• For a market to be prosperous, both consumers and producers need to be free to act in their best interest. Our current market enables substantial freedom for consumers, but not for producers. Government imposed regulations, controls and mandates have substantially driven up operating costs for producers - increases which are passed directly to consumers. Most Americans sense the freedom they have as consumers, but are ignorant of how, and to what detrimental extent, government regulation and intervention stifles producers. Failure to consider the producer aspect leads them (along the encouragement of statists pining for power) to incorrectly blame the “free market” as faulty and inadequate. They are right to advise doing something, but wrong in the something they condone (increased government intervention). The solution is to free the other essential realm in the market - the producers.
  
  Consumptive Freedom + Productive Freedom = Prosperity
  Consumptive Freedom + Production Regulation = Escalating Costs/Declining Value
  Consumptive Regulation + Production Regulation = Market Stagnation

• Americans have tolerated (and confessedly bought into) the welfare state out of altruistic default. We’ve dealt with more and more wealth being confiscated in countless new ways to fund seemingly endless streams of income redistribution. We can only hope that enough people will sense that this collectivist endeavor is a different beast altogether. Socializing medicine differs in that it moves beyond simply confiscating money through taxation to buy other people’s widgets - it effectively (in time) stifles and stagnates the entire widget market for everyone.
• Until recently, I never imagined a day would come where I’m actually considering which of my physician friends would function as my “Black Market Doctor”.
• The only way a private business gains any kind of immunity to economic forces is through some form of government influence impinging upon it. Without such influence, businesses (regardless of size) are subject to consumer choice. They may have immense capital assets and infrastructure, but they still have to keep the customer happy or in time they’ll go bankrupt. This is the key difference between economic and political power - only the latter, the power of government, can be legally forceful. The only way insurance companies, the most commonly demonized player in this scenario, obtain any power to operate in a manner which may appear to be immune to market forces is as a result of some government distortion of economics. The demand for medical expertise, usually through insurance coverage, is so high that any lack of efficiency or uncompetitive offerings would present an opportunity for other players in the market to seize the chance for expanding their market share. However, if some unnatural force prevents new players from entering the market, or prevents existing competitors from acting upon the opportunity, then the market goes unchecked and prices may rise while quality of service declines. This should sound very familiar.
• Insurance companies are typically condemned for the amount of profit they earn, but this can only be an issue in a mixed-economy, i.e., an unfree market. A producer can increase profits by either raising the market price of their goods to consumers, or lowering their costs of production through efficiency - the high-price method, or the low-cost method. In a free market, competition urges producers to compete on the latter, because competing on high prices would be contrary to the law of supply and demand. This competitive dynamic leads to lower prices, because any savings from the low-cost method can be used to gain a competitive advantage and are transferred directly to consumers. But, when that competitive dynamic is retarded or eliminated by barriers to market entry, or oppressive regulations that stifle competitive pressure, prices tend to trend upwards. This escalating trend that appears immune to supply/demand is what grants certain businesses the facade of power - political power. The only way insurance providers, or any business in any market for that matter, can obtain political power on consumers is when equipped with government assistance.
• When prices in a given market escalate at a higher rate than inflation without a comparable increase in value to the consumer, some force is distorting the economics. That force could be a natural one, e.g., a shortage in some vital resource (labor, materials, etc.), or an unnatural one - which, in a mixed-economy, is most often government intervention in some form or manner.

This entry was posted on Saturday, August 15th, 2009 at 2:23 pm and is filed under Economics, Capitalism, Socialism, Health Care, Medicine, Collapse. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.