Capitalism, free enterprise, free markets, or whatever you label our system is moral because one succeeds by meeting the needs and wants of other people. This has been true for the entire life of our country, still true today and will be tomorrow as well.
In another untrue attack on our way of life, the Socialist/Communist rail that our healthcare system is a failure of capitalism. Free markets are the solution here, not more government control. Ours is a 3rd party healthcare system: government(Medicare and Medicaid), insurance companies and large employers, not consumers. Hospitals revenues depend on how well they negotiate with 3rd parties, not how well they please their patients. What a drug company charges for a medicine is far smaller than what you see reflected on a hospital bill. Check your hospital bill and see what they charge for an aspirin, last visit for me, the charge for a single aspirin was $3.50. A big chunk of this price goes to pay pharmaceutical benefit managers. Discovering in advance what a procedure might cost is a herculean effort.
In normal markets, if you make an advance in productivity, competitors will likely follow suit quickly. Not so in healthcare or higher education. The Surgery Center of Oklahoma posts all of its prices online. It has topflight surgeons; its overhead is low, by industry standards; and the cost of an operation is a fraction of that charged at traditional hospitals and clinics because patients pay cash in advance. Their prices are higher if a patient wants them to file their insurance claim. Yet it has few imitators. Why? Because there is no consumer market. Since 3rd parties foot most of the bill, most patients have no incentive to compare quality and price, and would be hard pressed to do so even if they wanted to.
Ever wonder why each new doctor, and sometimes even existing ones often ask for you to fill out page after page of personal and medical info? Where are the electronic records in our digital age? Every dry cleaner, gas station, grocery store, etc. has had them for 20 years. But not healthcare providers: There was no competitive advantage. Then Washington decided to mandate electronic records, but did so destructively, in a manner worthy of the defunct Soviet Union; thus we keep filling out form after form for doctors visits. Just part of the cost of our healthcare.
Purdue University has frozen tuitions since 2013. They have enacted numerous efficiencies so that to attend this prestigious institution a student today pays less than a student did 6 years ago. They also boosted the number of tenured professors. Yet, there are no stampede of colleges and universities urgently following Purdue’s example
Our free markets have turned scarcity into abundance, todays luxuries into tomorrow’s common products. Among countless examples is the handheld phone. The first cellphone of the early 1980’s, which could only make calls was as large as a shoe box, weighed more than a brick, had barely an hour of battery life and cost around $4,000. Today there are billions of cell phones and most have the capability that a supercomputer had a couple decades ago. This same phenomenon of getting more for less would happen in healthcare and education if government would simply step aside and let the market work.
Profit is not a bad word, it is essential and moral. Without profit, the economy stagnates and regresses. Vibrant economies need enormous amounts of new capital to move forward. Change constantly destroys old capital, look at what the internet did to the value of legacy newspaper and magazine publishers, which must be replaced. Capital is needed to finance start-ups(most fail) and expansions as well as the productivity improvements of existing businesses. Capital comes from profits and savings so in that sense profit is a cost of doing business.
It is true that some people in business do bad, amoral or unethical things. This is not unique to capitalism. However, in an open, free market and democratic system, the bad ones are usually flushed out, unlike in authoritarian or socialist regimes. While the Socialist/Communists take every opportunity to bash every business misstep, they never point out the many missteps, corruption, waste and fraud in government. The recent disclosures of Quid Pro Quo Joe in Ukraine, just one in a long list, and the fact that most of our Congressional elected officials are millionaires, tells me and should tell you that the biggest, most unscrupulous folks are our elected officials. We see evidence of this daily in local, state, and federal governments. Or in other words, show me a politician who enters office poor and leaves rich and I’ll show you a crook. These words of former President Harry Truman ring true even more today.
The Socialist/Communist alternative to capitalism has not worked and will never work. It always leads to blood, tyranny and tears, as can be seen today in Venezuela, Cuba and North Korea and in the most recent past in the Soviet Union, Maoist China and communist Cambodia(where in less than 4 years, the regime slaughtered more than ¼ of the population).
We are constantly told that what our Socialist/Communist will bring to America is not the Socialism/Communism of these failed countries but the socialism of Scandinavia and Europe. These are not socialist countries in that the government owns and runs the economy. Many of these countries have elaborate welfare programs, restrictive labor laws and overtaxation. These so called socialist countries are beginning to change. Sweden as an example has been scaling back government, cutting taxes, has no inheritance tax, and allows school choice. All these changes in Sweden are directly opposite to what the Socialist/Communist propose for America! Check out their promises of “free stuff” and their plans for implementing. Not a single proposal includes scaling back government, cutting taxes, eliminating inheritance tax, and school choice. In fact they propose just the opposite. Don’t be confused, misled by these folks. As for the rest of Europe the average rate of economic growth since 2008 has been miniscule, less than half that of the U.S.
It is a fact that capitalism creates the wealth that makes welfare states possible. That is why more and more Europeans are looking at pro-capitalist reforms, such as low taxes, to gin up their economies.
If I did not ask this question to close out this blog, I would be derelict in my duties. What is it that government does well? I have asked this question for about 20 years now, and have not received a single answer. Ask yourself this question? Answer? That should tell you all you need to know!