Sunday, March 11, 2007

Wal-Mart, health care, and irresistable market forces

Bo's post today about Wal-Mart made me think of an excellent definition, thanks to Byrne's Eye View:

Economic system under which any legitimate complaint can be rephrased as a decent business plan…

Bo's complaint is about customer service: it can take a long time to get in and out of the place. In a free market, goods are allocated by price and by time. When we think of Tiffany & Co., for example, a price tag with many digits comes to mind, but if a customer walks in weary from hauling around so much cash, they'll graciously relieve him of that burden.

Wal-Mart chooses the opposite corner: low prices but slow service. Target's business model attracts customers with more money to spend, and they do it with features such as cleaner stores and better customer service, which their customers value more highly than the few extra dollars that they trade in return.

Even deeper in the corner of low price and long lines are the popular proposals for "free" health care. (As P.J. O'Rourke quipped, "If you think health care is expensive now, wait till it's free.") The "free" health care in Canada and the UK are characterized by long waiting lists -- which exist for exactly the same reasons as the bread lines in the Soviet Union.

Economist Ludwig von Mises wrote, "Even the most mighty government, operating with the utmost severity, cannot succeed in endeavors that are contrary to what has been called 'economic law.'" The mighty United States government has sort of a pilot program for "free," "single-payer" health care: the VA's frightening maze, and, boy, is it a success!

I'm confident that the calls for "free" health care are well-meaning, but their inevitable result would cruelly force everyone into the same trap -- while politicians insult everyone with unending proclamations of success. (Don't be surprised if members of the congress also give themselves a "special" health care system just as they did with Social Security.)

The lesson is simple: there ain't no such thing as a free lunch.


saintseester said...

My sister's husband is Air Force. The grand experiment on socialized medicine is being taken out on them. Ask her how she feels about it.

I was visiting her last year. Her daughter was very sick (fever, vomiting, sore throat). I told her I thought she had strep throat but it was friday evening. She called to get permission to go to the urgent care on base. They told her no, if it wasn't going to involve loss of life, limb or eyesight they had to wait until monday.

So she went to a walkin clinic, paid for it herself. It was Strep. Can you imagine a child having to suffer that for 3 days before being treated? That is what socialized medicine buys you.

I also hate it when people complain that their insurance doesn't cover everything. Why should it? I think we should all be repsonsible for everyday ills, meds etc, and insurance should only be for the over and above, like appendicitis or a longer term illness. Not a sinus infection.

Anonymous said...

What a capitalistic view of an essential service. Obviously you know nothing about socialized medicine beyond what the United States air force has to offer you. I used to get strep throat every year when I was younger, always around February for some odd reason and do you know what socialized health care bought me, a two hour wait at a satellite clinic and a prescription I could pick up for free the same evening.

It amuses me that a tax payer can release even more of their money for their health and expect nothing but road services and military from their taxes. I'd rather wait in pain for a year on a 'bread line' than spend the next fifteen years trying to pay for it because my insurance company doesn't feel my coverage is adequate. Bravo to both of you who can obviously take care of yourselves so well