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.



Smash and Grab

Will competitive Senate contests in Kansas and South Dakota lead to more late-breaking races in future elections?

Stop Panicking. America Is Now in Very Good Shape to Respond to the Ebola Crisis.

The 2014 Kansas City Royals Show the Value of Building a Mediocre Baseball Team

The GOP Won’t Win Any Black Votes With Its New “Willie Horton” Ad

Sleater-Kinney Was Once America’s Best Rock Band

Can it be again?


Forget Oculus Rift

This $25 cardboard box turns your phone into an incredibly fun virtual reality experience.

One of Putin’s Favorite Oligarchs Wants to Start an Orthodox Christian Fox News

These Companies in Japan Are More Than 1,000 Years Old

Trending News Channel
Oct. 20 2014 6:17 PM Watch Flashes of Lightning Created in a Lab  
  News & Politics
Oct. 20 2014 8:14 PM You Should Be Optimistic About Ebola Don’t panic. Here are all the signs that the U.S. is containing the disease.
Oct. 20 2014 7:23 PM Chipotle’s Magical Burrito Empire Keeps Growing, Might Be Slowing
Oct. 20 2014 3:16 PM The Catholic Church Is Changing, and Celibate Gays Are Leading the Way
  Double X
The XX Factor
Oct. 20 2014 6:17 PM I Am 25. I Don't Work at Facebook. My Doctors Want Me to Freeze My Eggs.
  Slate Plus
Tv Club
Oct. 20 2014 7:15 AM The Slate Doctor Who Podcast: Episode 9 A spoiler-filled discussion of "Flatline."
Brow Beat
Oct. 20 2014 9:13 PM The Smart, Talented, and Utterly Hilarious Leslie Jones Is SNL’s Newest Cast Member
Oct. 20 2014 11:36 PM Forget Oculus Rift This $25 cardboard box turns your phone into an incredibly fun virtual-reality experience.
  Health & Science
Medical Examiner
Oct. 20 2014 11:46 AM Is Anybody Watching My Do-Gooding? The difference between being a hero and being an altruist.
Sports Nut
Oct. 20 2014 5:09 PM Keepaway, on Three. Ready—Break! On his record-breaking touchdown pass, Peyton Manning couldn’t even leave the celebration to chance.