I am writing a paper on Heath Care policy and I am reading an article by Krugman http://www.nybooks.com/articles/18802 . In it he states that a free market can’t provide health insurance properly because the people who end up getting insurance are not the ones who need it (end of section 1 in the article). Can anyone shine light on what is possibly wrong with his argument and any sources arguing against this specific point? Any help would really be appreciated.
Does Krugman just defend every piece of crap that comes out of mainstream liberal politics? Sheesh.
This basically falls under a redistribution of wealth argument. Some people are haves, some people are have nots. Bad things can happen if you are a have-not, so the haves must be forced to give you stuff.
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Violation of self ownership, individual liberty and free association. A sick person has no right to my labor. It must be given by consent. Case closed.
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Subsidizes non-production, punishes production. Oh those evil capitalist rich people. They have so much money!!!
Well this is mostly due to state interference. Theoretical arguments aside all the biggest industries are also the most regulated (health care, insurance, banking etc). Everyone complains about the high costs of THESE industries, but if you look at the relatively free market industries, like consumer electronics, hygiene, and the like, the price of their goods (as well as their profit margins) approach zero. No one complains that poor people can’t afford toothpaste and soap, or that that greedy Sandisk corporation is a monopoly run by fatcats.
In short, wealth redistribution only seems necessary because the rich get richer and the poor get poorer. Basic Austrian econ theory predicts the opposite will happen in a free market. From the fact that I can buy a 2gb MP3 player for 15 dollars, I think Austrian theory about free and open markets is true.
- Krugman (KRUGMAN!!!*) also criticizes the profit in health care, but profit is a signal for entrepreneurs to focus their efforts in this sector of the economy. Being a profit seeking entity is only bad when you have no competition because you can charge whatever you want. Being a profit seeking entity is good when you have competition since you have to offer better and/or cheaper services than your competitors.
So it should be no surprise that health care costs are skyrocketing! You have profit seekers with no competition! Between the FDA, Intellectual Property Rights, Certificates of Need, the AMA licensing monopoly… sheesh.
Ask anyone what they think would happen if they gave intel the right to license computer science majors, stopped electronics from japan being sold in the united states, and if best buy had to give permission for other electronics distributors to set up shop in their city… The obvious answer is cost up quality down. Derrrrrrrp.
*KRUGMAAAAAAAAAAAN!!!
Shine light into the stupidity of Krugman?
OK, according to Krugman,
the people with Auto insurance who haven’t wrecked their car [yet] don’t need insurance, and those who already wrecked their cars and didn’t have insurance before hand are the ones who actually need it. Yes, the above is a very stupid statement, but that is exactly what Krugman just said.
The problem stems from people confusing health care with health care insurance.
Krugman is an ivy league professor who doesn’t know what insurance is.
The only solution to getting people affordable health care is the free market as the free market is the ONLY human institution that rewards those who supply those products and services demanded by consumers and gives incentive to produce those products more efficiently that ends in reducing the prices charged for those products and services. That having been said.
Krugman is correct for the most stupid of reasons, he is using the insurance to cover something that is not insurable. Insurance is a contract where an individual pays a speculator to take the risk of an unknown event occuring. Krugman is asking the specualtor take the risk when the event is known. This is not insurance but pre-paid health care. So with a little slip of the terms anybody can be correct.
Understand that the sad thing about what Krugman is saying. He is saying that only government can provide the uninsurable insurance as if the insurance is what is valuable not the health care it pays for. So instead of having the invisible hand reduce the prices of health care products and services, he is wanting bureaucracy and force to take over the health care business to insure the uninsurable with the predictable result that health care will be worse and higher in price for all.
A better plan to provide people affordable health care instead of centralizing the delivery of the product would be to do the following:
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Eliminate licensing of medical providers.
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Eliminate the FDA and patent protection that gives certain suppliers monopolies over the sale of drugs and devices.
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Allow interstate and international purchases of insurance.
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Eliminate all state and federal and local mandates on insurance and health care providers.
/thread