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Why people downvoted this. Price control doesn't work. Just read any economic book and you will realize it's true. It hurts, but it's true. If price control wor
by meerita 7y ago
Why people downvoted this. Price control doesn't work. Just read any economic book and you will realize it's true. It hurts, but it's true. If price control works, then why prices never were freezed. Why don't freeze it forever? Because it doesn't work.
- StephenAmar 7y agoPrice control works in other countries for healthcare.
- Fjolsvith 7y agoWhich ones and for how long?
- cav71b 7y agoMost European countries for at least 70years
- rayiner 7y agoLargely because the US continues to subsidize medical R&D. Free riding is a good gig if you can get it.
- paulryanrogers 7y agoNow that advertising drugs to the public had ballooned marketing budgets beyond R&D is that still true? I imagine that dollar-for-dollar a non-profit with the right incentives and oversight could out do the VC-backed leeches driving up prescription med prices.
- astazangasta 7y agoThe US subsidizes drug development, that's about all. Other medical R&D doesn't really come out of any publicly funded research system, it comes from medical practitioners. The cost of US drug development subsidy is maybe $40 billion, accounting for basic research and development by pharmaceutical companies. This is pretty much peanuts compared to global healthcare spending. Also, this money is arguably not really that well spent, since most of drug development is useless, and nations can improve their health systems and outcomes much more through things like routine care and monitoring than they will through expensive research.
- michaelmrose 7y agoCan't we keep paying for the R and D and just not let a minority of private actors profit?
- rayiner 7y agoThe private actors are the ones who pay for the R&D, to the tune of $70 billion/year. That's on the same order as total annual venture capital spending nationwide ($70-$80 billion/year from 2014-2017, though 2018 was an outlier at $130 billion). These amounts are small enough where the U.S. government could pretty easily cover the expenditures. So by your logic, why do we need Silicon Valley venture capital? Why not just have the government pay for the R&D and make the results freely available to everyone? Either the government is good at allocating capital for high-tech R&D or its not. Whether you're talking about medical tech or computer tech doesn't make a difference.
- cannonedhamster 7y agoThe vast majority of pure research has funding generated directly from government funds. Medical funding is roughly half from public funds. This wouldn't change with price controls. More profits don't lead to more research.
- RHSeeger 7y agoYou're assuming that the profit on the item is enough that it's still worth it if the price is reduced. Why do you make that assumption?
- cannonedhamster 7y agoMedicine will never not happen. People will continue to get sick. People will continue to become doctors. We've literally seen this before.
- meerita 7y agoPrice control doesn't work on healthcare. I give you an example: Spain, "free" healthcare: they realized people went to socialize to hospitals, making impossible to address the demand. People went to hospitals for headaches, colds, creating an incredible ammount of problems. How they solved it? They charged money (little) for any consult you wanted to do. This reduced instantly a big ammount of the consults and false positives. This was tested in Barcelona and in other provinces. This was also a case for Singapur, where everyone have access to healthcare (starting from 16$/mo) and healthcare is subsidised by demand.
- dmitriid 7y ago> Just read any economic book and you will realize it's true. In theory, theory always beats practice. In practice, however... Case in point: nearly every other developed country.
- mistermann 7y ago> Price control doesn't work. Just read any economic book and you will realize it's true. This sounds like a bit of an oversimplification.
- linuxftw 7y agoSounds that way, but it isn't. Price control doesn't work.
- rtpg 7y agoA theory that isn’t validated in practice isn’t much of a theory. I’ve lived in several countries with price controls (at least on reimbursements, you’re free to get price gouged at some doctor but not many people will follow) and things are fine. If anything I ended up having issues at the few parts that _arent_ price controlled (eyecare in France is a pain, though I think mostly because supply of optometrists are limited)
- ianai 7y agoI wonder whether it’s price discovery that controls price. It’s hard deny service for a price you’re already accepting/accepted elsewhere.
- meerita 7y agoPrice control is not a theory. There are several books, papers (Hayek, Mises, Friedman), topics that address this topic. If it is so good, why isn't implemented? It's the same argument than communism: if it is so good, why we don't implement it? Because it doesn't work. It never worked. Price control generates scarcity. Because bureaus can't have all the information about the market, it's impossible. The moment a bureau determinate a price you're generating an impact on the different areas without having the possibility to address it. The gov. is not the market, the gov can't be an omnipotent entity that knows everything, that's why they screw everything.
- thefringthing 7y ago> Hayek, Mises, Friedman What a diversity of thinkers!
- meerita 7y agoDo you want more? I've read others. You want me to bow before Marx or Keynes? LOL
- blincoln 7y agoIt's more or less implemented for medical care in most other first-world countries and it seems to work better than ours* in all of them. I lived in Canada for three years, and growing up in a fairly conservative area in the US, I was prepared for the worst - six-month wait times for life-saving procedures, etc. What I saw was more like Star Trek - people who needed medical care went to a clinic or hospital and got it, and they didn't have to worry about being bankrupted in the process. After I moved back to the US, I got to see what it was like for most people - delaying or never getting critical procedures done, people with teeth rotting in their heads because they can't afford to go to the dentist, almost everyone 1 unexpected medical bill away from permanent financial ruin. Our system is objectively bad, and we deserve to feel bad for sticking with it. You can cite all the market theory you want, but the US is a perfect empirical example of why those theories are wrong. * Except for the tiny minority of the ultra-wealthy who can afford to pay any price for health care.
- michaelmrose 7y agoPeople call economics the dismal science but the truth is that it isn't even a science. Its predictive power is laughable and it seems to consist mostly of just so stories told after the fact. You can't just claim something which is demonstrably functional somewhere doesn't in fact work because your half baked theory trumps actual reality. This is why this sort of comment is downvoted.
- meerita 7y ago> You can't just claim something which is demonstrably functional somewhere doesn't in fact work because your half baked theory trumps actual reality. This is why this sort of comment is downvoted. What actual reality? Because there's price controls doesn't mean it works. It generates scarcity, always. Go to SF, put all rentals to 100 dollars and see the effects of the price controls. They will be the same there and in China. I am not surprised people who deny the fact of economic science is downvoting this.
- michaelmrose 7y agoThere is more than enough money in the system to pay for the actual health care providers. Some of the middle men would have to get bent.
- meerita 7y agoNot true. Not forever. Proven already. Same argument as Universal Wage.
- linuxftw 7y agoThere's countless volumes of information on price controls and their failures to have the desired outcomes.
- cannonedhamster 7y agoPrice controls force efficiency gains. If wages go up you don't stop paying your employee wages, you either train cheaper employees, find a way to get more work out of them, or find a better way to do it. The same applies to price controls.
- meerita 7y agoThis is not true. The moment you set a red line, you're making impossible for the lesser trained to join the wagon for getting a chance to climb the ladder. Also, you're making the capitalist not paying for not hiring lesser people, since none has to hire, there are not faults. The idea is that investors should fight to get you in, but if they're denied, they get the monopoly since no one can enter the market to compete with them by hiring people who is willing to work for less than the regulated wage price is meant is. Plus, wages will not go up easily, since you're killing the force supply by setting a line on it. Milton Friedman explained this properly, you can see his speech on Youtube.
- cannonedhamster 7y agoMilton Friedman is only one school of economic thought. Nothing is proven in economics and likely won't be since it involves human psychology. When gas prices rose dramatically economists expected the US to move away from large vehicles. That's not what happened. The rational thought is almost never what happens in economics. People buy high and sell low, their purchases are often emotional, and investors pour money into acting blockchain.
- RHSeeger 7y agoOr stop competing in that business.
- cannonedhamster 7y agoThat's already been happening though, so I'm not sure how much that would change what's already been happening.