Truly free markets alone keep producers honest

The current administration’s actions, palpable in so many ways, are girded by some fundamentally destructive and dangerous ideas.  Nothing perhaps more so than their belief in markets as dishonest.  For example,

Secretary of HHS: “I think there will be a competitor to private insurers,” Sebelius said. “That’s really the essential part, is you don’t turn over the whole new marketplace to private insurance companies and trust them to do the right thing.”


Dear Leader: “I am pleased by the progress we’re making on health care reform and still believe, as I’ve said before, that one of the best ways to bring down costs, provide more choices and assure quality is a public option that will force the insurance companies to compete and keep them honest,” Obama said in July.

This is a truly Marxist view of markets.  Robert Murphy explains here what Mises called “consumer sovereignty”. If markets are truly free then the producers are at the mercy of a the consumer.

One thing is most certain about health care and that is in its current state, it is anything BUT a free market.

Not when the consumer is separated from the producer in the exchange.

Not when employers purchase insurance for their employees.  The consumer will have no say in what health care they get.

Not when health care producers bill insurance companies, as the pricing mechanism, so vital for markets to operate effectively, is destroyed.

Not when insurance companies are prohibited from attracting customers in other states, there is no free market.

Not when producers are forced to provide their product regardless the consumer’s ability to pay.

Not when almost half of all dollars spent on health care are by the government, usually far under the prevailing market price.

Not when the current consumers’ purchases are providing subsidization for the consumption of others.

This is but a partial list.  Make no mistake about it, health care is anything but a free market, and to call it one is a lie.  The current administration’s view of the “market” for health care is either terribly ignorant or highly disingenuous.

My guess?  It’s both.  They are both clueless and dishonest, to a degree unmatched by even the previous administration.  And that is quite an accomplishment.


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