We have different economic & market tools. We should use the right tool for the problem.
Some markets are best served with a free market system, others with a single payer system, others with a monopoly.
There are studies (no reference) which indicate that every euro spent by government on education has a 10 times return on investment: better educated people, have better jobs, pay more taxes, create more companies, create more jobs, attract more companies, have less health issues, etc.
Making people pay for their own education, and thereby limiting the education level of the population of a country, a country is doing itself a disservice.
> Dogmas are a disease… We should use the right tool for the problem.
It's bizarre to me how rare this stance is.
I understand disagreement over what exactly the "right tool" is, because these things are complex. But people who believe there is only one right tool for every job -- big government, small government, free markets, more regulation, whatever -- strike me as intellectually lazy.
The US system is actually the worst of both worlds (capitalist and socialist). It combines heavy regulation costs, high litigation costs, high public funding, AND profiteering. Literally anything would be better. It's based on a government-protected trade union married to a system of geographic monopolies... yet it's still allowed to charge whatever it wants to a captive market - and then price discriminate on top! It's overburdened with CYA and barrier-to-entry regulations, yet falsely labelled as "free-market" and "capitalist" by its status-quo PR & lobbyists to get that political support. Same thing as Universities.
If it was truly "capitalist" then literally anyone would be free to hang a shingle and provide medical services (kind of like car mechanics), there would be competing professional accreditations (trademarked brands) as well (kind of like private technical certificates). But when the "market" is so perverted, "capitalism" (whatever is left of it) gets a bad rap because the incentives are fked to begin with.
There are negative side effects of capitalism for sure, but it's possible to identify these effects and work to counteract them.
In a democratic country, the populace regularly campaigns for new regulations to counteract some of the bad behavior incentivized by capitalism and the negative externalities produced by capitalism. We're chatting in a thread about California banning private prisons, for example.
In fact, I'm not even sure regulation by a state is something opposed to capitalism. Rather, regulation enables capitalism.
One could view capitalism as a system of regulations that attempts to limit the ways that people can profit from one another, ideally by limiting them to value-creating activities, but at a minimum blocking them from nefarious and value-destroying activities. If you want money, it's far easier to take it by force, or trickery, or monopoly, or coercion, or bribery, or espionage, or cutting corners, or nourishing addiction, or any number of unsavory things.
Capitalism is an attempt to cut off these options, at least to the extent that many people abandon them, and instead decide to create value for others instead.
The problem is that those who get unfathomably rich off of "business" will employ this tremendous power to erode the barriers between what's an acceptable business venture and what is not.
Capitalism is not a "disease" really, it's a legacy system whose fundamental mechanisms are becoming an increasingly large source of dysfunction.
Nonsense. There are things where the pricing mechanism of allowing free enterprise allow us to search for and converge to an optimum. There are other things where information asymmetry, problem opacity, and transaction costs mean that it's better handled a different way.
It isn't an ideological problem. You'll see this choice in places like companies, where people band together to solve a problem rather than invoicing each other to get to some objective.
I don't disagree, but our current socioeconomic/government system leads us to wildly bad situations where we have privatized industries hellbent on extracting every last cent possible from disadvantaged populations (in every sense of the word) and then using that money to further their aims and resource extraction via influencing legislature.
It spreads, it's self perpetuating, it's sick, and it is a disease.
I am in agreement on there being a problem where you can turn money into legislation. That does destabilize the system through regulatory capture. Haven't encountered satisfactory solutions yet.
That's markets, not capitalism. Capitalism is specifically the arrangement where the means of production can be bought and sold (on the market). It's only been around since the industrial revolution - prior to that the means of production were too simple to do this sort of thing with, and there was just land and labor. Markets have been around a lot longer.
Non-capitalist but still market-based systems are possible. You can have worker ownership (worker co-ops like Bob's Red Mill), consumer ownership (consumer co-ops like REI), state ownership (national healthcare or municipal utility companies), or some mix of them. These organizations can and often do still compete with each other on the market.
Capitalism is great for some things, and awful for others. Capitalism works best when there's no power differential between customers and service providers because the goal is to maximize profit. If my choice is to pay for cancer treatment or die, you can (and do) charge me literally whatever you want in a capitalist system. If I get no choice in which prison I go to, well, I get bilked.
Basically anywhere you have no choice should be socialized or two-tier: Medicine, Prison, Army, Education.
On the other hand, nobody's forcing me to buy phones.
> If my choice is to pay for cancer treatment or die
In a socialized medicine system, someone else is making this choice for you. Medical costs (drugs, doctors' education and time, research costs, equipment) are unbounded, while resources are not (no matter what kind of insurance you have), so tradeoffs have to be made. ("What? My daughter is dying from an extremely rare disease and you're not having 1000 PhD researchers working on the cure?! You're spending the resources on curing breast cancer instead?!? WHAT IS WRONG WITH YOU!!!") AFAIK (though I haven't deeply researched this topic) society-level recommendations aren't made on what is best, but on what is most cost effective (e.g. how often you should have mammography, when you should start having regular colon cancer scans) so it's perfectly reasonable, if you're rich(er), to supplement the public medical system with some extra resources of your own to improve the health outcomes of yourself and/or people close to you. In addition, that funds new research (e.g. the anti-aging craze currently happening in SV, funded mostly by rich billionaires that don't want to die... the medical system doesn't even recognize aging as a disease (so drugs can't be approved to be "anti-aging")!)
In a capitalist system someone else is making the choice for me too: VISA. I’d rather the government take a wholistic view of resource allocation than a luck based bank account balance strategy.
> If my choice is to pay for cancer treatment or die, you can (and do) charge me literally whatever you want in a capitalist system
One provider might charge a fortune. But then another will come along and realize he can get all this business by charging slightly less than a fortune. Then another comes along and charges slightly less. And so on until they are charging just enough to make a slight profit.
That’s how a healthy market works. But if you put up tons of barriers and rules about who can provide a service and how the service must be performed, the whole competitive system breaks down.
Might I suggest perusing the Farm Bill? The government is literally paying farmers to grow crops people wouldn’t pay for. That doesn’t sound like a very free market system... frankly I wish they’d stop.
That's to insure we aren't undersupplied on food and famines caused by a bad season/trade with another country are absolutely terrible. Seems like a cheap insurance for a terrible possible outcome especially considering that any consistent oversupply from the subsidies will get weeded out due to the subsidies.
Would you prefer a shortage of food every few years?
That hardly supports your argument that it’s a free market, and that’s the point I was making. The rest was an aside. I don’t know there’s evidence that not subsidizing corn (the vast majority isn’t for human consumption anyways) to below the cost of production is the only way you ensure lack of famine. Either way I’m not sure why this socialism is okay but medicine is beyond the pail.
For instance grain crops can be stored long-term by the government [1] and of course so can raisins [2]. None of this has to do with the farm bill.
> If my choice is to pay for cancer treatment or die, you can (and do) charge me literally whatever you want in a capitalist system.
Erm, no. Because if people can't pay for it, then your drug get no sales, and you lose your investment. The problem right now is that there are several payers involved and nobody sees the real cost of things. Were you to pay directly for drugs from your own pocket without intermediaries I'd wage all drugs would be way cheaper.
Tell that to your $600 epipen. Seriously. Canada doesn't even have socialized drug insurance for prescriptions and it costs $100 and in the UK $38. Drugs would be, in a perfect system with no socialist intervention, priced at whatever value they provide you. If that's your life, it's very expensive. There's no room for mercy in capitalism.
There's a reason Sovaldi is $84,000 and it's not because it costs a lot to make. It's the same reason as soon as they realized that you could treat cancer with Thalidomide the price rose two orders of magnitude.
this is not how prices work. consumers only pay the maximum they would be willing to pay for a good when there is only one provider. when there are multiple providers prices are pushed down to the cost of production. or so the theory goes.
* caveat: Assuming no power disparty between buyers and sellers.
If you need something more than the seller needs your money they're free to adjust the price up no matter how many of them there are. For instance, a hurricane comes in to town. All of a sudden, every gas station is charging $50/bottle for water and $10/gal for gas, even though the market is no more or less competitive than the day before when they charged $2.50. Externalities matter. Gouging like this is illegal in the event of bad weather but it's the status quo in the event of bad health, and much of the time, you exert equal control over both. The only real difference is one tends to skew acute and the other tends to skew chronic, I guess.
Sure I get the theory and I actually buy into it. However I’ve been on this earth long enough to know that theory doesn’t match reality a lot of the time and that’s when then the government should step in and right the scales.
> Canada doesn't even have socialized drug insurance for prescriptions and it costs $100 and in the UK $38
It's kind of easy for a country to dictate drug prices when they had no hand in developing them. Now show me a country like the US that develops just as many drugs. Ah, you can't, there is none.
You really aren't making the point you think you are. We are talking about a drug discovered (Poland) more than 100 years ago, isolated (Japan) more than 100 years ago, synthesized (England, Germany) more than 100 years ago. Then wrapped in a device basically developed by the US army in the 1970s. So how does letting an mostly uninvolved private US company set prices arbitrarily lead to more of this sort of development? For completeness, I'll note Merck did real work in improving the delivery mechanism (after a couple of recalls), but the heavy lifting was as above. Merck is of course German, not US, but it went through one or two US companies before landing there, if I recall correctly, and then Mylan acquired marketing rights in the US. Without new development, Mylan ran the price up about 6x over the 2009-2016 years (to a margin of about 95%) , which is what caused all the pricing fuss.
More generally, while I know what you are getting at you have to be careful with this sort of statement "this is the only way to do the drug development" is a pharma industry talking point but it is largely bullshit (although not entirely, the model run in the US does make it quite expensive and that can't be fully supported the way it is on, say, generics pricing).
It is true that the US is more productive in this space per capita than most places (but not as much as many think) , but it is really difficult to determine if this is primarily due to fundamental capacity, or due to financial incentives...
And check where these R&D spenders make the most money in the world. In the US. There would be no such level of investment if the US market did not exist.
Note, per capita it looks like most of the countries studied are discovering new drugs (in the study's terminology "new molecular entity") at much faster rate than the United States when adjusted for population.
The money quote:
" Our data suggest that the United States is important but not disproportionate in its contribution to pharmaceutical innovation. Interestingly, some countries with direct price control, profit control, or reference drug pricing appeared to innovate proportionally more than their contribution to the global GDP or prescription drug spending"
Denmark is so tiny compared to the US, it hardly makes sense to compare drug discovery per cápita. If Denmark happens to release just a single extra drug one year, it totally shifts their ratio.
Drug prices have absolutely nothing to do with where the drug is developed. AstraZeneca being Swedish never prevented Swedes from having a yearly out of pocket maximum at $120.
Roche, Novartis, AZN, Novo Nordisk, Sanofi,GSK and on and on. You could hardly pick a worse sector than healthcare to make this kind of nonsense America first point.
why does the healthcare discussion always regress to capitalism vs socialism? everyone cites canada as the ideal model of social healthcare but forget to mention the long wait times and the fact that their population is only a fraction of the US. i think our system could use some tweaks but throwing it out altogether for a socialist program is not it.
No we cite the entire OECD except America each of which rank higher in healthcare quality by WHO standards and cost at most half as much. It’s like a poor student saying “just because I’m the bottom of my class doesn’t make me dumb” — in a way, no but in a much more relevant and important way, definitely. It shows relative to your peers you suck at the task at hand.
It comes down to this debate because the pro market people offer zero solutions other than staying the course and the course is straight down. Offer something better.
> the fact that their population is only a fraction of the US
I don't understand why that matters. But if it does, couldn't the US implement social healthcare at the state level? Canada and California have roughly equal populations, for instance.
They totally could but for some reason no state does... Instead, I only see senators, representatives, and potential presidential candidates trying to force it upon the entire country. We are the united states, let individual states start the process and let it bubble up to the federal level once enough states enable it just like we are doing with marijuana laws.
IMO, the federal government has been getting too large just like how they dangle interstate highway funds from states for enforcing the stupid 21 year old drinking age.
> They totally could but for some reason no state does
No state alone can, because it would have (or at least would fear) a large influx of people coming for the free healthcare. If enough states set up their own systems and make them interoperable, it might have some legs. I hear rumblings of this from time to time,
What I meant was a federally-mandated, state-implemented system. Federal law can define a minimum level of healthcare that every state is obligated to provide. States set up and administer their own systems, any way they want - single-payer, mandatory private insurance etc. Isn't that how Canada actually does it?
It handles the "US is too big" objection to universal healthcare that everyone loves to bring up, by moving the systems to a lower level.
Capitalism distills incentives. It’s hard to think of a poorer incentive structure than that between prisons and prisoners. For healthcare, there is a mix of incentives, some of which incentivize improved quality and quantity of care. For prisons, I can’t think of a single incentive around capital which could lead to better outcomes for prison life compared to a public structure.
Absolutely. For example, from a societal perspective, reducing recidivism is a huge win. from the perspective of the operator of a private prison, it's lost profit.
