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> "Why are certain things getting so much more expensive?" Incentive. Something costs X dollars because there are sufficient number of customers that are willi

> "Why are certain things getting so much more expensive?" Incentive. Something costs X dollars because there are sufficient number of customers that are willing to pay X amount. Even if the cost of providing goods or services gets cheaper, businesses will charge more if they can. Capitalism assumes things will get cheaper as a result of competition, but that does not take into account third party involvement. if the payment is made by a third party,the incentive to compete by lowering prices decreases dramatically. A third party could be a credit card backer,insurance,government subsidies,etc... The impact of reducing the price is either not felt or is delayed significantly. It plays a much smaller role in consumer decision making when a thirdparty is involved. The problem cascades up and down supply chains,making trivial projects and services cost an insane amount. I blame this for many things including healthcare costs,car repair costs,public infrastructure costs,etc...

Aunche 8y ago
The American healthcare system is the perfect combination of misaligned incentives. In the US, patients are the ones who have to foot the bill, but they have no incentive to keep the costs down because things are covered by insurance. As a small example, I don't need new glasses every year, but I get a new pair every year because it's covered by insurance. On a much larger scale, in most countries, it doesn't make economic sense to spend tens of millions of dollars to develop a medicine that's 1% more effective than a currently existing one. In poorer countries like India, there will be very few people who could afford the new medicine. In countries with socialized medicine, the government would rather spend the money on something else. In the US, patients are more than happy to pay for the new medicine because it costs the same as the old one after insurance. Meanwhile, everyone's insurance premiums bump up a few cents and nobody bats an eye. Repeat this a thousand times and you're left with an incredibly bloated healthcare system.

Aunche 8y ago

The American healthcare system is the perfect combination of misaligned incentives. In the US, patients are the ones who have to foot the bill, but they have no incentive to keep the costs down because things are covered by insurance. As a small example, I don't need new glasses every year, but I get a new pair every year because it's covered by insurance. On a much larger scale, in most countries, it doesn't make economic sense to spend tens of millions of dollars to develop a medicine that's 1% more effective than a currently existing one. In poorer countries like India, there will be very few people who could afford the new medicine. In countries with socialized medicine, the government would rather spend the money on something else. In the US, patients are more than happy to pay for the new medicine because it costs the same as the old one after insurance. Meanwhile, everyone's insurance premiums bump up a few cents and nobody bats an eye. Repeat this a thousand times and you're left with an incredibly bloated healthcare system.