The absence of market discipline in medicine cannot last. Governments and the medical cartel have successfully used fear to maintain control. Fear has kept the masses from rising up. Until now.
While economists and journalists are fond of saying inflation is "X" percent, in reality, the price indexes don't measure inflation accurately. Instead, they are statistical constructs created to benefit the government.
While government officials and politicians denounce high drug prices, they have created monopoly privileges for drug firms, thus ensuring higher-than-competitive prices for pharmaceuticals.
People often react to sudden price changes by demanding that government "do something" to bring prices down. It is important to understand the mentality behind such beliefs.
We're often told that it is too difficult to access healthcare services in America. So why are "certificate of need" laws being enacted making it harder to create new healthcare facilities?
In contrast to the classical cost (labor) theory of value, the so-called marginal revolution ushered in the modern, subjective theory, whereby market price is determined by the marginal utility of a good.
If the hallmark of conventional economics is unrealistic models, the hallmark of Austrian economics is a profound appreciation of the price system. Prices provide us with critical information about the relative scarcity of goods and services.
