Getting Competition Wrong

In a particularly myopic example of confusing America’s monopoly capitalism with a free market, Philip Caper (published at Truthout) argues that “full-blown market-based competition doesn’t work” when it comes to health care. One wonders how he might know that, given that what we’re seeing now (and have been seeing for decades) is just about as plainly constrained and engrossed by the rich and powerful as a system of delivering health care products and services could be. Now, as a criticism of corporate capitalism and the collusion between the state and capital, Caper’s would be close to the target. “The pricing of health care services,” Caper says, “is so complicated and irrational that it is impossible to determine in advance what the costs of treatment will be.” True enough, and that’s the predictable result of annulling the real free market’s price mechanism, which functions only when buyers and sellers are allowed to move freely with their resources.

Out of control costs and the low quality that Caper complains of are features of monopolism, of a capitalist package of policies that includes patents on drugs and supplies, lofty legal/regulatory barriers to market entry, and outright prohibitions against many organizational models for offering health care. Caper writes, “The next time somebody tells you we need more competition in health care, just remember that what you’re hearing is the sound of smoke being blown in order to create a smokescreen.” Right, the Big Business lobbies that tailor U.S. health policy only want you to think they believe in competition. And Caper ate it up. Writing in 1893, market anarchist William Bailie had already answered Caper’s shallow understanding of genuine competition:

We are told that competition among the capitalists leads also to low wages, to lying, adulteration, and all manner of deception; . . . Also it is said that competition is the parent of monopoly, that it drives the capitalists to combine, and gives us the trusts by means of which they rob the people with impunity. But this kind of reasoning is superficial. . . . where [competition] is assailed today, a close analysis reveals, not the evil effect of competition, but the need of more liberty.

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