Filed under: Economy, Freedom, Health Care | Tags: Cost Benefit Analysis, Hard Choices, Who Decides?
The problem with economics is that there is never enough of anything. Resources are constrained, we can’t have everything, so someone has to make the cost-benefit decision.
Capitalism works by, say, a brand new offering of giant TV screens. Wow, gorgeous picture. Real movie theater in your own home, and you don’t even have to pay an exorbitant price for the popcorn. But the cost! Everybody wants one, but how long does it take to pay for one and is it worth it?
What usually happens is that those who can easily afford the cost will promptly buy one. That income to the manufacturer allows the next batch of giant TV screens to be larger and cost a little less. As quantities grow, the manufacturer can make more money by selling larger quantities. You make more money by selling 10,000 at $10 profit each than by selling 100 at $100 profit each. Before too long the price has really come down and way more people can afford to buy one.
Those who rail at the wealthy man who buys the first, highly prized product as being somehow “unfair” are missing the point. It is the people who are willing to shell out for the originals that make the later low price possible.
Keith Hennessey focuses today on a very basic health care question: “Who should decide whether additional medical care is worth the cost.” Most of the health care debate boils down to this question. Mr. Hennessey has a wonderful ability to frame questions in a way that makes you think through the problems. We have to understand the trade-offs and the decisions involved. His portrayal of the debate is short, but reading the comments is also useful. Don’t miss this one!!