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.



Talking White

Black people’s disdain for “proper English” and academic achievement is a myth.

Hong Kong’s Protesters Are Ridiculously Polite. That’s What Scares Beijing So Much.

The One Fact About Ebola That Should Calm You: It Spreads Slowly

Operation Backbone

How White Boy Rick, a legendary Detroit cocaine dealer, helped the FBI uncover brazen police corruption.

A Jaw-Dropping Political Ad Aimed at Young Women, Apparently

The XX Factor
Oct. 1 2014 4:05 PM Today in GOP Outreach to Women: You Broads Like Wedding Dresses, Right?

How Even an Old Hipster Can Age Gracefully

On their new albums, Leonard Cohen, Robert Plant, and Loudon Wainwright III show three ways.

How Tattoo Parlors Became the Barber Shops of Hipster Neighborhoods

This Gargantuan Wind Farm in Wyoming Would Be the Hoover Dam of the 21st Century

Oct. 1 2014 8:34 AM This Gargantuan Wind Farm in Wyoming Would Be the Hoover Dam of the 21st Century To undertake a massively ambitious energy project, you don’t need the government anymore.
  News & Politics
Oct. 1 2014 7:26 PM Talking White Black people’s disdain for “proper English” and academic achievement is a myth.
Buy a Small Business
Oct. 1 2014 11:48 PM Inking the Deal Why tattoo parlors are a great small-business bet.
Oct. 1 2014 6:02 PM Facebook Relaxes Its “Real Name” Policy; Drag Queens Celebrate
  Double X
The XX Factor
Oct. 1 2014 5:11 PM Celebrity Feminist Identification Has Reached Peak Meaninglessness
  Slate Plus
Behind the Scenes
Oct. 1 2014 3:24 PM Revelry (and Business) at Mohonk Photos and highlights from Slate’s annual retreat.
Brow Beat
Oct. 1 2014 9:39 PM Tom Cruise Dies Over and Over Again in This Edge of Tomorrow Supercut
Future Tense
Oct. 1 2014 6:59 PM EU’s Next Digital Commissioner Thinks Keeping Nude Celeb Photos in the Cloud Is “Stupid”
  Health & Science
Oct. 1 2014 4:03 PM Does the Earth Really Have a “Hum”? Yes, but probably not the one you’re thinking.
Sports Nut
Oct. 1 2014 5:19 PM Bunt-a-Palooza! How bad was the Kansas City Royals’ bunt-all-the-time strategy in the American League wild-card game?