Category Archives: economics

is health care a “human right?”

The most important economic principle is the concept of scarcity. Everything has a limited supply. I was talking to someone the other day about the drought in California and wondered aloud why California cannot channel water from the ocean to meet their needs. What I hadn’t thought of was the processes involved in retrieving that water, desalinating it, irrigating it, plumbing it into homes, etc. What we see in California is this stark contrast between a literal ocean of water and a drought, side by side. The drought is caused by scarcity; not only of available water, but also of capital, labor and resources to transform sources of water for commercial use throughout the state.

StatismIdeasSoGoodTheyHaveToBeMandatory

The definition of scarcity seems obvious, but its implications elude people every day. The bottom line is that there is a finite number of any given thing, and a lot of people who want that thing. Thus, we arrive at the cost mechanism. The subjective theory of value (as opposed to Marx’s labor theory) tells us that worth is determined not by the time and effort that went into making something, but by how much someone is willing to pay for it. As a simple example, you go to the store and see an entire aisle of bread. The bread is not exceedingly scarce since there is an abundance of it. Because there is a high supply of bread and a relatively low demand, the price will be fairly low. Additionally, there are several bread-producing companies competing for your dollar, and thus the price becomes lower and lower. The lack of extreme scarcity coupled with market competition leads to a market price that you are willing to pay. You are willing to give up $1.50 for a loaf of bread. The $1.50, in economic terms, is the equilibrium price, where supply meets the demands of the market to give us a price we’re willing to pay. You’ve probably never thought of bread as scarce, but in an economic sense it is since there is a finite amount of it. For example, in Venezuela right now, bread would most definitely be considered scarce. If you needed bread to feed your family or you thought they might starve, you would be willing to pay much more than $1.50 for it since your subjective evaluation of the bread has gone up, and the supply has gone down.

Let’s look at another example of scarcity. You drive out of your neighborhood and some girls are selling lemonade (if they haven’t been carted off to jail for selling without a license). They’re charging $1.00 for a 5oz dixie cup of somewhat-cold lemonade. But it’s hot outside and the stand is right there at your disposal. You take out your wallet and give them a dollar. You didn’t even think twice about the price. What’s a dollar these days? But did you know you could have gone to the grocery store, bought the same $5 powdered lemonade mix they’re using and made it yourself at home for what would have amounted to 25 cents a glass? What does all this mean? Were you ripped off? Did these girls scam you? Did you overpay by 75 cents? Recall the concept of scarcity as it pertains to supply and demand. You had just left the house when the mood struck for lemonade, and theirs was the only stand in a ten mile radius. You wanted it right then, and there wasn’t a lot of it to go around outside these girls’ stand. Your demand was high, the supply was low because lemonade stands around your house were scarce, and consequently the market price was higher than it would have been in the store. I’m inclined to channel my inner Matt Chandler and ask “ARE YOU FOLLOWING ME? ARE YOU GETTING THIS?” To summarize, you paid more for that cup of lemonade because of its scarcity. If there were a lemonade stand on every corner of your neighborhood, the cost would inevitably have come down and you could have “shopped” around. (Unless the kids are unionizing…which wouldn’t surprise me). But because there was only one lemonade stand near you, your evaluation of its worth went up and thus you were willing to pay more for it.

Market mechanisms like value and cost are fascinating. Your super-computer of a brain has been utilizing cost/benefit since you were a baby without you probably ever realizing it. When you were little you decided that it was worth it to eat your greens since you placed a higher value on dessert than the temporary discomfort of eating vegetables.

Consider an engagement ring. We pay hundreds, thousands, and tens of thousands (not me) of dollars for a small circle with a shiny rock on it. There are a limited amount of diamonds and jewelers, i.e. they are scarce, and thus a high demand and low supply means the market cost will generally be high. But if I’m willing to pay what’s on the price tag because it agrees with my evaluation, then I cannot rightly say “I overpaid” or that it was “too expensive.” Only a capitalist system could transform all of the parts and labor required to make an engagement ring and make it readily available and affordable to me, all within a few miles of my house. Not to mention, our system of credit gave me the option to finance it, thus allowing me to trade my high demand (to have the ring now) for a higher cost over time (interest).

Scarcity seems like a simple concept when it comes to assessing the price of a loaf of bread, but a lot of Americans today pretend the rules of scarcity don’t apply when it comes to much more complex issues. As an example, imagine a college-aged kid named Mark. Mark and I plan to meet for coffee but I beat him there and try to go ahead and place our orders. They are out of dark roast, Mark’s favorite. I tell Mark they’re out, and he says it’s no big deal. I say “Mark, I am sooooooooooo sorry they’re out. We would all love to live in a world where there was enough dark roast for everyone, but there’s just not.” Mark says I’m making too big of a deal about it…people run out of stuff. Mark considers himself a socialist. Or, at the very least, he’s left-leaning. Mark thinks things like health care and education and a livable wage should be “universal.” Everyone should have these things, he says. Maybe he can budge on education or even the dollar amount of the minimum wage, but not on health care. Health care is too serious to leave up to the whims of the market. A free market system is okay for things like bread and milk, but not for life-and-death issues, Mark says. In his opinion, America is too wealthy and advanced for a thing like health care to not be afforded to everyone. Bottom line, he says, health care is a human right.

Mark sees zero irony in the fact that the coffee shop ran out of coffee (i.e. they couldn’t even make coffee “universal” within the coffee shop that day), but he thinks something as complex as health care should be a “universal right.”

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“Health care is a human right.”

“Make no mistake about it, thousands of Americans every year will die unnecessarily if the Republican legislation is passed.”

“The United States is the wealthiest country in the history of the world. Our people should not have to beg for their right to health care.”

~Bernie Sanders

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The same points I’m about to make could also be said for education, minimum wage, and a variety of other left-leaning topics, but for the sake of time let’s just look at health care. What is health care? Bernie Sanders would have you believe that health care is this neatly-packaged box that has a lifetime supply of cure-all pills inside. But health care is actually a vast network of facilities, doctors, nurses, financial donors, investors, pharmaceutical companies, equipment and product manufacturers, among others. Not to mention the endless byproducts of health care that are no-less necessary to the process: colleges, doctors, medical schools, construction crews who build hospitals, engineers who design them, plumbers and electricians who give doctors and nurses the access they need, janitors who clean hospitals, blue collar types in foreign countries who assemble and package everything from gauze to mattress pillows, truck drivers who deliver prescriptions to pharmacies, ambulance drivers and first-responders…it goes on and on. It’s even more complex when you consider the extended network of people who build the ambulances, make the cleaning supplies the janitors use, dispose of toxic waste, and infinite other tasks and products. This is no neatly packaged miracle box of goodies. (Although in a free market system, all of these things come together seamlessly. You go to the doctor and poof- it’s all there).

I went to the dentist this morning and the doctor must have used twenty different instruments while working on my teeth. Can you even imagine how those got designed and made and packaged and delivered and cleaned and stored and reordered and restocked?

Back to Mark. Mark completely understood that the coffee shop ran out of dark roast. No big deal, right? It’s just coffee and it stands to reason that there’s not an infinite amount of it. In other words, Mark understood, without saying it, that coffee is scarce. What he doesn’t understand is that everything is scarce. There is not a single thing in the world that is limitless. So it is baffling that people like Mark intrinsically understand the concept of scarcity when it comes to simple things life coffee, and yet, like Bernie Sanders, cannot comprehend why America does not have “universal health care.” People like Bernie Sanders pretend to have the moral high ground, too. You heard him…“thousand of Americans will die” if the Republicans alter or dismantle federal health care as it currently stands. You would think he is the only one who cares about poor Americans that have a hard time paying their medical bills.

How, as a veteran U.S. Congressman, does Bernie Sanders not understand that nothing in life is “universal.” If water in California is scarce, a state adjacent to a major ocean, then how does Bernie expect to bypass the law of scarcity when it comes to the complex network that makes up health care? Here is what Bernie Sanders in effect is saying when he says that health care is a human right, and that it should be universal:

All humans are born with a right to compel doctors, nurses, pharmacists, drug makers, hospital equipment manufacturers, and all others involved in the health care industry to provide their services at a price that is deemed fair by Bernie Sanders.

Because Bernie sees health care as this carrot at the end of the stick, he thinks calling it “universal” is as simple as giving everyone a carrot. But it’s not. Every single facet involved in health care is scarce, from the colleges where doctors study, to the plants where medical tools are manufactured. When Bernie says that access to these things is a human right, he is saying humans have the right to enslave all those involved in health care to meet their need. How else can it be considered a universal right unless every single person has access to it? And since there are more people than there are doctors, the only way to provide this universal right will be via compulsion.

Here is a socialist litmus test (™?):

If you and a doctor were the last people on earth, would you be justified in forcing him to treat you?

Because that is exactly what Bernie Sanders means when he says health care is a human right. By the way, he never addresses the fact that if it truly were a universal human right, he should also be advocating for all of the children in third-world countries dying of diseases. Or does he only advocate universal health care in the United States because his job is dependent on votes from people like Mark who love the idea of universal health care. It’s a fairy tale that helps Bernie sleep at night, with the false and pretentious pomposity that he is doing his part by perpetuating economic myths like “universal” anything.

Replace health care with “Chevy Trailblazer.”

“Chevy Trailblazers are a human right,” Bernie says.

How is he going to implement this policy of ensuring all Americans have a Chevy Trailblazer? They’re no Cadillac but a project of this size will still be expensive. And it’s not as simple as telling everyone to buy a Trailblazer with their own money. Some people can’t afford one. The only way Bernie can provide “universal Trailblazer coverage” is to take money from people who can afford several cars and use it to buy some for people who cannot even afford one. And thus we arrive at the very heart and soul of socialists…violence. They would forcibly take from some to give to others (or themselves), with no regard to the means used to do so. And they would have you believe that they are the ethical ones…that they care about the poor and sick and that you don’t since you don’t support their policy of theft and redistribution. After all though, if Chevy Trailblazers are a human right, who can argue with the methods of guaranteeing that right?

There is much more to be said about how a true free market (completely free from government mandates and regulations) provides accessible, affordable health care, while a socialized system lessens the quality of it while increasing the cost. But that is a topic for another day. The bottom line is that, like the lemonade or engagement ring, every facet of health care is scarce. Because it is scarce, your own evaluation of a given procedure or treatment or drug will determine what you are willing to pay for it. But make no mistake, someone always pays for it, even if there’s an old Senator touting “universal health care.” Recall that the girls at the lemonade stand could charge a higher price since there weren’t other stands (i.e. market competition). The same may be said of health care. When the government regulates doctors, drugs, facilities, premiums, minimum coverages, insurance policies, and myriad other areas of health care, there is a lack of true market competition. And Bernie’s answer to the existing, government-regulated health care  is…“universal health care”…provided and regulated by that same government.

Health care is not a human right.

Chevy Trailblazers are not a human right.

Both are scarce.

Why does admitting the latter make you logical, while the former makes you a heartless person who wants poor Americans to die in the street?

You can desire that all Americans have access to health care, while simultaneously admitting that scarcity impedes that desire.

 

-KF

kollin.fields@gmail.com

Check out the following for more on the topic of scarcity-

Leonard Reed’s I, Pencil

Henry Hazlitt’s Economics in One Lesson FULL TEXT

 

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