Courtship Today: The View from Academia

Spring 2001

By Daniel Cere

Courtship charts pathways to marriage. Its customs and rituals help individuals negotiate the complex transition from sexual attraction, through love, to lasting marriage. It provides, for better or worse, the moral and emotional education for married life. And yet, courtship no longer occupies a vital place within contemporary American culture; the word itself now seems quaint and outdated. Social historians such as Beth Bailey and Ellen Rothman have documented the decay of courtship traditions in twentieth-century America. Leon Kass has pointed out that the erosion of courtship, coupled with other worrisome trends in law, economics, and technology, has destabilized the institution of marriage.1 Today, the road to marriage is devoid of clear markers and fraught with more accidents and wrong turns.

The decline of courtship may reflect broader cultural trends. According to Anthony Giddens, one of Britain’s most distinguished sociologists, popular culture is creating a new grammar of intimacy. In The Transformation of Intimacy and, more recently, in the prestigious Reith Lectures, Giddens argues that we are moving from a marriage culture to a culture that celebrates the “pure relationship.” A “pure relationship” is one that has been stripped of any goal beyond the intrinsic emotional, psychological, or sexual satisfaction it brings to the individuals involved. In this new world of “relationships,” marriage is placed on a level playing field with all other long-term sexually intimate relationships, with similar values and processes governing their initiation, maintenance, and dissolution. Accordingly, the concept of a special pathway to marriage – i.e., courtship – tends to be abandoned in favor of a more general discussion of the dynamics of any close relationship.

However, as the consequences of family fragmentation have become more apparent, there are signs of a renewed interest in finding ways to strengthen marriage. A large body of research shows that healthy marriages protect the well-being of spouses and their children, and that a number of significant social costs are generated when marriages fail. This renewed appreciation for marriage’s importance may be triggering some interest in the question of courtship. In the popular realm, a number of new books on courtship, both secular and religious, have sold well. Ellen Fein and Sherrie Schneider’s popular 1996 book, The Rules, purports to teach battle-scarred women a practical, no-nonsense script for finding a fabulous husband. Joshua Harris’s 1997 Christian best-seller, I Kissed Dating Good-Bye, urges young people to eschew recreational dating and return to older “scriptural” courtship practices. And Leon Kass and Amy Kass’s well-received anthology of readings on courtship and marriage, Wing to Wing, Oar to Oar, offers readers wisdom on the nature of courtship and marriage culled from 5,000 years of the Western tradition. The success of these books indicates a yearning among many young people for clearer and more effective pathways to marriage than the culture now provides. The spread of marriage education, in both schools and religious communities, also suggests that the case for courtship is not completely closed.

But what does contemporary scholarship have to say about the courtship question? According to Norval Glenn, the dean of American family sociologists, the study of courtship is now “virtually moribund.” Academics do not appear particularly interested in discussing pathways to marriage. There are, however, a number of scholarly theories poking around into topics of related interest: heterosexual attraction, mate selection, pair bonding, and close relationships. Three schools of scholarly thought merit attention: exchange theory, sociobiology, and close-relationship theory. While these approaches contribute little to the study of courtship itself, they do provide fascinating articulations of the dominant ideologies guiding today’s discourse on heterosexual pair bonding.

The commodification of courtship

The contemporary cultural disarray over dating, courtship, and mate selection reflects deep-seated historical developments that have been the subject of scholarly discussion for a few generations. The transition to modernity and then to postmodernity was accompanied by a diminishment of social scripting of interpersonal relationships, including sexual relationships, courtship, and marriage. Over 60 years ago, one of America’s eminent sociologists, Willard Waller, drew attention to the modern shift away from the explicit standards for mate selection that characterized more homogeneous societies. The nature of the “bargaining process” for heterosexual pair bonding was becoming “confused” and “complex.” Waller argued that the modern emphasis on “marriage for love” was little more than a mask for our cultural confusion over the absence of more explicit communal guidelines toward marriage.

Waller noted that new types of bargains were being struck in the courtship process, “bargains which have to do with merely the conditions of association outside of marriage.” Over the course of the twentieth century, dating and courtship patterns gradually drifted into free-floating social space, devoid of any meaningful connection to the goal of marriage. Rising rates of premarital sexuality, cohabitation, and out-of-wedlock births since the 1960s signaled a decline in the cultural and social stature of marriage as the unique repository of sexual life and childbearing. These trends eroded the traditional connection of courtship to marriage.

Critical social theorists such as Eva Illouz in Consuming the Romantic Utopia and Beth Bailey in From Front Porch to Back Seat have attempted to trace one important aspect of this story, namely, the commodification and commercialization of courtship practices in modern capitalist economies. They argue that nineteenth-century courtship practices lay within the sphere of civil society: Churches, families, kinship groups, and cultural communities largely shaped courtship rites and practices. However, twentieth-century courtship increasingly moved to the beat of modern capitalism. Courtship was driven out of the home and into the marketplace: Movie theaters, automobiles, restaurants, dance halls, and clubs, rather than homes, church halls, and community celebrations, became the privileged spaces for courtship activity. According to Bailey, the language of the market came to dominate academic theories of courtship and romance, as well as popular culture:

As it emerged in the twentieth century, courtship largely was construed and understood in models and metaphors of modern industrial capitalism. The new system of courtship privileged competition (and worried about how to control it); it valued consumption; it presented an economic model of scarcity and abundance as a guide to personal affairs. The rules of the market were consciously applied; the vocabulary of economic exchange defined acts of courtship.
But a systematic application of economic theory to courtship had to await the work of economist Gary Becker. It was Becker and his school’s special, but limited, achievement to apply the tools of the economist to the arena of love, and to do so, moreover, at the very moment in history when the commodification of courtship was largely completed. Exchange theory explicitly assumes that acts of marriage, like other acts, are the choices of rational selves. “Persons marry,” Becker wrote in his 1974 essay “A Theory of Marriage,” “when the utility expected from the marriage exceeds the utility expected from remaining single.” In the self-contained world of exchange theory, any desire, even the desire to love and care for another human being, must be shoved within the cramped confines of a person’s “utility function.”

Exchange theory views the passion and poetry of mate selection as mere marketing strategies. The utility of a marriage depends on the “commodities” produced by the potential partner: standards of living, quantity and quality of children, sexual gratification, social status, and others. The marriage market consists of three critical components: supply, preferences, and resources. Men and women actively looking for a spouse represent the “supply.” “Preferences” are the characteristics men or women, as customers, look for in a spouse. “Resources” are the various attributes that men and women offer in order to gain those preferences.

This “exchange theory” model of courtship, the oldest of our three expert stories, is by no means dead. The “marriage market” model, with all its bland economic vocabulary (supply and demand, preferences, bargaining, exchange, and investment), continues to influence some prominent discussions of mate selection – and still generates research into such areas as the relationship between employment and the marriageability of men.

For those interested in marriage as a social institution, the advantage of this perspective is that it still views courtship as the pathway to marriage. But in exchange theory, the marriage vow has been dumbed down to a mere contract intended to serve the narrow interests of the individuals investing in the relationship. No-fault divorce laws make marriage agreements far flimsier and more vulnerable to shifting preferences than most business contracts. Exchange theory nicely reflects this cultural shift and spotlights the increasingly utilitarian motivations that guide entrance into these fragile marriage “deals.”

Yet by assuming that, by definition, individuals act as rational consumers, “exchange theory” is of limited use in understanding the social and interpersonal aspects of courtship and marriage as institutions. It fails to appreciate the irrational or unselfconscious ideas that may move people to marriage and may keep them in it long after a “rational consumer” would have traded in their old clunky model for a jazzier new one. Many of the essential features of love – the longing for permanence, the desire to give oneself to another – must in the economists’ story of courtship be either submerged into “contract theory” or dismissed altogether as irrational. For a full understanding of how and why people marry, we must look elsewhere.

It’s all in the genes

Sociobiology is one of the most popular of the new theoretical perspectives on courtship, marriage, and sexuality. In the quest to unravel the convoluted scripts of heterosexual bonding, sociobiology has emerged as an attractive alternative, basing arguments on an appeal to genes rather than morals. In contrast to rational choice or exchange theories of courtship, sociobiologists search for deeply rooted evolutionary factors that govern sexual and romantic preferences in mate selection.

Evolutionary psychology maintains that males and females have radically divergent sexual psychologies. Innate evolutionary factors have conditioned women to value and select men on the basis of their ability to provide nourishment, protection, security, and social status for themselves and their offspring. Females seek “dominant males.” Status signals such as power, money, social position, intelligence, education, skills, and the ability to father rank high for women. Males, on the other hand, are “hardwired” to seek sexual liaisons with women who show signs of reproductive viability, such as health, youth, and physical attractiveness.

In this highly charged and competitive world of courtship, male and female interests are essentially incommensurable, yielding divergent strategies and counter-strategies of seduction. Females deceive about their age and physical attractiveness; males dissemble about their financial resources, career prospects, and willingness to commit. Women deceive and seduce cosmetically, men deceive and seduce through ritualized displays of acquisition. Women concentrate on dressing for dates, men concentrate on planning and paying for dates.

Given these courtship dynamics, sociobiology predicts the emergence of a “marriage gradient” with women “marrying up” and men “marrying down.” This puts a “marriage squeeze” on high-status women. High-status males have an immense pool of potential female mates from which to choose, but high-status women seeking to “marry up” face a very restricted pool of available males. The male tendency to “marry down” tends further to sideline high-status females. Feminists often disparage this pattern as a patriarchal strategy aimed at female subordination: Men socially entrench the subordination of women by marrying down and ruling over their younger and lower-status women. This male strategy also contributes to the social marginalization of high-achieving women.

Sociobiologists smile at these expressions of moral outrage. From their perspective, feminists are usually high-status women with careers, resources, and power; however, feminists predictably refuse to “marry down.” They are in the market for “challenging” men – a feminist euphemism for “dominant males.” In his 1998 book What Women Want, What Men Want, John Townsend notes that the feminist disparagement of “marrying-down” males echoes the age-old rhetorical strategies of high-status females, who typically denigrate low-status female competitors while simultaneously berating high-status males for daring to overlook them.

These courtship strategies have a profound impact on hierarchical structuring of human societies. Male and female mate preferences generate very different social outcomes. The traits that men value (female youth, health, and attractiveness) have relatively little impact on social order, aside from the impetus they give to the development of cosmetic and clothing industries. But the traits that women value – status, productivity, dominance, resources – fire up the male “will to power.” Men need to make a difference in the world if they are to be noticed by women. Mary Batten, author of Sexual Strategies: How Females Choose Their Mates, argues that female mating strategies play a major role in driving men to compete for power and wealth, thereby fostering in all human societies the “social dominance orientation” of men.

Sociobiology offers a rollicking comic spoof on the world of romance and power. In the world of sociobiology, lovers are bustling about, stumbling through their relationships, deceiving one another, wooing and warring with one another from very different, even contradictory, scripts of love – and yet, somehow, when all is said and done, these mismatched lovers land in bed together, men on top, cunningly trapped by the inexorable logic of reproductive success. Meanwhile, in the public sphere, men exhaust themselves to succeed in the worlds of high finance and global politics in order to be “attractive” to the next pretty blond that happens to pass by. In the words of Henry Kissinger: “Without an office, you have no power, and I love power because it attracts women.”

Sociobiology also offers an intellectual spin on the growing climate of cynicism that pervades contemporary explorations of marriage in literature, popular film, and music. According to David Buss in The Evolution of Desire, we must “lift our collective heads” out of the romantic sands and recognize that heterosexual relationships are about power, sex, property, deceit, and control, rather than love, self-giving, romance, and commitment. Sociobiology replaces the tale of Cupid’s arrows with a story of another outside agent: our own impish genes, which manipulate us and mock our purposes in their blind, relentless search for survival and replication.

Power males

Some scholars believe that sociobiology offers scientific support for monogamous marriage. Townsend’s colorful exploration of evolutionary perspectives on mate selection ends with a homiletic flourish on the role evolution played in the development of the stable monogamous marriage. Yet if we follow the logic of maximum reproductive success to its endpoint, we seem to find a case made for male polygyny, not monogamy. To the extent that sociobiology suggests or implies a particular social-sexual order, dominant male polygyny, not strict monogamy, may eventually emerge as its central plank.

Townsend himself has trouble shaking loose from the inner logic of this position. “Men in position of power,” he admits, “tend to practice polygyny: legitimate polygyny where it is allowed; functional polygyny where it is not.” Townsend notes that polygyny is accepted in over 83 percent of human societies. He concedes that Western societies have firmly prohibited polygyny but argues that many elite males are “in effect, polygynous.” Divorce and remarriage or a series of sexual partners are forms of “serial polygyny.” The illicit sexual relationships that garnish the lives of many high-status males are forms of “functional polygyny.” As sociobiology cleans the dust from our evolutionary psychology, out springs an aggressive and promiscuous male genie.

And today, male elites command resources, technologies, and services far beyond the wildest dreams of their predecessors. They are able to sustain relationships with a variety of women, as well as make significant investments in their offspring. Indeed, we may be in the midst of a subtle and imperceptible drift toward some form of socially acceptable concubinage for dominant males. Sociobiology might accelerate this trend by making the concept of polygyny appear to be a reasonable accommodation to some of the more problematic exigencies of dominant male psychology.

Sociobiology does bring one crucial advantage to current debates. It reconnects courtship with procreation, offering a powerful exploration of the intrinsic connections between sexuality, heterosexual bonding, reproductive success, and investment in offspring. And it provides a corrective to other theoretical approaches, which tend to separate the question of children and child-rearing from courtship and mate selection. However, it is important to note that according to sociobiology, sexual attraction per se is not dependent on conscious awareness of the linkage between attraction and procreation. This linkage was forged in our distant evolutionary past. Once the evolutionary hardwiring is in place, men are instinctively attracted to young voluptuous women, and women are instinctively attracted to dominant males. They are not attracted because physical beauty or social dominance signal reproductive potential; they are just attracted.

But what happens when these ancient evolutionary drives are loosened from their moorings in reproduction? What happens when, aided by technology, we can weaken or dissolve altogether the linkage between sex and procreation? Sociobiologists assure us that our drives are now genetically secure enough to dispense with any direct concern with procreation. In days of old, procreation was a critical fact in the slow evolutionary hardwiring of heterosexual attraction, but that work is done. The dynamics of heterosexual attraction can now thrive in freestanding forms. So where, in the final sociobiological analysis, do children fit in? In social terms, nowhere.

In sum, for all of its explanatory power regarding the interactions among sexual desire, procreation, and social processes, sociobiology is unable to understand or strengthen marriage as an institution. In the current environment, sociobiology also reinforces trends of dubious value. Its particular version of sexual realism corresponds well to contemporary cynicism about heterosexual love and marriage. Sociobiology has a very modest interest in marriage; if other arrangements can meet our “evolutionary desires,” sociobiology is more than willing to consider them. There is also its barely veiled celebration of dominance, exploitation, and raw power. Insofar as sociobiology helps shape our standards, it supports efforts to give dominant males more latitude to make full use of their resources in the realm of sexual pursuit. Finally, sociobiology has a nice way of acknowledging children for their unique contribution to the evolution of our sexual drives, then politely showing them the door.

Postmodern courtship

One of the most prominent perspectives in contemporary courtship research is that of “close-relationships” theory. In 1988, Steve Duck edited a major anthology, Handbook of Personal Relations, which marked the tenth anniversary of a new discipline, “the science of close relationships.” Current research in the field continues at the “incredible rate” of expansion that Duck celebrated in 1988. This work has been spearheaded by a diverse group of scholars who have formed professional associations, such as the International Society for the Study of Personal Relationships and the International Network on Personal Relationships. They have also launched two journals, the Journal of Social and Personal Relationships and Personal Relationships, as well as a number of major publication series, such as the Sage Series on Close Relationships and Advances in Personal Relationships. The field employs a variety of research methodologies, from standard social-science surveys to intensive one-on-one and small-group interviews.

The dynamics of initiating and developing close, sexually based relationships are a major preoccupation of close-relationship theory. Articles and monographs cover a very wide range of topics: “falling in love,” romantic love, attachment patterns, “love styles,” interracial and interethnic dating, physical attractiveness (body shape, health status, hair length, height, voice intonation), age preferences, jealousy, love triangles, dating infidelity, fatal attractions, family-of-origin influences, socioeconomic status, self-disclosure processes, topic avoidance, deceit, nonverbal signals, the use of humor, coping with peer and parental criticism, relationship dissolution, and romance grieving processes.

This complex body of theories probing a baffling array of topics might appear to resist general commentary and review, but certain common themes do emerge: Marriage is knocked off its pedestal, and its purpose of child-rearing gets short shrift. And the transcendent ideal of love is replaced by the “love styles” of individual selves seeking sexual satisfaction in episodic relationships. Courtship, rather than leading to marriage, becomes just one damn relationship after another.

Generic brand relationships

Close-relationship theorists argue that we need to bring a common theoretical and methodological approach to the study of all “sexually based primary relationships.” In their 1989 book The Sexual Bond: Rethinking Families and Close Relationships, John Scanzoni, Jay Teachman, and Linda Thompson argue that alternative sexual life styles are not “qualitatively other from what is known as the benchmark conventional nuclear family.” Courtship, spousal, and familial relationships can and should be “subsumed under the broader construct of close or primary relationships.”

In the taxonomy of sexually based adult relationships, the existence or nonexistence of a legally recognized bond, such as marriage, is a secondary consideration. Marriage is merely a de jure category, not an actual scientific reality. Close-relationship theorists argue that the family is “essentially a lay or commonsense construct” rather than a meaningful scientific model. The terms “family” and “families” are “valid poetic and literary descriptions of folk-culture reality” that may be of value in “fostering communication among lay persons” about the “slippery realities” of personal relationships. However, such “lay” constructs distort and limit scientific work on intimate adult relationships. Scholars and professionals will “find it more fruitful both practically and scientifically to think and work in more general or generic terms – specifically in terms of close or primary relationships.”

A close relationship is “dyadic.” It is an “interaction” between two individuals that is characterized by strong and coherent patterns of interdependence, self-disclosure, exchange, investment, commitment, and conflict. These dyadic bonds constitute an interpersonal microcosm with their own unique processes and dynamics. One side-effect of redefining all relationships as inherently dyadic is that it obscures the communal side of marriage. The family itself fades away as a unit of analysis. For close-relationship theorists, the only way to understand the family is to break it down into bidirectional dyadic pairs: husband-wife, mother-child, father-child, or brother-sister relationships.

In The Sexual Bond: Rethinking Families and Close Relationships, Scanzoni, Teachman, Thompson, and Karen Polonko suggest that legal theorists should consider expanding their thinking about sexually bonded intimacy beyond the confines of the family to include all “close relationships.” The American Law Institute recently proposed model legislation that does just that, offering most cohabiting partners with children many of the legal rights heretofore reserved for married couples. The Canadian Bar Association recently published a lengthy report, Recognizing and Supporting Close Personal Relationships Between Adults, which advocates fundamental reforms of Canadian laws in the light of close-relationship theory. It argues that the law must now stress the “substance of relationships” rather than favoring certain types of “arrangements” such as marriage. Any relationship marked by interdependence, mutuality, intimacy, and endurance merits legal recognition. The report contends that governments “should recognize and support” all significant adult close relationships so long as they are “neither dysfunctional nor harmful.”

If marriage and family fade from view, so too do children. Close-relationship theorists tend to ignore the procreative dimension of sexual relationships. This child-free understanding of courtship also shapes, and often distorts, these theorists’ view of social reality. One would assume, for example, that our society’s high rates of teen pregnancy and unwed childbearing would be relevant to the study of contemporary heterosexual courtship. Yet these trends receive scant attention in close-relationship theory. Its narrow concentration on the interpersonal dynamics of dyadic relationships precludes any serious consideration of the procreative dimension of heterosexual coupling.

Yet children do happen, and their arrival does, therefore, present a theoretical quandary. Close-relationship theorists respond to this problem by drawing attention to the vexing impact of children on adult close relationships. For example, Steve Duck encourages us to abandon the traditional view of children as “bundles of joy,” and instead to understand them as “one of the greatest stressors of a relationship.” According to Duck, the transition to parenthood is “hazardous to marriage,” since it is typically accompanied by sharp declines in relationship satisfaction. In a popular rendition of close-relationship theory, Partnering: A New Kind of Relationship, Hal and Sidra Stone devote two chapters to the exploration of obstacles to satisfactory dyadic relationships. One chapter surveys a variety of potential threats to relationships, such as drug addiction and alcohol abuse; the other chapter focuses entirely on children. The Stones argue that children pose the major threat to “primary relationships” between adults, since these relationships are “very frequently … destroyed by the presence of children.”

Love under construction

In close-relationship theory, relationships have no teleology or common goal: not marriage, certainly, not even love. In this view, love has no objective existence; it is a construct of the individual, a shifting metric by which each of us defines whether or not relationships are “good enough” to continue. Constructivism challenges the old “love and marriage, horse and carriage” view. It notes that some of the most exquisite forms of romantic love, such as the courtly love tradition of the medieval era, stood outside of conjugal and familial life, and concludes that intimate dyadic love can flourish in many freestanding forms.

The “love researchers” of close-relationship theory attempt to provide tools for measuring how people construct and conceptualize love. This project turns our attention away from any substantive exploration of “real love” or “true love” (the phrases themselves seem so quaint) to a consideration of “how” love is “constructed” or “represented” by diverse individuals or communities. Constructivism seems to be our emerging cultural conclusion on the meaning of love.

In The Psychology of Love, John Alan Lee puts forward one of the most thoroughly constructivistic views of love in close-relationship theory. Lee states that he is “not concerned with defining love itself” but with helping lovers distinguish between different love constructs. These “love styles” represent “competing ideologies of love” that Lee culled from an extensive study of Western literature and philosophy. His “constructive typology” consists of six types of love, which, he cautions his readers, are far from exhaustive. Eros is passionate love. Erotic lovers seek intimate sexual and emotional involvement. Ludus is flirtatious; love is a game. Ludus lovers avoid commitment or self-disclosure. Storge is companionate love or friendship. Mania is an obsessive love that is intense, explosive, jealous, and possessive. Agape is an altruistic and self-giving love based more on will than emotion. Pragma is a utilitarian love concerned with a sensible match that will effectively meet the social and emotion needs of each partner.

The key word is “style.” There are “love styles” just as there are “life styles.” The differences between lovers consist only of different “styles” of loving, “each valid according to each person’s taste.” In this view, love styles can be constantly adjusted and changed, since they are grounded in no external or objective standards but instead in the subjective satisfactions of the “customers.” One might find a particular love style (or love-styler) “dissatisfying,” so, John Lee asks, “why not change?”

The value of various constructed styles of love is pegged to levels of subjective satisfaction. Yet there is considerable debate over the standards for measuring satisfaction. Is it a matter of the partners’ subjective feelings about their relationship (how the relationship feels)? Or is it about their actual relationship behavior (how it works)? In their contribution to the volume Satisfaction in Close Relationships, Susan and Clyde Hendricks distance themselves from attempts to offer more objective criteria of relationship success. They maintain that close-relationship theory is “fixed on people’s subjective, affective experiencing of their own happiness and contentment with their close relationship.”

The essay by Larry Erbert and Steve Duck in the same volume insists on the importance of “subjective evaluation by each relational partner”: “Satisfaction measures are not designed as objective assessments of relational interaction, but as measures of the attitudes and feelings of the relational partners.” The authors argue for a “dialectical theory of relationship satisfaction” that challenges and deconstructs the “ideal type” implicit in most measures of satisfaction. They contend that these measurements conceal an ideological bias favoring stability over change, reliability over uncertainty, togetherness over individuality, and agreement over conflict. These valuations also entrench “a rigid structural prison that serves to limit the validation of other types of relationships.” By instead emphasizing subjective feelings and dispositions, these theorists hope to validate more fluid and variable relationships.

All about me

And how are we to understand the “self” that close relationships are intended to serve, satisfy, and enhance? Julia Wood and Steve Duck insist that we can no longer view the “identity” of the self as “enclosed in a stable core.” Instead, “selves are recognized as contingent, forming and reforming within diverse relationships and circumstances.” The self only assumes identity “in response to others.” According to Kenneth Gergen and Regina Walter, relationships are the “ontological prior,” by which they mean that “the individual is essentially an extension of relationship.” Thus the grounding of identity in our society, once secured by morality and religion, has shrunk down to the small circles of shifting close relationships in which selves seek recognition and meaning through intimacies with “significant others.”

For Gergen, the modern “saturated self” is essentially a “pastiche personality” that is continually constructed, deconstructed, and reconstructed in diverse social contexts. Since the self is constantly “fashioned” and then refashioned within processes of social interchange, the individual does not have an “autobiography” in which, for example, courtship may represent one chapter in a coherent life story. Instead, we now have “sociobiographies,” in which diverse relationships constantly help to construct, deconstruct, and reconstruct personal identity. For Julia Wood and Steve Duck, this “relational self” is a “teeming mass of potentialities, any of which may be realized in particular moments and none of which is invariant over time and context.”

In this view, close relationships are significant only insofar as they generate worlds of meaning that enrich and enhance the self. Close-relationship theorists develop models to chart the “self-enhancement” component in close relationships, and argue that these relationships are “one especially satisfying, useful, and human means of expanding the self through including each other in the self.” Close-relationship advocates Elaine and Arthur Aron cite the ancient Upanisadic axiom that “all love is directed toward the Self.” Even in loving, the self is still profoundly self-referential.

Microwave relationships

In close-relationship theory, romantic relationships are said to constitute the “formation stage” of sexually based relationships. For these theorists, courtship does not point toward a specific end, such as stable, successful marriage. The intense, fluid, exploratory world of courtship-as-romance – not courtship leading to marriage – is the paradigm for all sexually intimate relationships, including marriage.

And so marriage lands finally in a very curious spot. Instead of courtship being defined by the goal of marriage, marriage is defined by the dynamics of courtship. Close-relationship theory agrees with the old cosmetics advertisement slogan: The test of a good marriage is its capacity to maintain the “thrill of courtship.” The phrase “You would never know they are married” becomes the highest praise for conjugal love. Of course, intense courtship cannot be sustained forever. But it may be precisely the necessarily limited duration of courtship that makes this bond so fascinating to close-relationship theorists. Close-relationship theory tends to focus particularly on “initiation” and “disengagement,” since these are “particularly striking phases” of intimate relationships. It tends to pass over the dreary world of “relationship maintenance” (marriage).

The relational self is supremely adapted to an endless ebb and flow of romantic encounters and liaisons. In the post-modern world, “Purpose is replaced with pastiche.” Relationships are pastiche, marriage is purpose. Gergen and Walter exclaim the wonders of intense, but fragile, romances. These passionate liaisons are “joint creations” that offer accelerating, mutually generated forms of “reverberating activity” – “my pleasure increases as I experience your pleasure, yours increasing as a result of mine, mine increasing further because of yours, and so on.”

Gergen argues that courtship now refers to an ongoing process that involves the formation of many different sexually bonded relationships throughout life. He defines these interactions as “microwave relationships” – cooked up fast, served, and consumed. The layers of emotional residue left by the multiple passages through episodic relationships are not lamented but celebrated: “The pace of relationships is hurried, and processes of unfolding that once required months or years may be accomplished in days or weeks … The single person may experience not a handful of courtship relationships in a life time but dozens.”

In this postmodern world, stability, domesticity, and fidelity evoke little interest. Relational life is episodic, consisting of closures of old relationships to make way for self-disclosing new intimacies.

Flat and dull

A research model primarily aimed at understanding the internal dynamics of close, sexually intimate relationships is obviously ill-equipped to understand marriage or what leads to marriage. Yet times change. The new world imagined by close-relationship theory – essentially a world of serial coupling – is, more and more with each passing day, the world in which we live. Close-relationship theory is thus an articulation of an increasingly popular, and perhaps soon dominant, ideology of personal relationships.

In Couples: Scenes from the Inside, Sally Cline argues that we are in the midst of a “relationship revolution.” In this new world, five ideas stand out. First, the distinction between marriage and other intimate partnerships is all but eliminated. Courting couples are now said simply to be “in a relationship,” which puts them in the same generic category as married couples, subject to the same norms and processes of relationship quality, maintenance, and dissolution. Second, while the need for basic human attachment and intimacy must still be satisfied, we now privately choose the specific “love styles” with which we gratify those needs. Third, the new world is only big enough for the dyad, the couple. Children are essentially screened out. Despite complaints about the narrowness of the old nuclear family, the world of “close relationships” is far narrower, and also far more boring. Fourth, the new dyadic relationships are measured not by their capacity to foster traditional virtues such as courage or self-sacrifice, but solely by their capacity to satisfy what the self views as its needs. All externally based criteria for what is needed, or for what might constitute satisfaction, are banished; all standards become radically subjective. Finally, the openness, emotional intensity, and relative brevity of courtship are the very traits that make it superior to marriage as an expression of, and as a way of understanding, relationships. Consequently, romantic relationships replace marriage as life’s main arena for the discovery of personal meaning.

In the end, close-relationship theory reduces courtship and marriage to the loving interactions of ever-changing dyad partners. This shift may be the soft underbelly of contemporary theory and practice. For when the dust of this revolution settles, only “relationships” remain – thin and shadowy vestiges of formerly powerful vocations. Despite postmodern celebrations of uncertain futures and new-found freedoms, the road ahead seems flatter and less interesting. Don’t bother to fasten your seat belts.

Courtship, culture, and postmodernity

Today’s three most influential schools of academic thought on courtship – exchange theory, sociobiology, and close-relationship theory – do provide some useful insights. But these insights are fragmentary and quite limited. Exchange theory illuminates our growing capacity to understand marriage in essentially utilitarian terms. This approach has predictive power, insofar as our actual marrying behavior increasingly conforms to the expectations of the theory. Sociobiology exemplifies our cultural fatigue with idealistic views of romance. Its emphasis on the irrational nature of sexual desire and conflict nourishes contemporary cynicism. Its harsh realism further erodes those moral and religious ideals which, for earlier generations, sought to elevate sexual desire into lasting marital love.

Close-relationship theory illuminates our growing tendency to blur the distinctions between marriage and other relationships. Its theoretical insights ring true precisely to the extent that marriage itself is increasingly diluted and reduced to the fluidity and plasticity of just another “relationship.” In short, the older understanding of marriage as covenantal, life-long, genealogical, self-sacrificial, and child-centered is gradually being replaced by an understanding of marriage as merely another dyadic intimate relationship. To the extent that this operation succeeds, close-relationship theory will resonate ever more clearly with our actual personal and social experiences.

And yet, while the models of courtship generated by these schools of thought illuminate certain current realities, they blind us to others. Marriage retains a central importance in American culture, both practically and as an ideal. While nonmarital sex and childbearing are much more common, it is also true that about 90 percent of Americans marry, and Americans of all ages and social classes continue to list a “happy marriage” as vital to their lives. Scholars would do us all a great service if they would rediscover their interest in marriage and the pathways leading to it. Marriage is not just a close relationship, or a sexual barter, or a consumer good. Illuminating these distinctions will require theoretical models that begin, above all, with curiosity about what marriage is.

This is not a plea for homespun “family values” and virtues. “Family values” discourse may actually contribute to our cultural apathy about marriage by obscuring the more radical, startling, and unsettling characteristics of monogamous marriage. Marriage is an erotic bond that bridges the fundamental sexual divide within the human species. It is an intersexual coupling, but it is not just about self-enhancing satisfaction; it is a procreative bond that generates human life. It resonates through the poetry, religion, art, myth, and symbols of the human spirit. Marriage embraces the life, the passions, the beauty, the journeys, the betrayals, the dreams, and, ultimately, the death of the other. A symptom of the curious flatness of our postmodern sexual culture is its growing inability to perceive the elemental depths and power of this primordial human bond.

1 “The End of Courtship,” The Public Interest, Number 126, Winter 1997.

Daniel Cere is director of the Newman Institute of Catholic Studies at McGill University. His essay is based on a report prepared for the Institute for American Values, where he is an affiliate scholar.

How to Cure Health Care

Winter 2001

By Milton Friedman

Since the end of World War II, the provision of medical care in the United States and other advanced countries has displayed three major features: first, rapid advance in the science of medicine; second, large increases in spending, both in terms of inflation-adjusted dollars per person and the fraction of national income spent on medical care; and third, rising dissatisfaction with the delivery of medical care, on the part of both consumers of medical care and physicians and other suppliers of medical care.
Rapid technological advance has occurred repeatedly since the industrial revolution – in agriculture, steam engine, railroad, telephone, electricity, automobile, radio, television, and, most recently, computers and telecommunication. The other two features seem unique to medicine. It is true that spending initially increased after nonmedical technical advances, but the fraction of national income spent did not increase dramatically after the initial phase of widespread acceptance. On the contrary, technological development lowered cost, so that the fraction of national income spent on food, transportation, communication, and much more has gone down, releasing resources to produce new products or services. Similarly, there seems no counterpart in these other areas to the rising dissatisfaction with the delivery of medical care.

I. International comparison

These developments in medicine have been worldwide. By their very nature, scientific advances know no geographical boundaries. Data on spending are readily available for 29 Organization for Economic Cooperation and Development (OECD) countries. In every one, medical spending has gone up both in inflation-adjusted dollars per person and as a fraction of national income. Data are available for both 1960 and 1997 for 21 countries. In 13, spending more than doubled as a fraction of gross domestic product. The smallest increase was 67 percent, the largest, 378 percent. In 1997, 16 of the 29 OECD countries spent between 7 percent and 9 percent of gross domestic product on medical care. The United States spent 14 percent, the highest of any OECD country. Germany was a distant second at 11 percent; Turkey was the lowest at 4 percent.

A key difference between medical care and the other technological revolutions is the role of government. In other technological revolutions, the initiative, financing, production, and distribution were primarily private, though government sometimes played a supporting or regulatory role. In medical care, government has come to play a leading role in financing, producing, and delivering medical service. Direct government spending on health exceeds 75 percent of total health spending for 15 OECD countries. The United States is next to the lowest of the 29 countries, at 46 percent. In addition, some governments indirectly subsidize medical care through favorable tax treatment. For the United States, such subsidization raises the fraction of health spending financed directly or indirectly by government to over 50 percent.

What are countries getting for the money they are spending on medical care? What is the relation between input and output? Spending on medical care provides a reasonably good measure of input, but, unfortunately, there is no remotely satisfactory objective measure of output. For the hospital segment, number of beds occupied may at first seem like an objective measure. However, improvements in medicine have included a reduction in the length of hospital stay required for various medical procedures or illnesses. So, fewer patient days may be a sign of greater, not lesser, output. The desired output of medical care is “good health.” But how can we quantify “good health,” and equally important, allow for the role that factors other than medical care – such as plentiful food, pure water, and protective clothing – play in producing “good health”?

The least objectionable measure I have been able to find is expected length of life at birth or at various later ages, though that too is a far from unambiguous measure of the output attributable to spending on medical care. The remarkable increase in life span in advanced countries during the past century reflects much more than spending on medical care proper. Moreover, it does not allow for changes in the quality of life-attempted measurement of which is still in its infancy.

Figure 1 (see Appendix) shows the relation in 1996 for the 29 OECD countries between the percentage of the gross domestic product spent on medical care and the expected length of life at birth for females.1 The relation is clearly positive, though very loose.2 The United States and Germany are clear outliers, ranking first and second in spending but twentieth and seventeenth in length of life. As another indication of looseness, nine countries spent between 7 and 8 percent of GDP on medicine. The group includes Japan, which has the highest expected length of life (83.6 years), and the Czech Republic, fourth from the bottom (77.3 years). Clearly, many factors other than spending on medical care affect expected length of life.

Exploring that relation more fully, however worthwhile a project, is not the purpose of this article, which is to examine the situation in the United States. I have presented the data on the OECD countries primarily to document the two (related?) respects in which the United States is an outlier: We spend a higher percentage of national income on medical care (and more per capita) than any other OECD country, and government finances a smaller fraction of that spending than all except Korea.

II. Why third-party payment?

Two simple observations are key to explaining both the high level of spending on medical care and the dissatisfaction with that spending. The first is that most payments to physicians or hospitals or other caregivers for medical care are made not by the patient but by a third party – an insurance company or employer or governmental body. The second is that nobody spends somebody else’s money as wisely or as frugally as he spends his own. These statements apply equally to other OECD countries. They do not by themselves explain why the United States spends so much more than other countries.

No third party is involved when we shop at a supermarket. We pay the supermarket clerk directly. The same for gasoline for our car, clothes for our back, and so on down the line. Why, by contrast, are most medical payments made by third parties? The answer for the United States begins with the fact that medical-care expenditures are exempt from the income tax if, and only if, medical care is provided by the employer. If an employee pays directly for medical care, the expenditure comes out of the employee’s income after income tax. If the employer pays for the employee’s medical care, the expenditure is treated as a tax-deductible expense for the employer and is not included as part of the employee’s income subject to income tax. That strong incentive explains why most consumers get their medical care through their employer or their spouse’s or their parents’ employer. In the next place, the enactment of Medicare and Medicaid in 1965 made the government a third-party payer for persons and medical care covered by those measures.

We have become so accustomed to employer-provided medical care that we regard it as part of the natural order. Yet it is thoroughly illogical. Why single out medical care? Food is more essential to life than medical care. Why not exempt the cost of food from taxes if provided by the employer? Why not return to the much-reviled company store when workers were in effect paid in kind rather than in cash?

The revival of the company store for medicine has less to do with logic than pure chance. It is a wonderful example of how one bad government policy leads to another. During World War II, the government financed much wartime spending by printing money while, at the same time, imposing wage and price controls. The resulting repressed inflation produced shortages of many goods and services, including labor. Firms competing to acquire labor at government-controlled wages started to offer medical care as a fringe benefit. That benefit proved particularly attractive to workers and spread rapidly.

Initially, employers did not report the value of a fringe benefit to the Internal Revenue Service as part of their workers’ wages. It took some time before the IRS realized what was going on. When it did, it issued regulations requiring employers to include the value of medical care as part of reported employees’ wages. By this time, workers had become accustomed to the tax exemption of that particular fringe benefit and made a big fuss. Congress responded by legislating that medical care provided by employers should be tax-exempt.

III. Effect of third-party payment on medical costs

The tax exemption of employer-provided medical care has two different effects, both of which raise health costs. First, it leads employees to rely on their employer, rather than themselves, to make arrangements for medical care. Yet employees are likely to do a better job of monitoring medical-care providers, because it is in their own interest, than is the employer or the insurance company or companies designated by the employer. Second, it leads employees to take a larger fraction of their total remuneration in the form of medical care than they would if spending on medical care had the same tax status as other expenditures.

If the tax exemption were removed, employees could bargain with their employers for a higher take-home pay in lieu of medical care and provide for their own medical care either by dealing directly with medical-care providers or by purchasing medical insurance. Removal of the tax exemption would enable governments to reduce the tax rate on income while raising the same total revenue. This hidden subsidy for medical care, currently more than $100 billion a year, is not included in reported figures on government health spending.

Extending the tax exemption to all medical care – as in the current limited provision for medical savings accounts and the proposals to make such accounts more widely available – would reduce reliance on third-party payment. But, by extending the hidden subsidy to all medical-care expenditures, it would increase the tendency of employees to take a larger portion of their remuneration in the form of medical care. (I will more fully discuss medical savings accounts in the conclusion.)

Enactment of Medicare and Medicaid provided a direct subsidy for medical care. The cost grew much more rapidly than originally estimated – as the cost of all handouts invariably do. Legislation cannot repeal the non-legislated law of demand and supply. The lower the price, the greater the quantity demanded; at a zero price, the quantity demanded becomes infinite. Some method of rationing must be substituted for price and that invariably means administrative rationing.

Figure 2 provides an estimate of the effect on medical costs of tax exemption and the subsequent enactment of Medicare and Medicaid. The top line in the chart is actual per capita spending on medical care expressed in constant 1992 prices, to allow for the effect of inflation. Spending multiplied more than 23-fold from 1919 to 1997, going from $155 per capita to $3,625. The bottom line shows what would have happened to per capita spending if it had continued to rise at the same rate as it did from 1919 to 1940 (3.1 percent per year). On that assumption, per capita spending would have risen to $1,751, instead of $3,625 by 1997, or less than half as much.3,4

To estimate the separate effects of tax exemption and of Medicare and Medicaid, the second line shows what would have happened to spending if, after Medicare and Medicaid were enacted, spending had continued to rise at the same rate as it did from 1946 to 1965 (4 percent per year). The segment between the two bottom lines shows the effect of tax exemption; the segment between the two top lines shows the effect of the enactment of Medicare and Medicaid. According to these estimates, tax exemption accounts for 57 percent of the increase in cost; Medicare and Medicaid, 43 percent.

Figure 3 presents a different breakdown of the cost of medical care: between the part paid directly by the government and the part paid privately. As the figure shows, the government share has been growing over the whole period. Government’s share went from one-eighth of the total in 1919 to nearly a quarter in 1946 to a quarter in 1965 to nearly half in 1997. The rise in the government’s share has been accompanied by centralization of spending – from primarily by state and local governments to primarily by the federal government. We are headed toward completely socialized medicine and are already halfway there, if in addition to direct costs, we include indirect tax subsidies.

Expressed as a fraction of national income, spending on medical care went from 3 percent of the national income in 1919 to 4.5 percent in 1946, to 7 percent in 1965 to a mind-boggling 17 percent in 1997.5 No other country in the world approaches that level of spending as a fraction of national income no matter how its medical care is organized. The change in the role of medical care in the U.S. economy is truly breathtaking. To illustrate, in 1946, seven times as much was spent on food, beverages, and tobacco as on medical care; in 1996, 50 years later, more was spent on medical care than on food, beverages, and tobacco. In 1946, twice as much was spent on transportation as on medical care; in 1996, one-and-a-half times as much was spent on medical care as on transportation.

IV. The changing meaning of insurance

Employer financing of medical care has caused the term “insurance” to acquire a rather different meaning in medicine than in most other contexts. We generally rely on insurance to protect us against events that are highly unlikely to occur but involve large losses if they do occur – major catastrophes, not minor regularly recurring expenses. We insure our houses against loss from fire, not against the cost of having to cut the lawn. We insure our cars against liability to others or major damage, not against having to pay for gasoline. Yet in medicine, it has become common to rely on insurance to pay for regular medical examinations and often for prescriptions.

This is partly a question of the size of the deductible and the co-payment, but it goes beyond that. “Without medical insurance” and “without access to medical care” have come to be treated as nearly synonymous. Moreover, the states and the federal government have increasingly specified the coverage of insurance for medical care to a detail not common in other areas. The effect has been to raise the cost of insurance and to limit the options open to individuals. Many, if not most, of the “medically uninsured” are persons who for one reason or another do not have access to employer-provided medical care and are not willing to pay the cost of the only kinds of insurance contracts available to them.

If tax exemption for employer-provided medical care and Medicare and Medicaid had never been enacted, the insurance market for medical care would probably have developed as other insurance markets have. The typical form of medical insurance would have been catastrophic insurance – i.e., insurance with a very high deductible.

V. Bureaucratization and Gammon’s Law

Third-party payment has required the bureaucratization of medical care and, in the process, has changed the character of the relation between physicians or other caregivers and patients. A medical transaction is not simply between a caregiver and a patient; it has to be approved as “covered” by a bureaucrat and the appropriate payment authorized. The patient, the recipient of the medical care, has little or no incentive to be concerned about the cost – since it’s somebody else’s money. The caregiver has become, in effect, an employee of the insurance company or, in the case of Medicare and Medicaid, the government. The patient is no longer the one, and the only one, the caregiver has to serve. An inescapable result is that the interest of the patient is often in direct conflict with the interest of the caregiver’s ultimate employer. That has been manifest in public dissatisfaction with the increasingly impersonal character of medical care.

Some years ago, the British physician Max Gammon, after an extensive study of the British system of socialized medicine, formulated what he called “the theory of bureaucratic displacement.” In Health and Security, he observed that in “a bureaucratic system … increase in expenditure will be matched by fall in production…. Such systems will act rather like ‘black holes,’ in the economic universe, simultaneously sucking in resources, and shrinking in terms of ’emitted production.'” Gammon’s observations for the British system have their exact parallel in the partly socialized U.S. medical system. Here too input has been going up sharply relative to output. This tendency can be documented particularly clearly for hospitals, thanks to the availability of high quality data for a long period.

Before 1940, output, as measured by number of patient days per 1,000 population (equal to the number of occupied beds per 1,000 population) and input, as measured by cost per 1,000 population, both rose (input somewhat more than output presumably because of the introduction of more sophisticated and expensive treatments). The number of occupied beds per resident of the United States rose from 1929 to 1940 at the rate of 2.4 percent per year; the cost of hospital care per resident, adjusted for inflation, at 5 percent per year; and the cost per patient day, adjusted for inflation, at 2 percent per year.

The situation changed drastically after the war, as Figure 4 and the top part of Table 1 show. From 1946 to 1996, the number of beds per 1,000 population fell by more than 60 percent; the fraction of beds occupied, by more than 20 percent. In sharp contrast, input skyrocketed. Hospital personnel per occupied bed multiplied nine-fold, and cost per patient day, adjusted for inflation, an astounding 40-fold, from $30 in 1946 to $1,200 in 1996 (at 1992 prices). A major engine of these changes was the enactment of Medicare and Medicaid in 1965. A mild rise in input was turned into a meteoric rise; a mild fall in output, into a rapid decline. The 40-fold increase in the cost per patient day was converted into a 13-fold increase in hospital cost per resident of the United States by the sharp decline in output. Hospital days per person per year were cut by two-thirds, from three days in 1946 to an average of less than a day by 1996.

Taken by itself, the decline in hospital days is evidence of progress in medical science. A healthy population needs less hospitalization, and advances in science and medical technology have reduced the length of hospital stays and increased outpatient surgery. Progress in medical science may well explain most of the decline in output; it does not explain much, if any, of the rise in input per unit of output. True, medical machines have become more complex. However, in other areas where there has been great technical progress – whether it be agriculture or telephones or steel or automobiles or aviation or, most recently, computers and the Internet – progress has led to a reduction, not an increase, in cost per unit of output. Why is medicine an exception? Gammon’s law, not medical miracles, was clearly at work. The provision of medical care as an untaxed fringe benefit by employers, and then the federal government’s assumption of responsibility for hospital and medical care of the elderly and the poor, provided a fresh pool of money. And there was no shortage of takers. Growing costs, in turn, led to more regulation of hospitals and medical care, further increasing administrative costs, and leading to the bureaucratization that is so prominent a feature of medical care today.

Medicine is not the only area where this pattern has prevailed. Aside from defense and medicine, schooling is the only other major area of our society that is largely financed and administered by government, and here too Gammon’s law has clearly operated. Input per unit of output, however measured, has clearly been going up; output, especially if measured in terms of quality, has been going down, and dissatisfaction, as in medicine, is growing. The same may well be true also in defense. However, measuring output independently of input is even more baffling for defense than for medicine.

To return to medicine, hospital cost has risen as a percentage of total medical cost from 24 percent in 1946 to 32 percent half a century later. The cost of physician services is currently the second largest component of total medical cost. It too has risen sharply, though less sharply than hospital costs. In 1946, the cost of physician services exceeded the cost of hospital services. According to the estimates in Table 1, the cost of physician services has multiplied four-fold since 1946, the major rise coming after the adoption of Medicare and Medicaid in 1965.

Figure 5 shows what has happened to the number of physicians and their income. The number almost doubled, and the income per physician almost tripled over the half-century from 1946 to 1996. Both reflect the increase in funds available to finance medical care and the third-party character of payment. The demand for physician services went up, and income had to go up to attract additional physicians. Paradoxically, the attempt by third-party payers – particularly the federal government – to keep costs down has been at least partly self-defeating, because it took the form of imposing onerous rules and regulations on physicians. The resultant bureaucratization of medical practice has made the practice of medicine less attractive as an occupation to most actual and potential physicians, which increased the necessary rise in incomes. It has also reduced their productivity.

VI. Medical-care output

So much for input. What about output? What have we gotten in return for quadrupling the share of the nation’s income spent on medical care?

I have already referred to one component of output – days of hospital care per person per year. That has gone down from three days in 1946 to less than one in 1996. Insofar as the reduction reflects the improvements in medicine, it clearly is a good thing. However, it also reflects the pressure to keep hospital stays short in order to keep down cost. That this is not a good thing is clear from protests by patients, widespread enough to have led Congress to mandate minimum stays for some medical procedures.

The output of the medical-care industry that we are interested in is its contribution to better health. How can we measure better health in a reasonably objective way that is not greatly influenced by other factors? For example, if medical care enables people to live longer and healthier lives, we might expect that the fraction of persons aged 65 to 70 who continue to work would go up. In fact, of course, the fraction has gone down drastically – thanks to higher incomes reinforced by financial incentives from Social Security. With the same “if” we might expect the fraction of the population classified as disabled to go down, but that fraction has gone up, again not for reasons of health but because of government social security programs. And so I have found with one initially plausible measure after another – all of them are too contaminated by other factors to reflect the output of the medical-care industry.

As noted earlier, the least bad measure that I have been able to come up with is length of life, though that too is seriously contaminated by other factors – improvements in diet, housing, clothing, and so on generated by greater affluence, better garbage collection and disposal, the provision of purer water, and other governmental public-health measures. Wars, epidemics, and natural and man-made disasters have played a part. Even more important, the quality of life is as meaningful as the length of life. Perhaps the extensive research on aging currently underway will lead to a better measure than length of life.

Figures 6 and 7 present two different sets of data on expected length of life: Figure 6, expected length of life at birth; Figure 7, remaining length of life at age 65. Both cover the whole century, from 1900 to 1997, the last year for which I was able to get data. For Figure 6 the data are annual; for Figure 7, decennial until recent years. The two tell very different, but equally remarkable, stories.

Expected longevity went from 47 years in 1900 to 68 years in 1950, a truly remarkable rise that proceeded at a fairly steady rate, averaging four-tenths of a year per year. Public-health activities, such as those leading to cleaner water and air and better control of epidemics, played a major role in lengthening life, no doubt; but so too did improvements in medical practice and hospital care, particularly those leading to a sharp reduction in infant and maternal mortality. Whatever its source, the increase in longevity did not have any systematic relation to spending on medical care as a fraction of income. We have reasonably accurate data on spending only from 1929 on; crude data from 1919 on. Except for the deep depression years of 1932 and 1933, national health spending never exceeded 5 percent of national income, and from 1919 to 1948, varied between 3 and 5 percent, primarily as a result of wider swings in national income than in health spending.

The most striking feature of Figure 6 is the sharp slowdown in the increase in longevity after 1950. From 1950 on, longevity grew at less than half the rate that it grew from 1900 to 1950-averaging less than two-tenths of a year per year compared to the earlier four-tenths.6 In the first 50 years of the century, the life span increased by 21 years; in the next 47 years, by eight years. As in the first 50 years, the increase proceeded at a surprisingly steady pace. I have no good explanation for the shift from one trend to the other. I conjecture that it reflects the exhaustion by the end of World War II of the possibility of further major improvements from public-health activity. I leave it to scholars more knowledgeable about medicine than I to give a more satisfactory answer.

The later trend was accompanied, as the earlier one was not, by a major increase in spending as a fraction of national income. However, I attribute that increase in spending to the changes in the economic organization of medical care discussed earlier. I doubt that it is related as either cause or effect to the slowdown in the growth of longevity.

Data are much less readily available for longevity at age 65 than at birth, so I have resorted to the use of decennial estimates except for the most recent year. Figure 7 is almost the mirror image of Figure 6 – that is, the same picture reversed. Instead of first rising rapidly and then slowly, longevity at age 65 at first rose slowly and then rapidly. Until 1940, longevity rose at an average of only .025 years per year. Remaining years of life went from 12 – or to age 77 – in 1900 to 13 – or age 78 – in 1940. Then there was a sharp acceleration, and in the next 57 years, remaining years of life went up by an additional five years to 18 – or age 83, rising at the average rate of .085 years per year. Understandably, both the earlier and the later rates of growth in longevity at age 65 are much smaller than the comparable figures for longevity at birth. The remarkable phenomenon is the shift in trend around 1940, and the steadiness of the trend both before and after 1940.

Data for later years of life suggests that the steadiness of the trend in longevity at age 65 is not likely to continue. At these later ages, there has been a distinct slowing of increases in longevity since about 1980. At age 85, remaining years of life for females has not changed in the 17 years from 1980 to 1997. It was 6.4 years in both 1980 and 1997.7

What caused the change in the trend at age 65, and why was that change in the opposite direction from the change in the trend at birth, and why did it occur about 10 years earlier? Could it have been the emergence of penicillin and sulfa at around 1940 that explains the dating of the shift? No doubt many other advances in medicine, from the handling of blood pressure to the perfecting of open-heart surgery, the improved treatment of cancer, and the better understanding of diet were of special importance for preventing death at later ages. I am incompetent to judge these matters and their relative importance. But I have no doubt that one economic change also played an important role. That was the sharp improvement in the economic status of the elderly brought about by government transfer programs, notably Social Security. From being among the poorest groups in society, the elderly have become among the most affluent in the post-World War II period.

However interesting these speculations may be, they are a long way from providing an answer to the question with which we started this section, namely, “What have we gotten in return for quadrupling the share of the nation’s income spent on medical care?” The slowdown in the increase of longevity at birth started before tax exemption and Medicare had any effect on spending. Similarly, the acceleration in the increase in longevity at age 65 started 25 years before Medicare was enacted and showed no speedup thereafter. Perhaps better measures of the health of the population and various subgroups will show a relation to total spending. But on the evidence to date, it is hard to see that we have gotten much for that spending other than bureaucratization and widespread dissatisfaction with the economic organization of medical care.

VII. The United States vs. other countries

Our steady movement toward reliance on third-party payment no doubt explains the extraordinary rise in spending on medical care in the United States. However, other advanced countries also rely on third-party payment, many or most of them to an even greater extent than we do. What explains our higher level of spending?

I must confess that despite much thought and scouring of the literature, I have no satisfactory answer. One clue is my estimate that if the pre-World War II system had continued – that is, if tax exemption and Medicare and Medicaid had never been enacted – expenditures on medical care would have amounted to less than half its current level, which would have put us near the bottom of the OECD list rather than at the top.

In terms of holding down cost, one-payer directly administered government systems, such as exist in Canada and Great Britain, have a real advantage over our mixed system. As the direct purchaser of all or nearly all medical services, they are in a monopoly position in hiring physicians and can hold down their remuneration, so that physicians earn much less in those countries than in the United States. In addition, they can ration care more directly – at the cost of long waiting lists and much dissatisfaction.8

In addition, once the whole population is covered, there is little political incentive to increase spending on medical care. In an insightful analysis of political entrepreneurship, W. Allen Wallis noted that

one of the ways politicians compete for votes is by offering to have the government provide new services. For an offer of a new service to have substantial electoral impact, the service ordinarily must be one that a large number of voters is familiar with, and in fact already use. The most effective innovations for a political entrepreneur to offer, therefore, are those whose effect is to transfer from individuals to the government the costs of services which are already in existence, not to alter appreciably the amount of the service reaching the people.9
Medicare, Medicaid, the political stress on the “uninsured,” and the current political pressure for government financing of prescriptions all exemplify this phenomenon. Once the bulk of costs have been taken over by government, as they have in most of the other OECD countries, the political entrepreneur has no additional groups to attract, and attention turns to holding down costs.

An additional factor is the tax treatment of private expenditures on medical care. In most countries, any private expenditure comes out of after-tax income. It does in the United States also, unless the medical care is provided by the employer. For this reason, the bulk of medical care is provided through employers, and private expenditures on medical care are decidedly higher than they would be if medical care, like food, clothing, and other consumer goods, had to be financed out of post-tax income. It is consistent with this view that Germany, the country second to the United States in the fraction of income spent on medical care, has a system in which the employer plays a central role in the provision of medical care and in which, so far as I have been able to determine, half of the cost comes out of pre-tax income, half out of post-tax income.

Our mixed system has many advantages in accessibility and quality of medical care, but it has produced a higher level of cost than would result from either wholly individual choice or wholly collective choice.

VIII. Medical savings accounts and beyond

The high cost and inequitable character of our medical-care system is the direct result of our steady movement toward reliance on third-party payment. A cure requires reversing course, reprivatizing medical care by eliminating most third-party payment, and restoring the role of insurance to providing protection against major medical catastrophes.

The ideal way to do that would be to reverse past actions: repeal the tax exemption of employer-provided medical care; terminate Medicare and Medicaid; deregulate most insurance; and restrict the role of the government, preferably state and local rather than federal, to financing care for the hard cases. However, the vested interests that have grown up around the existing system, and the tyranny of the status quo, clearly make that solution not feasible politically. Yet it is worth stating the ideal as a guide to judging whether proposed incremental changes are in the right direction.

Most changes made in the final decade of the twentieth century have been in the wrong direction. Despite rejection of the sweeping socialization of medicine proposed by Hillary Clinton, subsequent incremental changes have expanded the role of government, increased regulation of medical practice, and further constrained the terms of medical insurance, thereby raising its cost and increasing the fraction of individuals who choose or are forced to go without insurance.

There is one exception, which, though minor in current scope, is pregnant of future possibilities. The Kassebaum-Kennedy bill, passed in 1996 after lengthy and acrimonious debate, included a narrowly limited four-year pilot program authorizing medical savings accounts. A medical savings account enables individuals to deposit tax-free funds in an account usable only for medical expense, provided they have a high-deductible insurance policy that limits the maximum out-of-pocket expense. As noted earlier, it eliminates third-party payment except for major medical expenses and is thus a movement very much in the right direction. By extending tax exemption to all medical expenses whether paid by the employer or not, it eliminates the present bias in favor of employer-provided medical care. That too is a move in the right direction. However, the extension of tax exemption increases the bias in favor of medical care compared to other household expenditures. This effect would tend to increase the implicit government subsidy for medical care, which would be a step in the wrong direction.10 But, on balance, given how large a fraction of current medical expenditures are exempt, it seems likely that the net effect of widely available and flexible medical savings accounts would be very much in the right direction.

However, the current pilot program is neither widely available nor flexible. The act limits the number of medical savings accounts to no more than 750,000 policies, available only to the self-employed who are uninsured and employees at firms with 50 or fewer employees. Moreover, the act specifies the precise terms of the medical savings account and the associated insurance. Finally, at the end of four years (the year 2000) Congress will have to vote to continue or change the program. (Those who signed up in the first four years would be entitled to continue their accounts even if Congress terminates the program.) A number of representatives and senators have indicated their intention to introduce bills to extend and widen the availability of medical savings accounts.

Prior to this pilot project, a number of large companies (e.g., Quaker Oats, Forbes, Golden Rule Insurance Co.) had offered their employees the choice of a medical savings account instead of the usual low-deductible employer-provided insurance policy. In each case, the employer purchased a high-deductible major medical insurance policy for the employee and deposited a stated sum, generally about half of the deductible, in a medical savings account for the employee. That sum could be used by the employee for medical care. Any part not used during the year was the property of the employee and had to be included in taxable income. Despite this loss of tax exemption, this alternative has generally been very popular with both employers and employees. It has reduced costs for the employer and empowered the employee, eliminating much third-party payment.

Medical savings accounts offer one way to resolve the growing financial and administrative problems of Medicare and Medicaid. Each current participant could be given the alternative of continuing with present arrangements or receiving a high-deductible major medical insurance policy and a specified deposit in a medical savings account. New entrants would be required to accept the alternative. Many details would have to be worked out: the size of the deductible and the deposit in the medical savings account, the size of any co-payment, and whether additional medical spending would be tax-exempt. Yet it seems clear from private experience that a program along these lines would be less expensive and bureaucratic than the current system, and more satisfactory to the participants. In effect, it would be a way to voucherize Medicare and Medicaid. It would enable participants to spend their own money on themselves for routine medical care and medical problems, rather than having to go through HMOs and insurance companies, while at the same time providing protection against medical catastrophes.

An interesting and instructive experiment with medical savings accounts has recently taken place in South Africa, as explained by Shaun Matisonn of the National Center for Policy Analysis:

For most of the last decade [the nineties] – under the leadership of Nelson Mandela – South Africa enjoyed what was probably the freest market for health insurance anywhere in the world…. South Africa’s insurance regulations were and are sufficiently flexible to allow the type of innovation and experimentation that American law stifles…. The result has been remarkable…. In just five years, MSA plans captured half the market, proving that they are popular and meet consumer needs as well as or better than rival products. South Africa’s experience with MSAs shows that MSA holders save money, spending less on discretionary items in a way that does not increase the cost of inpatient care. Contrary to allegations by some critics, the South African experience also shows that MSAs attract individuals of all different ages and different degrees of health.
A more radical reform would, first, end both Medicare and Medicaid, at least for new entrants, and replace them by providing every family in the United States with catastrophic insurance – i.e., a major medical policy with a high deductible. Second, it would end tax exemption of employer-provided medical care. And third, it would remove the restrictive regulations that are now imposed on medical insurance – hard to justify with universal catastrophic insurance.

This reform would solve the problem of the currently medically uninsured, eliminate most of the bureaucratic structure, free medical practitioners from an increasingly heavy burden of paperwork and regulation, and lead many employers and employees to convert employer-provided medical care into a higher cash wage. The taxpayer would save money because total government costs would plummet. The family would be relieved of one of its major concerns – the possibility of being impoverished by a major medical catastrophe – and most could readily finance the remaining medical costs. Families would once again have an incentive to monitor the providers of medical care and to establish the kind of personal relations with them that were once customary. The demonstrated efficiency of private enterprise would have a chance to improve the quality and lower the cost of medical care. The first question asked of a patient entering a hospital might once again become “What’s wrong?” and not “What’s your insurance?”

While so radical a reform is almost surely not politically feasible at the moment, it may become so as dissatisfaction with the current arrangements continue to grow. And again, it gives a standard – if less than an ideal one – against which to judge incremental changes.



 

Notes

  1. Females only are included to remove one source of irrelevant difference among countries. In general, females tend to have a longer expected length of life than males, and countries differ in the ratio of males to females. The correlation of expected length of life with per capita spending on medical care in dollars is almost the same as with percent of GDP spent on medical care.
  2. The correlation is partly spurious because percent spent tends to be positively correlated with real GDP, and real GDP is positively correlated with length of life for given percent spent. However, the partial correlation of percent spent with length of life is statistically significant and higher than the partial correlation of real GDP with length of life.
  3. In an extensive study, the Rand Corporation compared the effect of different health-insurance plans, varying from one with no deductible and no co-payment – that is, free medical care – to one with 95 percent co-payment, very close to complete private responsibility. In his summary of the results, Joseph Newhouse concluded that, “had there been no MDE [maximum deductible expense], demand on the 95 percent coinsurance plan would have been a little over half as large as on the free care plan,” and an accompanying table gives 55 percent as the actual fraction.The 1997 value of the extrapolated trend from 1919-1940 is 48 percent of on a completely independent set of data. See Joseph P. Newhouse, Free for All? Lessons from Rand Health Insurance Experiment (Harvard University Press, 1993), p. 458.
  4. Had this been the total expenditure in 1996, the United States would have ranked twenty-first, rather than first, among the 29 OECD countries in fraction of income spent on medical care.
  5. The figure of 14 percent referred to earlier was from OECD data; it referred to 1996 rather than 1997 and to percent of gross domestic product, not national income.
  6. I have used data for the population as a whole, although data are also available by sex and race. There are minor differences between the sexes and between the races, but the broad picture is essentially the same for all, so I have not thought it worthwhile to present more detailed data, as I did in Input and Output in Medical Care (Stanford: Hoover Institution Press, 1992).
  7. I am indebted to James Fries, a leading expert on aging, for calling this phenomenon to my attention. The data cited are from Metropolitan Life Insurance Statistical Bulletin, Oct.-Dec., 1998.
  8. See Cynthia Ramsay and Michael Walker, Critical Issues Bulletin: Waiting Your Turn, 7th edition (Vancouver, B.C., Canada: Fraser Institute, 1997).
  9. W. Allen Wallis, An Overgoverned Society (Free Press, 1976), p. 256.
  10. Whether medical savings accounts increase or decrease the government subsidy to medical care, including the hidden tax subsidy of tax exemption, depends on whether they raise or lower total medical expenditures exempted from tax. First-party payment works toward reducing such expenditures by giving consumers an incentive to economize and by reducing administrative costs. The availability of tax exemption to a wider class of medical expenses has the opposite effect. Such experience as we have with medical savings accounts or their equivalent suggests that the first effect is highly significant and is likely to overwhelm the second. However, this issue deserves more systematic investigation.

Milton Friedman is a senior research fellow at the Hoover Institution and author (with Rose D. Friedman) of Two Lucky People (University of Chicago Press, 1998). He received the Nobel Prize for Economic Science in 1976.