This has to be one of the worst explanations of why medical costs are high. But what is terribly horrifying about it is that it is from someone who is supposed to be a free market champion.
He’s wrong about the technology cost. Technology makes things cheaper, not more expensive. Otherwise, how would you explain that LASIK is cheaper now than years ago?
But at least he’s against government healthcare, unlike most Americans, it seems.
sure. over time greater technology in capital goods lowers costs of the products that they produce. rather he is choosing to emphasise that more technologically complex consumer or end goods cost more than goods that can be produced with fewer/cheaper resources.
of course he could say so much about whats wrong with the price system with regard to medicine but you would be reading a book so he made a simple point that government can’t hope to vanquish the costs of provision at the stroke of a pen. which suprisingly a lot of people need explaining.
He sounds like someone who doesn’t have a clue about the enormous inefficiencies of the healthcare system due to the government already subsidizing and regulating it. It doesn’t sound like somebody who understands anything about why or how markets work and why socialism doesn’t.
are you familiar with Sowells writings outside of this? I am, and so I will give him the benefit of the doubt by considering his audience etc.
I have read some of his articles in the past. I always found some of his technical arguments somewhat weak or insufficient. He’s a mixed bag for me in general, but this particular article is simply inexcusable. It is not weak but simply false! It sounds like something a Conservative radio talk show host would use.
it might be weak considering other things he could have also said about cost of medical care. but I can’t find what is out and out false, what is a fallacy. are you sure you arent strawmanning him?
Also, notice that he is using cost theory analysis as oppose to a value theory analysis to explain prices. Is he tired, drunk, or what?
Everything about his analysis is false! He is basically saying that prices (and services) reflect the wishes of consumers. As if the demand is driven by a free market.
there is a place for cost theory analysis and he used it non-fallaciously from what I can tell. I can point you to some reisman on topic. if you pushed him he could go on to explain how costs are determined by supply and demand for factors of production through subjective valuation of buyers and sellers, but her hardly needs to do that here.
ceteris parabis if customers demand switches from other uses to focus on some popular product suddenly prices of that product will rise, until the production process can be realigned and then prices might start to fall again. of course if government hampers the realignement the price will remain elevated, strangulated supply, false scarcity.
He is claiming that consumers are paying more for healthcare here in the US because we are getting more bells and whistles. There is nothing even close to free market medicine here in the US. Why is it so difficult to explain this to this Conservative audience? His analysis is counterproductive. It perpetuates the myth that we have a private enterprise health care industry. This plays right into the hands of the socialists.
he doesnt say thats all there is. but its one factor. in fact, a lot of the bells and whistles stuff comes about from government regulation, mandating ‘cadillac’ healthcare when some people would rather volvo’s etc.