Why am I such a fan of free markets?  Why are most people in the health care business not big fans?  Why are most people in any business not free marketeers?  I think the answer is complicated and simple all at the same time.  I mean by this that there are many reasons, each of which is fairly easy to explain.  Many businessmen start off as free marketeers only to succumb to the help that the “government” can provide.  Why is this?


Any organization or institution or business has one goal after it comes into being:  staying in business….survival.  When competition rears its unforgiving head, two paths present themselves:  the desire to improve and compete or alternatively the fearful path, one where  the business’s shortcomings will be found irremediable leading to the pursuit of “protection” from this competition.  Enter the politician/legislator.  He/she is all too willing to “sell” protection to this business by bestowing some advantage on the already established yet threatened business, or by hamstringing the upstart such that the threat if not completely eliminated is rendered a manageable threat at best.  Some choose to reject fear of competition.  Fewer choose to reject offers of protection from competitors, a devil’s bargain.  Competition makes us better than we would be on our own and forces us to examine how we value our services in terms of time and price.  If as physicians we take our oaths seriously and consider our patients’ welfare and wellbeing to be  paramount, there is no better check on our hubris and no better quality taskmaster than the free  market and we should welcome the  oversight the market mechanism provides.


Every man’s concept of justice is different.  In some men’s minds the economic mindset of conquest seems just.  In this view, taking property/goods/services by force with no compensation to the victim is justified by the notion that in the hands of the ordained/brilliant/enlightened this property or these goods/services are better distributed.  For those who value property rights and peace, the philosophy of non-aggression and mutually beneficial exchange dictates our actions.  This transition from a civilization of conquest to one of mutually beneficial exchange is equivalent to the transition from barbarism to modernity.  Fans of free markets embrace this notion of non-aggression and leaving other folks alone and to their own devices, and make their living by providing goods and services which people value enough to engage in voluntary exchange:  their goods/services/wealth/money for another’s…a fair trade, the determination of which is made between the parties involved.  If this seems like common sense, I apologize, for the very notion of non-aggression and mutually beneficial exchange and the subjective determination of value remains an elusive group of economic ideas for many, particularly those with lots of formal education.

Time Preference

Short sighted actors (those with a high time preference) are wanting to “cash in now!”  ”Get it while the getting is good.”  ”Damn the future…take what you can however you can get it.”  Those who accept government money, those who depend on this funding, those who lobby for even more….they have a high time preference.  People who start businesses, the revenue for which comes from a robbed taxpayer, have every reason to lobby for the continual robbery of taxpayers and embrace a very unstable business model, for once the taxpayer resists this robbery either by refusing to pay or refusing to work, the revenue stream is cut off for the beneficiary of this theft.  Those with a low time preference have a more stable business as the budget fights in D.C. and the impending bankruptcy of government at all levels does not represent the threat that it does for the businessman depending on this loot.  I maintain that a low time preference is a pragmatic and stable business philosophy, not unlike the tortoise and the hare.


“I want what you have” is jealousy.  ”I want what you have but know that I can never have it so I want to destroy it so you can’t have it either” is envy.  Ludwig von Mises wrote a little book entitled “The Anti-Capitalist Mentality.”  I highly recommend it.  He describes how academicians, for instance, become envious of the “haves.”  They figure that they are smarter and have more education than that “stupid car salesman” therefore should make more money.  The concert pianist cannot abide by the riches sent the rock star’s way.  People vote with their dollars.  Rock stars get more “votes” than concert bassoonists, even though the skill, practice and talent necessary to play a bassoon well dwarfs that necessary to perform even the most demanding guitar lick.  Mises says basically, “if you want to make a lot of money, don’t be a bassoonist or harpsochordist.”  The envy that results from this situation leads many to reject rather than embrace the free market.  This is a common thought process amongst those in academia and in the arts, in particular.

If I choose to embrace the free market and the discipline it provides, does that make me better (ethically or morally) than the guy who is lobbying for more and more theft of your wages?  Yes, I think so.  The thief wants your wages without having earned it.  I want to earn your wages and want you to part with your hard-earned money at my surgery center voluntarily.  I also embrace the market out of self interest as I believe it to be more stable long term.  Health related businesses that rely for instance on Medicare funds are inherently unstable as this source of funding is constantly under threat of cuts/bankruptcy.

Not exactly the same thoughts as those who created Obamacare.

G. Keith Smith, M.D.