Justice Scalia's Law School Economics

A blog about business and economics.
March 28 2012 8:51 AM

Justice Scalia's Law School Economics

Here's an odd remark from Justice Scalia wondering where it all stops if the government can levy a fine on people who aren't active duty soldiers, veterans, Medicare beneficiaries, Medicaid beneficiaries, participants in an employer-provided health care plan, purchasers of an individual health insurance plan, or recipients of a hardship waiver*:

If people don't buy cars, the price that those who do buy cars pay will have to be higher.

This is perhaps true at some unusual margin, but of course the standard analysis of the market for automobiles is that if there's extremely high levels of demand for the Toyota Prius, Toyota can and will charge a lot of money to people looking to buy one. Conversely, if the car's sales start stagnating relative to Honda's Civic Hybrid or people decide they'd rather take the bus to work and save money for a vacation, then prices will fall. It's true that in a market for health insurance characterized by regulations limiting firms' ability to screen customers for health status, expanding the pool of customers will lower average prices. But that's not true of the market for cars or broccoli or anything else. Scalia seems to me to have stumbled right into the limiting principle he's asking for, namely that the minimum coverage rule is a way of reducing average prices in the special circumstances of an insurance market in which Congress is seeking to ban health status discrimination.

* This is what seems to be passing in the media as a law that "forces you to buy health insurance" even though it's plainly the case that the overwhelming majority of Americans will be exempt from the rule in question.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.



Meet the New Bosses

How the Republicans would run the Senate.

The Government Is Giving Millions of Dollars in Electric-Car Subsidies to the Wrong Drivers

Scotland Is Just the Beginning. Expect More Political Earthquakes in Europe.

Cheez-Its. Ritz. Triscuits.

Why all cracker names sound alike.

Friends Was the Last Purely Pleasurable Sitcom

The Eye

This Whimsical Driverless Car Imagines Transportation in 2059

Medical Examiner

Did America Get Fat by Drinking Diet Soda?  

A high-profile study points the finger at artificial sweeteners.

The Afghan Town With a Legitimately Good Tourism Pitch

A Futurama Writer on How the Vietnam War Shaped the Series

  News & Politics
Sept. 21 2014 11:34 PM People’s Climate March in Photos Hundreds of thousands of marchers took to the streets of NYC in the largest climate rally in history.
Business Insider
Sept. 20 2014 6:30 AM The Man Making Bill Gates Richer
Sept. 20 2014 7:27 AM How Do Plants Grow Aboard the International Space Station?
  Double X
The XX Factor
Sept. 19 2014 4:58 PM Steubenville Gets the Lifetime Treatment (And a Cheerleader Erupts Into Flames)
  Slate Plus
Tv Club
Sept. 21 2014 1:15 PM The Slate Doctor Who Podcast: Episode 5  A spoiler-filled discussion of "Time Heist."
Sept. 21 2014 9:00 PM Attractive People Being Funny While Doing Amusing and Sometimes Romantic Things Don’t dismiss it. Friends was a truly great show.
Future Tense
Sept. 21 2014 11:38 PM “Welcome to the War of Tomorrow” How Futurama’s writers depicted asymmetrical warfare.
  Health & Science
Bad Astronomy
Sept. 22 2014 5:30 AM MAVEN Arrives at Mars
Sports Nut
Sept. 18 2014 11:42 AM Grandmaster Clash One of the most amazing feats in chess history just happened, and no one noticed.