Tag: free market

Hospitals Mock the Free Market

On By southwerkIn Business Ethics

 

Changing memory
Changing memory

Hospitals Mock the Free Market

Hospital Prices No Longer Secret As New Data Reveals Bewildering System, Staggering Cost Differences

When a patient arrives at Bayonne Hospital Center in New Jersey requiring treatment for the respiratory ailment known as COPD, or chronic obstructive pulmonary disease, she faces an official price tag of $99,690.

Less than 30 miles away in the Bronx, N.Y., the Lincoln Medical and Mental Health Center charges only $7,044 for the same treatment, according to a massive federal database of national health care costs made public on Wednesday.

Americans have long become accustomed to bewilderment and anxiety when confronting health care bills. The new database underscores why, revealing the perplexing assortment of prices for medical care, with the details of bills seemingly untethered to any graspable principle.

Even within the same metropolitan area, hospitals charge prices that differ by staggering degrees for the same procedures. People without health insurance pay vastly higher costs for care when less expensive options are often available nearby. Virtually everyone who seeks health care winds up paying inflated prices in one form or another as these stark disparities in price sow inefficiencies throughout the market.

Hospital Prices No Longer Secret As New Data Reveals Bewildering System, Staggering Cost Differences

Given the opportunity to charge without oversight, hospitals developed a byzantine pricing system that was favorable to them in every way. I am shocked. I want the free market fundamentalists to come here and take a long good look. This is reality. Market actors misusing the system to cruelly abuse their customers and our only hope of salvation, the much maligned government. That is, unless, you want to wait for the hospitals to wake up and realize that the free market is better for everybody? Maybe their profits blind them to the unearthly beauty of your doctrine? What do you think?

James Pilant

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Listen to the “Morality” of Laissez-faire.

On By southwerkIn Economic Justice

The English government during the Irish Famine of 1845 – 1852 adhered strictly to a doctrine of Laissez-faire. I want you to listen to the cold blooded ramblings of a government in thrall to a cruel, vicious and irrational policy concept. This is where economic philosophy confronted tragedy and compounded it.

Watch the clip and see if you can avoid recoiling in horror at the voices of the decision makers mindlessly repeating the necessity of letting the market have its way.

James Pilant

Laissez-faire

When Ireland Starved Episode 3 Managing The Famine (Part 1 of 3) – YouTube

When Ireland Starved Episode 3 Managing The Famine (Part 1 of 3) – YouTube

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Catherine Crier Attacks Conservative Dogma About Adam Smith

On By southwerkIn Economic Justice
Adam Smith; engraving
Image via Wikipedia

In an article in Huffington Post, Catherine Crier finds the Tea Party and Conservative view of Adam Smith and his doctrines to be ridiculous. In her interpretation (and mine), Adam Smith was at one with the principles of the mixed economy, that is, some regulation and some economic freedom. Here’s two key paragraphs –

Just as Jeffersonian democracy operates best on a small scale, Adam Smith believed his self-correcting free markets were ideal for small businesses in a domestic economy. Integrated in their communities, these businesses would be influenced directly by the needs and demands of consumers, and any dangerous or abusive conduct would rarely affect the broader economy. But Smith treated large, powerful companies very differently. He said big business was led by “an order of men…that generally have an interest to deceive and even to oppress the public”, and he referred to powerful corporations (then known as joint stock companies) as “unaccountable sovereigns” that were as dangerous to free markets as tyrannical governments. Unrestrained, they had the power to shape society and governments for their own purposes, and consumers would pay for “all the extraordinary profits” while suffering from “all the extraordinary waste”, the inherent fraud and abuse, that accompanies such immense economic power.

Smith stated emphatically that a strong government, acting through democratic and legal institutions, was the only entity capable of challenging such corporate power. Smith supported necessary government regulations, labor and human rights, public education, and progressive taxation to ease the economic and social inequities he knew would occur in a capitalist system. Without these “liberal” measures, social and political unrest would threaten a nation’s stability and his free market economy could not survive.

I have often been surprised what conservative say writers mean and what I read when I study the same text. She appears to have had the same experience. Few individuals read the Great Works of the Western World with any focus. The material is difficult and often lengthy as well but the Great Books are worth the effort.

I have long been a fan of Robert Maynard Hutchins and his belief in the importance of books and skilled reading. I have read almost a third of the books he lists at the end of his book, “How to Read a Book.” Let’s have more reading and understanding and less dogma.

James Pilant

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Confronting “Grazing” At The Supermarket (via Kevin Benko)

On By southwerkIn business ethics

Here we have an analysis of a moral conundrum. Is it okay to take something of small value? Even if it is very small in value? The analysis here results in a finding of “still wrong whatever size.”

I agree with that.

But follow the line of reasoning and see if you would have worked through it the same way. It’s interesting.

James Pilant

I was shopping at a local Wholefoods for a few items when I noticed someone in the store “grazing” at the bulk foods. Grazing is the term that is commonly used to describe the act of theft, or shoplifting, by eating the store’s food while shopping. I suspect that the term “grazing” is used to justify this particular act of theft and attempting to delude oneself that their theft is not, indeed, theft. I confronted the individual, a man who seemed … Read More

via Kevin Benko

Can The Free Market Help With Foreclosures?

On By southwerkIn Government Failure2 Comments

Can The Free Market Help With Foreclosures?

Yes, it can. Ira Hecht proposes the creation of an online market for troubled mortgages to be called: Mortgage Crisis Solution Program. The program would allow those with troubled mortgages to enter their data onto the database, (with privacy protections of course), and lenders would be able to find troubled mortgages worthy of re-financing. Obviously, this would not solve the mortgage crisis. But it would allow those who have short term difficulties to negotiate to keep their homes. Many people with good credit and properly valued homes deserve an opportunity to refinance.

This is an idea that should be developed. In this country much of the devotion to the free market is the most shallow of lip service. This would be government service to put lenders and borrowers together. If it’s socialism to put these people together, we need more of it. We should be encouraging this type of exchange, allowing individuals to profit while saving people’s homes.

Andrew Caplin has been writing about problems in the mortgage market for years. He is an economist and important author in the field. He thinks this is a good idea.

Let’s let the free market help this country in its time of need.

James Pilant

Can Ethical Decisions Be Life or Death Choices?

On By southwerkIn business ethics

Can Ethical Decisions Be Life or Death Choices?

ABC news reports that Consumer Reports, the magazine, has released a new study that reports the following:

The bad news from a new study is that two thirds of store-bought chicken was found to be contaminated with potentially harmful bacteria.

This is a clear situation where ethics and morality have a role to play. Okay, now, ask yourself, can you ethically sell chickens contaminated with bacteria? Let’s be clear about the consquences. We are talking about food poisoning. Let me quote from wikipedia:

However, foodborne illness can result in permanent health problems or even death, especially for people at high risk, including babies, young children, pregnant women (and their fetuses), elderly people, sick people and others with weak immune systems.

So, we are talking about dead people and serious illness for thousands of others and since food poisoning can mimic other diseases like the flu, the numbers reported are too low.

Now, back to our moral dilemma. The bacteria from your chicken will kill some people often the elderly or the very young. On the other hand, you are participating in busines worth billion of dollars a year. (Tyson sold 26 billion dollars worth of food in 2005.) If your competitors do not act to fix the problem, they can sell chicken for less than you. You will lose market share and thousands of people might lose their jobs.

Now, you might say, “James, you have to draw the line here, we are talking about people’s lives.” I agree that lives are at stake, but I can’t help but point out that it doesn’t look like anybody is drawing a line.

Should we wait for industry to act? A study two years ago showed 80 percent of all chicken contaminated with bacteria. We’ve gone from 80 percent to 2/3 of all chicken sold. Isn’t that movement in the right direction? Don’t you know that incremental change is the responsible way to accomplish these kinds of goals? If you were to impose radical changes on the industry, everyone in American would have to pay a lot more for chicken. Don’t you want even the poorest in this country to have access to meat and the nutritional benefits it brings?

So, we come down to the usual questions. What are you willing to do as an employee of such a company? Where do you draw the line? What’s worth losing your job for? What’s the “right” thing to do?

Futher, as a society, what social costs are we willing to incur for low levels of bacteria in chicken: loss of jobs, increases in foreign competition and a greater price at the supermarket? What’s the social value of cheap chicken?

My conclusion is the following.

Selling chicken which you know to be contaminated with bacteria when you have the technology to eliminate some or all the bacteria is murder. I’m sorry about all the jobs. I’m sorry about the lost profits and danger of competition from foreigners but I just get upset about dead people, a personal weakness of mine, perhaps.

Since, it does not appear any chicken selling company is willing to make the first move to eliminate bacteria and endanger its bottom line, the government will have to mandate new standards.

Now, I realize that given time the free market will solve this problem. After all companies that sell chicken that kill will undoubtedly lose market share. Or will they? Reported levels of 80% didn’t stop people from continuing to buy chicken. On the other hand, this information does not appear to be common knowledge. It appears that the free market doesn’t function well when the consumers do not all have the same information. If death from chicken were certain instead of sporadic it would be easier for the public to make a good decision but food poisoning takes as long as a week to manifest itself. It’s hard to figure out what you ate over a seven day period and of course you might think it’s the flu. What do you think? Could this be an example of the free market yielding illogical or tragic results? Does the free market unfettered by government interference solve all problems?

James Pilant