I have been reading (well, re-reading actually, it was just a very long time ago that I first read it. Then however, much of the book was a little beyond the full scope of my understanding, though now much later and with much better knowledge, its much more lucid!!) Hayek’s Pure Theory of Capital and this particular passage really hit home:
In the second place, the resources available for the satisfaction of these wants will be unevenly distributed between the individuals. As a rule, we shall find that most individuals do not command all the resources which, with the technique actually in use, are required to carry on the continuous production even of a single commodity. Usually we shall find that the resources required for anyone process of production are divided between a number of persons. In most cases equipment belonging to different stages of one process of production will be in different hands. And some at least of the permanent resources whose services are required in the different stages, certainly human labour if no others, will be under the control of persons other than those who own the material equipment and direct and organise production. In consequence it will be necessary to exchange not only different final products but also intermediate products and the services of resources of all kinds. (pg. 249)
Let’s examine this brilliant description of the highly complex capital structure in relation to health care.
Last year after my son broke his arm, we went to a pediatric trauma care center (no, it wasn’t that bad. He didn’t even really cry at all. Kids break, they heal. It happens. Harder on parents than kids for sure!!), a pediatric orthopedic center, and a hospital (he had to have a pin put in). The titanium rod alone, its lifespan from the ore to the arm, would probably be a story even more complex than Leonard Read’s pencil. Everything from the xray to the cast, each is a story unto itself in complexity.
There is no doubt that the titanium used in the pin in his arm could very well have been utilized in any thousand other ways and products.
I shudder to think that these “geniuses” in Washington truly believe that they are capable of managing this vastly dispersed capital structure which creates the most miraculous medical care in the world. Have they no humility?
Of course, when capital is homogenous and fixed, and labor is the sole physical unit which is required in the economic system…