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However, it is fruitful to point out that not all markets are created equal. Even if an exchange of money takes place in return for goods and services, the mark

However, it is fruitful to point out that not all markets are created equal. Even if an exchange of money takes place in return for goods and services, the market that exists is not necessarily a free market. Sometimes this is true even in the most idealized of cases. For example, healthcare isn’t composed of one market, but several between different operators operating under different market forces and regulatory rules. As it’s too complicated to go into each, I’ll go into one that’s most apparent; the market between patients and healthcare providers (not insurance companies!). Assuming the most idealized of cases that exist without external constraints and regulations, this market would never be a free market. Because the buyer will never be in the position to make the decision to not buy the good. Even a rational free agent would not be in a position to disagree from making a purchase. The value each sentient lifeform places on their life is for all intents and purposes infinity in the healthcare context. No sane suicidal individual or hero would sign up for a purposeless, slow and painful death. This removes the essential mechanism that free markets have to regulate themselves; the freedom to not participate. In most markets, if a good or service is too expensive then the business selling them will go bankrupt or remain small due to a lack of buyers. This creates an incentive for a cheaper mousetrap to exist. But healthcare isn’t like that. Your choice is severely limited. At best, you can choose between providers (though for serious, and sadly incredibly routine, issues the immediacy of needing treatment trumps this) and at worst you’re unconscious and unable to make any decisions yourself. So the element of choice isn’t present making it axiomatically not a free market. Please note that I am not going into ancillary factors like the difficulties patients face in making informed decisions, the viral component that exists for certain classes of disease (you choosing not to do X in the case of a serious enough pathogen could lead to a sick household or an epidemic. See: the return of measles), the difficulty of rationing care (Americans spend more partly because they see their doctors less by design and are discouraged from accessing preventative care), and overall incentive misalignment between doctors, pharmaceutical manufacturers, hospital staff, insurers, HMOs etc that creates runaway effects. We treat all markets in the same way, but they aren’t all the same. The market for healthcare is different from consumer electronics and the market for plastic surgery (a procedure where I must note there is an option to say no). Reductively put, you can choose not to buy a MacBook Pro. But you can’t choose not to treat sepsis. So why does our literature usually assume that both are the same?

CryptoPunk 7y ago
>>this market would never be a free market. Because the buyer will never be in the position to make the decision to not buy the good. A free market does not mean a market where a buyer has a choice of not buying something. It only means one where the market choices of agents are not constrained by coercive intervention of other agents. We need to buy food, but the market for food is still quite free, and consequently, very efficient.
- areoform 7y ago
  > A free market does not mean a market where a buyer has a choice of not buying something. It only means one where the market choices of agents are not constrained by coercive intervention of other agents. That's not how I was taught this concept. I know, Wikipedia is a bad source, but I would like to point out how widespread my specific interpetation is amongst the economics textbooks I've read; In a free market, individuals and firms taking part in these transactions have the liberty to enter, leave and participate in the market as they so choose. Prices and quantities are allowed to adjust according to economic conditions in order to reach equilibrium and properly allocate resources. Note, enter and leave. This means both as a producer and a consumer, without this we cannot have efficient allocation. > We need to buy food, but the market for food is still quite free, and consequently, very efficient. The food market is a really good counter-argument to mine, but when I was first making my observations, I found that food is a very different market that was originally constrained in similar ways but isn't. First is that it's a "market" that's nearing globalized post-scarcity (this doesn't preclude localized scarcity). We produce enough food that we can feed the global population twice over https://ourworldindata.org/food-per-person https://ourworldindata.org/food-per-person (3k+ per capita for developed nations and 2k+ for underdeveloped ones). Humans have reached this state due to government-sponsored research and sponsored application of revolutionary new technologies. Second, our ability to process food has also led to a surplus in stored calories. We can feed ourselves even during catastrophes (though distribution will remain a challenge). And third, historically (as I am not certain about this particular point, but it is consistent with my reading of history), prior to the green revolution, the food market was never this free - it has always been state managed to a varying degrees. From feudal lords and chieftains to the Roman grain dole, food has been a carefully managed resources until our time. Due to its oversupply and heterogeneity, the food market has a very different structure and dynamics that are inherent to it. But, taking my argument at face value, I would argue that it is indeed possible to exit the food market - we can grow our own food! Even a small-ish farm with good practices can feed a family for a year or more using wild seeds, natural compost and herbicides alone.

CryptoPunk 7y ago

>>this market would never be a free market. Because the buyer will never be in the position to make the decision to not buy the good. A free market does not mean a market where a buyer has a choice of not buying something. It only means one where the market choices of agents are not constrained by coercive intervention of other agents. We need to buy food, but the market for food is still quite free, and consequently, very efficient.

areoform 7y ago
> A free market does not mean a market where a buyer has a choice of not buying something. It only means one where the market choices of agents are not constrained by coercive intervention of other agents. That's not how I was taught this concept. I know, Wikipedia is a bad source, but I would like to point out how widespread my specific interpetation is amongst the economics textbooks I've read; In a free market, individuals and firms taking part in these transactions have the liberty to enter, leave and participate in the market as they so choose. Prices and quantities are allowed to adjust according to economic conditions in order to reach equilibrium and properly allocate resources. Note, enter and leave. This means both as a producer and a consumer, without this we cannot have efficient allocation. > We need to buy food, but the market for food is still quite free, and consequently, very efficient. The food market is a really good counter-argument to mine, but when I was first making my observations, I found that food is a very different market that was originally constrained in similar ways but isn't. First is that it's a "market" that's nearing globalized post-scarcity (this doesn't preclude localized scarcity). We produce enough food that we can feed the global population twice over https://ourworldindata.org/food-per-person https://ourworldindata.org/food-per-person (3k+ per capita for developed nations and 2k+ for underdeveloped ones). Humans have reached this state due to government-sponsored research and sponsored application of revolutionary new technologies. Second, our ability to process food has also led to a surplus in stored calories. We can feed ourselves even during catastrophes (though distribution will remain a challenge). And third, historically (as I am not certain about this particular point, but it is consistent with my reading of history), prior to the green revolution, the food market was never this free - it has always been state managed to a varying degrees. From feudal lords and chieftains to the Roman grain dole, food has been a carefully managed resources until our time. Due to its oversupply and heterogeneity, the food market has a very different structure and dynamics that are inherent to it. But, taking my argument at face value, I would argue that it is indeed possible to exit the food market - we can grow our own food! Even a small-ish farm with good practices can feed a family for a year or more using wild seeds, natural compost and herbicides alone.