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Calling the "free market" inefficient is the most absurd thing I've heard in at least a week. "Free Markets" clearly aren't the answer for everything, but they
by DigitalJack 14y ago
Calling the "free market" inefficient is the most absurd thing I've heard in at least a week.
"Free Markets" clearly aren't the answer for everything, but they are when efficiency is the primary goal. Laws and regulations aren't there to promote efficiency. They are there, ideally, to promote safety. In my experience, the overlap of safety and efficiency is vanishingly small. Would that it were not.
In every situation, we need some balance of efficiency and safety.
Yes, it's true, when you are having a heart attack, you probably don't want to spend time shopping around. That is exactly what "insurance" is for.
When you have a cold and you go to the doctor, that is a waste of a limited resource (the doctor's time specifically). If you as a consumer had to bear the full brunt of the cost of seeing a doctor for non-catastrophic issues, you'd think twice about going over a cold.
That doctor would then be able to take on more patients because their time wouldn't be wasted on trivial things. This is more efficient.
The flip side, is that the expense of the doctor's office dealing with insurance companies would absolutely be reduced. That's an immediate cost reduction. The demand for arbitrary doctor services would be reduced (by virtue of everyone with a sniffle not immediately heading to the doctor).
Simultaneously, doctor's would be able to reach more patients at a lower cost.
Prices for everyday type treatment would go down.
When you disconnect the scarcity of a resource from its price, you wreak havoc on the system. The way we (in the US) use health insurance, it's more like "prepaid medical services" than what insurance was meant for. The problem is that you have disconnected the scarcity of the doctor's time and service with the price of that service. It artificially inflates demand on that doctor's time, because hell, you've already paid the premium this month, if you don't go see the doctor for a cold, you are wasting money.
And that's true. You have wasted money, but going to the doctor for that cold just wastes their time, so now you've doubled down on waste and inefficiency.
- sets13 14y agoI wont respond to the rest of your response, but it has been pretty clearly demonstrated by people smarter than you or I (at least in their respective professions) that free markets aren't always the most efficient solution to a problem, particularly when the desired solution is not just to come up with a price that is profitable for for the seller. http://www.basiceconomics.info/market-failures-and-externalities.php http://www.basiceconomics.info/market-failures-and-externali...
- pdonis 14y agoit has been pretty clearly demonstrated What has been clearly demonstrated is that free markets don't always reach the optimal solution. That is not the same as saying that governments can do better. In cases where there are market failures and/or externalities, very often there is no way to get to the optimal solution. The real question is, which has worse failure modes, free markets or governments? I'm going to go with governments on that one.
- sets13 14y agoI guess I would disagree with you on that. Given that the U.S. is basically the only first world country that still has private healthcare and it is typically rated somewhere between 15 and 40 world wide on most healthcare metrics, it seems like a number of countries have figured out a way to do public healthcare better... (and more cheaply) http://www.businessinsider.com/best-healthcare-systems-in-the-world-2012-6?op=1 http://www.businessinsider.com/best-healthcare-systems-in-th... http://en.wikipedia.org/wiki/World_Health_Organization_ranking_of_health_systems http://en.wikipedia.org/wiki/World_Health_Organization_ranki... http://www.reuters.com/article/2010/06/23/us-usa-healthcare-last-idUSTRE65M0SU20100623 http://www.reuters.com/article/2010/06/23/us-usa-healthcare-...
- pdonis 14y agoit seems like a number of countries have figured out a way to do public healthcare better... (and more cheaply) "More cheaply" if you only look at health care, perhaps. But not if you look at total government spending: http://en.wikipedia.org/wiki/Government_spending http://en.wikipedia.org/wiki/Government_spending But the real point is that all of those numbers have been increasing over time, and will continue to increase until the governments and countries collapse under the deadweight costs of centralized control. And on the way, we get to have laws bought by special interests and government regulations written by the companies that are supposed to be regulated.
- sets13 14y ago
- DanBC 14y ago> "Free Markets" clearly aren't the answer for everything, but they are when efficiency is the primary goal. Laws and regulations aren't there to promote efficiency. They are there, ideally, to promote safety. In my experience, the overlap of safety and efficiency is vanishingly small. Would that it were not. I always wonder if people remember the rolling brownouts caused by Enron in the chase for profit. De-regulation did nothing to help keep the lights on in California.