Economics 101 continued

While the fictitious Free Market™ fails to produce the purported paradise in general, the concept is glaringly absurd in the case of health care.* In the first place, asymmetrical information is part of the definition of the service -- the produce is expertise. If I knew everything my doctor knows, I wouldn't need one. In the second place, it has positive externalities that produce public goods. Infectious disease control is maybe the most obvious, but a healthier workforce, not having to watch people suffering and dying in the streets,† and fewer families psychologically burdened by premature loss are among the many others. Of course there are some negative externalities as well, including fossil fuel consumption and a lot of plastic waste, but these aren't as bad as many industries.

But maybe the biggest joker in the deck is the nature of demand. If you've taken Economics 101 you probably remember the concept of utility, and declining marginal utility, and consumer choice and yadda yadda which is why the Free Market™ purportedly empowers consumers. Health care isn't like that at all. When I go to the supermarket I can pick and choose the foods I like as long a I stay within my budget. But I don't get to choose what health care I want, in fact much of it is compulsory. If I have Type 1 diabetes, I need insulin or I'll die. I didn't make that choice, it just happened to me. Ditto if I'm hit by a bus or I get cancer or am at risk for a heart attack or stroke. In my case, right now, I need cataract surgery and my other option is to go blind.

So everybody's needs are different and largely unpredictable. Yes, of course there are steps we can take to protect and promote our own health but people's opportunities and freedom to do so vary depending on their resources, where they live, their pre-existing state of health, and other factors beyond their control. You can not smoke but tobacco companies spent decades advertising and promoting smoking and claiming it was actually good for you, and hundreds of millions of people were fooled. There's just a basic question of morality here: abandoning people to an awful fate because they can't pay for expensive but effective solutions, in the wealthiest society in history, is just wrong.

There is no Free Market™ solution to this. The idea is preposterous on its face. But there is an actual solution: universal, comprehensive, single payer national health care. Right. But that would be socialism.‡ That's just for starters -- it won't solve everything because even if we can pay for health care, there are a lot of ways it could still be better. But it's a necessary start.

* A term I don't like, for a couple of reasons, but we're stuck with it.

† Sadly, most people do seem willing to tolerate this in the case of people with mental illness or substance use disorder.

‡ Economics experiments are not only possible, they are commonplace  Here's one. In general, once economists started doing experiments, they proved that Economics 101 is bullshit. But they still teach it.