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It's not that they are "too important" for profit, it's that the supply and demand laws are such that a free market is very hard to establish. Taking healthcar
by tomp 11y ago
It's not that they are "too important" for profit, it's that the supply and demand laws are such that a free market is very hard to establish.
Taking healthcare for example, the incentives of the buyers (patients) and sellers (doctors) are inherently conflicting, as the former seek health, while the latter benefit when the former are sick. Furthermore, the patients very often urgently need help and don't have the time (nor the knowledge) to "shop around".
Or education. The "value" of a college is the increase in lifetime income vs. a high-school education, but given the slow feedback cycle (30 years or so of working) the market equilibrium is trending towards the price of college being the discounted value of all discretionary income of the graduates. This is aided by the US government that guarantees the loans and prevents them being discharged in bankruptcy.
A similar field is also infrastructure.
None of these fields must inherently be constrained by the government, but they need to be regulated in such a way that a free competition is encouraged.
- rayiner 11y ago> Taking healthcare for example, the incentives of the buyers (patients) and sellers (doctors) are inherently conflicting, as the former seek health, while the latter benefit when the former are sick. That's trivially true of almost every market. People want food but restaurants benefit when the former are hungry!
- tomp 11y agoThat's true. Which is why restaurants in tourist spots should be less trusted. But most other restaurants have enough returning customers, and the customers have enough knowledge about the product they're buying, that the feedback loop (good product -> more profit) is much more direct.
- gress 11y agoThat ignores the issue - being hungry is a basic need and it's ok that we keep getting hungry and meeting that need through restaurants. People getting sick is not a basic need unless you are a healthcare company. That's why the incentives are conflicting.
- rayiner 11y agoGetting hungry happens naturally, so does getting sick. Restaurants and healthcare companies are needed to address each need. The incentives are the same.
- gress 11y agoAbsolutely false. Getting hungry again happens naturally regardless of the choice of food offered by a restaurant. Whether you remain sick, are cured, or get sick again depends significantly on the choice of treatment offered. Healthcare companies have an incentive to choose treatments that don't cure you.