Sunday, August 09, 2009

Free Market versus Government Provided

One definition of economics is that it is the study of the allocation of scarce resources. Scarce simply means that we don't have as much of something as we would like. Because we don't have as much as we would like, we have to make choices in order to allocate what we have.

There are a number of different ways to allocate stuff. One way is to use the free market and let the pricing system and people's incentives take care of it. Another is to have the government provide the stuff, and then allocate it another way, usually by waiting.

A John Stossel video report (start at about 5:40) presents the difference between the two systems when it comes to CT scans in Canada. If you want one for yourself, it is government provided, but you get to wait a month. If you want one for your pet, you get to pay for it, but it's next day service. Pick one.

Update: Apparently when it comes to health care, it's better to be a dog than an human in the UK as well.

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