Here's a scenario:
Your name is Bob. You live in a small village community which doesn't have access to any foods other than pie. You make $2 a day.
Well Bob, things are tough. You've been working for most of your life just trying to make it by. You're middle class for your village, and you have to have pie to live. Since there's no alternative to pie for sustaining your life and you don't make much money, you're stuck buying it as rarely as you can so that you just barely sustain your body's energy needs. But there's a big problem, Bob, and I don't think you're going to like it.
Today you went to purchase pie with an empty stomach. You've been trying to wait as long as possible between pie purchasing trips, but you know you have to go. Normally you head on over to Jack's Pie Shop, which is a rundown store with some pretty mediocre quality pies. They get the job done, but you've gotten sick a couple times and you've heard rumors that sometimes the quality of the pies is so bad people have died. But you know you have no choice. The only other people who make pies charge $30 a pie compared to the $5 a pie that Jack charges! You've only got $32 to your name right now, as you've got other bills and things just don't ever seem to look up for you.
So you head to Jack's Pie Shop. As you walk to the door, you're positively stunned. Jack's Pie Shop has been closed, and you find out that Jack has been run out of business! The other pie store owners have formed a kind of gang that they're calling a "Pie Maker's Association", and they've enlisted the help of the town council to ensure that nobody opens up a pie shop without their approval. The town council, of course, has control of the local peacekeepers and can enforce the will of the Pie Owner's Association in the name of "health and safety' since they are now keeping Jack's mediocre quality pies off the market. You realize you don't have a choice at this point. $30 pies it is.
You walk to the other side of town to Barack's pie shop, walk on in, and order a pie. They bring out a great big delicious pie, place it in a box, and ask for payment. You begrudgingly pull out $30 to hand to the man at the counter, and he looks at you like you're defecating on his floor. He points at a sign, and you see the price of a single pie is now $75.
"But how can this be? You were just charging $30 for a pie yesterday! Why have you increased your prices over double!?!?"
"Oh, yeah. Prices go up. That's capitalism for ya. "
Okay Bob, thanks for participating. The 2nd person narrative is over for now.
If you're reading this the answer as to why the prices went up is obvious to you, and it's sure as hell not "capitalism". It's the exact opposite of voluntary and free trade. Lack of competition in any given industry allows for prices to skyrocket to any level those who can actually participate in the supply of that industry's products or services wish. This is doubly and especially true in industries such as food and medical care. These are two things that most people literally cannot live without, food being a day-to-day necessity and medical care being a necessity when the body doesn't function as it should or falls prey to illness. If you replace just some of the nouns in my example with "heart surgery" or "antibiotics", you can see that this very simple example holds true not just for pies.
B-But James! Real economies are way more complex than what your example would lead people to believe. The medical industry simply doesn't work that way!
Yeah, no. All industries that involve labor and property operate in the exact same ways. There are basic "laws" concerning human interaction. Of course they can be bent or ignored by complete idiots for a short period of time, but if you don't adhere by them you'll lose all of your money and go out of business. This isn't a post explaining why Capitalism is correct or why voluntaryism works, so I'm not delving into that. I just need to make it clear to you that by using the argument "uh, dude, the medical industry is like, uh, so complex dude" that you're not making an argument at all, and you are in fact a jackass.
But wait, there's more!
- Billy Mays
There's always more when it comes to how the government has screwed up things for us, isn't there? Not only has government completed eliminated competition for doctors and hospitals by creating arbitrary and ridiculous rules for who can become a doctor, but they've screwed things up by socializing and subsidizing medicine. When the government starts picking who gets a service that they can't afford based on "muh feelies", then things really start getting crazy. Just look at (spoiler alert for another eventual post) education! But let's get this straight: Neither you, nor your mother, your aunt your brother or sister or dog or cousin or best friend or worst enemy deserve medical care. Now I understand that your chest may be tightening while your face turns bright pink.
[YOU'RE A FUCKING WHITE MALE INTENSIFIES]
- Carl the Cuck, and every other Crybaby
But you don't. I don't care how far progressed as a civilization we are or how much of a surplus of any commodity we have. You never "deserve" the product of another's labor, nor the labor itself. If you are unable to enter into a voluntary agreement regarding what labor or property you will transfer to another party in exchange for their labor or property, you do not have a right to their property or labor. It doesn't matter if you'll die without it. I don't care if you'll die without it, and neither should anyone else. Your urgency to have that property or service creates a great demand which a free market is going to be more than willing to satiate if physically possible. However, when the government gets involved and says, "well, right now Bob is going to die if we don't get him pie (brain surgery), so we'll have to steal money (taxes) from everyone else so that Bob can get his pie (brain surgery)", everything gets thrown out of whack. Because now a service that would otherwise cost, hypothetically, $50 can now cost literally anything the supplier wishes as they know that the government is going to pay for it.
How do they know this? Because the government, in the case of the United States, has clear legislation that communicates an obligation on its part to pay for these services and products for many of the citizens of this nation. Not only does that negatively affect the economy via income being stolen, but now everyone's medical prices go up as the industry understands that the government is going to keep on keepin' on with the payments.
Can't the problem be fixed by legislating laws into place that force the medical industry to keep prices low?
No.
I sure hope nobody actually thinks that's a legitimate solution. Some people pretend to think that'll work, though, so let's bring Bob back for this one.
So Bob has gotten his pie. The government payed for it because he didn't have the credit needed to land a loan and he sure couldn't afford it with his measley savings. The Pie Maker's Association holds a town council sanctioned (and created) monopoly on pie sales, so everyone has to go there and those who aren't rich can't afford to pay for their own pies. Even the rich are now finding themselves being gutted by the pie prices and the now insane theft of their incomes and transactions by the town council to pay for pie purchases for everyone else. Now the pie makers are able to gouge prices as high as their hearts desire, but suddenly the town council tells them that prices are going to be fixed at $50 whether the Pie Maker's Association likes it or not. They're used to reeling in bank at this point, are they going to settle for $50 per pie? Well yes, they are. They'd rather make $50 per pie than not make pie at all. But guess what? Those $50 pies are going to have corners cut to reduce pie making costs as low as possible to bring profit margins as close as possible to when they were selling pies at $75 a pop. Guess what just happened? The Pie Maker's association is now selling pies at a similar or even lower quality as Jack's Pie Shop was, but now they're 10 times more expensive and the Pie Maker's Association has a monopoly on the market and nobody can stop them.
Now, you may be thinking,
"Well whatever! Who cares about money when people who would otherwise starve are now getting to eat pie? Lives matter more than money!"
What a silly thing to think. That assertion presupposes that there is no way that these people could get pie if not for the government stealing from the more wealthy. Remember at the beginning of this hypothetical village, when Bob was living just fine when buying pie from Jack's Pie Shop? Sure, it wasn't the highest quality and sometimes it didn't work out perfectly, but nothing can be perfect. People get sick sometimes when they eat the really expensive pies too! What's the difference between the two places to buy pie from, really? Jack's prices were far lower than the big pie places and he was providing a service that people voluntarily agreed to. Sure, they had to have the service and that makes the "voluntary" part hard for some to stomach, but that doesn't change the fact that they have no claim to Jack's labor or property. We live in a tough world. There aren't limitless resources for everyone to share and have a merry time with.
If you haven't already been equating the pie examples to medical care, you really need to get that metaphor through your head. The prohibitions on private medical practice that isn't approved by government sanctioned medical associations and educational boards are morally wrong. Preventing two people from voluntarily agreeing to exchange labor or property is an initiation of force that not only violates the NAP but is completely senseless. "But what if everyone starts going to shady back alley doctors for their medical care!?" Well, I guess the shady back alley doctors are doing a damn good job at a damn good price, because nobody is going to leave their life to a doctor that they don't trust can provide medical care that's up to par. There are always bad eggs, even when the government is involved. Having that extra level of coersion and overhead doesn't make things safer, it just makes them more expensive.
So let's recap what we've got so far.
The government + medical industry == bad. duh
It is bad due to inflation of prices via subsidies and through socialization. It is also bad because it creates unnecessary regulations on who can practice medicine, which creates an artificial scarcity of practicing doctors, thus lowering supply for an ever growing demand. We all know basic supply and demand economic theory. But what we've not discussed is the property side of this industry: medical equipment, drugs, and the like.
I feel like I'm beating a dead horse by going into this, so I'll keep it brief. You can find the history of government intervention in "big pharma" and medical supply companies through a simple internet search that will be far simpler to understand and more organized than I could hope to rehash here. But by creating monopolies through crony capitalism, the United States has allowed drug companies and medical supply corporations to make a killing. The ridiculous prices of these goods due to a complete lack of competition further inflates an already astoundingly inflated industry and leaves everyone sitting on the outside getting screwed. We all get sick, break a bone, or succumb to a genetic predisposition to our body saying "unsheathes katana... heh, nothin' personal, kid" at some point. There's no getting around it as humans. So people, who probably thought they were helping out, decided that everyone deserves to have Grade A++++ medical care whether they can afford it or not. Now everyone is getting Grade C- medical care at prices that, in a free market, even the Grade A++++++++++++ guys wouldn't dream of asking and could never sustainably demand.
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Great post and I wish steemit had a sticky or pin option because this is one of those special posts. ??
Very nice post. I'm amazed how many people don't understand basic economics. It's true that government interference in an attempt to make things "fair" always makes blames capitalism when their policies cause unintended consequences like higher prices. And it's also true that only government policies cause inflation.