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Business is Not to Blame

In a pandemic, the worst thing is that governments try to control prices because the unfailing result is the lack of the drug or service in question

[Leer a español]

First, we should refer to etymology. Business is, literally, non-leisure. The dictionary describes it as “any occupation, employment or work.” In a broader sense it refers to a subject and in a narrower sense it refers to the link with the pecuniary, to the search for a monetary benefit.

However, in a free society, in order to survive, each person is obliged to attend to the needs of his neighbor in order to improve his own situation. This is how all goods and services are produced: those who give in to the requirements of their fellow human beings obtain profits and those who err incur losses. This is the way to progress, this is the way by which the most evolved societies increase their standard of living. In this context, the monopoly of force that we call government is theoretically constituted to prevent and avoid injuries to the rights of each person.

On a broader level, everything is done for the personal interest of the acting subject. In this sense, there is no such thing as disinterested action. It’s redundant to uphold the idea that those who act in one direction do it because it is in their interest to do so.

Mother Teresa was interested in the care of lepers, the one who robbed a bank is interested in getting a good haul and not being punished, the one who sells potatoes is interested in getting a profit from the transaction, the one who bought a bicycle is interested in riding that gadget, in short, in everything there is a personal interest that in some cases can be monetary and in others non-monetary. In some cases the goal pursued is noble and in other cases it is evil. The quality of people is judged by the objectives they aim at.

At this level of argument, there are two misconceptions that are smuggled into this analysis. In the first place, gratuitousness. It must be understood that nothing is free, everything has a cost. In economics we call it opportunity cost to show that every time we do something we are forced to stop doing the second thing that in our priorities we would have done, which is the real cost of this act on our part.

In everyday life, when it is said that this or that thing should be given out “for free” it must be clear that someone is paying for it. In this sense, it is common to try the magical transformation of the State apparatus into Santa Claus, without realizing that it is always a neighbor who is forced to pay for another neighbor.

The second major misconception lies in the distortion of the law. This is how the right to decent housing, the right to carbohydrates and vitamins, the right to an adequate salary, the right to recreation and even the nonsense of the right to the Internet is proclaimed. This vociferous iteration doesn’t take into account that every right has an obligation.

If a person earns $100 in the labor market, there is a universal obligation to respect that income, but if that person makes claim to $200 when he or she earned only $100 (and the government grants the claim) it necessarily means that others will be forced to hand over the difference with the fruit of their labor, which makes the operation a pseudo-right, since it infringes on the right of others.

Both outlandish ideas -that of supposedly free and pseudo-rights- demolish civilized institutional frameworks and therefore seriously harm the welfare of all, but especially the most needy since wastefulness instead of the use of the always scarce resources threatens incomes and wages in real terms more forcefully upon the marginalized, since investment rates decrease.

In this article, attention is focused on the subject of doctors, health services, vaccines, laboratories and others in the healthcare industry that, suffering a high degree of cynicism are supposed to live off the land without charging for their services, while those who claim such an attitude dedicate themselves to their private businesses. This certainly does not rule out the very meritorious philanthropic work that is closely correlated with the climate of freedom.

To observe these works everywhere, one only has to go to the United States, a situation that doesn’t exist in Cuba where it disguises itself as a “Welfare State”, a contradiction in terms since, by definition, the apparatus of force cannot be considered as doing charity or beneficence, defined as giving its own resources voluntarily. If I assault my neighbors and hand over the loot to others, I have not carried out a charitable act or a show of solidarity, but rather I have committed a robbery.

Among many others, John Chamberlin in his essay entitled The Disease of Socialized Medicine highlights the resounding failures of the Nordic countries and others in introducing the state apparatus into healthcare and how they have had to abruptly backtrack on that political decision. In this sense, for example, there is a book in which twenty-one meticulous professionals publish works on the serious and very alarming problems that invariably arise in area of state health. The book bears the suggestive title of Politicized Medicine and is published by the Foundation for Economic Education.

At no time does this mean that we do not recognize the invaluable effort and remarkable capacity of the doctors, nurses, and other health care professionals in the state’s health care centers. The point is to understand the decisive issue of incentives and the “tragedy of the commons” that invariably breaks out because what belongs to everyone belongs to no one, and it is not the same attitude when you have to take care of bills as when you force others to pay them.

In the aforementioned trials, and in many others along the same lines, the fundamental role of incentives is highlighted in the context of the permanent lack of inputs, equipment and resources in general in the midst of the usual and exhausting requests for shifts by patients, the deficits reflected in the management and the consequent request for funds from the government administration and the often deplorable situation of the buildings, all of which does not occur in private sanatoriums because a business that is not supported by its customers disappears.

So what should be done is to eventually sell off, with all possible incentives, all state health centers to the same team of doctors, physicians and administrative staff who operate them. Politicization and the use of force should not take place in such a delicate and important area. I imagine that no attempt will be made to argue the absurdity of not proceeding accordingly because others do not, a similar reasoning argued when the imperative need to abolish slavery was proposed and the answer was that on the planet that system had been in place for thousands and thousands of years.

The entanglement with the status quo cannot lead to mental dullness of that magnitude. No progress would have existed if there had not been a first mover who went out of his way and questioned what was in place.

And for people with health problems but without sufficient income, as a transitional measure, until other substantive measures can be taken, apply vouchers, that is, credits to be paid by third parties so that these patients can be cared for efficiently. There is a non sequitur here, namely: the fact that some must finance the health of others does not mean that there must be state health centers, since the patient will select the private entity that is most suitable for him or her.

Subsidizing demand instead of supply radically changes the picture of the situation, since all the incentives of management change course because of the afore-mentioned tragedy of the commons (a modern name as Garret Hardin called it in Science Magazine but that in practice goes back to Aristotle in his refutation of Plato’s Communism).

Medicine does not operate independently of the nature of things; prices are irreplaceable signals of where to invest and where to disinvest. In a pandemic the worst thing is for governments to try to control prices because the unfailing result is the lack of the medicine or service in question.

By forcing prices below market levels, demand increases and supply contracts. The same phenomenon occurs with mutual medicine companies or medical services in general, with the aggravating circumstance that they try to incorporate by force candidates who have not contributed to the service, which crumbles the whole idea of insurance. These acute problems burst out in due course due to the aforementioned lack of understanding of the laws of economics and a false gratuitousness as, furthermore, when a new procedure appears, whereupon the state apparatus usually flatten prices, delaying in turn results, and in some cases wiping out the beneficial novelty.

In other words, it does not follow from the fact that there are doctors who attend to patients without seeking monetary retribution, as was stated, that it is a profession that must live spending their own resources in the process. We reiterate the hypocrisy of those who dedicate themselves to their personal business while pretending that doctors should work free of charge.

It also reveals great hypocrisy to demand free attention “due to the importance of human rights” while many endorse and subscribe to the extermination of human life in the mother’s womb with the unheard of pretense of violating the Hippocratic Oath, while also insisting on being paid by others by force, confiscating the fruit of their labor.

Emboldened with the best intentions and purposes, Pope Francis again took it up against the market in his Mass on December 24, 2020, in which he prayed that “the law of the market does not prevent vaccines from reaching everyone”, which reveals the superlative incomprehension of the meaning of the market process and the devastating effect of imitating the Statist recipes of African republics and their ilk where disease and famine are commonplace because they do not follow the market, which is another way of saying that people’s requirements must be ignored.

Previously, this Pope, among so many denials against the foundations of a free society, had referred to money “as the devil’s dung” without paying attention to the incoherence of the traditionally corrupt Vatican Bank. In the field of health, as the distinguished doctor-psychiatrist and professor emeritus Thomas Szasz has reiterated, among others: “The most forceful thing that can be done to destroy the health of the most vulnerable is for governments to intervene in the prices of medicines and medical equipment by violating the market, since this necessarily causes artificial shortages and manifest deterioration in the quality of service. To proceed in this direction is criminal.”

In short, the demonization of business leads to the closure of free and voluntary contractual arrangements on which the open society rests, which does not mean ignoring that there are also traps and frauds in the private sector that must be punished in the field of Justice, but the solution is not to eliminate incentives for progress, just as it would not be sensible to eliminate cars with the idea of avoiding traffic accidents.

Once again we emphasize that in the area of cheating and fraud there are those who play at being businessmen but who base their operations on privilege, gift and captive markets resulting from their stinking alliances with the power in power, with that they miserably exploit their fellow men, whether in the medical area in the guise of social work or in any other disguise, or in any area whatsoever, these assailants must be blocked. These are not businesses, but negotiations, which naturally make their perversion a completely different nature.

If a person obtains one hundred dollars in the labor market for his work, there is a universal obligation to respect that income, but if that person claims two hundred when he earns one hundred, and the government grants that claim, it necessarily means that others will be forced to hand over the difference with the fruit of their own labor, which makes the operation a pseudo-right since it infringes on the right of those others. (Flickr)

Generosity only takes place from one’s own resources, without private property there is no such thing as generosity. The prolongation of life and the quality of life are the direct result of medicine and medical research insofar as they have been able to develop in a climate of freedom.

Let us also remember the formidable work that so many medical professionals have done in the area of social sciences, as has been the case of none other than the father of liberalism: John Locke.

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