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Wednesday, June 29, 2011

Is Capitalism Rationing?

It is necessary for people to intervene, sometimes collectively, in order to circumvent the laws of inertia and change the existing order.  Whether causing such change is warranted, appropriate, or even desirable is the source of much political debate.  Changing the fundamental structure of the US health care delivery system is one example.

If the infinitive to ration means to limit individual availability of a commodity to a fixed portion, and some force external to the dynamics of supply and demand within a given market effects that limiting, enforcing that rationing becomes an issue.  Only government has the power to enforce arbitrary rules that run counter to the interactions driven by internal forces in unfettered markets.

Since the production of commodities is finite, there can only be so many available doctors’ appointments, flu shots, and replacement livers available at any given moment.  In both free and managed economies, dollars compete for goods and services, and in the process, their prices escalate proportionate to demand.  Inevitably, some bidders lack the needed resources to stay in the contest and fall by the wayside.

This is where the mommy staters enter the fray.  Only the productivity of the governed limits government’s resources, meaning that the state’s purchasing power greatly exceeds that of any individual.  Through regulatory and economic pressure, governments control industries to determine price and availability.

The issue of rationing health care—forget for the moment what health care means this week—brings baggage with it.  How best to cut up the pie that the state has confiscated becomes a related matter.  At this point, progressives trot out their smoke-and-mirrors campaign concerning fairness.  They severely and arbitrarily euphemize the term fair

Rather than an even handed, laissez-faire approach in which each one of us bids for commodities, mommy staters want government intervention to insure that all outcomes are equal regardless of individual input.  To them, taxpayers should pay for an illegal alien receiving, on the basis of a demographically determined quota system, the next available kidney rather than allowing an entrepreneur whose efforts employ 500 people to buy it with private resources.

Rationing is an act of government; under capitalism, individual buying power determines commodity distribution.  A free market has no human characteristics.  It is not fair nor cruel, not just or callous.  It is merely the collective actions of people exchanging goods and services in competition with others.  In such a market, fluctuations in supply and demand are not rationing per se any more than one can blame people for coastal flooding because they allowed the tides to rise.

May your gods be with you.     

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