Sunday, May 08, 2016

China: Poster Child For or Against Self-Regulation?

The other day I mentioned to my students that living in China is a healthcare gamble for foreigners. They were offended. "Why is it so dangerous living in China?" they demanded. Well, first of all, because I have no idea how I'd call for medical assistance. Then, once I do get through to someone, there's no "press 2 for English." And since there's no E9-1-1 system, all that will happen is I'll have a person speaking Mandarin in my ear while I bleed out and die.

Previously I shared with you this story of the type of high-quality medical care completely fluent nationals receive. It did not make me excited about my expected level of care. Here's another article, this one about using taxi meters in ambulances to keep drivers from implementing "surge pricing," so to speak. Of course, the meter won't be visible to the patient, nor will the route selected, nor the proximity of other hospitals.

Many of my colleagues like to point at China as an illustration of just how terrible the regulationless state would be. When talk turns to air quality (as it often does), these Americans basically say, "There but for the grace of the EPA go I." But what they don't get is that it's not the missing regulation that makes China a Hobbesian state of nature, it's the missing rule of law. There's no tort law, basically. Who do you sue when the escalator kills you? The property owner and the escalator manufacturer and the equipment maintenance company will all shuffle blame around, and if you get close to pinning one of them down, they'll declare bankruptcy and re-open under a different name. Only criminal punishment is taken seriously. With nearly zero liability, reputation loses its strength. China's not an example of the market's inability to use self-regulation, it's an example of how self-regulation dies when the enforcement mechanism is destroyed.

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