Category: free market

Categories
economics free market freedom

What capitalism is

In my last post, I gave a defense of capitalism against a common critique (it’s exploitive, it’s evil, etc.) but I didn’t really talk about what it is. Capitalism is what happens when people are free to make the most of what they have. People have skills, education, money, land, etc. and they want to use those things to better themselves. That’s capitalism. It is something that occurs naturally, it isn’t something you can legislate or put into action from on high. A government can do little but impede it. Capitalism is a “ground up” as opposed to a “top down” phenomena. Clearly, free trade is involved in this too, they are related, but not exactly the same thing.

Here’s the thing about capitalism, what it looks like will vary depending on what system it is in. What many people decry as capitalism is really the effect of being in a system where influence is being sold. There is a big difference between crony capitalism and free market capitalism. Here in the US, companies routinely get special breaks, incentives, and outright subsidies from the government. Strangely enough, people tend to get angry with the companies instead of the system that allows them, encourages them actually, to purchase that influence. Why get angry at the people asking when you cold get angry at the people selling the influence? Cronyism is a feature of a government with too much influence.

Capitalism happens regardless of what system is implemented in the government. The uglier the capitalism is, usually the stricter the government control of it is. The overall impact of capitalism will be better the more freedom there is. Black markets usually breed violence as they run up against government authority. With true free markets, violence just isn’t worth it. Free markets also allow people to improve themselves as they accumulate capital. That capital may be in the form of money and the things you can get with money, but often times it takes the form of improved skills. This is why easy entry into the job market is so crucial. Developing skills is the surest way to increase pay. If you have no skills, or very few, you are going to have to start at the low end of the pay scale. As you develop more skills, capitalism will allow you to parley them into better jobs. Having a large pool of skilled workers will allow countries’ overall wages to climb.

 

Capitalism is something that is done by individuals trying to make the most of what they have. INothing wrong with that. n my view, anything that tries to limit that is the true evil.

Categories
free market freedom

Self sufficiency and freedom

 

Our entire way of life depends on others doing lots of work for us. We do our work for them as well. It’s a great system. You do what you you can to help other people, and they do what they can to help you. Isn’t it great to have other people do things for you? It’s especially good since I have no idea how to make a lot of the things I use. We all barter our labor for the things that we want through the intermediary of money. You work and are given IOU’s to other people’s labor in the form of money. Other people will do almost anything for you in exchange.

When viewed in this way, it is easy to see why a society based on freedom of exchange works so well. It gives all of us the most varied products and services and the lowest prices. When you see money as the way to barter your labor for others labor, paying low prices seems even better! Cooperation is the name of the game, and freedom is the cause of it, and the result of it.

People that espouse “self sufficiency” have a general distrust of this idea of free cooperation. In my more cynical moments, I get the feeling that they just distrust people in general. Self sufficiency is the road to privation. You spend much more of your most precious commodity, time, on things that could be gotten much more easily with exchange. Cooperation and exchange is the two laned road to abundance and freedom.

There are people that espouse the idea that we should grow our own food, raise our own animals, and do our own canning (canning for God’s sake!) in order to pursue freedom. All that stuff is fine if you enjoy doing them, but don’t pretend that you are any more “free” because you did it yourself. Don’t kid yourself, you have given up a lot to do those things.

Our current wealth is evidence. I once asked my grandmother why she didn’t can things and make pickles anymore. She gave me a look that I’ll never forget and said, “Because I don’t have to anymore.” Canning was hard work and it simply wasn’t worth her time. She would have laughed in my face if I had told her that some people think that canning is part of the formula for freedom.

Go shopping for the things you need, work for other people’s benefit, and enjoy the extra time you get instead of doing everything yourself. What could be more freeing than that?

 

Categories
free market

The best sentence I read today

“In other words, I’m not in favor of business. I’m in favor of competition.”

That’s from Megan McArdle, a really good blogger from the Atlantic. She has a knack for explaining things from a libertarian point of view very well. I highly recommend checking her blog out.

Categories
free market freedom of choice medical politics

Something has to give

I’m trying to keep up with the whole health care reform thing, and it’s making me question my sanity. I thought that the pressing issue was how much our health care cost, but now it seems like “coverage” is the big thing. The real problem is how we imagine health care should be. The ideal coverage doesn’t cost us anything and treats everything. Clearly, that can’t happen.

I got this comparison from Penn Gillette of all people… Imagine that we had “food insurance” that worked the same way as our health insurance does now. Do you think that the prices of food would rise if there wasn’t any incentive to look at how expensive things are? If our insurance covered everything (and what good is insurance if it doesn’t?), we would buy the best food all the time. In addition, all of the people that made food would make more and more expensive food. In other words, the good things about a market would get turned on it’s head and we’d have ever increasing costs instead of competition driving prices down.

I do think that the price we pay is way out of whack, but I don’t put the blame on greed, I put it on the fact that our incentives are all screwed up. If you wanted to get philosophical, you could claim that greed is what causes people to want services at either no cost or very little cost to them… but I would never do that.

We need insurance to be more like our home insurance or car insurance. Those policies do not cover everything, they are there for catastrophic losses. The typical health insurance tries to be exhaustive. What ends up happening is the worst of all worlds. We end up paying for our health care in installments AND we get the high prices from the screwed up system. Yes, we should insure against really bad things happening, but we have gone overboard in insulating ourselves from the cost of things, our current system is the result.

Needless to say, the 1000 page monstrosity that is being worked on up in DC is nothing more than doling out favors and scoring political points. I am very certain that whatever comes out of that process will cause prices to go up even more, our quality of service to go down, or some other really bad outcome. The political process is not a very good tool for problems like this, look at what it has already done! If more people would realize what has happened, we wouldn’t be turning to the same people that screwed us up in the first place.

Categories
economics free market medical

Another rant on medical costs

I’m getting another blast of medical bill nuttiness. Where to start…

As you may know, my insurance company has been denying all claims. I’m not going to get into that here, the upshot is that I’m getting the bills. I have had some success with negotiating lower prices at some places, my neurologist’s included. A big part of this negotiation involves me whipping out a credit card and actually paying the bill. Getting paid right away is a big incentive, at least to some people…

I needed a spinal tap, so naturally I was worried about the price. I knew that I could work with the neurologist’s but they made it clear that they lab costs were out of their hands. OK, maybe if I contact the lab and work out something before the test, I can work a good price. Hoo boy. I called my neurologist’s office to find out what lab they are using. I then called the lab. They directed me to another number for billing questions and then they sent me back to the lab. At that time, I was only trying to get a price. It turns out that the person I needed to speak to had already left.

So I went and got my spinal tap the next day, and at the lab I told them that my insurance wasn’t going to cover it. I asked if they had a discount for prepayment. They said they used to, but they stopped doing that on April 1. They did say I could pay for a third and then fill out a form to see if Riverside medical would be willing to forgive the rest. Um, OK. Can’t you do something now, I would prefer to pay now. They would do that only if I paid the entire cost. They would not move an inch.

I got a similar run around with some of the other doctor’s offices I dealt with from Riverside Medical. When I call to the office, they say they do not handle the billing. When I call, they are not willing to lower the price at all even though they were willing to accept my insurance company’s much lower payment. It was common practice for my mother (an orthopedic surgeon) to charge a much lower rate, usually the medicare rate, when the patient didn’t have insurance. So what’s going on?

What my neurologist’s office and my mother’s previous office had in common is that they did their own billing. All of the other people I have dealt with have others do the billing. Why does that matter? It matters because when I deal with people at the other offices, they don’t care if I pay or not. It isn’t their job to collect, their job is to do the paperwork properly. As a matter of fact, they have been conditioned to not get involved in the money aspects of the business, it is uncomfortable and messy. They insulate themselves to the point that they have no idea what things cost.

The problem is that the prices that are charged are set with the idea that the insurance companies will pay a fraction of that. If you do not have insurance, you are stuck with a much larger bill than the insurance companies would get. This isn’t necessarily a problem, reasonable people can quickly come to an agreement based on what the insurance company or the government pays for any given procedure. The key is that the other side has to be interested in getting paid, they have to be willing to make a deal. The companies that do not handle their own billing and the billing companies that do it for them are not interested. They just want to do their job. If you pay, you go into one slot, if you don’t pay, you go into the other…

All of this has had the perverse effect of making it attractive for the medical claim to go into collections. You see, the collection agent is paid based on their ability to get money. They have every incentive to get money, so they have every incentive to wheel and deal on the price. They would be ecstatic to get half of the bill paid. They take their cut, and the rest goes to the medical company. It’s their own stupidity and the incentives set up by their structure that prevent them from getting that money in the first place.

Categories
free market

Chinks in the shaving cartel’s armor

How often do you wince when you go buy shaving supplies? How often have you noticed the quality of the older, perfectly adequate, blades go down after the introduction of the newest multi-bladed contraption?

I got on a kick the other night trying to figure out why the ultimate shaving system hadn’t been invented yet. Turns out that it has been, and quite a while ago. The straight razor is capable of giving you the best shave that you can get. On top of that, you only ever have to buy it once! The folks over at straight razor place have all of the info you’ll ever need on the subject. It turns out that for a little over a 100 bucks, you could be set for the rest of your life when it comes to your razor.

Too scary? Too much work with all of the stropping and honing and whatnot?Well, there’s always the so called safety razor. These are the once ubiquitous razors that take double sided razor blades. By all accounts, they shave as well as, if not better than the newer many bladed razors of today. The best part? You can get the blades for about 18 cents a piece if you’re willing to buy a bunch of them at once. Here’s a little trick that my dad told me; once you think the blade is too dull, just flip it over! I think that skin acts like an excellent stropping material, making the other side a great shaving surface.

Don’t forget the shaving cream! Use shaving soap instead of the stuff in cans. Just doing this will get you a much nicer shave. The soap is incredibly cheap, wal mart sells a shaving set that has the soap, brush, and a cup for the soap for $7.50. Soap refills are around $2.50. It’s like shaving with skin lotion! Not only am I getting a closer shave, but my face feels great afterwards as well.

And this isn’t just for the guys, you ladies can benefit from this old technology too! So far I’ve only tried the soap. Once I run out of blades, I’m ordering a safety razor. One day, I might try a straight razor, but luckily for me I don’t have a very tough beard, so I doubt that it’ll be necessary. Stop spending so much money for inferior products! Go back to basics, you’ll thank me!!!

Categories
free market medical

Shopping for medical care

For those of you not in the loop, I’ve been going to different appointments trying to figure what’s wrong with me. I have what I think is a good doctor and he’s being very methodical. The sad thing is that I wasn’t overly worried about what was going on until I went to a doctor and then found out how serious it could be.

We’ve gotten the really nasty diagnoses out of the way, not without a little sweating though. I don’t have ALS or cancer… The next big thing to rule out is MS (I’m thinking positive), but to do that I need some MRIs done.

I found out tonight that my insurance is denying all of my claims so far so I have no reason to think that they’ll pay for my MRIs. That’s a bit of a problem because they are pretty expensive. I’ll find out on monday, but I’m willing to bet that the price is between $1500 and $2500 each, and I need two.

It turns out that there are places that have discounts if you pay up front. And I’m talking about some serious discounts, I can go up to northern Virginia and get an MRI (with a radiologist reading) for $630 each. Yeah, it’s a three hour drive, but what the hell, it’s worth the savings!

I am going to call up the place that is scheduled to do mine on tuesday and see if I can’t negotiate a better price and use this other location as their competition. It’s worth a shot. If they can get close, I’ll do it here instead of driving. We’ll see just how much of a business it really is and how willing they are to move their price in order to avoid the complications and hassle of insurance.

Even if they don’t budge, I’m happy that there are alternatives. That’s the way it should be, competition is good for us!!!

Technorati Tags:
, , ,

Categories
economics free market

More wisdom from the Austrian school…

The story is told that Ludwig von Mises was once asked, “Do you mean to say that the government should have done nothing during the Great Depression?” Mises responded, “I mean to say it should have started doing nothing long before that.”

The point being that it isn’t enough to “do nothing” once a bad situation comes up. I certainly advocate non-intervention in market processes but the important thing to remember is that there hasn’t been a major economic “crisis’ that wasn’t fueled by government distortions and incompetence. I may sound like a broken record, but it’s true. Systematic collapse and long term depressions are not possible without government meddling.

HT FEE

Categories
economics free market politics

Hate to say I told you so

GM is looking for more money. Let them go into bankruptcy already. People are going to get fired in any event, we should allow the things that are worth something to be sold and the rest go away. Why are we being saddled with keeping this failed corporation alive?

Technorati Tags:
, , ,

Categories
economics free market freedom politics

Two sides to everything (pt. 2)

I don’t want anyone to think these are the only reasons that people would be for or against the stimulus bill. There is always the possibility of stupid partizanship. I’m ignoring the possibility that people are for it/against it simply because of who proposed it. There are also an infinite number of variations on what Ihave written, but I’m trying to paint with large strokes in order to simplify. I’ll admit to having a little trouble with characterizing the group that is in favor of this “stimulus” bill, but I will try anyway. Please correct me if I’m way off…

At their best, the people that are in favor of this bill are worried about the general public’s welfare and believe that the government has the power to make sure that everyone is cared for. There is a deep belief in the power of the government to work for what is right and true. Underneath this belief, there seems to be the usually unsaid understanding that all things economically flow through and come from the government. If the government doesn’t do it, it won’t happen. They believe that morality should be the basis of government and that no “good” person could really be against a government made this way.

At their worst, the people that are in favor of not only stimulating the economy but in all of the other things that are in the bill are technocrats. They believe that they know what is best for everyone in this country. Underneath this belief is the understanding that people at large can’t be entrusted to take care of themselves. Not only are people stupid, but they should be actively discouraged from doing what they think is best. Somehow, even though they are stupid, they are still the technocrats burden and must be cared for…

Once again, the more extreme view is pretty out there, but they do exist. How often have we heard the phrase, “They should be sterilized?” I know, that is usually said in jest, but it points to a deeper feeling of “We are in the right and they are insignificant.”

Don’t jump on me, I know there’s a wider spread, but these seem like they are the two extremes of the people that favor this bill.

I do have some big problems with even the best case scenario I’ve outlined above (the worst case I won’t even dignify with a critique). First, I don’t see any evidence that the government has “our” best interest at heart. That is tied up in my second issue in that the government keeps changing. Even if we were to elect a government that is pure in word and deed and had perfect foresight, that government would change. I think it is telling that the people that have the above belief only have it when the “right” people are in office. No one ever seems to connect the dots in the fact that if a government has the power to do good, it also has the power to do evil. I worry about the power, if they don’t have sweeping power, it matters much less who is in charge.

The third thing that I don’t like is that there have been governments based on the principles outlined above. They have been formed with the stated goals of equality and justice and have all been nothing but evil. The Soviet Union, Red China, North Korea, etc. What needs to be emphasized is not that the wrong people were in charge, but that people like that will always be drawn to lead governments like that. While I don’t think that our government is in danger of becoming like those, I am very worried about those types of people being drawn into the government because of all of the power they can wield.

This isn’t a left/right or republican/democrat thing. This is all about what people believe when it comes to the government’s role in our lives. I’m willing to bet a lot of people don’t give it much thought and I’m also willing to believe that the majority of people in this country believe in what I have described above. I’m just hoping to make my point and tell people why I am against this and not be seen as an uncaring person or a partisan hack…

Technorati Tags:
, , , , , , , ,