U.S. Income Tax

Those April Blues

By STEPHEN MOORE April 13, 2007; Page A12

Americans are natural procrastinators when it comes to unpleasant tasks, so it should be no surprise that surveys show half of all tax filers wait until this last week before the April 16 deadline to do their taxes. No wonder: This year there are a record 66,000 pages of mostly incomprehensible tax laws to comply with, and for those with really complicated returns, 526 separate forms that may need to be filled out.

In 2005 an astonishing six out of every 10 taxpayers needed the help of a trained professional to complete their returns. Tax preparation is now one of America's fastest growth industries. A Cato Institute study finds that 1.2 million workers are employed as tax accountants, lawyers, and H&R Block employees. Even so, to make sense of their taxes American workers and businesses devote 6.4 billion hours a year, about 45 hours per return. There are now 16 separate tax breaks for college education and several dozen for energy conservation, including write-offs for such things as purchasing electricity-saving refrigerators. About two-thirds of Americans say they can't figure out basic IRS regulations or the tax laws on the sale of a home.

Yet Congress says that it has passed 22 laws to "simplify the tax code" over the past 40 years.

The income tax has not always been such a burden or labyrinth. When the 16th Amendment was under debate nearly a century ago, the proponents -- including Republican presidents Theodore Roosevelt and William H. Taft -- assured Americans that the tax on income would be small and nonintrusive. The amendment was ratified in 1913. Rep. Cordell Hull, who drafted the first income tax, promised that it would apply only to "the Carnegies, the Vanderbilts, the Morgans and the Rockefellers with their aggregated billions of hoarded wealth."

In the beginning the return was indeed simple, resembling the postcard flat tax that Steve Forbes and Dick Armey have advocated in recent years. The original 1040 form in 1914 was so compact, the New York Times printed it on the front page. There were a grand total of four instruction forms. Now there are 4,000.

Tax rates were modest too, ranging from 1% to 7%, with most income under the equivalent of a half-million dollars today exempt. The opponents of the income tax urged that, at least, there should be a provision to the 16th amendment capping the tax rate at no more than 10%. Advocates claimed this was unnecessary because the tax rate would never exceed 10%. By 1918, when the government wanted money to fight World War I, the rate was 70%.

Nevertheless, in its early days the income tax really was only the "rich man's burden": 0.5% of Americans, or about 360,000 people, had to fill out a tax form. Today, 135 million Americans, or nearly every worker, must do so. The same bait-and-switch tactic suckered the country into swallowing the alternative minimum tax in 1969. Originally the AMT was passed to force 155 wealthy individuals who had escaped the income tax to pay their "fair share." This year six million filers are subject to the AMT. If Congress does not intervene, next year it will be 26 million.

In 1914 the total income-tax collections were $10 billion (in today's dollars). Now the income tax gathers in roughly $1 trillion, and gathering that stash requires a massive collection machine. The original IRS enforcement office had 4,000 employees. Now the IRS has 100,000 tax agents, more employees than the Environmental Protection Agency, the Occupational Safety and Health Administration and the Food and Drug Administration combined. Yet Congressional Democrats want to hire thousands more tax agents to audit more Americans and close the $300 billion "tax gap." Before hiring more tax snoops, we might want to heed the warning of historian Charles Adams, who notes in his book "For Good and Evil: The Impact of Taxes on the Course of Civilization": "From the earliest records of civilization, tax laws have taken away liberty more often than foreign invaders."

The complexity of the tax code, the cost it imposes on the economy simply to comply with it, and the civilian army of agents needed to enforce it continues to grow like cancer cells attacking the healthy ones. At the same time, common sense reforms like the flat tax or the national sales tax remain politically stalled -- perhaps because there are so many vested interests in keeping it complicated. Even conservative Republican presidential candidate Mitt Romney of Massachusetts recently came out against a flat tax arguing that it might be unfair. To whom? Tax accountants and lawyers? Meanwhile, just last week the Czech Republic announced plans to become the next former communist nation of Eastern Europe to adopt a flat tax. Everywhere this idea is catching hold, except in Washington.

Looking back 93 years, there's a case to be made that the 16th amendment was an even greater failure than that other Progressive era experiment, prohibition. We should have listened to the advice rendered by the New York Times, which while editorializing against the income tax in 1909 warned: "When men get in the habit of helping themselves to the property of others, they cannot be easily cured of it."

Mr. Moore is senior economics writer for the The Wall Street Journal's editorial page.

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Copyright 2007 Dow Jones & Company, Inc. All Rights Reserved

Universal Healthcare of some kind

What’s the One Thing Big Business and the Left Have in Common?

By JONATHAN COHN

The struggle to establish universal health insurance, dormant for more than a decade, is back. Should it actually succeed over the next few years, historians may trace that triumph, at least in part, to a news conference on Capitol Hill — and to a most unusual figure who participated in it. The event took place in early December, just after the Democrats won back control of Congress. Its sponsor was Senator Ron Wyden, Democrat of Oregon, who was unveiling what would become the first universal-coverage proposal of the new political alignment. The impending change in Congressional leadership lent the announcement greater significance than usual — Wyden’s proposal would actually get a hearing, for one thing.

In many respects, the news conference seemed rather mundane. Universal health care has always been a liberal’s cause, after all, and Wyden is one of the Senate’s most liberal members, somebody who has long defined universal coverage primarily in terms of fairness and equal opportunity. Among those flanking Wyden onstage were other longtime advocates of universal coverage, including Andy Stern, president of the Service Employees International Union. He, too, paid homage to the traditional rationale, arguing that Wyden’s plan “sets down a moral test: Why doesn’t every American have the right to the same health care as the president, the vice president, 535 members of Congress and three million federal workers?”

One of the men alongside Wyden and Stern stood out, however, politically if not visually. He was Steve Burd, chairman and C.E.O. of Safeway supermarkets. Nobody has ever accused Burd of having a bleeding heart: a former management consultant with a graduate degree in economics, he became notorious two years earlier when he helped lead California grocers into battle with their labor unions over employee medical benefits. Burd insisted that the unions accept skimpier insurance to save his company money. In the four-month walkout that ensued, newspapers ran articles about checkout clerks defaulting on their cars and homes. Union supporters blasted Burd as “evil” and “a rat.” At one point, a group of clergy members marched on Burd’s California estate, holding a prayer vigil and delivering a handwritten plea for him to compromise. He didn’t. And eventually he won, forcing major concessions from the union.

Yet here was Burd in Washington, arm in arm with one of labor’s most passionate leaders, endorsing a plan in which the government would guarantee affordable, high-quality insurance to every single American. “Our nation is facing a crisis that requires immediate attention,” Burd declared. “Working together, business, labor, government, consumer groups and health-care providers can collectively solve this problem.” And while the “working together” line had the feel of boilerplate, Burd meant it. In the year that Wyden took constructing his proposal, Burd was quietly advising him; eventually they or their staffs were conferring almost every week.

When Burd wasn’t working with Wyden, he was talking about health care with another audience: his fellow C.E.O.’s, whose support for universal coverage he was trying to secure. Soon that effort may also produce results. When I spoke to Burd recently at Safeway’s headquarters in Pleasanton, Calif., just east of San Francisco Bay, he told me that within weeks he expects dozens of companies to join a nonprofit advocacy group he is organizing called the Coalition to Advance Health Care Reform. Burd declined to reveal their names or the exact number of corporations participating. He did say that they represent a broad swath of corporate America and that all will be known when the group goes public later this spring. Burd also confirmed that one of the coalition’s officers in Washington will be the longtime Republican Party operative Ed Gillespie — whose presence in an organization explicitly endorsing “universal health coverage,” as the coalition’s founding principles do, would seem about as likely as the presence of George W. Bush himself, whose disdain for anything resembling “government-run health care” is a matter of public record.

Is all of this indicative of a broader shift in the politics of health care? Perhaps. As health care has become more expensive and even middle-class Americans have become anxious that their hold on employer-sponsored coverage is precarious, politicians have been talking seriously again about making health insurance a birthright, just as it is in every other developed nation. Not long after Wyden unveiled his plan, former Senator John Edwards, who is running for president, offered a detailed universal-coverage proposal of his own. His chief rivals for the Democratic nomination, Senators Hillary Clinton and Barack Obama, have pledged to insure all Americans. Meanwhile, Mitt Romney of Massachusetts signed a statewide universal law last year before leaving the governor’s office; his campaign for the Republican nomination now proclaims it his major policy achievement. Gov. Arnold Schwarzenegger, another Republican, has proposed a similar system for California.

But it is corporate America’s interest that is most striking. For many years, the only business leaders openly calling for universal coverage were mavericks like Howard Schultz, the chairman of Starbucks, who has long preached the need for business to show greater social responsibility. The C.E.O.’s rallying to universal coverage now — particularly in the last few months — are acting not so much out of social solidarity as out of financial necessity, as the burden of financing workers’ premiums has become ever more onerous.

“The refrain from business was, ‘We can’t afford to do universal health care,’ ” says Wyden, whose plan calls for shifting responsibility for buying insurance from employers to individuals. “Now the refrain is, ‘We can’t afford not to do it.’ ” The Business Roundtable, one of Washington’s most influential business lobbies, now endorses universal coverage, at least in broad principle. And probably no spectacle captured the spirit of the times more than a joint conference held in February by Andy Stern and a man he has spent much of the last few years attacking, Lee Scott, the C.E.O. of Wal-Mart. Together the two pronounced the need for universal coverage by 2012.

Of course, at that news conference, Scott didn’t go into great detail about exactly what kind of universal health-care system he would like, just as the Business Roundtable shied away from specifics in its statement. And that’s the rub. In the early phases of the last great debate about health-care reform, during the early 1990s, prominent business leaders sent out strikingly similar signals — suggesting they were ready to embrace universal health care, for the same essential reasons they cite now. At one point, a coalition of business leaders put out a “play or pay” proposal that would have required corporations either to insure their workers or to pay into a common fund for the uninsured. But as President Clinton’s health-care plan lost political momentum, the business community’s support for universal health care faltered and, eventually, collapsed. Is its support any more reliable now? “This is precisely the political equation the Clintons bet on,” says Jonathan Oberlander, a health-policy scholar at the University of North Carolina. “Sorry to say this may turn out to be another mirage.”

Burd, who like most successful business leaders does not lack self-confidence, vows to see this campaign through and to bring his fellow C.E.O.’s along with him. Veteran universal-coverage supporters like Stern and Wyden who have worked with Burd say they think it’s possible he will do just that. But even they concede that Burd’s ideas — and more generally, the ideas of the business community — don’t line up perfectly with their own. How far can such a coalition go? And, no less important, where will it go?

The first calls to create what we now know as universal health care date back to the early 20th century. Before then, medical care was generally cheap because it was, for the most part, ineffective. As one scientist put it, “It was around 1910 or 1912 when it became possible to say that a random patient with a random disease consulting a random doctor stood better than a 50-50 chance of benefiting from the encounter.” But by the 1920s, medical advances — in particular, the refinement of anesthesia and the development of sanitary techniques — enabled doctors to cure patients rather than simply comfort them. As medicine grew more sophisticated, however, it became more expensive. Particularly after the Depression set in, large numbers of people could no longer afford to pay for medical care on their own. Many went into debt. Others simply didn’t get the care they needed.

Franklin Roosevelt ended up rejecting calls to incorporate health insurance into the New Deal; he is thought to have feared that the opposition of organized medicine might sink his Social Security Act. As a result, the inability of patients to pay for their medical bills remained a problem — not just for the patients but, increasingly, for the providers as well. Having spent the boom years of the 1920s building up their facilities, hospitals faced a serious financial crunch with the onset of the Depression. To improve their prospects of being paid by patients, they created the nation’s first group-insurance plans. These plans evolved into the Blue Cross system and eventually became the model upon which all health insurance would be based. Among the most important characteristics of these plans was that they were linked to employment: in order to spread the cost of caring for the sick, hospitals pitched the plans primarily to groups of employees — a method that brought in enough healthy people to subsidize the cost of the sick or injured.

By and large, leaders of the business community in the middle of the century embraced this change. Given their staunch opposition to government interference in the private sector, Blue Cross-style insurance seemed the least-objectionable solution to the medical-cost problem. And during World War II, when the government exempted fringe benefits from its strict controls on wages, employers started offering ever more generous health benefits in order to attract workers. Another government decision — to exempt group health insurance premiums from personal income taxes — made health insurance an even more attractive option for business to offer. This effectively made a dollar of insurance worth more than a dollar of income, giving companies an easy way to cement worker loyalty.

During the postwar era, with widespread prosperity helping to create relatively good relations between management and labor, C.E.O.’s frequently spoke of themselves as stewards of their employees’ well-being — a claim consistent with their role as the country’s primary sources of insurance. But by the 1970s, improved technology and increasing demands for it (spurred, in part, by the creation of Medicare) sent the cost of medicine skyrocketing. Meanwhile, America’s manufacturing sector faced intense competition from producers abroad who paid considerably less for labor than their American counterparts. As insurance became more expensive, businesses started looking for ways to limit the burden. Often, they succeeded — which is one reason the proportion of Americans without insurance climbed in the late 1980s and early 1990s, setting in motion the Clinton health-care episode.

Though it is not widely remembered, Clinton tried hard to curry favor with business. Ira Magaziner, the chief architect of the administration’s plan, met repeatedly with corporate leaders to seek their advice, understand their needs and anxieties and test their tolerance for various provisions. Although the final White House plan included an “employer mandate” — meaning all businesses would be required to pay for a portion of their employees’ health-care costs — Clinton constructed that mandate so that many employers would actually benefit: For example, the automakers and other large employers obligated by union contracts to provide generous benefits would get some financial relief. Even businesses that didn’t offer such generous benefits would at least enjoy more predictability, since contributions to a government-administered fund would fluctuate a lot less than existing private-insurance premiums. The mandate would have the hardest impact on the country’s small businesses, since so many were not providing any sort of health insurance at all. But the Clinton plan had subsidies for these establishments too. Given all this, why didn’t business support the Clinton health plan?

Actually, there was some support — at least initially. Most notably, the U.S. Chamber of Commerce at first embraced the concept of an employer mandate. But when the chamber, which represents both big and small companies, announced its endorsement, it came under attack from the National Federation of Independent Businesses, which represents only small firms. The chamber quickly started to lose members — and to field irate calls from Republican legislators warning against giving any support to the Clinton plan. The chamber and other allies backed off.

Following the plan’s demise, the most influential leaders of the business community assumed a strongly oppositional stance to virtually any health-care reform that involved more regulation or spending, no matter how modest. In 1998, when Congress considered passing a law that would regulate the practices of H.M.O.’s, both the Chamber of Commerce and the National Association of Manufacturers joined a coalition that spent $1 million fighting the measure. One of the coalition’s advertisements featured a Frankenstein figure — and a warning to Congress: “Be careful how you play doctor. You might mandate a monster.”

It was during the Clinton-era debate over health-care reform that Burd made his first foray into politics as Safeway’s C.E.O. In 1993, well before Clinton unveiled his full plan, Democratic lawmakers interested in building support for universal coverage invited a group of corporate leaders — Burd among them — to visit Washington. During a brief discussion on Capitol Hill, Burd acknowledged that, yes, he thought universal health care was probably a good idea, because his supermarkets spent so much money on their worker benefits and because universal coverage, done right, might bring some relief. As Burd retells the story, no sooner had the C.E.O.’s finished talking than the legislative staff threw open the doors — ushering in a flood of reporters and cameras for a news conference. Apparently the other participants knew this was coming, because they had prepared statements. Burd didn’t. So he just spoke extemporaneously when his turn came, saying more or less what he had a few minutes earlier. His comments made the next day’s papers, but aside from taking a few follow-up calls, Burd says he didn’t play much of a role in the political drama that followed. Instead, he watched the coming political train wreck from afar and concluded that there wasn’t much a C.E.O. could do in that political environment.

Within a few years, however, Burd found himself thinking about health care all over again. Like many companies, Safeway received temporary relief from rising insurance costs during the mid- and late 1990s, as insurers began using the techniques of managed care — restricting patients to certain doctors and bargaining harder on prices from hospitals. But those huge managed-care savings vanished once insurers squeezed out the obvious waste; once consumers rebelled against H.M.O. restrictions; and once doctors and hospitals consolidated into groups with more bargaining leverage. By the late 1990s, premiums started rising at their old rates again. It became all too apparent that if businesses wanted to hold down the cost of employees’ health insurance, simply herding everybody into managed care plans wasn’t going to do the trick.

Of course, not all businesses faced the same difficulties. Health-care costs had long been an overriding concern for heavily unionized companies obligated to pay lifetime health benefits to generations of retirees. The Big Three automakers liked to say these “legacy costs” added more than a thousand dollars to the cost of every new car, making their products effectively uncompetitive with foreign rivals. And although this was something of an old story — the former Chrysler C.E.O. Lee Iacocca was warning about health care’s impact back in the 1980s — the problem had magnified over the years. Uwe Reinhardt, a Princeton economist, has described the Big Three automakers as “a social insurance system that sells cars to finance itself.”

Safeway, certainly, had no comparable burden. But as a low-margin business — profits in the grocery industry tend to run between 1 and 3 percent of revenues — it was still very sensitive to rising benefit costs. (Burd likes to refer to the grocery chains as occupying the lowest decks of a leaking ship; as the hull starts to fill with water, they’re the first ones to notice.) And while Safeway wasn’t directly threatened by competition from abroad, it had become extremely worried about one very big competitor at home: Wal-Mart.

If G.M., with its lavish insurance, represented the quintessential industrial-age employer, Wal-Mart was a prototype for doing business in the postindustrial era. Its work force was nonunionized (thanks in no small part to the company’s staunch resistance) and, as such, it could get away with offering less insurance to fewer workers than companies like Safeway. In late 2003, after Wal-Mart announced that it would take its new superstores into California, the big supermarket chains said they had no way to compete with Wal-Mart’s bargain-basement prices without heavy concessions from their workers on benefits. Although the union argued that Safeway was merely using Wal-Mart as an excuse to reduce benefits, the eventual settlement of the ensuing strike gave Burd much of what he wanted. In a new, two-tier benefits system, new employees had to wait longer for benefits and, even then, were not promised the same plan as existing employees. In other words, Safeway’s insurance would start to look just a little more like Wal-Mart’s.

Burd had a freer hand to tinker with the benefits of his nonunion employees — the supervisors and corporate administrative personnel who make up about 15 percent of the company’s 200,000-person North American work force. Here he simultaneously adopted two approaches. Instead of offering employees virtually full coverage, Safeway followed the lead of other corporations that were introducing plans with higher deductibles — and lower premiums. By encouraging employees to “put some skin in the game,” as the saying went, business hoped workers would become shrewder — and more frugal — consumers of health care.

But that was just Step 1. Step 2 was to develop a comprehensive wellness program for the workers. Burd, who is 57, is something of a fitness nut, thanks in part to personal circumstances: With a family history of early heart attacks, he ran on a treadmill every day, lifted weights twice a week and meticulously watched his diet. A high-school baseball player, he took special pride in his leadership of the corporate softball team. But he was even more proud that he’d been keeping his cholesterol level below 135.

Burd said he thought that if his employees adopted the same habits, they’d be healthier, too. And healthier employees, he’d come to learn, didn’t run up such high medical bills. Burd had never been shy about offering Safeway employees advice about how to behave — in 1998, he famously encouraged his workers to be more cheerful, even setting up a one-day training program that employees mocked as “smile school”; soon he began feeding his employees a steady diet of healthful-living propaganda, through speeches and newsletters. He also introduced screening and counseling for chronic disease, whose treatment inevitably constitutes the bulk of health-care spending. Enrollment in the screening program was strictly voluntary, but those who joined got breaks on their insurance premiums. And just to make sure employees didn’t skimp on preventive care in order to save some money — a common hazard of higher-deductible plans — he exempted such treatments from the deductibles and effectively made them free.

Burd says the results were impressive: in 2006, the first year of full implementation, employees who enrolled in the newer plans, with the greater individual cost-sharing, had their personal health-care bills drop by 20 to 30 percent, while the company’s health bill for those employees shrank by 11 percent. (It is unclear what happened to the costs of people who stayed in the old plan.) But Burd soon realized that corporate cost-cutting had its limits. Over the years his interest in wellness had led him to become a major supporter of disease research. In conversations around the Bay Area, he heard over and over from hospital administrators about the financial burden the uninsured were placing on their facilities — a burden that eventually rippled through the insurance system and showed up on Safeway’s bottom line as inflated health premiums.

Burd’s first effort to trim costs and keep Safeway competitive involved cutting back on health benefits. Then he tried encouraging his workers to be healthier. Could nationwide universal health care simply be the next step? As long as there were large numbers of uninsured, Burd reasoned, there would be no solution to his company’s — or the country’s — problems with affordable care. And that, he says, is when it finally dawned on him: Maybe this was a problem the company couldn’t solve on its own. If he wanted relief from employee health costs, the government would have to help.

It was not an idea that came easily to Burd, a self-described conservative and Republican; in his office, a “Bush 2000” baseball hat sits in a glass display case. But when Burd came to Washington and started talking about his company’s problems with health care, it was Wyden, a Democrat, who seemed most interested in working with him.

Ultimately, the bill that Wyden and Burd produced is powerful evidence that an alliance including liberals and conservatives, labor and management, can produce meaningful legislation. According to the Lewin Group, a well-respected health-care consulting firm, the Wyden plan would achieve universal health insurance in a financially sound way. Families’ costs would vary depending on their medical expenses and the insurance plan they chose, but on average those making less than $40,000 would end up with a little more money than before. Those making more than $40,000 would end up with a little less money, although they’d also get more choice of plans, better benefits and the knowledge that they could never lose their coverage.

Wyden is quick to share credit for the plan with Burd, particularly when it comes to what is arguably its most significant provision: the severance of the longstanding relationship between where you work and how you’re insured. Under the Wyden proposal, most Americans would still use private insurance. But they would not get that coverage through employers anymore. Instead, all employers that offer insurance would “cash out” their benefits — in effect, giving their employees higher wages rather than health benefits. Once that was done, people would be required to buy coverage on their own, directly from insurers. (Wyden’s plan leaves enforcement to the states. Some have suggested that schools could require proof of insurance before enrolling children, and uninsured adults could be penalized on their tax returns.) The federal government, in turn, would closely regulate the insurance offerings to make sure all policies provided certain minimum benefits — Wyden has initially set those benefits to match existing Blue Cross-Blue Shield plans. Under Wyden’s plan, the federal government would also make sure those benefits were available to everybody at the same rate, regardless of pre-existing medical conditions. Finally, the government would offer subsidies to people too poor to buy insurance on their own, phasing out Medicaid.

Wyden says Burd initially thought that mandating relatively generous benefits was a mistake; it reminded him of those policies he’d replaced at Safeway. But to Wyden’s pleasure, Burd didn’t insist he strip down his plan. In turn, Burd was pleased to see Wyden promote healthful behavior. In order to finance the subsidies for the poor, Wyden’s plan calls for a tax on businesses, pegged to a firm’s revenues and size. Companies that now provide relatively generous employee benefits would likely end up paying slightly less under the plan, while companies that don’t would likely pay more. And even though employers would no longer be insuring their employees, they would get financial incentives to set up wellness and fitness programs, while employees would get insurance discounts for enrolling in them.

Although Wyden says he thinks there’s a chance his bill, or something like it, could pass this Congress, most experts believe a serious effort to achieve universal health care won’t take place until after a new president takes office in 2009. Then Wyden’s plan could well become a starting point for the discussion, particularly since it represents a variation on the most-talked-about health-care reform idea of the moment: the “individual mandate,” so called because it “mandates” that “individuals” buy private insurance just as individuals with cars are mandated to buy private auto insurance. (In some individual-mandate schemes, people can still enroll in public programs like Medicaid if they are eligible.) Mitt Romney and Arnold Schwarzenegger made the individual mandate the foundation of their universal-coverage plans.

It’s no great mystery why some businesses might like an individual mandate. It gets them out of the business of insuring their workers while relieving them of most, if not all, of the financial liabilities associated with health care. In addition, it levels the playing field among companies that have been generous and companies that haven’t — in effect, taking away Wal-Mart’s ability to undercut Safeway by skimping on worker benefits. No less important, an individual mandate does all of this without asking the government to assume direct responsibility for providing most Americans with health care — which is what would happen if the U.S. instead adopted what is known as a “single payer” system. Indeed, that’s usually the punch line of Burd’s pitch to corporate audiences: If business doesn’t coalesce behind a universal scheme that’s based on private insurance, he warns them, frustration with the status quo will produce a backlash that results in single-payer.

Of course, some experts would argue that, strictly on the merits, a single-payer system might actually work better. Unlike plans like Wyden’s that rely on private insurers, a single-payer plan substantially reduces the amount of money spent on administration, since insurance companies spend far more on overhead (and marketing, and profits) than public systems. And while the data on medical outcomes are notoriously uneven and hard to interpret, they don’t show that the United States provides uniformly better care than single-payer nations like Canada or France. In fact, on measures like “Disability Adjusted Life Expectancy,” which social scientists use to measure the performance of national health-care arrangements, single-payer systems actually seem to perform slightly better on the whole.

Insofar as the advocates to Burd’s left are eager to achieve universal coverage any way they can — even if it means adopting what they consider an imperfect model — none of this may matter. “We’re ready to have a very bipartisan solution,” Andy Stern said. “What you are seeing now that you didn’t see in 1994 is that everyone is on the same side saying, ‘We want universal coverage.’ The only question is, How?” But some of Burd’s fellow members of the business community are another matter. Like Burd, they believe forcing workers to take on higher deductibles and more responsibility for their health care decisions is a good strategy for controlling costs. Unlike Burd, they’re not necessarily so committed to subsidizing preventive care or providing benefits as generous as Wyden’s plan. And they are certainly not that enthusiastic about government doing more — even if it’s a plan that preserves a large role for private insurance. “We should not forget there is another way out for companies besides government intervention,” says Jonathan Oberlander, the health-policy scholar. “Cut back on coverage, hold down wages and shift costs to workers.”

Then again, maybe Burd doesn’t have to bring along all of corporate America, with its many and sometimes conflicting interests, in order to make a difference. Maybe it is enough for him simply to give the idea of universal health care greater respectability — to give it the imprimatur of businessmen, who, after all, are typically the kinds of people most suspicious of such grandiose interventions in the first place. And if Burd is acting for reasons that largely reflect his corporate sensibility rather than a sense of social responsibility, even the most passionate advocates for universal coverage say they can live with that. “Unfortunately, simply making this a moral issue hasn’t worked,” Andy Stern says. “Making it clear that this is a competitiveness and jobs issue, as well—that is what has propelled the business community into this discussion.”

Besides, Safeway’s bottom line is not the only thing on Burd’s mind these days. As he has gotten more deeply into this campaign, he has talked increasingly about the health-care crisis as a threat to competitiveness — one in which the future of the entire American economy hangs in the balance. At the same time, the health-care problem lately — and unexpectedly — acquired a personal resonance. Burd’s own son, a recent college graduate, now runs a small fitness company. Like Burd, he works hard to keep in top physical shape. But because he injured his back a few months ago, and received cortisone treatments for it, insurance carriers have been turning down his insurance applications.

Most likely, Burd’s son will be just fine. One of the perks of being a nationally prominent C.E.O. is that you tend to know other C.E.O.’s, including those who run insurance companies. Burd has sent off a few pointed inquiries, and, he told me with a grin, he’s pretty sure one company or another will find a way to write a policy for his son. But Burd has also taken note of the experience: it’s just one more sign that American health insurance doesn’t work the way it should. It may not offend his morality, but it certainly offends his sense of efficiency. If that’s what makes him such an influential supporter of universal health care, his newfound allies in the fight aren’t going to complain.

Jonathan Cohn is the author of “Sick: The Untold Story of America’s Health Care Crisis — and the People Who Pay the Price,” to be published next week. He is a senior editor at The New Republic and a senior fellow at Demos.

Copyright 2007 The New York Times Company

Relations between rich and poor countries

March 25, 2007

Idea Lab

Reverse Foreign Aid

By TINA ROSENBERG

For the last 10 years, people in China have been sending me money. I also get money from countries in Latin America and sub-Saharan Africa — really, from every poor country. I’m not the only one who’s so lucky. Everyone in a wealthy nation has become the beneficiary of the generous subsidies that poorer countries bestow upon rich ones. Here in the United States, this welfare program in reverse allows our government to spend wildly without runaway inflation, keeps many American businesses afloat and even provides medical care in parts of the country where doctors are scarce.

Economic theory holds that money should flow downhill. The North, as rich countries are informally known, should want to sink its capital into the South — the developing world, which some statisticians define as all countries but the 29 wealthiest. According to this model, money both does well and does good: investors get a higher return than they could get in their own mature economies, and poor countries get the capital they need to get richer. Increasing the transfer of capital from rich nations to poorer ones is often listed as one justification for economic globalization.

Historically, the global balance sheet has favored poor countries. But with the advent of globalized markets, capital began to move in the other direction, and the South now exports capital to the North, at a skyrocketing rate. According to the United Nations, in 2006 the net transfer of capital from poorer countries to rich ones was $784 billion, up from $229 billion in 2002. (In 1997, the balance was even.) Even the poorest countries, like those in sub-Saharan Africa, are now money exporters.

How did this great reversal take place? Why did globalization begin to redistribute wealth upward? The answer, in large part, has to do with global finance. All countries hold hard-currency reserves to cover their foreign debts or to use in case of a natural or a financial disaster. For the past 50 years, rich countries have steadily held reserves equivalent to about three months’ worth of their total imports. As money circulates more and more quickly in a globalized economy, however, many countries have felt the need to add to their reserves, mainly to head off investor panic, which can strike even well-managed economies. Since 1990, the world’s nonrich nations have increased their reserves, on average, from around three months’ worth of imports to more than eight months’ worth — or the equivalent of about 30 percent of their G.D.P. China and other countries maintain those reserves mainly in the form of supersecure U.S. Treasury bills; whenever they buy T-bills, they are in effect lending the United States money. This allows the U.S. to keep interest rates low and Washington to run up huge deficits with no apparent penalty.

But the cost to poorer countries is very high. The benefit of T-bills, of course, is that they are virtually risk-free and thus help assure investors and achieve stability. But the problem is that T-bills earn low returns. All the money spent on T-bills — a very substantial sum — could be earning far better returns invested elsewhere, or could be used to pay teachers and build highways at home, activities that bring returns of a different type. Dani Rodrik, an economist at Harvard’s Kennedy School of Government, estimates conservatively that maintaining reserves in excess of the three-month standard costs poor countries 1 percent of their economies annually — some $110 billion every year. Joseph Stiglitz, the Columbia University economist, says he thinks the real cost could be double that.

In his recent book, “Making Globalization Work,” Stiglitz proposes a solution. Adapting an old idea of John Maynard Keynes, he proposes a sort of insurance pool that would provide hard currency to countries going through times of crisis. Money actually changes hands only if a country needs the reserve, and the recipient must repay what it has used.

No one planned the rapid swelling of reserves. Other South-to-North subsidies, by contrast, have been built into the rules of globalization by international agreements. Consider the World Trade Organization’s requirements that all member countries respect patents and copyrights — patents on medicines and industrial and other products; copyrights on, say, music and movies. As poorer countries enter the W.T.O., they must agree to pay royalties on such goods — and a result is a net obligation of more than $40 billion annually that poorer countries owe to American and European corporations.

There are good reasons for countries to respect intellectual property, but doing so is also an overwhelming burden on the poorest people in poorer countries. After all, the single largest beneficiary of the intellectual-property system is the pharmaceutical industry. But consumers in poorer nations do not get much in return, as they do not form a lucrative enough market to inspire research on cures for many of their illnesses. Moreover, the intellectual-property rules make it difficult for poorer countries to manufacture less-expensive generic drugs that poor people rely on. The largest cost to poor countries is not money but health, as many people simply will not be able to find or afford brand-name medicine.

The hypercompetition for global investment has produced another important reverse subsidy: the tax holidays poor countries offer foreign investors. A company that announces it wants to make cars, televisions or pharmaceuticals in, say, east Asia, will then send its representatives to negotiate with government officials in China, Malaysia, the Philippines and elsewhere, holding an auction for the best deal. The savviest corporations get not only 10-year tax holidays but also discounts on land, cheap government loans, below-market rates for electricity and water and government help in paying their workers.

Rich countries know better — the European Union, for example, regulates the incentives members can offer to attract investment. That car plant will most likely be built in one of the competing countries anyway — the incentives serve only to reduce the host country’s benefits. Since deals between corporations and governments are usually secret, it is hard to know how much investment incentives cost poorer countries — certainly tens of billions of dollars. Whatever the cost, it is growing, as country after country has passed laws enabling the offer of such incentives.

Human nature, not smart lobbying, is responsible for another poor-to-rich subsidy: the brain drain. The migration of highly educated people from poor nations is increasing. A small brain drain can benefit the South, as emigrants send money home and may return with new skills and capital. But in places where educated people are few and emigrants don’t go home again, the brain drain devastates. In many African countries, more than 40 percent of college-educated people emigrate to rich countries. Malawian nurses have moved to Britain and other English-speaking nations en masse, and now two-thirds of nursing posts in Malawi’s public health system are vacant. Zambia has lost three-quarters of its new physicians in recent years. Even in South Africa, 21 percent of graduating doctors migrate.

The financial consequences for the poorer nations can be severe. A doctor who moves from Johannesburg to North Dakota costs the South African government as much as $100,000, the price of training him there. As with patent enforcement, a larger cost may be in health. A lack of trained people — a gap that widens daily — is now the main barrier to fighting AIDS, malaria and other diseases in Africa.

Sometimes reverse subsidies are disguised. Rich-country governments spent $283 billion in 2005 to support and subsidize their own agriculture, mainly agribusiness. Artificially cheap food exported to poor countries might seem like a gift — but it is often a Trojan horse. Corn, rice or cotton exported by rich countries is so cheap that small farmers in poor countries cannot compete, so they stop farming. Three-quarters of the world’s poor people are rural. The African peasant with an acre and a hoe is losing her livelihood, and the benefits go mainly to companies like Archer Daniels Midland and Cargill.

Most costly to poor countries, they have been drafted into paying for rich nations’ energy use. On a per capita basis, Americans emit more greenhouse gases into the atmosphere — and thus create more global warming — than anyone else. What we pay to drive a car or keep an industrial plant running is not the true cost of oil or coal. The real price would include the cost of the environmental damage that comes from burning these fuels. But even as we do not pay that price, other countries do. American energy use is being subsidized by tropical coastal nations, who appear to be global warming’s first victims. Some scientists argue that Bangladesh already has more powerful monsoon downpours and Honduras fiercer cyclones because of global warming — likely indicators of worse things ahead. The islands of the Maldives may someday be completely underwater. The costs these nations will pay do not appear on the global balance sheets. But they are the ultimate subsidy.

Tina Rosenberg is a contributing writer for the magazine.

Copyright 2007 The New York Times Company

Brain Is Not Mind

March 11, 2007

The Brain on the Stand

By JEFFREY ROSEN

I. Mr. Weinstein’s Cyst When historians of the future try to identify the moment that neuroscience began to transform the American legal system, they may point to a little-noticed case from the early 1990s. The case involved Herbert Weinstein, a 65-year-old ad executive who was charged with strangling his wife, Barbara, to death and then, in an effort to make the murder look like a suicide, throwing her body out the window of their 12th-floor apartment on East 72nd Street in Manhattan. Before the trial began, Weinstein’s lawyer suggested that his client should not be held responsible for his actions because of a mental defect — namely, an abnormal cyst nestled in his arachnoid membrane, which surrounds the brain like a spider web.

The implications of the claim were considerable. American law holds people criminally responsible unless they act under duress (with a gun pointed at the head, for example) or if they suffer from a serious defect in rationality — like not being able to tell right from wrong. But if you suffer from such a serious defect, the law generally doesn’t care why — whether it’s an unhappy childhood or an arachnoid cyst or both. To suggest that criminals could be excused because their brains made them do it seems to imply that anyone whose brain isn’t functioning properly could be absolved of responsibility. But should judges and juries really be in the business of defining the normal or properly working brain? And since all behavior is caused by our brains, wouldn’t this mean all behavior could potentially be excused?

The prosecution at first tried to argue that evidence of Weinstein’s arachnoid cyst shouldn’t be admitted in court. One of the government’s witnesses, a forensic psychologist named Daniel Martell, testified that brain-scanning technologies were new and untested, and their implications weren’t yet widely accepted by the scientific community. Ultimately, on Oct. 8, 1992, Judge Richard Carruthers issued a Solomonic ruling: Weinstein’s lawyers could tell the jury that brain scans had identified an arachnoid cyst, but they couldn’t tell jurors that arachnoid cysts were associated with violence. Even so, the prosecution team seemed to fear that simply exhibiting images of Weinstein’s brain in court would sway the jury. Eleven days later, on the morning of jury selection, they agreed to let Weinstein plead guilty in exchange for a reduced charge of manslaughter.

After the Weinstein case, Daniel Martell found himself in so much demand to testify as a expert witness that he started a consulting business called Forensic Neuroscience. Hired by defense teams and prosecutors alike, he has testified over the past 15 years in several hundred criminal and civil cases. In those cases, neuroscientific evidence has been admitted to show everything from head trauma to the tendency of violent video games to make children behave aggressively. But Martell told me that it’s in death-penalty litigation that neuroscience evidence is having its most revolutionary effect. “Some sort of organic brain defense has become de rigueur in any sort of capital defense,” he said. Lawyers routinely order scans of convicted defendants’ brains and argue that a neurological impairment prevented them from controlling themselves. The prosecution counters that the evidence shouldn’t be admitted, but under the relaxed standards for mitigating evidence during capital sentencing, it usually is. Indeed, a Florida court has held that the failure to admit neuroscience evidence during capital sentencing is grounds for a reversal. Martell remains skeptical about the worth of the brain scans, but he observes that they’ve “revolutionized the law.”

The extent of that revolution is hotly debated, but the influence of what some call neurolaw is clearly growing. Neuroscientific evidence has persuaded jurors to sentence defendants to life imprisonment rather than to death; courts have also admitted brain-imaging evidence during criminal trials to support claims that defendants like John W. Hinckley Jr., who tried to assassinate President Reagan, are insane. Carter Snead, a law professor at Notre Dame, drafted a staff working paper on the impact of neuroscientific evidence in criminal law for President Bush’s Council on Bioethics. The report concludes that neuroimaging evidence is of mixed reliability but “the large number of cases in which such evidence is presented is striking.” That number will no doubt increase substantially. Proponents of neurolaw say that neuroscientific evidence will have a large impact not only on questions of guilt and punishment but also on the detection of lies and hidden bias, and on the prediction of future criminal behavior. At the same time, skeptics fear that the use of brain-scanning technology as a kind of super mind-reading device will threaten our privacy and mental freedom, leading some to call for the legal system to respond with a new concept of “cognitive liberty.”

One of the most enthusiastic proponents of neurolaw is Owen Jones, a professor of law and biology at Vanderbilt. Jones (who happens to have been one of my law-school classmates) has joined a group of prominent neuroscientists and law professors who have applied for a large MacArthur Foundation grant; they hope to study a wide range of neurolaw questions, like: Do sexual offenders and violent teenagers show unusual patterns of brain activity? Is it possible to capture brain images of chronic neck pain when someone claims to have suffered whiplash? In the meantime, Jones is turning Vanderbilt into a kind of Los Alamos for neurolaw. The university has just opened a $27 million neuroimaging center and has poached leading neuroscientists from around the world; soon, Jones hopes to enroll students in the nation’s first program in law and neuroscience. “It’s breathlessly exciting,” he says. “This is the new frontier in law and science — we’re peering into the black box to see how the brain is actually working, that hidden place in the dark quiet, where we have our private thoughts and private reactions — and the law will inevitably have to decide how to deal with this new technology.”

II. A Visit to Vanderbilt Owen Jones is a disciplined and quietly intense man, and his enthusiasm for the transformative power of neuroscience is infectious. With René Marois, a neuroscientist in the psychology department, Jones has begun a study of how the human brain reacts when asked to impose various punishments. Informally, they call the experiment Harm and Punishment — and they offered to make me one of their first subjects.

We met in Jones’s pristine office, which is decorated with a human skull and calipers, like those that phrenologists once used to measure the human head; his father is a dentist, and his grandfather was an electrical engineer who collected tools. We walked over to Vanderbilt’s Institute of Imaging Science, which, although still surrounded by scaffolding, was as impressive as Jones had promised. The basement contains one of the few 7-tesla magnetic-resonance-imaging scanners in the world. For Harm and Punishment, Jones and Marois use a less powerful 3 tesla, which is the typical research M.R.I.

We then made our way to the scanner. After removing all metal objects — including a belt and a stray dry-cleaning tag with a staple — I put on earphones and a helmet that was shaped like a birdcage to hold my head in place. The lab assistant turned off the lights and left the room; I lay down on the gurney and, clutching a panic button, was inserted into the magnet. All was dark except for a screen flashing hypothetical crime scenarios, like this one: “John, who lives at home with his father, decides to kill him for the insurance money. After convincing his father to help with some electrical work in the attic, John arranges for him to be electrocuted. His father survives the electrocution, but he is hospitalized for three days with injuries caused by the electrical shock.” I was told to press buttons indicating the appropriate level of punishment, from 0 to 9, as the magnet recorded my brain activity.

After I spent 45 minutes trying not to move an eyebrow while assigning punishments to dozens of sordid imaginary criminals, Marois told me through the intercom to try another experiment: namely, to think of familiar faces and places in sequence, without telling him whether I was starting with faces or places. I thought of my living room, my wife, my parents’ apartment and my twin sons, trying all the while to avoid improper thoughts for fear they would be discovered. Then the experiments were over, and I stumbled out of the magnet.

The next morning, Owen Jones and I reported to René Marois’s laboratory for the results. Marois’s graduate students, who had been up late analyzing my brain, were smiling broadly. Because I had moved so little in the machine, they explained, my brain activity was easy to read. “Your head movement was incredibly low, and you were the harshest punisher we’ve had,” Josh Buckholtz, one of the grad students, said with a happy laugh. “You were a researcher’s dream come true!” Buckholtz tapped the keyboard, and a high-resolution 3-D image of my brain appeared on the screen in vivid colors. Tiny dots flickered back and forth, showing my eyes moving as they read the lurid criminal scenarios. Although I was only the fifth subject to be put in the scanner, Marois emphasized that my punishment ratings were higher than average. In one case, I assigned a 7 where the average punishment was 4. “You were focusing on the intent, and the others focused on the harm,” Buckholtz said reassuringly.

Marois explained that he and Jones wanted to study the interactions among the emotion-generating regions of the brain, like the amygdala, and the prefrontal regions responsible for reason. “It is also possible that the prefrontal cortex is critical for attributing punishment, making the essential decision about what kind of punishment to assign,” he suggested. Marois stressed that in order to study that possibility, more subjects would have to be put into the magnet. But if the prefrontal cortex does turn out to be critical for selecting among punishments, Jones added, it could be highly relevant for lawyers selecting a jury. For example, he suggested, lawyers might even select jurors for different cases based on their different brain-activity patterns. In a complex insider-trading case, for example, perhaps the defense would “like to have a juror making decisions on maximum deliberation and minimum emotion”; in a government entrapment case, emotional reactions might be more appropriate.

We then turned to the results of the second experiment, in which I had been asked to alternate between thinking of faces and places without disclosing the order. “We think we can guess what you were thinking about, even though you didn’t tell us the order you started with,” Marois said proudly. “We think you started with places and we will prove to you that it wasn’t just luck.” Marois showed me a picture of my parahippocampus, the area of the brain that responds strongly to places and the recognition of scenes. “It’s lighting up like Christmas on all cylinders,” Marois said. “It worked beautifully, even though we haven’t tried this before here.”

He then showed a picture of the fusiform area, which is responsible for facial recognition. It, too, lighted up every time I thought of a face. “This is a potentially very serious legal implication,” Jones broke in, since the technology allows us to tell what people are thinking about even if they deny it. He pointed to a series of practical applications. Because subconscious memories of faces and places may be more reliable than conscious memories, witness lineups could be transformed. A child who claimed to have been victimized by a stranger, moreover, could be shown pictures of the faces of suspects to see which one lighted up the face-recognition area in ways suggesting familiarity.

Jones and Marois talked excitedly about the implications of their experiments for the legal system. If they discovered a significant gap between people’s hard-wired sense of how severely certain crimes should be punished and the actual punishments assigned by law, federal sentencing guidelines might be revised, on the principle that the law shouldn’t diverge too far from deeply shared beliefs. Experiments might help to develop a deeper understanding of the criminal brain, or of the typical brain predisposed to criminal activity.

III. The End of Responsibility? Indeed, as the use of functional M.R.I. results becomes increasingly common in courtrooms, judges and juries may be asked to draw new and sometimes troubling lines between “normal” and “abnormal” brains. Ruben Gur, a professor of psychology at the University of Pennsylvania School of Medicine, specializes in doing just that. Gur began his expert-witness career in the mid-1990s when a colleague asked him to help in the trial of a convicted serial killer in Florida named Bobby Joe Long. Known as the “classified-ad rapist,” because he would respond to classified ads placed by women offering to sell household items, then rape and kill them, Long was sentenced to death after he committed at least nine murders in Tampa. Gur was called as a national expert in positron-emission tomography, or PET scans, in which patients are injected with a solution containing radioactive markers that illuminate their brain activity. After examining Long’s PET scans, Gur testified that a motorcycle accident that had left Long in a coma had also severely damaged his amygdala. It was after emerging from the coma that Long committed his first rape.

“I didn’t have the sense that my testimony had a profound impact,” Gur told me recently — Long is still filing appeals — but he has testified at more than 20 capital cases since then. He wrote a widely circulated affidavit arguing that adolescents are not as capable of controlling their impulses as adults because the development of neurons in the prefrontal cortex isn’t complete until the early 20s. Based on that affidavit, Gur was asked to contribute to the preparation of one of the briefs filed by neuroscientists and others in Roper v. Simmons, the landmark case in which a divided Supreme Court struck down the death penalty for offenders who committed crimes when they were under the age of 18.

The leading neurolaw brief in the case, filed by the American Medical Association and other groups, argued that because “adolescent brains are not fully developed” in the prefrontal regions, adolescents are less able than adults to control their impulses and should not be held fully accountable “for the immaturity of their neural anatomy.” In his majority decision, Justice Anthony Kennedy declared that “as any parent knows and as the scientific and sociological studies” cited in the briefs “tend to confirm, ‘[a] lack of maturity and an underdeveloped sense of responsibility are found in youth more often than in adults.’ ” Although Kennedy did not cite the neuroscience evidence specifically, his indirect reference to the scientific studies in the briefs led some supporters and critics to view the decision as the Brown v. Board of Education of neurolaw.

One important question raised by the Roper case was the question of where to draw the line in considering neuroscience evidence as a legal mitigation or excuse. Should courts be in the business of deciding when to mitigate someone’s criminal responsibility because his brain functions improperly, whether because of age, in-born defects or trauma? As we learn more about criminals’ brains, will we have to redefine our most basic ideas of justice?

Two of the most ardent supporters of the claim that neuroscience requires the redefinition of guilt and punishment are Joshua D. Greene, an assistant professor of psychology at Harvard, and Jonathan D. Cohen, a professor of psychology who directs the neuroscience program at Princeton. Greene got Cohen interested in the legal implications of neuroscience, and together they conducted a series of experiments exploring how people’s brains react to moral dilemmas involving life and death. In particular, they wanted to test people’s responses in the f.M.R.I. scanner to variations of the famous trolley problem, which philosophers have been arguing about for decades.

The trolley problem goes something like this: Imagine a train heading toward five people who are going to die if you don’t do anything. If you hit a switch, the train veers onto a side track and kills another person. Most people confronted with this scenario say it’s O.K. to hit the switch. By contrast, imagine that you’re standing on a footbridge that spans the train tracks, and the only way you can save the five people is to push an obese man standing next to you off the footbridge so that his body stops the train. Under these circumstances, most people say it’s not O.K. to kill one person to save five.

“I wondered why people have such clear intuitions,” Greene told me, “and the core idea was to confront people with these two cases in the scanner and see if we got more of an emotional response in one case and reasoned response in the other.” As it turns out, that’s precisely what happened: Greene and Cohen found that the brain region associated with deliberate problem solving and self-control, the dorsolateral prefrontal cortex, was especially active when subjects confronted the first trolley hypothetical, in which most of them made a utilitarian judgment about how to save the greatest number of lives. By contrast, emotional centers in the brain were more active when subjects confronted the second trolley hypothetical, in which they tended to recoil at the idea of personally harming an individual, even under such wrenching circumstances. “This suggests that moral judgment is not a single thing; it’s intuitive emotional responses and then cognitive responses that are duking it out,” Greene said.

“To a neuroscientist, you are your brain; nothing causes your behavior other than the operations of your brain,” Greene says. “If that’s right, it radically changes the way we think about the law. The official line in the law is all that matters is whether you’re rational, but you can have someone who is totally rational but whose strings are being pulled by something beyond his control.” In other words, even someone who has the illusion of making a free and rational choice between soup and salad may be deluding himself, since the choice of salad over soup is ultimately predestined by forces hard-wired in his brain. Greene insists that this insight means that the criminal-justice system should abandon the idea of retribution — the idea that bad people should be punished because they have freely chosen to act immorally — which has been the focus of American criminal law since the 1970s, when rehabilitation went out of fashion. Instead, Greene says, the law should focus on deterring future harms. In some cases, he supposes, this might mean lighter punishments. “If it’s really true that we don’t get any prevention bang from our punishment buck when we punish that person, then it’s not worth punishing that person,” he says. (On the other hand, Carter Snead, the Notre Dame scholar, maintains that capital defendants who are not considered fully blameworthy under current rules could be executed more readily under a system that focused on preventing future harms.)

Others agree with Greene and Cohen that the legal system should be radically refocused on deterrence rather than on retribution. Since the celebrated M’Naughten case in 1843, involving a paranoid British assassin, English and American courts have recognized an insanity defense only for those who are unable to appreciate the difference between right and wrong. (This is consistent with the idea that only rational people can be held criminally responsible for their actions.) According to some neuroscientists, that rule makes no sense in light of recent brain-imaging studies. “You can have a horrendously damaged brain where someone knows the difference between right and wrong but nonetheless can’t control their behavior,” says Robert Sapolsky, a neurobiologist at Stanford. “At that point, you’re dealing with a broken machine, and concepts like punishment and evil and sin become utterly irrelevant. Does that mean the person should be dumped back on the street? Absolutely not. You have a car with the brakes not working, and it shouldn’t be allowed to be near anyone it can hurt.”

Even as these debates continue, some skeptics contend that both the hopes and fears attached to neurolaw are overblown. “There’s nothing new about the neuroscience ideas of responsibility; it’s just another material, causal explanation of human behavior,” says Stephen J. Morse, professor of law and psychiatry at the University of Pennsylvania. “How is this different than the Chicago school of sociology,” which tried to explain human behavior in terms of environment and social structures? “How is it different from genetic explanations or psychological explanations? The only thing different about neuroscience is that we have prettier pictures and it appears more scientific.”

Morse insists that “brains do not commit crimes; people commit crimes” — a conclusion he suggests has been ignored by advocates who, “infected and inflamed by stunning advances in our understanding of the brain . . . all too often make moral and legal claims that the new neuroscience . . . cannot sustain.” He calls this “brain overclaim syndrome” and cites as an example the neuroscience briefs filed in the Supreme Court case Roper v. Simmons to question the juvenile death penalty. “What did the neuroscience add?” he asks. If adolescent brains caused all adolescent behavior, “we would expect the rates of homicide to be the same for 16- and 17-year-olds everywhere in the world — their brains are alike — but in fact, the homicide rates of Danish and Finnish youths are very different than American youths.” Morse agrees that our brains bring about our behavior — “I’m a thoroughgoing materialist, who believes that all mental and behavioral activity is the causal product of physical events in the brain” — but he disagrees that the law should excuse certain kinds of criminal conduct as a result. “It’s a total non sequitur,” he says. “So what if there’s biological causation? Causation can’t be an excuse for someone who believes that responsibility is possible. Since all behavior is caused, this would mean all behavior has to be excused.” Morse cites the case of Charles Whitman, a man who, in 1966, killed his wife and his mother, then climbed up a tower at the University of Texas and shot and killed 13 more people before being shot by police officers. Whitman was discovered after an autopsy to have a tumor that was putting pressure on his amygdala. “Even if his amygdala made him more angry and volatile, since when are anger and volatility excusing conditions?” Morse asks. “Some people are angry because they had bad mommies and daddies and others because their amygdalas are mucked up. The question is: When should anger be an excusing condition?”

Still, Morse concedes that there are circumstances under which new discoveries from neuroscience could challenge the legal system at its core. “Suppose neuroscience could reveal that reason actually plays no role in determining human behavior,” he suggests tantalizingly. “Suppose I could show you that your intentions and your reasons for your actions are post hoc rationalizations that somehow your brain generates to explain to you what your brain has already done” without your conscious participation. If neuroscience could reveal us to be automatons in this respect, Morse is prepared to agree with Greene and Cohen that criminal law would have to abandon its current ideas about responsibility and seek other ways of protecting society.

Some scientists are already pushing in this direction. In a series of famous experiments in the 1970s and ’80s, Benjamin Libet measured people’s brain activity while telling them to move their fingers whenever they felt like it. Libet detected brain activity suggesting a readiness to move the finger half a second before the actual movement and about 400 milliseconds before people became aware of their conscious intention to move their finger. Libet argued that this leaves 100 milliseconds for the conscious self to veto the brain’s unconscious decision, or to give way to it — suggesting, in the words of the neuroscientist Vilayanur S. Ramachandran, that we have not free will but “free won’t.”

Morse is not convinced that the Libet experiments reveal us to be helpless automatons. But he does think that the study of our decision-making powers could bear some fruit for the law. “I’m interested,” he says, “in people who suffer from drug addictions, psychopaths and people who have intermittent explosive disorder — that’s people who have no general rationality problem other than they just go off.” In other words, Morse wants to identify the neural triggers that make people go postal. “Suppose we could show that the higher deliberative centers in the brain seem to be disabled in these cases,” he says. “If these are people who cannot control episodes of gross irrationality, we’ve learned something that might be relevant to the legal ascription of responsibility.” That doesn’t mean they would be let off the hook, he emphasizes: “You could give people a prison sentence and an opportunity to get fixed.”

IV. Putting the Unconscious on Trial If debates over criminal responsibility long predate the f.M.R.I., so do debates over the use of lie-detection technology. What’s new is the prospect that lie detectors in the courtroom will become much more accurate, and correspondingly more intrusive. There are, at the moment, two lie-detection technologies that rely on neuroimaging, although the value and accuracy of both are sharply contested. The first, developed by Lawrence Farwell in the 1980s, is known as “brain fingerprinting.” Subjects put on an electrode-filled helmet that measures a brain wave called p300, which, according to Farwell, changes its frequency when people recognize images, pictures, sights and smells. After showing a suspect pictures of familiar places and measuring his p300 activation patterns, government officials could, at least in theory, show a suspect pictures of places he may or may not have seen before — a Qaeda training camp, for example, or a crime scene — and compare the activation patterns. (By detecting not only lies but also honest cases of forgetfulness, the technology could expand our very idea of lie detection.)

The second lie-detection technology uses f.M.R.I. machines to compare the brain activity of liars and truth tellers. It is based on a test called Guilty Knowledge, developed by Daniel Langleben at the University of Pennsylvania in 2001. Langleben gave subjects a playing card before they entered the magnet and told them to answer no to a series of questions, including whether they had the card in question. Langleben and his colleagues found that certain areas of the brain lighted up when people lied.

Two companies, No Lie MRI and Cephos, are now competing to refine f.M.R.I. lie-detection technology so that it can be admitted in court and commercially marketed. I talked to Steven Laken, the president of Cephos, which plans to begin selling its products this year. “We have two to three people who call every single week,” he told me. “They’re in legal proceedings throughout the world, and they’re looking to bolster their credibility.” Laken said the technology could have “tremendous applications” in civil and criminal cases. On the government side, he said, the technology could replace highly inaccurate polygraphs in screening for security clearances, as well as in trying to identify suspected terrorists’ native languages and close associates. “In lab studies, we’ve been in the 80- to 90-percent-accuracy range,” Laken says. This is similar to the accuracy rate for polygraphs, which are not considered sufficiently reliable to be allowed in most legal cases. Laken says he hopes to reach the 90-percent- to 95-percent-accuracy range — which should be high enough to satisfy the Supreme Court’s standards for the admission of scientific evidence. Judy Illes, director of Neuroethics at the Stanford Center for Biomedical Ethics, says, “I would predict that within five years, we will have technology that is sufficiently reliable at getting at the binary question of whether someone is lying that it may be utilized in certain legal settings.”

If and when lie-detection f.M.R.I.’s are admitted in court, they will raise vexing questions of self-incrimination and privacy. Hank Greely, a law professor and head of the Stanford Center for Law and the Biosciences, notes that prosecution and defense witnesses might have their credibility questioned if they refused to take a lie-detection f.M.R.I., as might parties and witnesses in civil cases. Unless courts found the tests to be shocking invasions of privacy, like stomach pumps, witnesses could even be compelled to have their brains scanned. And equally vexing legal questions might arise as neuroimaging technologies move beyond telling whether or not someone is lying and begin to identify the actual content of memories. Michael Gazzaniga, a professor of psychology at the University of California, Santa Barbara, and author of “The Ethical Brain,” notes that within 10 years, neuroscientists may be able to show that there are neurological differences when people testify about their own previous acts and when they testify to something they saw. “If you kill someone, you have a procedural memory of that, whereas if I’m standing and watch you kill somebody, that’s an episodic memory that uses a different part of the brain,” he told me. Even if witnesses don’t have their brains scanned, neuroscience may lead judges and jurors to conclude that certain kinds of memories are more reliable than others because of the area of the brain in which they are processed. Further into the future, and closer to science fiction, lies the possibility of memory downloading. “One could even, just barely, imagine a technology that might be able to ‘read out’ the witness’s memories, intercepted as neuronal firings, and translate it directly into voice, text or the equivalent of a movie,” Hank Greely writes.

Greely acknowledges that lie-detection and memory-retrieval technologies like this could pose a serious challenge to our freedom of thought, which is now defended largely by the First Amendment protections for freedom of expression. “Freedom of thought has always been buttressed by the reality that you could only tell what someone thought based on their behavior,” he told me. “This technology holds out the possibility of looking through the skull and seeing what’s really happening, seeing the thoughts themselves.” According to Greely, this may challenge the principle that we should be held accountable for what we do, not what we think. “It opens up for the first time the possibility of punishing people for their thoughts rather than their actions,” he says. “One reason thought has been free in the harshest dictatorships is that dictators haven’t been able to detect it.” He adds, “Now they may be able to, putting greater pressure on legal constraints against government interference with freedom of thought.”

In the future, neuroscience could also revolutionize the way jurors are selected. Steven Laken, the president of Cephos, says that jury consultants might seek to put prospective jurors in f.M.R.I.’s. “You could give videotapes of the lawyers and witnesses to people when they’re in the magnet and see what parts of their brains light up,” he says. A situation like this would raise vexing questions about jurors’ prejudices — and what makes for a fair trial. Recent experiments have suggested that people who believe themselves to be free of bias may harbor plenty of it all the same.

The experiments, conducted by Elizabeth Phelps, who teaches psychology at New York University, combine brain scans with a behavioral test known as the Implicit Association Test, or I.A.T., as well as physiological tests of the startle reflex. The I.A.T. flashes pictures of black and white faces at you and asks you to associate various adjectives with the faces. Repeated tests have shown that white subjects take longer to respond when they’re asked to associate black faces with positive adjectives and white faces with negative adjectives than vice versa, and this is said to be an implicit measure of unconscious racism. Phelps and her colleagues added neurological evidence to this insight by scanning the brains and testing the startle reflexes of white undergraduates at Yale before they took the I.A.T. She found that the subjects who showed the most unconscious bias on the I.A.T. also had the highest activation in their amygdalas — a center of threat perception — when unfamiliar black faces were flashed at them in the scanner. By contrast, when subjects were shown pictures of familiar black and white figures — like Denzel Washington, Martin Luther King Jr. and Conan O’Brien — there was no jump in amygdala activity.

The legal implications of the new experiments involving bias and neuroscience are hotly disputed. Mahzarin R. Banaji, a psychology professor at Harvard who helped to pioneer the I.A.T., has argued that there may be a big gap between the concept of intentional bias embedded in law and the reality of unconscious racism revealed by science. When the gap is “substantial,” she and the U.C.L.A. law professor Jerry Kang have argued, “the law should be changed to comport with science” — relaxing, for example, the current focus on intentional discrimination and trying to root out unconscious bias in the workplace with “structural interventions,” which critics say may be tantamount to racial quotas. One legal scholar has cited Phelps’s work to argue for the elimination of peremptory challenges to prospective jurors — if most whites are unconsciously racist, the argument goes, then any decision to strike a black juror must be infected with racism. Much to her displeasure, Phelps’s work has been cited by a journalist to suggest that a white cop who accidentally shot a black teenager on a Brooklyn rooftop in 2004 must have been responding to a hard-wired fear of unfamiliar black faces — a version of the amygdala made me do it.

Phelps herself says it’s “crazy” to link her work to cops who shoot on the job and insists that it is too early to use her research in the courtroom. “Part of my discomfort is that we haven’t linked what we see in the amygdala or any other region of the brain with an activity outside the magnet that we would call racism,” she told me. “We have no evidence whatsoever that activity in the brain is more predictive of things we care about in the courtroom than the behaviors themselves that we correlate with brain function.” In other words, just because you have a biased reaction to a photograph doesn’t mean you’ll act on those biases in the workplace. Phelps is also concerned that jurors might be unduly influenced by attention-grabbing pictures of brain scans. “Frank Keil, a psychologist at Yale, has done research suggesting that when you have a picture of a mechanism, you have a tendency to overestimate how much you understand the mechanism,” she told me. Defense lawyers confirm this phenomenon. “Here was this nice color image we could enlarge, that the medical expert could point to,” Christopher Plourd, a San Diego criminal defense lawyer, told The Los Angeles Times in the early 1990s. “It documented that this guy had a rotten spot in his brain. The jury glommed onto that.”

Other scholars are even sharper critics of efforts to use scientific experiments about unconscious bias to transform the law. “I regard that as an extraordinary claim that you could screen potential jurors or judges for bias; it’s mind-boggling,” I was told by Philip Tetlock, professor at the Haas School of Business at the University of California at Berkley. Tetlock has argued that split-second associations between images of African-Americans and negative adjectives may reflect “simple awareness of the social reality” that “some groups are more disadvantaged than others.” He has also written that, according to psychologists, “there is virtually no published research showing a systematic link between racist attitudes, overt or subconscious, and real-world discrimination.” (A few studies show, Tetlock acknowledges, that openly biased white people sometimes sit closer to whites than blacks in experiments that simulate job hiring and promotion.) “A light bulb going off in your brain means nothing unless it’s correlated with a particular output, and the brain-scan stuff, heaven help us, we have barely linked that with anything,” agrees Tetlock’s co-author, Amy Wax of the University of Pennsylvania Law School. “The claim that homeless people light up your amygdala more and your frontal cortex less and we can infer that you will systematically dehumanize homeless people — that’s piffle.”

V. Are You Responsible for What You Might Do? The attempt to link unconscious bias to actual acts of discrimination may be dubious. But are there other ways to look inside the brain and make predictions about an individual’s future behavior? And if so, should those discoveries be employed to make us safer? Efforts to use science to predict criminal behavior have a disreputable history. In the 19th century, the Italian criminologist Cesare Lombroso championed a theory of “biological criminality,” which held that criminals could be identified by physical characteristics, like large jaws or bushy eyebrows. Nevertheless, neuroscientists are trying to find the factors in the brain associated with violence. PET scans of convicted murderers were first studied in the late 1980s by Adrian Raine, a professor of psychology at the University of Southern California; he found that their prefrontal cortexes, areas associated with inhibition, had reduced glucose metabolism and suggested that this might be responsible for their violent behavior. In a later study, Raine found that subjects who received a diagnosis of antisocial personality disorder, which correlates with violent behavior, had 11 percent less gray matter in their prefrontal cortexes than control groups of healthy subjects and substance abusers. His current research uses f.M.R.I.’s to study moral decision-making in psychopaths.

Neuroscience, it seems, points two ways: it can absolve individuals of responsibility for acts they’ve committed, but it can also place individuals in jeopardy for acts they haven’t committed — but might someday. “This opens up a Pandora’s box in civilized society that I’m willing to fight against,” says Helen S. Mayberg, a professor of psychiatry, behavioral sciences and neurology at Emory University School of Medicine, who has testified against the admission of neuroscience evidence in criminal trials. “If you believe at the time of trial that the picture informs us about what they were like at the time of the crime, then the picture moves forward. You need to be prepared for: ‘This spot is a sign of future dangerousness,’ when someone is up for parole. They have a scan, the spot is there, so they don’t get out. It’s carved in your brain.”

Other scholars see little wrong with using brain scans to predict violent tendencies and sexual predilections — as long as the scans are used within limits. “It’s not necessarily the case that if predictions work, you would say take that guy off the street and throw away the key,” says Hank Greely, the Stanford law professor. “You could require counseling, surveillance, G.P.S. transmitters or warning the neighbors. None of these are necessarily benign, but they beat the heck out of preventative detention.” Greely has little doubt that predictive technologies will be enlisted in the war on terror — perhaps in radical ways. “Even with today’s knowledge, I think we can tell whether someone has a strong emotional reaction to seeing things, and I can certainly imagine a friend-versus-foe scanner. If you put everyone who reacts badly to an American flag in a concentration camp or Guantánamo, that would be bad, but in an occupation situation, to mark someone down for further surveillance, that might be appropriate.”

Paul Root Wolpe, who teaches social psychiatry and psychiatric ethics at the University of Pennsylvania School of Medicine, says he anticipates that neuroscience predictions will move beyond the courtroom and will be used to make predictions about citizens in all walks of life.

“Will we use brain imaging to track kids in school because we’ve discovered that certain brain function or morphology suggests aptitude?” he asks. “I work for NASA, and imagine how helpful it might be for NASA if it could scan your brain to discover whether you have a good enough spatial sense to be a pilot.” Wolpe says that brain imaging might eventually be used to decide if someone is a worthy foster or adoptive parent — a history of major depression and cocaine abuse can leave telltale signs on the brain, for example, and future studies might find parts of the brain that correspond to nurturing and caring.

The idea of holding people accountable for their predispositions rather than their actions poses a challenge to one of the central principles of Anglo-American jurisprudence: namely, that people are responsible for their behavior, not their proclivities — for what they do, not what they think. “We’re going to have to make a decision about the skull as a privacy domain,” Wolpe says. Indeed, Wolpe serves on the board of an organization called the Center for Cognitive Liberty and Ethics, a group of neuroscientists, legal scholars and privacy advocates “dedicated to protecting and advancing freedom of thought in the modern world of accelerating neurotechnologies.”

There may be similar “cognitive liberty” battles over efforts to repair or enhance broken brains. A remarkable technique called transcranial magnetic stimulation, for example, has been used to stimulate or inhibit specific regions of the brain. It can temporarily alter how we think and feel. Using T.M.S., Ernst Fehr and Daria Knoch of the University of Zurich temporarily disrupted each side of the dorsolateral prefrontal cortex in test subjects. They asked their subjects to participate in an experiment that economists call the ultimatum game. One person is given $20 and told to divide it with a partner. If the partner rejects the proposed amount as too low, neither person gets any money. Subjects whose prefrontal cortexes were functioning properly tended to reject offers of $4 or less: they would rather get no money than accept an offer that struck them as insulting and unfair. But subjects whose right prefrontal cortexes were suppressed by T.M.S. tended to accept the $4 offer. Although the offer still struck them as insulting, they were able to suppress their indignation and to pursue the selfishly rational conclusion that a low offer is better than nothing.

Some neuroscientists believe that T.M.S. may be used in the future to enforce a vision of therapeutic justice, based on the idea that defective brains can be cured. “Maybe somewhere down the line, a badly damaged brain would be viewed as something that can heal, like a broken leg that needs to be repaired,” the neurobiologist Robert Sapolsky says, although he acknowledges that defining what counts as a normal brain is politically and scientifically fraught. Indeed, efforts to identify normal and abnormal brains have been responsible for some of the darkest movements in the history of science and technology, from phrenology to eugenics. “How far are we willing to go to use neurotechnology to change people’s brains we consider disordered?” Wolpe asks. “We might find a part of the brain that seems to be malfunctioning, like a discrete part of the brain operative in violent or sexually predatory behavior, and then turn off or inhibit that behavior using transcranial magnetic stimulation.” Even behaviors in the normal range might be fine-tuned by T.M.S.: jurors, for example, could be made more emotional or more deliberative with magnetic interventions. Mark George, an adviser to the Cephos company and also director of the Medical University of South Carolina Center for Advanced Imaging Research, has submitted a patent application for a T.M.S. procedure that supposedly suppresses the area of the brain involved in lying and makes a person less capable of not telling the truth.

As the new technologies proliferate, even the neurolaw experts themselves have only begun to think about the questions that lie ahead. Can the police get a search warrant for someone’s brain? Should the Fourth Amendment protect our minds in the same way that it protects our houses? Can courts order tests of suspects’ memories to determine whether they are gang members or police informers, or would this violate the Fifth Amendment’s ban on compulsory self-incrimination? Would punishing people for their thoughts rather than for their actions violate the Eighth Amendment’s ban on cruel and unusual punishment? However astonishing our machines may become, they cannot tell us how to answer these perplexing questions. We must instead look to our own powers of reasoning and intuition, relatively primitive as they may be. As Stephen Morse puts it, neuroscience itself can never identify the mysterious point at which people should be excused from responsibility for their actions because they are not able, in some sense, to control themselves. That question, he suggests, is “moral and ultimately legal,” and it must be answered not in laboratories but in courtrooms and legislatures. In other words, we must answer it ourselves.

Jeffrey Rosen, a frequent contributor, is the author most recently of “The Supreme Court: The Personalities and Rivalries That Defined America.”

Copyright 2007 The New York Times Company