Imagine this scenario: an economist examines consumers’ automobile purchases and comes to the conclusion that the market is completely out of whack. By any rational measure consumers are making irrational decisions about what cars to buy, raising the costs of automobile purchases far above what is economically sensible.
Consumers could save huge amounts of money by buying the “best” cars based upon cost, safety, fuel consumption, and other criteria set up by experts. Better yet, by standardizing automobiles society could benefit from diverting enormous resources to other, more worthy social goods. Reducing the frequency of automobile purchases could save enormous amounts of money too, without significantly impacting mobility.
Only a few types of cars would be manufactured instead of the 340-plus models available today. Standardization would improve efficiency immeasurably. All cars would have interchangeable parts, all mechanics would be specialized in maintaining the few standard cars available, and drivers would never have to waste time figuring out how to turn on the lights or windshield wipers when we rent a car. Nirvana!
You can make this kind of argument with just about any product and easily arrive at the conclusion that the free market is wildly inefficient and should be replaced by the rational management of the economy by experts. After all, experts are better equipped to evaluate the costs and benefits of different products and optimize the results for all involved. A planned economy would be much more rational and fair than the wasteful chaos of the free market.
Of course this logic is built on pure fantasy: experts cannot adequately account for diverse consumer preferences; innovation will slow to a crawl as research and development gets centralized; and lack of competition will inevitably cause industry to stagnate and become increasingly inefficient. The history of socialist experiments bears these criticisms out.
Unfortunately it seems like this lesson is never learned, especially by the “experts” themselves.
The next wave of health care “reform” is driven by this logic. The solutions being peddled to an unsuspecting public include dramatically more government regulation, imposing “best practices” requirements on doctors and hospitals, and reducing the already restricted consumer sovereignty in health care.
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