This is a pretty picture, but it's also a problem—a problem economists generally help us to see through. The policies that publicly express good will and mutual respect—that successfully broadcast that we care about one another—often are not the policies that would actually deliver the goods—the policies you'd favour if you cared more about people than signaling that you care about people. The policies that would actually deliver often would do so by enabling and encouraging consumer choice and entrepreneurial discovery and innovation in competitive markets. If the deep worry about certain forms of market exchange is that they put the poor at a disadvantage, we can address the worry by making certain that means-tested transfers are generous enough to ensure sufficient market power for all. But we can't address concerns about market inequity in this way if market-based policy is preemptively ruled out of bounds by a misguided public theology of markets and politics. Widespread public commitment to a vocabulary of moral and political symbolism according to which "merely commercial" transactions and relationships are seen to be profane, while political transactions and relationships are seen to be sacred, is a significant impediment to improving human welfare with policy that harnesses the power of markets. One task of the liberal intellectual is to chip away at taboos that cause preventable suffering by limiting the range of politically-feasible policy. Isn't this the opposite of what Mr Krugman is doing?
Matthew Steinglass, Wilkinson's colleague at the Economist, has a long response that's worth reading in full. The nub of his point is this:
When [Krugman] says "what has gone wrong with us" that we treat "patients as 'consumers' and health care as simply a financial transaction," he isn't arguing that people who talk about patients as consumers are insane. He's arguing that they havebad values. That may not be a particularly courteous argument to make, but it's a serious one.
But I do think that this argument points to an overarching cultural trend, namely an increasing tendency to use the language of economics when talking about any social or political issue whatsoever. Over the past 15 years, a number of gifted popularisers of economics have helped show laymen how to think about a lot of disparate subjects using economic tools and styles of thought. Paul Krugman was among the first of these; he has been followed by Stephen Levitt, Charles Wheelan, Tim Harford, and many others. But it seems that when Mr Krugman started writing columns suggesting how to look at political and social issues from an economist's perspective, he didn't anticipate that people might decide that economic language and styles of thought are always the best way to think about everything. Or that anyone would consider his continued willingness to think about social issues in other lights to be a betrayal of the economist's calling.
The idea that a single style of thought offers the best explanation for every facet of human society is an ideological seduction. Economists are not required to believe that every facet of social life is best treated as a form of commercial exchange, and I wouldn't trust an economist who did. The "-ist" in "economist" is not supposed to denote an ideologically committed position; an economist should not believe in Economism, in the way that (most) Marxists believe in Marxism.
Liberals have devoted a great deal of attention to the practical problems inherent in the conservative vision of consumer-driven health care, in which patients will be given incentives to shop smartly for their treatments and will thus use their dollars wisely to seek out the most efficient treatments. It's a deeply-flawed notion in numerous ways.
Krugman hit upon just one of those ways, and it's an important one. With most market goods, the seller is supposed to maximize his profit. You may have good reasons not to try to fleece your customers, but if you're selling cars, you have every reason to steer them toward the more expensive (or, at least, more profitable) model. The traditional basis of medicine is not based on the market for very sound reasons. Doctors have a massive information imbalance over patients. That's why we don't set them up as parties to a financial transaction. The doctor is a kind of secular clergy presumed to be acting in a way synonymous with the patient's interest.
There's a whole ethical code associated with that value system, and it sits uncomfortably aside the concept of the patient as shopper and doctor as merchant. Krugman isn't attempting to erect a moral taboo around commercialism in medicine, he's pointing out that its culture is (correctly) unsuited for the consumer-merchant model.