wonderful and really does face an existential threat. How can we tell the difference between the real McCoy and the Noble Lie?
The quickest tell: Faced with skeptical questions, is your first response, “That’s the mentality that’s going to lead to the destruction of our wonderful democracy!”? If so, you’re probably just a Noble Liar, spreading falsehoods for the allegedly greater good.
If you think the facts are actually on your side, in contrast, you’ll calmly stay on point. But that’s unstable. As long as you stay calm, you’ll quickly tone down your position.
How so?
First, democracy plainly isn’t wonderful. Not just according to me, but according to a simple observation that almost everyone shares. Namely: Even if you love one of the two main political sides, your beloved side is only in power about half the time. Seriously, how “wonderful” is that? And few people actually love either of the two main political sides. Best-case scenario: They’re both tolerable. That’s what I call damning with faint praise.*
Second, while democracy has definitely faced existential threats, it has faced vastly more false alarms of existential threats. Read (or re-read) Tetlock’s Expert Political Judgment and Superforecasting. Meaningful prediction is hard. Anyone can open a newspaper and announce, “Exactly as I predicted.” It’s a big world, so horrible stuff happens routinely even in the best of times. The real test of insight is a well-established track record of accurately predicting non-obvious events before they happen. The cleanest way to do so is with public bets against people who seriously disagree with you.
Suppose, for example, you claim that democracy faces an existential threat because Trump is going to order the military to start killing protesters. You could just wait for one soldier to kill one protester, then proclaim vindication. But frankly, this shows next to nothing. Highly-ranked democracies have killed dozens of protesters since 1945: Chat sets a lower bound of 7 for the U.S., 14 for the UK, 42 for France, and 10 for Italy. If you really foresee a massive shift, you have to publicly make a specific prediction well outside the previously observed range. Such as: “100 or more protesters will be killed by the U.S. military by January 1, 2027.”
If you’re well-known, this is already an impressive test of your insight. Better yet, however, is a public bet with someone who seriously disagrees, because it reduces ambiguity about what’s “non-obvious.” If people with a very different worldview agree that your prediction would be amazing if it happened, you deserve ample credit if your prediction comes to pass.
Why speak these timeless truths today? Because many people, including quite a few of my friends, are routinely spreading what look to me like Noble Lies about democracy and its imminent demise. While I freely admit that there is a non-zero probability that they’re correct, I think the probability is quite low. Yes, you could denounce me for being oblivious. But frankly, the more you denounce me, the lower my probability gets. People who see the future speak calmly and bet with alacrity.
Am I not horrified by many of Trump’s actions? Of course, especially on immigration and trade. But insofar as I pay attention to current events, I’ve been horrified by all of his predecessors as well. Am I not currently more horrified than normal? Only marginally. In my lifetime, American democracy has embraced more monstrous policies than Trump has so far. Starting with conscription. All things considered, my best bet is that we’ll muddle through once again, as we have for centuries.
A bitter realization, I know. But before you tell yourself that you can’t get through life without the crutch of Noble Lies, I suggest you instead seek comfort in your intellectual honesty. While your ability to change society is trivial, your own merit is ever in your hands.
* The only strong reply to my simple observation is just, “While I don’t love either of the two main political sides, I love the policies that result from their democratic rivalry.” If you think the modern welfare state is wonderful, if “getting to Denmark” is your idea of utopia, then this is a coherent position. My recently-finished Unbeatable argues otherwise, but if that’s where you stand, I doubt I’ll change your mind.
TORONTO — Scandal has rocked the baseball world as shortly after their 11-4 World Series victory, several members of the Toronto Blue Jays tested positive for performance-enhancing maple syrup.
Americans are afraid of their healthcare system — and that fear is justified. Families worry that an accident or illness will bankrupt them, and patients on public programs often wait months to see a doctor, sometimes dying in line before treatment begins. Nationally, healthcare spending is devouring nearly a fifth of the economy and driving America’s unsustainable debt trajectory.
The average family with employer-sponsored insurance now pays nearly $25,000 a year in premiums. Those dollars are siphoned out of paychecks before workers ever see them, enriching bureaucracies instead of delivering care. Meanwhile, US healthcare spending hit $4.9 trillion in 2023, almost 18 percent of GDP.
Where does all this money go? Too much is consumed by what we call BURRDEN: Bureaucratic, Unaccountable, Rigid, Regulated, Distorted, Expensive, and Needless costs.
My co-authored research with Dr. Deane Waldman shows that these hidden costs could account for as much as 50 percent of total healthcare spending — up to $2.5 trillion every year wasted on forms, delays, compliance, and red tape, instead of healing.
Death by Queue
The most tragic result of BURRDEN is not financial waste but human loss. Medicaid now covers more than 80 million Americans, yet “coverage” does not equal access. Because government reimbursement rates are so low, fewer US physicians accept new Medicaid patients. Those who do are often overwhelmed, leading to months-long waits for appointments.
This is what we call death by queue. A Medicaid card promises care, but in practice, it too often means waiting in line while conditions worsen. Medicaid patients are more likely to experience poor outcomes, not because doctors treat them differently once in the operating room, but because they can’t get timely access to care in the first place. In economics, this is a shortage: demand outstrips supply because the government suppresses prices.
More funding won’t fix this. As long as bureaucrats cap reimbursement rates, providers will be forced to limit access to stay in business, and patients will continue to die waiting.
A Workforce Out of Balance
The structure of the healthcare workforce highlights the imbalance. According to the Bureau of Labor Statistics, medical and health services managers — administrators — are projected to grow 23 percent over the next decade, while physicians will grow just three percent. America is producing far more paper-pushers than doctors.
This explosion of administration mirrors the money trail. A landmark study found administrative costs account for 34 percent of US health spending. Add regulatory compliance, licensing barriers, and insurance bureaucracy, and BURRDEN consumes nearly half of every healthcare dollar.
Why More Government Fails
Washington’s instinct is to impose more rules and more price controls. The Inflation Reduction Act and the May 2025 Most Favored Nation Executive Order tied US drug prices to European systems that ration care and free-ride on American innovation.
But price caps don’t lower costs — they reduce supply. A National Bureau of Economic Research study found that a 40–50 percent drop in expected drug prices would cut new drug development by up to 60 percent. That means fewer cures and longer wait times.
The biotech sector illustrates the stakes. For decades, the US has led the world in new therapies because our system rewarded innovation. Now, with the government importing failed foreign policies, China is catching up fast, investing heavily under its “Made in China 2025” plan.
If Washington continues to undermine innovation at home, patients will face not just queues, but the loss of tomorrow’s cures.
The Empower Patients Initiative
The alternative is clear: trust patients, not bureaucrats. The Empower Patients Initiative offers reforms that cut BURRDEN, reduce costs, and restore access to care.
- No-Limit Health Savings Accounts (HSAs)
Families should be able to save and spend their own healthcare dollars tax-free, without arbitrary caps. HSAs restore price sensitivity and unleash competition. Instead of $24,000 in hidden premiums, families could control those dollars directly. - Medicaid Block Grants to States
Medicaid should be block-granted to states, giving them flexibility to innovate. States could expand direct primary care networks, integrate community clinics, and tailor coverage to local needs. Federalism fosters competition and accountability. - Direct Patient-Doctor Relationships
Third-party reimbursement schedules force doctors to serve bureaucrats instead of patients. Direct pay and subscription models restore trust and reduce paperwork. Direct Primary Care practices have already demonstrated that fewer intermediaries mean more time for patients and lower costs. - Transparency and Real Prices
Markets can’t work without prices. Providers should post costs upfront, as the Surgery Center of Oklahoma does. Transparency pressures providers to compete on value, not billing codes. - Shrink Bureaucracy Naturally
Middlemen, such as pharmacy benefit managers, grew in popularity because the government disconnected patients from the costs of their healthcare. In a true market, PBMs would shrink or evolve naturally, no longer artificially necessary. The goal isn’t to regulate them more — it’s to restore market conditions that render them optional.
Cutting BURRDEN in Half
The economic potential of these reforms is staggering. If we reduce BURRDEN by even half, up to $1.2 trillion a year could be redirected from bureaucracy to patients and providers. That’s enough to lower family costs dramatically, raise take-home pay, and improve access without expanding federal debt.
Think of what it would mean if patients could get timely appointments, if doctors spent more time healing than coding, and if innovation flowed freely rather than being strangled by red tape. That’s not utopian — it’s simply what happens when markets are allowed to function.
A Human and Moral Case
The human cost of the current system is undeniable. Medicaid patients die waiting for care. Families sacrifice $24,000 a year for coverage they can’t control. Doctors burn out while administrators multiply.
The moral case for reform is clear: stop rationing by bureaucracy, stop wasting trillions on BURRDEN, and give patients the dignity of choice. Healthcare is not a favor dispensed by government; it is a service best delivered through voluntary exchange.
Conclusion: Break the Chains
Healthcare is broken not because markets failed, but because markets were never allowed to function. BURRDEN is the inevitable result of central planning. The Empower Patients Initiative offers the way forward: HSAs without limits, Medicaid block grants, direct doctor-patient relationships, and transparent pricing.
If we free even half of the dollars now wasted on BURRDEN, America’s healthcare system would become more affordable, more innovative, and more humane. Patients would no longer die in queues, families would keep more of their wages, and doctors would be free to heal.
The question is simple: will we continue feeding the bureaucracy — or will we empower patients?
The answer should be obvious. Empower patients, not bureaucrats. That’s how we cut costs, cure queues, and let people prosper.
On October 26, half of Argentina’s representatives and one-third of senators will face voters at the ballot box. This is, on its own, fortunately unexceptional. Indeed, Argentina has been a solid democracy since 1983, when the last generals left the presidential palace.
Nonetheless, these midterm elections represent an existential challenge for Argentina. They are, de facto, a referendum on the economic reforms of President Javier Milei. Milei, who was inaugurated on December 10, 2023, had flamboyantly promised to take a chainsaw to public spending, to tame an inflation rate nearing 300 percent per year, and to set the economy back on the path of growth. As realistic as he is idealistic, Milei promised 18 months of suffering and austerity measures to fix a country that had been ravaged by Perónism. Where does Argentina stand?
A Bit of History
Before looking at contemporary Argentina, it makes sense to offer a bit of historical context. Argentina was the forgotten backwater of the Spanish empire in the Americas; it lacked gold or a local population to be enslaved. After independence in 1816, Argentina suffered through a half-century of pendulum swings between dictatorships and civil wars — neither of which is favorable to economic growth. In 1860, Argentina adopted an almost verbatim translation of the US Constitution of 1787. Miraculous growth ensued. By 1910, Argentina was the eighth richest country in the world, a living laboratory for the economic theories of Adam Smith, Ludwig von Mises, F.A. Hayek, and Douglass North. Economic liberty, defense of contracts, freedoms of speech and religion — in sum, Argentina thrived under institutions that favored entrepreneurship and industrialization. Alas, Argentina didn’t quite have rule of law, but a ruling oligarchy with weak institutional safeguards. The first military coup came in 1930. There would be another 10 throughout the twentieth century, with a total of six military dictatorships (half the time, the military would simply evict the president and hold fresh elections).
The key factor for understanding the last century in Argentina is Perónism, a corporatism imported from Mussolini’s Italy, and given an Argentine flavor by Colonel (and future president) Juan Domingo Perón. Redistribution of wealth to buy friends and votes, populism, a corporatist balance of the country’s interest groups with an interventionist state as arbiter, five-year economic plans, and heavy regulation — these formed the new constitutional order. The eighth richest country in the world in 1910, Argentina suffered through a century of chronic hyperinflation, routine monetization of budget deficits, and economic crises — and fell to the rank of 68th richest country in the world today. Argentina has also garnered the dubious honor of being the IMF’s greatest debtor (it now owes $57 billion). Despite the obvious economic damage, the Perónist instinct dies hard; in the decade before Milei’s election, the Perónists doubled down on their policies. Intervention after intervention, regulation, redistribution, all took their toll. The poverty rate, which had fallen to 20 percent in 1993, hit a high of 58 percent before settling at 45 percent in 2023. The debt-spending was financed by printing money to feed friends and clients; hyperinflation, which had been tamed in the 1990s, returned, and rose to almost 300 percent per annum by 2023. Worst of all, the Perónists systematically destroyed the country’s institutional checks and balances.
Milei was elected in 2023, with a mandate to solve the economic consequences of Perónism. But the Perónists remain powerful: they hold 108 seats (of 257) in the lower house and 33 (of 72) in the Senate, along with 16 governor’s mansions (out of 23 provinces). This past September, the Perónist candidate won 47 percent of the votes in the Buenos Aires province gubernatorial election (against 33 percent for Milei’s party). To be sure, this province has long been a stronghold of Perónism… but this still represents a challenge to Milei’s reforms.
Halfway Through Milei’s Term, Where Is Argentina?
On December 10, 2023, Javier Milei inherited an economic and institutional disaster. He has — of course! — not been able fully to fix a century of interventionist damage in the span of two short years. But, 22 months into his presidency, where does Argentina stand?
Because he lacks a congressional majority, Milei has had to impose reforms by emergency decree. Such decrees, according to the Argentine constitution, are valid for one year, and must have the consent of one the two legislative chambers.
Milei was thus able to cut public spending, notably by reducing the number of cabinet agencies by half, from 18 to 9. By taking a chainsaw to government spending, Milei eliminated the budget deficit, a chronic feature of Perónist Argentina. Public debt, which had reached 155 percent of GDP in 2023, has now fallen to 83 percent.
Perónism’s fiscal profligacy had dire monetary consequences, because the budget deficit was routinely monetized by the central bank, which had effectively become an arm of the Treasury. Milei inherited an annual inflation rate of 294 percent — which he has reduced to 34 percent (this would be unthinkable in the US, but is quite healthy by Argentine standards).
As a good economist (and economics professor), Milei has not focused exclusively on macroeconomics. He has also attacked microeconomic impediments, by removing the heaps of regulation that blocked growth and suffocated the economy. By emergency decree, Milei removed import controls and price controls. Notably, the real estate market was paralyzed by rent controls, mandatory three-year leases, and the inability to sign a lease using dollars (or any currency but the Argentine peso). One does not need a doctorate in economics to predict that the sad combination of regulation and hyperinflation would erode supply, as landlords faced the very real possibility of evaporated rents. Since Milei suspended rent controls, the price of rental housing in Argentina has fallen by 30 percent, and housing supply has increased by 212 percent.
Argentina’s risk premium has tumbled dramatically, and foreign investment has returned. After years of recession, economic growth is now at an enviable 6.3 percent. The middle class has surged, in two years, from 23 percent to 39 percent of the population. The 45 percent poverty rate Milei inherited from the Perónists temporarily rose to over 50 percent — Milei had indeed promised the pains of austerity — but has already fallen to 31 percent.
This is but a summary of Milei’s success.
There’s One More Thing
Unfortunately, there is one glaring omission in Milei’s reforms.
He has allowed contracts to be signed in foreign currency and cryptocurrency. He has also imposed an amnesty for depositing the dollars that had been hidden in mattresses because of currency controls and the past freezing of dollar-denominated accounts. These are steps in the right direction. But he has not crossed the last Rubicon: the complete abolition of Argentina’s central bank — even though he had promised to wield his terrible swift chainsaw on it too. Closing the bank would have gotten rid of chronic hyperinflation, and opened the door to dollarization (which already exists de facto), or even currency competition, to replace the monetary cash cow.
Beyond the immediate economic benefit of taming and preventing hyperinflation, shutting down the central bank would represent the final nail in the coffin of Perónism. Indeed, all the good that Milei has brought to Argentina over the past two years could evaporate with one simple law or presidential decree if the Perónists return to power. Argentina would then relapse back into its perennial bad habits, with favors and votes purchased by redistribution, and budget deficits financed by the monetary printing press — in sum, a return to the predatory state of Perónism. Economist Emilio Ocampo (who had offered his services as the last president of Argentina’s central bank) explains that closing the central bank is the only method for Milei to show credible commitment to his reforms, and the only way to end the profligacy of Perónism.
These midterm elections are not merely a political footnote in the history of a troubled country. They are a veritable existential struggle between two forces. On one side, we have intervention, privilege, and a poverty that is as absurd as it is preventable. On the other, there is hope, progress, freedom, and prosperity.
Next Page of Stories