Health economics

From Wikipedia, the free encyclopedia

https://en.wikipedia.org/wiki/Health_economics 

World health expenditure as share of global GDP.

 

How much did the UK spend on healthcare in 2012?

Public health
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Health economics is a branch of economics concerned with issues related to efficiency, effectiveness, value and behavior in the production and consumption of health and healthcare. Health economics is important in determining how to improve health outcomes and lifestyle patterns through interactions between individuals, healthcare providers and clinical settings. In broad terms, health economists study the functioning of healthcare systems and health-affecting behaviors such as smoking, diabetes, and obesity.

One of the biggest difficulties regarding healthcare economics is that it does not follow normal rules for economics. Price and Quality are often hidden by the third-party payer system of insurance companies and employers. Additionally, QALY (Quality Adjusted Life Years), one of the most commonly used measurements for treatments, is very difficult to measure and relies upon assumptions that are often unreasonable.

A seminal 1963 article by Kenneth Arrow is often credited with giving rise to health economics as a discipline. His theory drew conceptual distinctions between health and other goods. Factors that distinguish health economics from other areas include extensive government intervention, intractable uncertainty in several dimensions, asymmetric information, barriers to entry, externality and the presence of a third-party agent. In healthcare, the third-party agent is the patient's health insurer, who is financially responsible for the healthcare goods and services consumed by the insured patient.

Health economists evaluate multiple types of financial information: costs, charges and expenditures.

Uncertainty is intrinsic to health, both in patient outcomes and financial concerns. The knowledge gap that exists between a physician and a patient creates a situation of distinct advantage for the physician, which is called asymmetric information.

Externalities arise frequently when considering health and health care, notably in the context of the health impacts as with infectious disease or opioid abuse . For example, making an effort to avoid catching the common cold affects people other than the decision maker or finding sustainable, humane and effective solutions to the opioid epidemic.

Scope

The scope of health economics is neatly encapsulated by Alan Williams' "plumbing diagram" dividing the discipline into eight distinct topics:

• What influences health? (other than healthcare)
• What is health and what is its value?
• The demand for healthcare
• The supply of healthcare
• Micro-economic evaluation at treatment level
• Market equilibrium
• Evaluation at whole system level
• Planning, budgeting and monitoring mechanisms.

The development of health economics

In the third century BC, Aristotle, an ancient Greek thinker, once talked about the relationship between farmers and doctors in production and exchange. In the 17th century, William Petty, a British classical economist, pointed out that the medical and health expenses spent on workers would bring economic benefits.

Nowadays, modern health economics has developed into a leading interdisciplinary science, which bridges the gap between economic theory and health care practice, and the wide diversification in various sub-disciplines and research fields has been clearly visible. Few would argue that the actual cradle of this knowledge was the academic tradition of the U.S.

The American Medical Association (AMA) was created in 1848, having as main goals scientific advancement, creation of standards for medical education, launching a program of medical ethics, and obtaining improved public health. Yet, it was only in 1931 that economic concerns came to the agenda, with the creation of the AMA Bureau of Medical Economics, established to study all economic matters affecting the medical profession.

After the Second World War, amid the rapid improvement of the level of medical research technology, the modernization of diagnosis and treatment means and health facilities and equipment, the aging of the population, the sharp increase of chronic diseases, and the improvement of people's demand for health care and other reasons, medical and health expenses increased significantly. For example, total U.S. health expenditures steadily increased as a share of gross domestic product (GDP), demonstrating the increased importance that society placed on health care relative to other non-health goods and services. Between 1960 and 2013, health spending as a share of GDP increased from 5.0 to 17.4 percent. Over the same period, the average annual growth in nominal national health expenditures was 9.2 percent compared to nominal GDP growth of 6.7 percent.

At the same time, the expenditure on health care in many European countries also increased, accounting for about 4% of GDP in the 1950s and 8% by the end of the 1970s. In terms of growth rate, the proportion of health care expenditure in GNP (gross national product) in many countries increased by 1% in the 1950s, 1.5% in the 1960s, and 2% in the 1970s. This high medical and health expenditure was a heavy economic burden on government, business owners, workers, and families, which required a way to restrain its growth.

In addition, the scale of health service increased, technical equipment became more advanced, and division of labor and specialization saw increases, too. The medical and health service developed into a "healthcare industry" which occupies a considerable amount of capital and labor and occupies an important position in social and economic life. The research on economic problems of the health sector became an important topic of economic research.

Selma Muskin published “Towards the definition of health economics” in 1958 and, four years the, "Health as an Investment." At that time, health was broadly regarded as rather a consumptive branch of the economy. Muhkin’s analysis was the first understanding that health investment had long-term beneficial consequences for the community. Probably, the single most famous and cited contribution to the discipline was Kenneth Arrow’s “Uncertainty and the welfare economics of medical care,” published in 1963.

After the 1960s, research in health economics developed further, and a second academic seminar on health economics was held in the United States in 1962 followed by a third in 1968. In 1968, the World Health Organization held its first international health economics seminar in Moscow. The convening of the three meetings showed that health economics had boarded an academic forum as an independent discipline, which also marked the official formation of health economics.

After the 1970s, the health economy entered a period of rapid development and nursing economics gradually emerged. In 1979, Paul Feldstein, a famous American health economist, first used the principles of economics to discuss the long-term care market, registered market, and other nursing economy issues, laying the foundation for the emergence of nursing economics.

In 1983, Nursing Economic Magazine was founded in the United States, and its main research content included nursing market development, nursing cost accounting, policies related to nursing services, nursing economic management, etc. The magazine's publication was a mark of the formal formation of nursing economics. In 1993, The University of Iowa Cost Research Center conducted a systematic nursing cost study, simply the NIC System. The specific practice consisted of establishing a special research institution equipped with full-time researchers, sorting out the nursing cost accounting content, and, finally, identifying 433 items in 6 categories. At the same time, the Center adopted computer technology to carry out nursing cost management, including cost assessment, reasonable budget, decision making, etc., which played a crucial role in improving the efficiency of nursing management and alleviating the nursing management crisis.

Healthcare demand

The demand for healthcare is a derived demand from the demand for health. Healthcare is demanded as a means for consumers to achieve a larger stock of "health capital." The demand for health is unlike most other goods because individuals allocate resources in order to both consume and produce health.

The above description gives three roles of persons in health economics. The World Health Report (p. 52) states that people take four roles in the healthcare:

1. Contributors
2. Citizens
3. Provider
4. Consumers

Michael Grossman's 1972 model of health production has been extremely influential in this field of study and has several unique elements that make it notable. Grossman's model views each individual as both a producer and a consumer of health. Health is treated as a stock which degrades over time in the absence of "investments" in health, so that health is viewed as a sort of capital. The model acknowledges that health is both a consumption good that yields direct satisfaction and utility, and an investment good, which yields satisfaction to consumers indirectly through fewer sick days. Investment in health is costly as consumers must trade off time and resources devoted to health, such as exercising at a local gym, against other goals. These factors are used to determine the optimal level of health that an individual will demand. The model makes predictions over the effects of changes in prices of healthcare and other goods, labour market outcomes such as employment and wages, and technological changes. These predictions and other predictions from models extending Grossman's 1972 paper form the basis of much of the econometric research conducted by health economists.

In Grossman's model, the optimal level of investment in health occurs where the marginal cost of health capital is equal to the marginal benefit. With the passing of time, health depreciates at some rate ${\displaystyle \delta }$. The interest rate faced by the consumer is denoted by ${\displaystyle r}$. The marginal cost of health capital can be found by adding these variables: ${\displaystyle MC_{HK}=r+\delta \,}$. The marginal benefit of health capital is the rate of return from this capital in both market and non-market sectors. In this model, the optimal health stock can be impacted by factors like age, wages and education. As an example, ${\displaystyle \delta \,}$ increases with age, so it becomes more and more costly to attain the same level of health capital or health stock as one ages. Age also decreases the marginal benefit of health stock. The optimal health stock will therefore decrease as one ages.

Beyond issues of the fundamental, "real" demand for medical care derived from the desire to have good health (and thus influenced by the production function for health) is the important distinction between the "marginal benefit" of medical care (which is always associated with this "real demand" curve based on derived demand), and a separate "effective demand" curve, which summarizes the amount of medical care demanded at particular market prices. Because most medical care is not purchased from providers directly, but is rather obtained at subsidized prices due to insurance, the out-of-pocket prices faced by consumers are typically much lower than the market price. The consumer sets ${\displaystyle MB=MC}$ out of pocket, and so the "effective demand" will have a separate relationship between price and quantity than will the "marginal benefit curve" or real demand relationship. This distinction is often described under the rubric of "ex-post moral hazard" (which is again distinct from ex-ante moral hazard, which is found in any type of market with insurance).

Health technology assessment

Main article: Health technology assessment

Economic evaluation, and in particular cost-effectiveness analysis, has become a fundamental part of technology appraisal processes for agencies in a number of countries. The Institute for Quality and Economy in Health Services (Institut für Qualität und Wirtschaftlichkeit im Gesundheitswesen – IQWiG) in Germany and the National Institute for Health and Care Excellence (NICE) in the United Kingdom, for example, both consider the cost-effectiveness of new pharmaceuticals entering the market.

Some agencies, including NICE, recommend the use of cost–utility analysis (CUA). This approach measures outcomes in a composite metric of both length and quality of life, the Quality-adjusted life year (QALY).

Healthcare markets

The five health markets typically analyzed are:

• Healthcare financing market
• Physician and nurses services market
• Institutional services market
• Input factors markets
• Professional education market

Although assumptions of textbook models of economic markets apply reasonably well to healthcare markets, there are important deviations. Many states have created risk pools in which relatively healthy enrollees subsidise the care of the rest. Insurers must cope with adverse selection which occurs when they are unable to fully predict the medical expenses of enrollees; adverse selection can destroy the risk pool. Features of insurance market risk pools, such as group purchases, preferential selection ("cherry-picking"), and preexisting condition exclusions are meant to cope with adverse selection.

Insured patients are naturally less concerned about healthcare costs than they would if they paid the full price of care. The resulting moral hazard drives up costs, as shown by the famous RAND Health Insurance Experiment. Insurers use several techniques to limit the costs of moral hazard, including imposing copayments on patients and limiting physician incentives to provide costly care. Insurers often compete by their choice of service offerings, cost-sharing requirements, and limitations on physicians.

Consumers in healthcare markets often suffer from a lack of adequate information about what services they need to buy and which providers offer the best value proposition. Health economists have documented a problem with supplier induced demand, whereby providers base treatment recommendations on economic, rather than medical criteria. Researchers have also documented substantial "practice variations", whereby the treatment also on service availability to rein in inducement and practice variations.

Some economists argue that requiring doctors to have a medical license constrains inputs, inhibits innovation, and increases cost to consumers while largely only benefiting the doctors themselves.

Economic Rationale for Government Intervention in the Healthcare Markets

Folland, Godman, and Stino the authors of the book, The Economics of Health and Health Care lists several separate and independent reasons for governments intervening in health-care systems rather than leaving it to the private market forces.

1. The first is to ensure that the optimum level of production and consumption of public goods (hospitals, vaccines) and goods with a partially public character are available.

2. Secondly, the rationale is to increase the quality and equity of insurance for those services that can be produced in the private sector but require risk-sharing due to the expense and uncertainties about needs. For example; investing in research and development for new cures and health care equipment. Governments usually subsidize for those who cannot afford insurance or, in certain situations, those low-cost activities and facilities that non-poor citizens can afford on their own. For example; the largest health insurance scheme in the world was launched in India by the name Ayushman Bharat in 2018.

3. The third reason for which the government might want to intervene is to prevent market failure. A classic example of market failure is Monopoly Power. Several health-care markets tend to have the potential for monopoly control to be exercised. Medical care in markets with few hospitals, patent-protected prescription products, and some health insurance markets is the major reason for higher costs and especially in cases where the providers are private companies.

4. Knowledge can be perceived as a public good with a strong economic value. The information provided by one user does not restrict the information available to another. While those who do not pay are often denied access to information and the marginal cost of providing information to another person is frequently low. As a result, one might argue that private markets would under-produce knowledge, necessitating government intervention to increase its availability. Government intervention, in this case, can be seen as assisting in the public distribution of established information, either directly or by subsidizing private sector operations.

5. The last point in this section is related to incomplete markets. Incomplete markets may arise when private markets struggle to satisfy existing demand. This situation can arise when the cure of disease is very expensive, such as cancer or a wide spread of new diseases such as HIV/AIDS or Covid-19. In such cases either private insurers require a high premium as the risk factor and costs are high or they may not insure the people for a particular case. This leads to a void in the market where a certain section of the population will not be able to afford healthcare. Certain insurance markets, such as those for patients with HIV/AIDS, cancer, or other pre-existing conditions who are searching for new coverage, may be incomplete in the sense that those patients may be unable to afford coverage at any price. In such cases, the government usually intervenes and provides health care for such cases. For example, during the Covid-19 pandemic, no private insurance company predicted (or could have predicted) that such an outbreak would occur; as a result, state intervention became necessary to treat people.

Other issues

Medical economics

Often used synonymously with health economics, medical economics, according to Culyer, is the branch of economics concerned with the application of economic theory to phenomena and problems associated typically with the second and third health market outlined above: physician and institutional service providers. Typically, however, it pertains to cost–benefit analysis of pharmaceutical products and cost-effectiveness of various medical treatments. Medical economics often uses mathematical models to synthesise data from biostatistics and epidemiology for support of medical decision-making, both for individuals and for wider health policy.

Mental health economics

Mental health economics incorporates a vast array of subject matters, ranging from pharmacoeconomics to labor economics and welfare economics. Mental health can be directly related to economics by the potential of affected individuals to contribute as human capital. In 2009 Currie and Stabile published "Mental Health in Childhood and Human Capital" in which they assessed how common childhood mental health problems may alter the human capital accumulation of affected children. Externalities may include the influence that affected individuals have on surrounding human capital, such as at the workplace or in the home. In turn, the economy also affects the individual, particularly in light of globalization. For example, studies in India, where there is an increasingly high occurrence of western outsourcing, have demonstrated a growing hybrid identity in young professionals who face very different sociocultural expectations at the workplace and in at home.

Mental health economics presents a unique set of challenges to researchers. Individuals with cognitive disabilities may not be able to communicate preferences. These factors represent challenges in terms of placing value on the mental health status of an individual, especially in relation to the individual's potential as human capital. Further, employment statistics are often used in mental health economic studies as a means of evaluating individual productivity; however, these statistics do not capture "presenteeism", when an individual is at work with a lowered productivity level, quantify the loss of non-paid working time, or capture externalities such as having an affected family member. Also, considering the variation in global wage rates or in societal values, statistics used may be contextually, geographically confined, and study results may not be internationally applicable.

Though studies have demonstrated mental healthcare to reduce overall healthcare costs, demonstrate efficacy, and reduce employee absenteeism while improving employee functioning, the availability of comprehensive mental health services is in decline. Petrasek and Rapin (2002) cite the three main reasons for this decline as (1) stigma and privacy concerns, (2) the difficulty of quantifying medical savings and (3) physician incentive to medicate without specialist referral. Evers et al. (2009) have suggested that improvements could be made by promoting more active dissemination of mental health economic analysis, building partnerships through policy-makers and researchers, and employing greater use of knowledge brokers.

Health and Utility

Generally, economists assume that individuals act rationally with the aim of maximizing their lifetime utility, while all are subject to the fact that they cannot buy more than their resources allow. However, this model gets complex as there exists the uncertainty over individuals' lifetime. As such, we should split the issue into two parts: 1. How does health produce utility and 2. What affects health (e.g., medical care and life-style choices).

Probably the most fundamental thing in consumer demand theory is that the good increases an individual’s utility. Health is not really a good in the traditional sense, but health in itself produces happiness. We can think of health as a durable good, much like for instance a car, a house or an education. We all come into the world with some inherent “stock” of health, and a healthy baby has a fairly high stock of health. Basically, every decision we take during our lifetime will affect our stock of health.

Think of X as a bundle of other goods, and H as a stock of health. With this in mind we can get the formula for an individual’s utility as: Utility = U(X, H). For simplicity, we continue to think the stock of health produces utility, but technically, it is the flow of services created by the stock of health that produces utility. As the traditional fashion for goods, we say that more is better, in other words an increase in health leads to an increase in utility. With this in mind it seems logical that X grows with health, for instance it is more enjoyable to visit the zoo when you do not suffer from a headache.

Like other durable goods, the stock of health wears out over time, much like other durable goods. This process can be called aging. When our stock of health has dropped low enough, we will lose our ability to function. We can say, in economic terminology that the stock of health depreciates. Since life expectancy has risen a lot during this century, it implies that e.g., the depreciation rate has decreased during this time. Public-health care efforts and individual medical care are in place to restore the stock of health or to decrease the depreciation rate on the stock of health. If we were to plot an individual’s stock of health throughout its lifetime in a graph, it would steadily increase in the beginning during its childhood, and after that gradually decline because of aging, meanwhile sudden drops created by random events, such as injury or illness.

There are many other things than “random” health care events, which individuals consume or do during their lives that affect the speed of aging and the severity and frequency of the drops. Lifestyle choices can deeply better or worse our health. If we go back to X, the bundle of goods and services, can undertake numerous characteristics, some add value while others noticeably decrease our stock of health. Outstanding among such lifestyle choices are the decision to consume alcohol, smoke tobacco, use drugs, composition of diet, amount of exercise and so on. Not only can X and H work as substitutes for one another in producing utility, but X can also affect H in a production sense as well. X can then be split into different categories depending on which effect it has on H, for instance “good” types (e.g., moderate exercise), “bad” types (e.g., food with high cholesterol) and “neutral” types (e.g., concerts and books). Neutral goods do not have an apparent effect on individuals’ health.

Containment

From Wikipedia, the free encyclopedia

https://en.wikipedia.org/wiki/Containment 

United States Information Service poster distributed in Asia depicting Juan dela Cruz ready to defend the Philippines from the threat of communism.

Containment is a geopolitical strategic foreign policy pursued by the United States. It is loosely related to the term cordon sanitaire which was containment of the Soviet Union in the 1940s. The strategy of "containment" is best known as a Cold War foreign policy of the United States and its allies to prevent the spread of communism after the end of World War II.

As a component of the Cold War, this policy caused a response from the Soviet Union to increase communist influence in Eastern Europe, Asia, Africa, and Latin America, while also being regarded as the beginning of the cold war. Containment represented a middle-ground position between detente (relaxation of relations) and rollback (actively replacing a regime). The basis of the doctrine was articulated in a 1946 cable by U.S. diplomat George F. Kennan during the post-WWII term of U.S. President Harry S. Truman. As a description of U.S. foreign policy, the word originated in a report Kennan submitted to U.S. Defense Secretary James Forrestal in 1947, which was later used in a magazine article.

Earlier uses of term

There were major historical precedents familiar to Americans and Europeans. In the 1850s, anti-slavery forces in the United States developed a free soil strategy of containment to stop the expansion of slavery until it later collapsed. Historian James Oakes explains the strategy:

The Federal government would surround the south with free states, free territories, and free waters, building what they called a 'cordon of freedom' around slavery, hemming it in until the system's own internal weaknesses forced the slave states one by one to abandon slavery.

Between 1873 and 1877, Germany repeatedly intervened in the internal affairs of France's neighbors. In Belgium, Spain, and Italy, Bismarck exerted strong and sustained political pressure to support the election or appointment of liberal, anticlerical governments. That was part of an integrated strategy to promote republicanism in France by strategically and ideologically isolating the clerical-monarchist regime of President Patrice de Mac-Mahon. It was hoped that by surrounding France with a number of liberal states, French republicans could defeat Mac-Mahon and his reactionary supporters. The modern concept of containment provides a useful model for understanding the dynamics of this policy.

After the 1917 Bolshevik Revolution in Russia, there were calls by Western leaders to isolate the Bolshevik government, which seemed intent on promoting worldwide revolution. In March 1919, French Premier Georges Clemenceau called for a cordon sanitaire, a ring of non-communist states, to isolate Soviet Russia. Translating that phrase, US President Woodrow Wilson called for a "quarantine."

The World War I Allies launched an incursion into Russia, ostensibly to create an eastern front against Germany. In reality, the policy was anti-Bolshevik as well, and its economic warfare took a major toll on all of Russia. By 1919, the intervention was entirely anti-communist, although the unpopularity of the assault led it to be gradually withdrawn. The US simultaneously engaged in covert action against the new Soviet government. While the campaigns were officially pro-democracy, they often supported the White Terror of former Tsarist generals like GM Semenov and Alexander Kolchak.

The U.S. initially refused to recognize the Soviet Union, but President Franklin D. Roosevelt reversed the policy in 1933 in the hope to expand American export markets.

The Munich Agreement of 1938 was a failed attempt to contain Nazi expansion in Europe. The U.S. tried to contain Japanese expansion in Asia in 1937 to 1941, and Japan reacted with its attack on Pearl Harbor.

After Germany invaded the Soviet Union in 1941 during World War II, the U.S. and the Soviet Union found themselves allied against Germany and used rollback to defeat the Axis Powers: Germany, Italy, and Japan.

Origin (1944–1947)

Key State Department personnel grew increasingly frustrated with and suspicious of the Soviets as the war drew to a close. Averell Harriman, U.S. Ambassador in Moscow, once a "confirmed optimist" regarding U.S.-Soviet relations, was disillusioned by what he saw as the Soviet betrayal of the 1944 Warsaw Uprising as well as by violations of the February 1945 Yalta Agreement concerning Poland. Harriman would later have a significant influence in forming Truman's views on the Soviet Union.

In February 1946, the U.S. State Department asked George F. Kennan, then at the U.S. Embassy in Moscow, why the Russians opposed the creation of the World Bank and the International Monetary Fund. He responded with a wide-ranging analysis of Russian policy now called the Long Telegram:

Soviet power, unlike that of Hitlerite Germany, is neither schematic nor adventuristic. It does not work by fixed plans. It does not take unnecessary risks. Impervious to logic of reason, and it is highly sensitive to logic of force. For this reason it can easily withdraw—and usually does when strong resistance is encountered at any point.

Kennan's cable was hailed in the State Department as "the appreciation of the situation that had long been needed." Kennan himself attributed the enthusiastic reception to timing: "Six months earlier the message would probably have been received in the State Department with raised eyebrows and lips pursed in disapproval. Six months later, it would probably have sounded redundant." Clark Clifford and George Elsey produced a report elaborating on the Long Telegram and proposing concrete policy recommendations based on its analysis. This report, which recommended "restraining and confining" Soviet influence, was presented to Truman on September 24, 1946.

In January 1947, Kennan drafted an essay entitled "The Sources of Soviet Conduct." Navy Secretary James Forrestal gave permission for the report to be published in the journal Foreign Affairs under the pseudonym "X." Biographer Douglas Brinkley has dubbed Forrestal "godfather of containment" on account of his work in distributing Kennan's writing. The use of the word "containment" originates from this so-called "X Article": "In these circumstances it is clear that the main element of any United States policy toward the Soviet Union must be that of long-term, patient but firm and vigilant containment of Russian expansive tendencies."

Kennan later turned against the containment policy and noted several deficiencies in his X Article. He later said that by containment he meant not the containment of Soviet Power "by military means of a military threat, but the political containment of a political threat." Second, Kennan admitted a failure in the article to specify the geographical scope of "containment", and that containment was not something he believed the United States could necessarily achieve everywhere successfully.

Harry S. Truman

After Republicans gained control of Congress in the 1946 elections, President Truman, a Democrat, made a dramatic speech that is often considered to mark the beginning of the Cold War. In March 1947, he requested that Congress appropriate $400 million in aid to the Greek and Turkish governments, which were fighting Communist subversion. Truman pledged to, "support free peoples who are resisting attempted subjugation by armed minorities or by outside pressures." This pledge became known as the Truman Doctrine. Portraying the issue as a mighty clash between "totalitarian regimes" and "free peoples," the speech marks the adoption of containment as official U.S. policy. Congress appropriated the money.

Truman's motives on that occasion have been the subject of considerable scholarship and several schools of interpretation. In the orthodox explanation of Herbert Feis, a series of aggressive Soviet actions in 1945–47 in Poland, Iran, Turkey, and elsewhere awakened the American public to the new danger to freedom to which Truman responded. In the revisionist view of William Appleman Williams, Truman's speech was an expression of longstanding American expansionism. In the realpolitik view of Lynn E. Davis, Truman was a naive idealist who unnecessarily provoked the Soviets by couching disputes in terms like democracy and freedom that were alien to the Communist vision.

According to psychological analysis by Deborah Larson, Truman felt a need to prove his decisiveness and feared that aides would make unfavorable comparisons between him and his predecessor, Roosevelt. "I am here to make decisions, and whether they prove right or wrong I am going to take them," he once said.

The drama surrounding the announcement of the Truman Doctrine catered to president's self-image of a strong and decisive leader, but his real decision-making process was more complex and gradual. The timing of the speech was not a response to any particular Soviet action but to the fact that the Republican Party had just gained control of Congress. Truman was little involved in drafting the speech and did not himself adopt the hard-line attitude that it suggested until several months later.

The British, with their own position weakened by economic distress, urgently called on the U.S. to take over the traditional British role in Greece. Undersecretary of State Dean Acheson took the lead in Washington, warning congressional leaders in late February 1947 that if the United States did not take over from the British, the result most probably would be a "Soviet breakthrough" that "might open three continents to Soviet penetration." Truman was explicit about the challenge of Communism taking control of Greece. He won wide support from both parties as well as experts in foreign policy inside and outside the government. It was strongly opposed by the Left, notably by former Vice President Henry A. Wallace, who ran against Truman in the 1948 presidential campaign.

Truman, under the guidance of Acheson, followed up his speech with a series of measures to contain Soviet influence in Europe, including the Marshall Plan, or European Recovery Program, and NATO, a 1949 military alliance between the U.S. and Western European nations. Because containment required detailed information about Communist moves, the government relied increasingly on the Central Intelligence Agency (CIA). Established by the National Security Act of 1947, the CIA conducted espionage in foreign lands, some of it visible, more of it secret. Truman approved a classified statement of containment policy called NSC 20/4 in November 1948, the first comprehensive statement of security policy ever created by the United States. The Soviet Union's first nuclear test in 1949 prompted the National Security Council to formulate a revised security doctrine. Completed in April 1950, it became known as NSC 68. It concluded that a massive military buildup was necessary to deal with the Soviet threat. According to the report, drafted by Paul Nitze and others:

In the words of the Federalist (No. 28) "The means to be employed must be proportioned to the extent of the mischief." The mischief may be a global war or it may be a Soviet campaign for limited objectives. In either case we should take no avoidable initiative which would cause it to become a war of annihilation, and if we have the forces to defeat a Soviet drive for limited objectives it may well be to our interest not to let it become a global war.

Alternative strategies

There were three alternative policies to containment under discussion in the late 1940s. The first was a return to isolationism, minimizing American involvement with the rest of the world, a policy that was supported by conservative Republicans, especially from the Midwest, including former President Herbert Hoover and Senator Robert A. Taft. However, many other Republicans, led by Senator Arthur H. Vandenberg, said that policy had helped cause World War II and so was too dangerous to revive.

The second policy was continuation of the détente policies that aimed at friendly relationships with the Soviet Union, especially trade. Roosevelt had been the champion of détente, but he was dead, and most of his inner circle had left the government by 1946. The chief proponent of détente was Henry Wallace, a former vice president and the Secretary of Commerce under Truman. Wallace's position was supported by far left elements of the CIO, but they were purged in 1947 and 1948. Wallace ran against Truman on the Progressive Party ticket in 1948, but his campaign was increasingly dominated by Communists, which helped to discredit détente.

The third policy was rollback, an aggressive effort to undercut or destroy the Soviet Union itself. Military rollback against the Soviet Union was proposed by James Burnham and other conservative strategists in the late 1940s. After 1954, Burnham and like-minded strategists became editors and regular contributors to William F. Buckley, Jr.'s National Review magazine.

Truman himself adopted a rollback strategy in the Korean War after the success of the Inchon landings in September 1950, only to reverse himself after the Chinese counterattack two months later and revert to containment. General Douglas MacArthur called on Congress to continue the rollback policy, but Truman fired him for insubordination.

Under President Dwight Eisenhower, a rollback strategy was considered against communism in Eastern Europe from 1953 to 1956. Eisenhower agreed to a propaganda campaign to roll back the influence of communism psychologically, but he refused to intervene in the 1956 Hungarian Uprising, mainly for fear that it would cause the Third World War. Since late 1949, when the Soviets had successfully tested an atomic bomb, they had been known to possess nuclear weapons.

Korea

A 1962 nuclear explosion as seen through the periscope of a U.S. Navy submarine. The goal of containment was to 'contain' communism without a nuclear war.

The U.S. followed containment when it first entered the Korean War to defend South Korea from a communist invasion by North Korea. Initially, this directed the action of the US to only push back North Korea across the 38th Parallel and restore South Korea's sovereignty, thereby allowing North Korea's survival as a state. However, the success of the Inchon landing inspired the U.S. and the United Nations to adopt a rollback strategy instead and to overthrow communist North Korea, thus allowing nationwide elections under U.N. auspices. General Douglas MacArthur then advanced across the 38th Parallel into North Korea. The Chinese, fearful of a possible US presence on their border or even an invasion by them, then sent in a large army and defeated the U.N. forces, pushing them back below the 38th parallel. Truman publicly hinted that he might use his "ace in the hole" of the atomic bomb, but Mao was unmoved. The episode was used to support the wisdom of the containment doctrine as opposed to rollback. The Communists were later pushed back to roughly around the original border, with minimal changes. Truman criticized MacArthur's focus on absolute victory and adopted a "limited war" policy. His focus shifted to negotiating a settlement, which was finally reached in 1953. For his part, MacArthur denounced Truman's "no-win policy."

Dulles

Many Republicans, including John Foster Dulles, were concerned that Truman had been too timid. In 1952, Dulles called for rollback and the eventual liberation of Eastern Europe. Dulles was named secretary of state by incoming President Eisenhower, but Eisenhower's decision not to intervene during the 1956 Hungarian Uprising made containment a bipartisan doctrine. Eisenhower relied on clandestine CIA actions to undermine hostile governments and used economic and military foreign aid to strengthen governments supporting the American position in the Cold War.

Cuba

In the Cuban Missile Crisis of 1962, the top officials in Washington debated using rollback to get rid of Soviet nuclear missiles, which were threatening the United States. There was fear of a nuclear war until a deal was reached in which the Soviets would publicly remove their nuclear weapons, the United States would secretly remove its missiles from Turkey and to avoid invading Cuba. The policy of containing Cuba was put into effect by President John F. Kennedy and continued until 2015.

Vietnam

Senator Barry Goldwater, the Republican candidate for president in 1964, challenged containment and asked, "Why not victory?" President Lyndon Johnson, the Democratic nominee, answered that rollback risked nuclear war. Johnson explained containment doctrine by quoting the Bible: "Hitherto shalt thou come, but not further." Goldwater lost to Johnson in the 1964 election by a wide margin. Johnson adhered closely to containment during the Vietnam War. Rejecting proposals by General William Westmoreland for U.S. ground forces to advance into Laos and cut communist supply lines, Johnson gathered a group of elder statesmen called The Wise Men. The group included Kennan, Acheson and other former Truman advisors.

Rallies in support of the troops were discouraged for fear that a patriotic response would lead to demands for victory and rollback. Military responsibility was divided among three generals so that no powerful theater commander could emerge to challenge Johnson as MacArthur had challenged Truman.

Nixon, who replaced Johnson in 1969, referred to his foreign policy as détente, a relaxation of tension. Although it continued to aim at restraining the Soviet Union, it was based on political realism, thinking in terms of national interest, as opposed to crusades against communism or for democracy. Emphasis was placed on talks with the Soviet Union concerning nuclear weapons called the Strategic Arms Limitation Talks. Nixon reduced U.S. military presence in Vietnam to the minimum required to contain communist advances, in a policy called Vietnamization. As the war continued, it grew less popular. A Democratic Congress forced Nixon, a Republican, to abandon the policy in 1973 by enacting the Case–Church Amendment, which ended U.S. military involvement in Vietnam and led to successful communist invasions of South Vietnam, Laos and Cambodia.

Afghanistan

President Jimmy Carter came to office in 1977 and was committed to a foreign policy that emphasized human rights. However, in response to the Soviet invasion of Afghanistan, containment was again made a priority. The wording of the Carter Doctrine (1980) intentionally echoed that of the Truman Doctrine.

Reagan Doctrine

Following the communist victory of Vietnam, Democrats began to view further communist advance as inevitable, but Republicans returned to the rollback doctrine. Ronald Reagan, a long-time advocate of rollback, was elected US president in 1980. He took a more aggressive approach to dealings with the Soviets and believed that détente was misguided and peaceful coexistence was tantamount to surrender. When the Soviet Union invaded Afghanistan in 1979, American policy makers worried that the Soviets were making a run for control of the Persian Gulf. Throughout the 1980s, under a policy that came to be known as the Reagan Doctrine, the United States provided technical and economic assistance to the Afghanistani guerrillas (Mujahideen) fighting against the Soviet army.

By sending military aid to anti-communist insurgents in Afghanistan, Angola, Cambodia, and Nicaragua, Reagan confronted existing communist governments and went beyond the limits of containment doctrine. He deployed the Pershing II missile in Europe and promoted research on a Strategic Defense Initiative, called "Star Wars" by its critics, to shoot down missiles fired at the United States. However, Reagan continued to follow containment in several key areas. He pursued a comprehensive nuclear disarmament initiative called START I and policy toward Europe continued to emphasize a NATO-based defensive approach.

After Cold War

The end of the Cold War in 1991 marked the official end of the containment policy, but the U.S. kept its bases in the areas around Russia, such as those in Iceland, Germany, and Turkey. Also, much of the policy helped influence U.S. foreign policy in later years, such as during the War on Terror and dealing with post-Cold War dictators, such as Iraq's Saddam Hussein.

Alcohol fuel

From Wikipedia, the free encyclopedia

https://en.wikipedia.org/wiki/Alcohol_fuel 

 

A dish of ethanol aflame

Various alcohols are used as fuel for internal combustion engines. The first four aliphatic alcohols (methanol, ethanol, propanol, and butanol) are of interest as fuels because they can be synthesized chemically or biologically, and they have characteristics which allow them to be used in internal combustion engines. The general chemical formula for alcohol fuel is C_nH_2n+1OH.

Most methanol is produced from natural gas, although it can be produced from biomass using very similar chemical processes. Ethanol is commonly produced from biological material through fermentation processes. Biobutanol has the advantage in combustion engines in that its energy density is closer to gasoline than the simpler alcohols (while still retaining over 25% higher octane rating); however, biobutanol is currently more difficult to produce than ethanol or methanol. When obtained from biological materials and/or biological processes, they are known as bioalcohols (e.g. "bioethanol"). There is no chemical difference between biologically produced and chemically produced alcohols.

One advantage shared by the four major alcohol fuels is their high octane rating. This tends to increase their fuel efficiency and largely offsets the lower energy density of vehicular alcohol fuels (as compared to petrol/gasoline and diesel fuels), thus resulting in comparable "fuel economy" in terms of distance per volume metrics, such as kilometers per liter, or miles per gallon.

Methanol and ethanol

Ethanol used as a fuel.

 

Main articles: Methanol fuel and Ethanol fuel

Methanol and ethanol can both be derived from fossil fuels, biomass, or perhaps most simply, from carbon dioxide and water. Ethanol has most commonly been produced through fermentation of sugars, and methanol has most commonly been produced from synthesis gas, but there are more modern ways to obtain these fuels. Enzymes can be used instead of fermentation. Methanol is the simpler molecule, and ethanol can be made from methanol. Methanol can be produced industrially from nearly any biomass, including animal waste, or from carbon dioxide and water or steam by first converting the biomass to synthesis gas in a gasifier. It can also be produced in a laboratory using electrolysis or enzymes.

As a fuel, methanol and ethanol both have advantages and disadvantages over fuels such as petrol (gasoline) and diesel fuel. In spark ignition engines, both alcohols can run at much higher exhaust gas recirculation rates and with higher compression ratios. Both alcohols have a high octane rating, with ethanol at 109 RON (Research Octane Number), 90 MON (Motor Octane Number), (which equates to 99.5 AKI) and methanol at 109 RON, 89 MON (which equates to 99 AKI).^[2] Note that AKI refers to 'Anti-Knock Index' which averages the RON and MON ratings (RON+MON)/2, and is used on U.S. gas station pumps. Ordinary European petrol is typically 95 RON, 85 MON, equal to 90 AKI. As a compression ignition engine fuel, both alcohols create very few particulates, but their low cetane number means that an ignition improver like glycol must be mixed into the fuel at approx. 5%.

When used in spark ignition engines alcohols have the potential to reduce NOx, CO, HC and particulates. A test with E85 fueled Chevrolet Luminas showed that NMHC went down by 20-22%, NOx by 25-32% and CO by 12-24% compared to reformulated gasoline. Toxic emissions of benzene and 1,3-butadiene also decreased while aldehyde emissions increased, (acetaldehyde in particular).

Tailpipe emissions of CO₂ also decrease due to the lower carbon-to-hydrogen ratio of these alcohols, and improved engine efficiency.

Methanol and ethanol fuels contain soluble and insoluble contaminants. Halide ions, which are soluble contaminants, such as chloride ions, have a large effect on the corrosivity of alcohol fuels. Halide ions increase corrosion in two ways: they chemically attack passivating oxide films on several metals causing pitting corrosion, and they increase the conductivity of the fuel. Increased electrical conductivity promotes electrical, galvanic and ordinary corrosion in the fuel system. Soluble contaminants such as aluminum hydroxide, itself a product of corrosion by halide ions, clog the fuel system over time.

To prevent corrosion the fuel system must be made of suitable materials, electrical wires must be properly insulated and the fuel level sensor must be of pulse and hold type, magneto resistive or other similar non-contact type. In addition, high quality alcohol should have a low concentration of contaminants and have a suitable corrosion inhibitor added. Scientific evidence reveals that water is an inhibitor for corrosion by ethanol.

The experiments are done with E50, which is more aggressive and speeds up the corrosion effect. It is very clear that by increasing the amount of water in fuel ethanol one can reduce corrosion. At 2% or 20,000 ppm water in the ethanol fuel the corrosion stopped. In line with the observations in Japan, hydrous ethanol is known to be less corrosive than anhydrous ethanol. The reaction mechanism is 3 EtOH + Al -> Al(OEt)₃ + 3⁄2 H₂ at lower-mid blends. When enough water is present in the fuel, aluminum will react preferably with water to produce Al₂O₃, repairing the protective aluminum oxide layer. The aluminum alkoxide does not make a tight oxide layer; water is essential to repair the holes in the oxide layer.

Methanol and ethanol are incompatible with some polymers. The alcohol reacts with the polymers causing swelling, and over time oxygen breaks down the carbon-carbon bonds in the polymer causing a reduction in tensile strength. For the past few decades though, most cars have been designed to tolerate up to 10% ethanol (E10) without problem. This includes both fuel system compatibility and lambda compensation of fuel delivery with fuel injection engines featuring closed loop lambda control. In some engines ethanol may degrade some compositions of plastic or rubber fuel delivery components designed for conventional petrol, and also be unable to lambda compensate the fuel properly.

"FlexFuel" vehicles have upgraded fuel system and engine components which are designed for long life using E85 or M85, and the ECU can adapt to any fuel blend between gasoline and E85 or M85. Typical upgrades include modifications to: fuel tanks, fuel tank electrical wiring, fuel pumps, fuel filters, fuel lines, filler tubes, fuel level sensors, fuel injectors, seals, fuel rails, fuel pressure regulators, valve seats and inlet valves. "Total Flex" autos destined for the Brazilian market can use E100 (100% ethanol).

One liter of ethanol releases 21.1 MJ in combustion, a liter of methanol 15.8 MJ and a liter of gasoline approximately 32.6 MJ; the difference is due to the different oxygen content. In other words, for the same energy content as one liter or one gallon of gasoline, one needs 1.6 liters/gallons of ethanol and 2.1 liters/gallons of methanol. The raw energy-per-volume numbers produce misleading fuel consumption numbers, however, because alcohol-fueled engines can be made substantially more energy-efficient. A larger percentage of the energy released by combustion of a liter of alcohol fuel can be converted to useful work. This difference in efficiency can partially or totally balance out the energy density difference, depending on the particular engines being compared.

Methanol fuel has been proposed as a future biofuel, often as an alternative to the hydrogen economy. Methanol has a long history as a racing fuel. Early Grand Prix Racing used blended mixtures as well as pure methanol. The fuel was primarily used in North America after the war. However, methanol for racing purposes has largely been based on methanol produced from syngas derived from natural gas and therefore this methanol would not be considered a biofuel. Methanol is a possible biofuel, however, when the syngas is derived from biomass.

In theory, methanol can also be produced from sustainably sourced biomass and ultimately carbon dioxide, and by hydrogen electrolysis using nuclear power, geothermal power or some other renewable energy source (see Carbon Recycling International). Compared to bioethanol, the primary advantage of methanol biofuel is its much greater well-to-wheel efficiency. This is particularly relevant in temperate climates where fertilizers are needed to grow sugar or starch crops to make ethanol, whereas methanol can be produced from unfertilized lignocellulose (woody) biomass.

Ethanol is already being used extensively as a fuel additive, and the use of ethanol fuel alone or as part of a mix with gasoline is increasing. Compared to methanol its primary advantage is that it is less corrosive and non-toxic, although the fuel will produce some toxic exhaust emissions. Since 2007, the Indy Racing League has used ethanol as its exclusive fuel, after 40 years of using methanol. Since September 2007 petrol stations in NSW, Australia have been mandated to supply all their petrol with 2% ethanol content

Butanol and propanol

Main article: Butanol fuel

Propanol and butanol are considerably less toxic and less volatile than methanol. In particular, butanol has a high flash point of 35 °C, which is a benefit for fire safety, but may be a difficulty for starting engines in cold weather. The concept of flash point is, however, not directly applicable to engines as the compression of the air in the cylinder means that the temperature is several hundred degrees Celsius before ignition takes place.

The fermentation processes to produce propanol and butanol from cellulose are fairly tricky to execute, and the Weizmann organism (Clostridium acetobutylicum) currently used to perform these conversions produces an extremely unpleasant smell, and this must be taken into consideration when designing and locating a fermentation plant. This organism also dies when the butanol content of whatever it is fermenting rises to 2%. For comparison, yeast dies when the ethanol content of its feedstock hits 14%. Specialized strains can tolerate even greater ethanol concentrations - so-called turbo yeast can withstand up to 16% ethanol. However, if ordinary Saccharomyces yeast can be modified to improve its ethanol resistance, scientists may yet one day produce a strain of the Weizmann organism with a butanol resistance higher than the natural boundary of 7%. This would be useful because butanol (due to its lower oxygen content) has a higher combustion energy density than ethanol, and because waste fibre left over from sugar crops used to make ethanol could be made into butanol, raising the alcohol yield of fuel crops without requiring more crops to be planted.

Despite these drawbacks, DuPont and BP have recently announced that they are jointly to build a small scale butanol fuel demonstration plant alongside the large bioethanol plant they are jointly developing with Associated British Foods.

The company Energy Environment International developed a method for producing butanol from biomass, which involves the use of two separate micro-organisms in sequence to minimize production of acetone and ethanol byproducts.

The Swiss company Butalco GmbH uses a special technology to modify yeasts in order to produce butanol instead of ethanol. Yeasts as production organisms for butanol have decisive advantages compared to bacteria.

Butanol combustion: C₄H₉OH + 6O₂ → 4CO₂ + 5H₂O + heat

Propanol combustion: 2C₃H₇OH + 9O₂ → 6 CO₂ + 8H₂O + heat

The 3-carbon alcohol, propanol (C₃H₇OH), is not often used as a direct fuel source for petrol engines (unlike ethanol, methanol and butanol), with most being directed into use as a solvent. However, it is used as a source of hydrogen in some types of fuel cell; it can generate a higher voltage than methanol, which is the fuel of choice for most alcohol-based fuel cells. However, since propanol is harder to produce than methanol (biologically or from oil), methanol-utilizing fuel cells are preferred over those that utilize propanol.

By country

Brazil

Main article: Ethanol fuel in Brazil

 

Historical trend of Brazilian production of light vehicles by type of fuel, neat ethanol (alcohol), flex fuel, and gasoline vehicles from 1979 to 2017.

Brazil was until recently the largest producer of alcohol fuel in the world, typically fermenting ethanol from sugarcane.

The country produces a total of 18 billion litres (4.8 billion gallons) annually, of which 3.5 billion liters are exported, 2 billion of them to the U.S. Alcohol cars debuted in the Brazilian market in 1979 and became quite popular because of a heavy subsidy, but in the 1980s prices rose and gasoline regained the leading market share.

However, from 2003 on, alcohol has rapidly increased its market share once again because of new technologies involving flexible-fuel engines, called "Flex" or "Total Flex" by all major car manufacturers (Volkswagen, General Motors, Fiat, etc.). "Flex" engines work with gasoline, alcohol or any mixture of both fuels. As of May 2009, more than 88% of new vehicles sold in Brazil are flex fuel.

Because of the Brazilian leading production and technology, many countries became very interested in importing alcohol fuel and adopting the "Flex" vehicle concept. On March 7 of 2007, US president George W. Bush visited the city of São Paulo to sign agreements with Brazilian president Luiz Inácio Lula da Silva on importing alcohol and its technology as an alternative fuel.

China

Main article: Bioenergy in China

As early as 1935, China has made alcohol fuel powered cars. China has reported with a 70% methanol use to conventional gasoline an independence from crude oil.

National Committee of Planning and Action Coordination for Clean Automobile had listed key technologies related to alcohol/ether fuel and accelerated industrialization into its main agenda. Alcohol fuels had become part of five main alternative fuels: Two of which were alcohols; methanol and ethanol

United States

See E85 in the United States

The United States at the end of 2007 was producing 26.9 billion litres (7 billion gallons) per year. E10 or Gasohol is commonly marketed in Delaware and E85 is found in many states, particularly in the Midwest where ethanol from corn is produced locally.

Many states and municipalities have mandated that all gasoline fuel be blended with 10 percent alcohol (usually ethanol) during some or all of the year. This is to reduce pollution and allows these areas to comply with federal pollution limits. Because alcohol is partially oxygenated, it produces less overall pollution, including ozone. In some areas (California in particular) the regulations may also require other formulations or added chemicals that reduce pollution, but add complexity to the fuel distribution and increase the cost of the fuel.

European Union

Consumption of Bioethanol (GWh)

Country	2005	2006	2007	2008
France	871	1,719	3,164	4,693
Germany	1,682	3,544	3,448	4,675
Sweden	1,681	1,894	2,119	2,488
Netherlands	0	179	1,023	1,512
Spain	1,314	1,332	1,512	1,454
Poland	329	611	837	1,382
United Kingdom	502	563	906	1,223
Finland	0	10	20	858
Austria	0	0	199	633
Hungary	28	136	314	454
Czech Republic	0	13	1	378
Ireland	0	13	59	207
Lithuania	10	64	135	182
Belgium	0	0	0	145
Slovakia	0	4	140	76
Bulgaria	-	0	0	72
Denmark	0	42	60	50
Slovenia	0	2	9	28
Estonia	0	0	0	17
Latvia	5	12	0	0
Luxembourg	0	0	14	11
Portugal	0	0	0	0
Italy	59	0	0	0
Greece	0	0	0	0
Romania	-	0	0	0
Malta	0	0	0	0
Cyprus	0	0	0	0
European Union	6,481	10,138	13,962	20,538
1 toe = 11,63 MWh, 0 = no data Alcohol consumption does not specify the traffic fuel use The 2008 data is not confirmed yet

Japan

Main articles: ja:ガイアックス_(燃料) and ja:アルコール燃料

The first alcohol fuel in Japan began with GAIAX in 1999. GAIAX was developed in South Korea, and imported by Japan. The principal ingredient was methanol.

Because GAIAX was not gasoline, it was a tax-free object of the gas tax of Japan. However, as a result, the use of GAIAX came to be considered an act of smuggling in Japan by the government and the petroleum industry. Retailing of GAIAX was done to avoid the tax evasion criticism by independently paying the diesel fuel tax in the legal system regulations.

Accidental vehicle fires where GAIAX was being refueled began to be reported in around 2000 when the tax evasion discussion had almost ended. The car industry in Japan criticized GAIAX, saying that "fires broke out because high density alcohol had corroded the fuel pipes". GAIAX was named a "high density alcohol fuel," and a campaign was executed to exclude it from the market long term. Finally, the Ministry of Economy, Trade and Industry also joined this campaign.

The gasoline quality method was revised under the pretext of safety concerns in 2003. This prohibited the manufacturing and sale of "High density alcohol fuel", and added a substantial GAIAX sales ban. By revising the law, fuel manufacturers are prohibited from adding 3% or more alcohol to gasoline. This revision to the law is grounds not to be able to sell alcohol fuel greater than E3 in Japan.

The petroleum industry in Japan is now proceeding with research and development of an original alcohol fuel that differs from GAIAX. However, the commercial manufacture and sale of any new fuel may be barred by existing laws that currently exclude GAIAX from the market. Moreover, the strong aversion by the Japanese consumer to a high density alcohol fuel of any type may prevent commercial success of any new fuel.