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A MEDICAL REVOLT IS COMING
G. Keith Smith, MD
May 18th, 2022
The Mises Institute
This article was originally published by G. Keith Smith, MD at The Mises Institute.
While the Free Market Medical Association [FMMA] is made up of buyers, sellers, and intermediaries, we decided this year to focus primarily on buyers. That decision inspired the remarks I’ll make today. We have always believed that the growth of this movement hinged on an empowered, enlightened, and red-pilled buyer. The seller’s then forced to accommodate buyer preferences.
In spite of the claims of the woke Left, a failure of the free market is not to blame for the disaster known as the American healthcare system. It is precisely the opposite. The disastrous part is thanks to the government intervention and interference that has prevented the market from working its magic. The absence of an unfettered market is to blame. How do we know this? We know this because in every other industry, a free market leads to higher quality and lower prices. We know this because once upon a time, not that long ago, affordable high-quality care was the rule, at least until big government entered the scene. We also know this because the movement started by this organization has spread, and everywhere it goes, it brings higher quality and lower prices.
But what exactly does it mean to say market discipline is absent? To answer this question is the key, I believe, to discovering the path to the high quality and affordability that only a free market can provide.
In short, market discipline is weak or absent to the extent that the buyer has been placed at a disadvantage. Government is to blame for the weakened bargaining position of the buyer, as the predatory state’s primary business is to sell favors to the sellers. Indeed, the government at all levels has been busy selling favors to industry big shots, and every favor sold weakens the influence and choices the buyer has in the marketplace. This is why Dr. Per Bylund refers to government regulations as choice restrictions. While this all sounds like common sense, I think a granular look at the buyer-seller relationship will yield some useful insights, particularly the importance of the buyer’s role and the hazard of placing too much importance on the seller’s role in this industry.
What did Ludwig von Mises have to say about the role of the buyer in an exchange? In his brilliant 1944 book titled Bureaucracy, he said:
The capitalists, the enterprisers, and the farmers are instrumental in the conduct of economic affairs. They are at the helm and steer the ship. But they are not free to shape its course. They are not supreme, they are steersmen only, bound to obey unconditionally the captain’s orders. The captain is the consumer.
The real bosses [under capitalism] are the consumers. They, by their buying and by their abstention from buying, decide who should own the capital and run the plants. They determine what should be produced and in what quantity and quality. Their attitudes result either in profit or in loss for the enterpriser. They make poor men rich and rich men poor. They are no easy bosses. They are full of whims and fancies, changeable and unpredictable. They do not care a whit for past merit. As soon as something is offered to them that they like better or is cheaper, they desert their old purveyors.
This, of course, is what the cartel has worked so hard to change. Without question, hospitals and their industry pals have bribed legislators and bureaucrats to avoid the same competitive market discipline that made the economic miracle of this country the envy of the world. For this reason, we must always focus on the consumer’s interests and completely discount any poor-mouthing claims of the sellers, claims which give cover to the dysfunctional arrangement we now endure.
Let’s go back even further, to the nineteenth century, when French economic Frédéric Bastiat penned his famous satirical essay “The Candlemakers’ Petition” in 1845. Here’s what he had to say about giving the seller the advantage over the buyer:
We are suffering from the intolerable competition of a foreign rival, placed, it would seem, in a condition so far superior to ours for the production of light that he absolutely inundates our national market with it at a price fabulously reduced. The moment he shows himself, our trade leaves us—all consumers apply to him; and a branch of native industry, having countless ramifications, is all at once rendered completely stagnant. This rival, who is none other than the sun, wages war mercilessly against us….
What we pray for is that it may please you to pass a law ordering the shutting up of all windows, skylights, dormer-windows, outside and inside shutters, curtains, blinds, bull’s-eyes; in a word, of all openings, holes, chinks, clefts, and fissures, by or through which the light of the sun has been in use to enter houses, to the prejudice of the meritorious manufactures with which we flatter ourselves that we have accommodated our country—a country that, in gratitude, ought not to abandon us now to a strife so unequal.
Mises and Bastiat knew full well what would happen if the buyer was placed at a disadvantage, whatever excuse the sellers or producers used.
Before I continue, we should distinguish between mutually beneficial exchange and a zero-sum, or leveraged, exchange. Always remember that the buyer and seller never voluntarily come together to exchange unless it is to the advantage of both. The seller of the milk values three dollars more than his milk, and the buyer values the milk more than his three dollars. Both parties emerge from the transaction improved from their prior position. A zero-sum exchange, in contrast, is where one party wins at the other’s expense. In this type of exchange, the buyer or the seller is victimized by the other party. This is the business model of government, and this is the business model of the medical cronies government enables. Think predator and prey. Think of yourself as clean sheets and the cronies as Amber Heard.
While there are two methods of exchange, there are two types of buyers: legitimate and illegitimate. A legitimate buyer respects mutually beneficial exchange and is represented by individual patients and any others who work as a good-faith proxy on an individual’s behalf, whether a self-funded plan or a cost-sharing ministry. Government and traditional insurance companies are illegitimate, zero-sum buyers, whose hit-and-run model is based on leveraged exchange and whose interests are diametrically opposed to the interests of patients. Patient and consumer misery are consistent with their goals. Government buyers in countries with universal care plans take this to the extreme with coerced euthanasia plans, as a citizen’s death helps their balance sheet. Doctors in Great Britain are actually paid a bounty for any sick or elderly patients they can lead to the euthanasia slaughterhouse.
Continued...
G. Keith Smith, MD
May 18th, 2022
The Mises Institute
This article was originally published by G. Keith Smith, MD at The Mises Institute.
While the Free Market Medical Association [FMMA] is made up of buyers, sellers, and intermediaries, we decided this year to focus primarily on buyers. That decision inspired the remarks I’ll make today. We have always believed that the growth of this movement hinged on an empowered, enlightened, and red-pilled buyer. The seller’s then forced to accommodate buyer preferences.
In spite of the claims of the woke Left, a failure of the free market is not to blame for the disaster known as the American healthcare system. It is precisely the opposite. The disastrous part is thanks to the government intervention and interference that has prevented the market from working its magic. The absence of an unfettered market is to blame. How do we know this? We know this because in every other industry, a free market leads to higher quality and lower prices. We know this because once upon a time, not that long ago, affordable high-quality care was the rule, at least until big government entered the scene. We also know this because the movement started by this organization has spread, and everywhere it goes, it brings higher quality and lower prices.
But what exactly does it mean to say market discipline is absent? To answer this question is the key, I believe, to discovering the path to the high quality and affordability that only a free market can provide.
In short, market discipline is weak or absent to the extent that the buyer has been placed at a disadvantage. Government is to blame for the weakened bargaining position of the buyer, as the predatory state’s primary business is to sell favors to the sellers. Indeed, the government at all levels has been busy selling favors to industry big shots, and every favor sold weakens the influence and choices the buyer has in the marketplace. This is why Dr. Per Bylund refers to government regulations as choice restrictions. While this all sounds like common sense, I think a granular look at the buyer-seller relationship will yield some useful insights, particularly the importance of the buyer’s role and the hazard of placing too much importance on the seller’s role in this industry.
What did Ludwig von Mises have to say about the role of the buyer in an exchange? In his brilliant 1944 book titled Bureaucracy, he said:
The capitalists, the enterprisers, and the farmers are instrumental in the conduct of economic affairs. They are at the helm and steer the ship. But they are not free to shape its course. They are not supreme, they are steersmen only, bound to obey unconditionally the captain’s orders. The captain is the consumer.
The real bosses [under capitalism] are the consumers. They, by their buying and by their abstention from buying, decide who should own the capital and run the plants. They determine what should be produced and in what quantity and quality. Their attitudes result either in profit or in loss for the enterpriser. They make poor men rich and rich men poor. They are no easy bosses. They are full of whims and fancies, changeable and unpredictable. They do not care a whit for past merit. As soon as something is offered to them that they like better or is cheaper, they desert their old purveyors.
This, of course, is what the cartel has worked so hard to change. Without question, hospitals and their industry pals have bribed legislators and bureaucrats to avoid the same competitive market discipline that made the economic miracle of this country the envy of the world. For this reason, we must always focus on the consumer’s interests and completely discount any poor-mouthing claims of the sellers, claims which give cover to the dysfunctional arrangement we now endure.
Let’s go back even further, to the nineteenth century, when French economic Frédéric Bastiat penned his famous satirical essay “The Candlemakers’ Petition” in 1845. Here’s what he had to say about giving the seller the advantage over the buyer:
We are suffering from the intolerable competition of a foreign rival, placed, it would seem, in a condition so far superior to ours for the production of light that he absolutely inundates our national market with it at a price fabulously reduced. The moment he shows himself, our trade leaves us—all consumers apply to him; and a branch of native industry, having countless ramifications, is all at once rendered completely stagnant. This rival, who is none other than the sun, wages war mercilessly against us….
What we pray for is that it may please you to pass a law ordering the shutting up of all windows, skylights, dormer-windows, outside and inside shutters, curtains, blinds, bull’s-eyes; in a word, of all openings, holes, chinks, clefts, and fissures, by or through which the light of the sun has been in use to enter houses, to the prejudice of the meritorious manufactures with which we flatter ourselves that we have accommodated our country—a country that, in gratitude, ought not to abandon us now to a strife so unequal.
Mises and Bastiat knew full well what would happen if the buyer was placed at a disadvantage, whatever excuse the sellers or producers used.
Before I continue, we should distinguish between mutually beneficial exchange and a zero-sum, or leveraged, exchange. Always remember that the buyer and seller never voluntarily come together to exchange unless it is to the advantage of both. The seller of the milk values three dollars more than his milk, and the buyer values the milk more than his three dollars. Both parties emerge from the transaction improved from their prior position. A zero-sum exchange, in contrast, is where one party wins at the other’s expense. In this type of exchange, the buyer or the seller is victimized by the other party. This is the business model of government, and this is the business model of the medical cronies government enables. Think predator and prey. Think of yourself as clean sheets and the cronies as Amber Heard.
While there are two methods of exchange, there are two types of buyers: legitimate and illegitimate. A legitimate buyer respects mutually beneficial exchange and is represented by individual patients and any others who work as a good-faith proxy on an individual’s behalf, whether a self-funded plan or a cost-sharing ministry. Government and traditional insurance companies are illegitimate, zero-sum buyers, whose hit-and-run model is based on leveraged exchange and whose interests are diametrically opposed to the interests of patients. Patient and consumer misery are consistent with their goals. Government buyers in countries with universal care plans take this to the extreme with coerced euthanasia plans, as a citizen’s death helps their balance sheet. Doctors in Great Britain are actually paid a bounty for any sick or elderly patients they can lead to the euthanasia slaughterhouse.
Continued...
