Excerpt from:  FAS Talk
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March 04, 2010

Hail Market

Blind faith in the free market to cure our health care ills makes my head spin.

Blind Faith There’s certainly no shortage of debates over our health care system.  And rightly so...  Can it produce some of the best health care in the world? Yes.  Can it produce some really poor results?  Yes.  Is it filled with competent, caring doctors, nurses, and other dedicated professionals? Yes. Is it filled with profiteers? Yes.  Does it waste resources? Yes.  Is it a matter of life and death?  Yes.  Can we do better?  Yes.  Is there an easy fix.  No.

Setting aside the sociopathic profiteers who pocket tens or hundreds of millions of dollars per year, and then setting aside many (most?) in the GOP who are fighting reform simply to damage the current administration (no worry that real humans are literally dying for reform), there’s one idea that I find particularly troubling.  That is the idea that the best approach is to simply take the controls off and let the “free market” settle in on the optimal solution.

And I heard it again in the comments on a Facebook post by Dennis McCarthy.  Now I don’t mean to pick on my brother-in-law, a smart guy whom I genuinely respect and admire, a great author (check out his fascinating new book, Here Be Dragons), a scholar, and a deep thinker, but I just don’t have this kind of faith:

“[I]f we want effective and universal coverage, we need consumer driven health care (HSA's and the like.) Let the free market work—as it has with bread, milk, eggs, cell phones, etc.—and health care will be distributed in a much more compassionate, efficient, and economical manner.”

Woa! There goes my spinning head!

Let’s not even talk about federal dairy and agricultural subsidies and regulations.  Or the myriad subsidies, regulations, taxes, tariffs, etc. in the telephone industry.  Let’s pretend those really were “free” markets.

Still, if I shop around for a cell phone and make a poor choice, I may not have the best cell phone. If I shop around for the best medicine, and make a poor choice, the consequences may be considerably worse.

And, just as I don't want to devote precious cycles to the process of finding the best county road repair contractor, or the best fire trucks for my neighborhood, even though I want the best choices to be made, I don't want to devote precious cycles to negotiations with drug companies, hospitals, etc., about which medicine I buy from whom or whether to have an x-ray from machine A vs. an MRI from machine B.

The every-person-decides-on-their-own-and-let-the-free-rational-market-optimize-everything philosophy has one fundamental drawback: it does not work—unless by “work” you’re willing to accept that some people will fall through the cracks completely, some will suffer unnecessarily, etc. That philosophy is rooted in the idea that individuals are not only rational, they are super-rational (in the sense they reason about the fact that others are reasoning...) and that a collection of super-rational decision makers constitutes a dynamic system that will settle in, eventually, on a stable, optimal solution to any complex, multidimensional problem (which, in some cases, will happen).

But here’s the real rub:  people are not rational.

If you have any doubt in that, ask if anybody believes...

  • homeopathy works; or
  • vaccines cause autism; or
  • humans once rode saddled dinosaurs; or
  • we are routinely being visited (and abducted) by aliens; or
  • astrologers can predict future human events by interpreting celestial signs; or
  • the current health care bill includes death panels; or
  • the Earth is 6,000 years old; or
  • our president is Kenyan; or
  • the Speaker of the House is like a suicide bomber; or
  • the dead talk to John Edward; or
  • Interstate 35 is the "highway of the righteous" mentioned in Isaiah:35; or
  • homosexuals cause earthquakes; or
  • birth defects are karmic payback for prior abortions; or
  • condom usage increases the spread of aids; or
  • divining rods can detect bombs; or
  • finding a parking spot constitutes proof that prayers work.

I could go on and on (and on).

Evolution has shown, over and over and over again, that cooperation outperforms going it alone. Molecular replicators band together in huge numbers to create cells. Cells band together in huge numbers to create plants and animals. Animals band together to create communities. Communities band together to create nations.

Why do we think, that banding together to address a universal human need—that of good, affordable healthcare—would be somehow different?

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Comments
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RE: Hail Market

The 100% batting average of free markets...

Hey, Andy, great post.  I don't have enough room here to properly respond, so I have posted it here. http://www.4threvolt.com/FreeMarket.html

I explain how I came to conclude that free market systems are what truly help the poor --and that big government systems always fail and end up hurting the poor.  I also provide links describing medical care reform ideas that exploit free market principles (which have been successfully implemented in Indiana and Singapore) -- while the big government systems in Canada and Great Britain are failing. Also, at the end of the post, I respond directly to some of your comments.

My love to the fam...

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