Clayton Cramer has some interesting observations on a recent incident in the US, where a government fire-sale of excess Apple iBooks for the unbelievably low price of $50 caused a stampede in which people were trampled and injured.
Free market prices perform a market clearing operation, as alluded to above in Different River's piece. If you only have 500 of item X, and there are 5000 people that want to buy item X, one of several things will happen:1. The lucky 500 will be those who got in line first.
2. The lucky 500 will be those who know someone at the store, and will get special treatment--which means everyone else will get mistreated.
3. You will have to set the price of item X sufficiently high that 4500 of those 5000 people decide, "That's too expensive. I've got other things on which I can spend my money." It may seem unfair that the price of item X is so high--but what's the alternative? Lots of queuing (choice 1)? Sleazy deals that involve insider influence (choice 2)? Or allowing prices to rise to reflect both scarcity and demand for the product (choice 3)?
Re: (2), One endlessly repeated argument in favor of socialized medicine is that the quality of care should not be determined by the amount of money one has. While I sympathize with this argument in principle, my practical experience with socialized healthcare (in Belgium and Israel) is that in practice "connections" take the place of money as the "discriminating" factor. I've seen this numerous times up close, and heard countless stories. People telling me loved ones faced 6--9 month waits for major treatments to loved ones (after which it might well be too late), and how they pulled strings and had the procedure done within 1--2 weeks. At least one other person who refused to call in favors at the expense of others, and ended up with botched brain surgery by a resident (rather than the surgeon himself) that left the patient with a lifelong speech impediment. People theoretically having to share rooms with 6 patients quietly being shunted away to what amounted to private rooms after favors were called in.
So somebody tell me: how is this situation preferable over the American "capitalist" healthcare system? Other than the obvious one, that the "New Class" to which much of the leftist commentariat belongs gets to be top dog in the former but not in the latter ;-)
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