Should Supreme Court Justices Know Economics?
Just some thoughts today about economics and the Supreme Court. Listening to Tuesday’s oral arguments, I became concerned about some economic basics. Markets and insurance were key ideas. However, no one defined a market and insurance was initially mischaracterized.
In my econ class, we define a market as a process. Determining price and quantity, markets have a demand and a supply side. On the demand side are buyers who are willing and able to purchase different amounts of a good or a service at different prices. Correspondingly, on the supply side are sellers who are willing and able to provide different amounts of goods and services at different prices. In class, we assess markets through the impact of the participants. However, Justice Ginsburg suggested that “…the people who don’t participate in this market are making it much more expensive for the people who do; …”
As for insurance, Justice Kagan said, “…health insurance exists only for the purpose of financing health care…We don’t get insurance so that we can stare at our insurance certificate. We get it so that we can go and access health care.” Accurately, the attorney for the respondents (opposing the individual mandate) said, “…I’m not sure that’s right. I think what health insurance does and what all insurance does is it allows you to diversify risk. And so it’s not just a matter of I’m paying now instead I’m paying later. That’s credit. Insurance is different than credit…”
Curious, I checked the Justices’ bios. Justice Kennedy attended the London School of Economics. Otherwise, I found little evidence of economics in anyone’s background.
My bottom line: Economic thinking provides a disciplined approach that would be meaningful when deciding the scope of the Commerce Clause and defining health insurance.