The Virtual Economy

by Siegfried Othmer | April 29th, 2009

The Virtual Economy by Siegfried Othmer, Ph.DSome years ago the parent of an ADHD child we had trained told us, “I would have given my house for what you have done for my child.” Nowadays such sentiments are more likely to be expressed by parents of autistic children. Not every person who pays for our services feels this way, but clearly a lot of people recognize that the value of neurofeedback bears no relationship to its costs. There’s no way to put a dollar value on the recovery of function in traumatic brain injury, dementia, or psychological trauma, or in the case of developmental delay.

This presents no problem to the economist who sees the price of an item as giving us the best measure of what it is actually worth. But we do have a problem in the economic modeling of health care precisely because perceived value is so out of line with costs. This is true across the board, and most particularly when it comes to life-saving medical interventions, or procedures that extend our useful lives further into the future. There’s almost no limit to what most individuals would wish to have done in order to recover function, and to extend useful life expectancy. What would Howard Hughes, for example, have been willing to do for his obsessive-compulsive condition? (If only he had had neurofeedback!)

Can one put this in terms that an economist can work with? The mother at the beginning of this tale saw the value to her child as equal to the value of her house, which probably constitutes the bulk of her assets. All of our tangible assets taken together probably amount to some five to ten times our annual GNP, give or take a housing and stock market bubble. So even if most people would be willing to pony up only some ten percent of their assets to assure the desired outcome of a critical medical or rehabilitative procedure, the total value still comes to something comparable to our whole GNP. One could go on to construct a wholly different GNP based not on actual prices but rather on perceived value of what the economy actually produces. Let’s call this a virtual GNP, on the basis of which one could envision a virtual economy of the future in which such value judgments would have a greater policy impact. We can see how that might go in the case of health care:

Our clearly expensive health care system consumes “only” 1/6th of GNP, whereas its value is comparable to or greater than our total GNP. This gets us, then, to the heart of the problem. The value of health care exceeds its cost, and this will continue to remain true almost irrespective of how high costs go. On the basis of the virtual or value-based economy, then, the society should put more resources into health care. Right now the entire discussion of economic issues is being dominated by the money-changers in the temple. For them the actual GNP is the relevant story, and for them health care looms larger on the cost side of the ledger. For all those who have to swim in these waters, however, it is the virtual economy that actually matters. What sense does it make to consider housing construction a good thing at the same time that extended rehabilitation of stroke victims is considered an unaffordable societal luxury? The difference is traceable to the fact that so much of medical care is paid for by third parties. Given the high valuation we place personally on medical and rehabilitative services, there simply must be external constraints.

One proposed response is to place the cost burden back on the individual in some fashion, through tax-favored health savings accounts. But this runs up against the obvious constraint that over the short term people will not act in their own best long-term interest. We see this in the failure to maintain healthy lifestyles, in the failure to moderate use of licit and illicit drugs, and even in the failure to faithfully floss one’s teeth! (There is, after all, no better cost-benefit ratio available to us than from the mundane act of flossing one’s teeth.) It has been demonstrated that, left to their own devices, people will under-utilize health care. Also, health savings accounts don’t handle the big items in health care. They just handle the more routine issues, which is just where we would want the emphasis to be placed. That’s not the place for stringency. In sum, individual health savings accounts take us in the wrong direction – precisely because they place the emphasis on short-term considerations vis-a-vis our longer term interests.

If there cannot be effective individual constraints, then there have to be external constraints, applied on the larger scale. This is the kind of thing that garners headlines, because it involves words like rationing. But rationing of healthcare is a given already, and it is intrinsically unavoidable given the above value calculus. The question, then, is merely one of bringing the process into the open so that all stakeholders know what is being decided and by whom. The terrain is already shifting, with a bias developing against aggressive management of most prostate cancer in the elderly, and with the most expensive of cardiac and other surgical procedures getting more scrutiny.

With the most health care dollars consumed in the last six months of life, to very little benefit, there is a lot of room for cost-cutting that will not adversely affect our total quality of life or life expectancy. Nevertheless, there is a general reluctance in our society to make such rationing rules too explicit, too monolithic, or on too centralized a basis. It is probably a good bias to have – against the society having too heavy a hand in end-of-life decisions.

But there is yet another approach to the whole problem: One can exert external constraints of a positive and affirmative nature rather than prohibitive or proscriptive. The requirement that children be educated is one such positive external constraint. Obligatory vaccination is another. If we truly believe our rhetoric regarding the health implications of good diet, exercise, weight management, good sleep hygiene, and the curtailment of excesses in our consumption of licit and illicit drugs (and, not to forget, the flossing of teeth…), then perhaps we should try to create circumstances where these outcomes are favored in our society rather than disfavored.

If only things were that easy. We already know, unfortunately, that an appeal to the will is insufficient to come up against the problem of obesity, of substance abuse, of dietary indiscretions, and of a neglect of the body generally – for most of the population. Every restaurant meal is an invitation to gluttony. Every entertainment medium is an invitation to passive consumption. And thus it goes. From moment to moment, our priorities are beguiled by near-term rewards. This is unsurprising, given the intensity and creativity with which our modern society intrudes distractions into our lives and hijacks our reward system.

What we need is something that makes good lifestyle factors either habit-forming or self-executing. The key to this is bringing our physiology into alignment with our will. Willpower is typically not sufficient by itself when it is arrayed against the propensities of our own physiology in the matter of drives and of our internal reward system. This is true across the board. Consider the long-term meditator as an exemplar of someone who has asserted most successfully the primacy of the mind, and of the will, over the tendencies, the desires, and even the needs of the body. Even such an experienced meditator will still have to contend with a mind that seems to have a mind of its own during his meditations. The problem, in short, exists at every level.

With neurofeedback we can now train our physiology toward more desired function with respect to our drives and our reward system. Appetite can be regulated; our pain response can be normalized; compulsive tendencies can be moderated; and the craving for drugs can be obliterated. More broadly, the reward system becomes more regulated so that the person no longer hazards extremes of risk-taking to find his bliss. At another level, the training of our emotional circuitry favors the establishment of the bonds of affection that ultimately determines nearly everyone’s sense of well-being. Finally, improved cognitive function improves one’s sense of mastery over life’s ongoing challenges.With successful neurofeedback, good lifestyle choices are not only easier to maintain but they may even be reinforced. Transgressions may no longer be experienced as rewarding. At the same time, there is the positive draw of new rewards at the level of relationships and of the deployment of one’s skills.

The most productive positive constraint our society should consider is the offering of neurofeedback to every person who needs it. I can think of nothing that has a comparable potential of improving our societal success, broadly conceived. There is a natural hierarchy of needs to which we should respond as this technology is inserted into our society. The mental health needs of our returning war veterans should rank right at the top of our hierarchy because clearly we have a societal responsibility here. Along the same lines, there are those who have suffered trauma in the civilian society. Most of these will need a leg up to recover from their condition. With neurofeedback such conditions can be resolved cost-effectively. Since much of such trauma ties back to criminality or drug use, our societal obligations are paramount here as well.

Next in the hierarchy are those who are ticking bombs for inflicting high costs on the society, namely the potentially violent criminal population. Many of these are not identifiable as such, however. We’ve had numerous instances in the news lately of individuals suddenly being apprehended for horrendous criminal acts of which they would never have been suspected. No one would have put them high on the priority list for neurofeedback or other interventions for their mental health.

This makes the case for offering universal neurofeedback to everyone in our society. We don’t really know who needs it, and we don’t know in advance who will benefit to what degree. The opportunity to train the brain simply has to be offered, for the sake of the person and for the sake of the society, just as we do now with vaccines. Many in our society have a natural immunity, but we don’t know who they are, so the goal is to get everybody vaccinated. Neurofeedback can be considered the equivalent of a vaccine for antisocial personality disorder, for sociopathy, and for psychopathy. The payoff would be immense, and the benefit-cost ratio would be enormous. The societal benefit of neurofeedback for the personality disorders alone would justify the costs of universal delivery of neurofeedback. But in fact the benefits would be distributed broadly in terms of both improved functionality and reduced need for conventional health care. Of course we have to face into the inertia of the guild system and into the resistance of those who are well-served by the current dysfunctional system of health care, and the system of incarceration of the dysfunctional. There is little question about where we need to go in order to improve not only health care but the field of education and the prison system.

Unsurprisingly, the answer for our society lies in innovation. We can’t succeed merely by reducing the cost of expensive healthcare technologies. We have to alter the hierarchy of approaches so that the emphasis is placed on health maintenance rather than on expensive fixes after the fact. Neurofeedback needs to play a large role here. At the beginning of the last century we had the revolution of public health and sanitation in the developed countries. The inflation of life expectancy that took place over the twentieth century had more to do with the diffusion of public health and sanitation measures than with any medical advance. The medical contribution to life expectancy is largely attributable to one single item: the development of antibiotics. These have had their salutary impact because of near-universal availability and high affordability. At the beginning of this century, we are opening the door to mental health and of mental hygiene on a universal scale and on an affordable basis. This is the future that the drug companies had mapped out for themselves. But we are finding that the medications don’t give us easy answers, or even easy choices. Neurofeedback is a much more organic approach to the problem of mental dysfunction, although of course the medications will continue to play a role.

The central political and economic debate in this country is still around the issue of the proper size and the role of government. The fear is that large government will be an agent biased toward the preservation of the status quo. At this point, however, large corporate entities function similarly to preserve the status quo. The current monumental effort to prop up the behemoths of finance can be seen as a joint effort by both private and public institutions to restore the economy of the past. This threatens to squeeze out the very thing that needs to happen, namely a lot of Schumpeter’s creative destruction. What is needed, therefore, is for us to emplace a new paradigm, that of the value-based or virtual economy as a basis for planning and decision-making. The question of whether the country can afford to put new resources into education or health care in the face of a declining economy presents a completely false choice. This is the voice of capital speaking, i.e. the voice of the status quo that pines for the restoration of the bubble economy. In the value-based economy, what is more important than seeing to it that our population is fed, housed, healthy, educated, and employable? That should be the starting point of the discussion. The mental competence of our population is key to all of these issues, and this is where neurofeedback will play the key role sooner or later. Why not sooner? This technology is now shovel-ready, and it is beginning to diffuse into the culture. To have the full benefit for the population, however, government must play its role to make neurofeedback universally available. This would truly prime the pump of the new economy and restore our national competitiveness.

The functionality of the individual in our society is an issue for two entities – the individual himself and the government. Unfortunately, our government has been made the hand-maiden of the economic hegemonists. It has been distracted from its priority of serving the population. Helicopter Ben is hovering only over Wall Street rather than distributing the fertilizer of finance broadly. This is unlikely to solve our real problem. Sooner our later we have to work our way to having the economy meet the actual needs of the population. There is no need to pump up demand at all. We only need to address the needs that exist. There is no unemployment in a colony of monkeys. When they have idle time on their hands, they groom each other.

Siegfried Othmer, Ph.D.

5 Responses to “The Virtual Economy”

  1. Phil Connell says:

    Dear Siegfried,

    Why do I think I am among the few who read your blog with great interest from start to finish, even when it became (surprise, surprise) something of an advertisement for neurofeedback? The reason for my interest is primarily that since I’ve seen you last, the direction of my work has been the training of those who will be leading in the future. I presume an economic transformation as the context thereof very similar to what you describe as “virtual economy.”

    The other reason I read with such interest is that I didn’t know you could write so well!

    Warmly, Phil

  2. Michael Lewis Moore says:

    Hope you have read Blaine Greteman’s article in ODE magazine, March issue. (You can find it on the web) I think there needs to be a neurofeedback Think Tank to figure out how to get this into the school systems. Put me down as a volunteer. Somehow, I think the sports programs would be a great target and they have the most money. If you could get some of the academically low performing high school and college athletes to performing better in the classroom and on the fields, you would probably have a real impact. Think of all the high school age ADD players who do not make it to the Division 1 schools because of academics. Change that and you would have the college coaches at your mercy.!!!! Michael Lewis Moore, Round Rock, Texas.

  3. Phil, thanks for your response.
    Clearly our hopes lie with the next generation that is not so encumbered by the rigidities of past thinking.
    The problem is that nothing in the life experience of current decision-makers leads them to welcome the claims of neurofeedback.
    The conditions we can now address have historically been so intractable.
    If what we say is true, then that diminishes a lot of what they have tried to accomplish in mental health or education or criminal justice over their lifespan.
    No one wants to see their own contributions diminished in that fashion.
    The next generation of leaders, by contrast, can focus on solutions to our challenges without the burden of attachment to threadbare dogmas.

  4. Thanks for writing, Michael–
    Bringing neurofeedback into the academy through sports is a good idea on many levels.
    First of all, the entire mindset here would be around improving performance, which is the way we would like neurofeedback to be seen.
    It is not first and foremost a therapy to address clinical conditions, although that’s its greatest application these days.
    In the day-to-day, of course, we have to respond to the urgencies that present themselves, and these are mostly concerned with relatively intractable clinical conditions.

    Needs come before wants, so the sports applications have not gotten much attention.
    Actually, we’ve had various famous sports figures come for neurofeedback over the years, but they don’t want that fact to be known….
    The same goes for performance artists and figures in the entertainment industry.

    By the way, the link to the article by Blaine Greteman is as follows:

  5. After Heath Ledger, now comes Michael Jackson. We now may have the second major entertainment figure who succumbed to inappropriate management of insomnia within a short space of time. Said Randy Taraborrelli, a Jackson biographer: “This was a person who would have paid anything—done anything—to get a good night’s sleep.” With neurofeedback, we could almost assuredly have resolved the sleep problem, and we could have helped with Michael’s pain. This goes to the issue of the value of neurofeedback being totally unrelated to its costs.

    There is further irony here. In these modern times, it is the top performers, artistic and otherwise, who put the greatest pressure on themselves, whereas idleness is more likely to be found among the bottom rung that has been chucked out of the economy. This is the reverse of what we had in earlier times, when the poor toiled endlessly and the well-to-do had to demonstrate to their class that they could afford idleness.

    Similarly, nowadays it is the struggling lower middle class that is most likely to benefit from neurofeedback. The upper echelons are protected by their brain trusts of MDs who either regard neurofeedback as a fancy placebo or as unproven, if they have any opinion on it at all. These MDs were selected as experts, and as such they are not going to recommend something on which they themselves are not expert.

    What was said above about insomnia could equally well have been said about substance abuse and about Bipolar Disorder, two of the chief afflictions of the entertainment community.

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