I watched a response by HowTheWorldWorks to a YouTube video about high-drug prices, and how the market based system is not a good method to deal with drug production. I am not really such a big fan of HTWW because he is a conservative, though his economics are pretty good for a conservative. I thought he had a great response: http://www.youtube.com/watch?v=ZFWTCBjtZa0
When I heard of the criticism that the market based system does not address important diseases, like malaria, instead of hair-baldness, because of the higher profit involved, I thought of an immediate logical conclusion from that. Car companies can earn more money selling expensive cars to rich people. But somehow there are cheap cars and expensive cars, both for rich and poor people. But what kind of a fallacy is this? It feels like this is some sort of comparative advantage law, but I am not able to sort this out. Is there a name for this economic phenomenon (that is, why are products and services produced to poor people even though there is more profit avaliable in producing them for rich) ?
MaikU, HTTW is an atheist. He's actually mentioned that he's one of the few "conservative" atheists on youtube multiple times.
Zizzer: Well, I don't understand libertarianism the best really but aren't there such people who classify themselves as constitutionalist libertarians? Maybe that would explain leaving the powers to the state. I remember one time he said he did not support the Iraq War too. And not that I don't believe you, but when has he supported the federal reserve? I remember one video after the fed did something outrageous he said something like, "this makes me agree with the austrians about the fed" or something like that. One of the people in the comments of this video here asked him if he adheres to a specific school of economics such as austrian. He replied by saying he agrees with most of the stuff the austrians say but doesn't want to identify with one school. I think he's generally on the money when defending the market or attacking socialism though.
Well, I don't understand libertarianism the best really but aren't there such people who classify themselves as constitutionalist libertarians? Maybe that would explain leaving the powers to the state. I remember one time he said he did not support the Iraq War too. And not that I don't believe you, but when has he supported the federal reserve? I remember one video after the fed did something outrageous he said something like, "this makes me agree with the austrians about the fed" or something like that. One of the people in the comments of this video here asked him if he adheres to a specific school of economics such as austrian. He replied by saying he agrees with most of the stuff the austrians say but doesn't want to identify with one school. I think he's generally on the money when defending the market or attacking socialism though.
HTWW said that Ron Paul is 99% on economics, he said Ron Paul is wrong about the Federal Reserve. He main influences are Thomas Sowell and Milton Friedman, which belonged to the Chicago school. So I would guess HTWW is mostly a Chigaco guy. (In fact, I might be mostly a Chigaco guy myself because most of the economics that I learned come from Friedman. Though I think it is foolish to trust the state to control the money supply.)
About constitutional libertarians: I do not like them. They treat the constitution as if it was some sort of infallible document, as if it is a Bible. Their entire argument comes down to, "look at this, the constitution says this, therefore we need to can/cannot do this". That argument has absolutely no appeal to me. I do think there is a look of good stuff in the constitution, and it is a highly respectable document, but my argument never revolves around the constitution.
I'm not quite sure why this thread seems to have turned into some kind of Lee Doren apologetics thread, but overall, I feel like Lee Doren is an alright guy. I'm subscribed to his channel (HTWW) on youtube. I'm also subscribed to the CEI channel on youtube. In the libertarian world, Lee Doren has his enemies because he took over Bureaucrash and he was much more conservative than what many people involved with Bureaucrash would've liked. But overall he's a good guy, his heart is in the right place, and he wages war successfully against the leftists on youtube. He might be wrong about an issue or two, but all of us disagree with each other on minor issues. As long as we're heading in the right direction, towards more liberty, there really is no reason to have major disagreements. We can disagree on lesser issues once we get to the point where it makes sense to disagree on those issues.
Political Atheists Blog
Yeah, that was my doing. Someone said he was a creationist or something.
I had more fun discussing the rasons for the high prices of drugs.
And also why other free market alternatives to high priced drugs like DDT (as mentioned before) and mosquito nets is not taking over
One of my smartest friends once told me that the economic basis for modern medicine is corrupt - you pay your doctor when you are sick instead of paying him when you are healthy.
There has been no innovation in the market of health for over a century since it became regulated by government.
The fallacies of intellectual communism, a compilation - On the nature of power
Look I'm no friend of government interference in medicine, but are you saying we are still doing surgery and medicine like the days before penicillin?
I believe Stranger implied that there was no innovation in organizing health care for the people (or something like that). Not that quality of medicine didn't improve.
(english is not my native language, sorry for grammar.)
Yes I assume he means no innovation in the distribution of medicine.
Ok maybe so, just like there's been no innovation in the distribution of peanut butter, or paper clips or vodka.
Pretty much you choose your provider of choice, you pay him money and get the service. If he does a good job you go back and he gets rich.
No innovation needed.
Now he might argue that the FDA and the DEA and the licensing laws have made medicine less accessible- I agree. The only innovation I want is for government to step out of the way.
Stranger, what's wrong with paying your doctor when you're sick? He provides the services to make you better, and you voluntarily pay for it. And why do you say you don't pay your doctor when you're healthy? They charge for routine checkups too.
The problem is that your doctor doesn't have an incentive to make you better, he has an incentive to keep you on medicine.
Ooooooh but now you're going to tread on dangerous ground:
If your doctor only gets paid while you are healthy, and when you get sick I assume he has to treat you at his own expense.......he has no incentive to keep you alive!
Think about it, he is never going to make money from you again, but if you die, he can stop losing money.
Dont be telling the free markets how to do their business- there is always a consequence.
Stranger:The problem is that your doctor doesn't have an incentive to make you better, he has an incentive to keep you on medicine.
Neither does your car salesman have an incentive to sell you a car that works for a long time, he has an incentive to keep you buying cars. Actually it's the case in most industries. Your bus driver doesn't have an incentive to get you closer to where you want, your gardener wants your plants to require watering more often, and what about the advice in the electronics store.
There are market forces that counteract this. One has been mentioned, that the incentive for short-term profit is often outweighed by the incentive to make business in the future. If your customer consistently gets a bad product he will take his money somewhere else. So you might have a rational incentive to screw your customers over in every separate transaction, but your greater interaction with him over many years provides the incentive to do a good job.
Then there is competition. If you don't offer proper service, somebody else will. Socialists like the zeitgeist people often forget that. They theorize what incentives an individual capitalist has outside of competition, and then they conclude that what happens in the free market is the sum of those decisions. But of course capitalists don't operate outside of competition, their actions are shaped by competition and not what their individual incentives would lead them to do in a vacuum.
And there are often different incentives at work than money. In many industries your reputation matters, so you'll do a good job for the sake of your reputation. If your customer finds out you screwed them over he might be pissed. So you'll do a good job to avoid a conflict. And then there's always honor and the feeling you get from doing a good job. As society gets richer people rather have a pleasant experience at work than to screw customers over to earn a little more.
But in the end the answer is that this does happen in a free market. People do give you bad advice and sell you the most expensive product. But still it's more efficient than any alternative. Because central planning is in so many more ways inefficient that it outweighs that. That the free enterprise system is imperfect does not argue that it is the worse alternative.
All the answers are in this nice book:
http://mises.org/books/prohibition.pdf
Have I mentioned it's free? It mostly concerns the Prohibition of the '20s but it's perfectly applicable to drug prohibtion of today.
EmperorNero: But in the end the answer is that this does happen in a free market. People do give you bad advice and sell you the most expensive product. But still it's more efficient than any alternative. Because central planning is in so many more ways inefficient that it outweighs that. That the free enterprise system is imperfect does not argue that it is the worse alternative.
You are right this misinformation does indeed happen in the market. What statists forget is that the same faults and moral failings of people persist in a state. A statist might argue that doctors have an incentive too keep you sick (which is sometimes true and sometimes not true, as you mentioned with other examples) and then conclude that is why we need government run medical care. But the statist commits the fallacy of assuming that the state will be free from the very same criticism. The doctors in a state run medical system will have the same incentive - even more so since they are protected from competition.