Sanders' Proposal Sets a Dangerous Precedent

Townhall.com ^ | April 7, 2016 | Ken Blackwell

[Rusty0604]

So if someone invests their own time and money and develops a product that could potentially save lives, they can be forced to sell at a loss? So they don’t really own it anymore? What if that product doesn’t work out for some and they are used? Do they suddenly become the owner again?

[Rusty0604]

Good point!

[Svartalfiar]

Number two; the argument 'I can do what I want with my property' is simply unreal as no legal system allows an owner to harm others with his property.

And how does charging $750 per pill harm anyone? You have the choice to buy or not buy the pills. Your dam example includes actual harm to others. The expensive pill doesn't harm anyone.

[RainMan]

You are confusing terms. What you are describing is a "Perfect Market" or "Perfect Competition", which is almost the opposite of a free market.

to wit ...

a perfect market requires a large number of buyers and sellers ... but in a free market, you can have just one buyer and just one seller. (I.e, monopoly and monopsony can exist in a free market, but not in a perfect market)

a perfect market requires "perfect information" ... i.e, everyone knows exactly the same information about prices and costs. A free market allows information to be used as a lever for price. (i.e, free markets leverage information asymmetry.)

a perfect market has homogenous products. A free market has products that differ based on the needs and requirements of both manufacturers and customers.

in a perfect market, every participant is a price taker, and nobody has the market power to set prices. In a free market, you can charge what the market will bear.

in a perfect market, you have rational buyers and sellers. A free market makes no such requirement.

in a perfect market, you have no externalities (i.e, transactions do not affect 3rd parties). In a free market, externalities can be a reason for participating in a transaction.

in a perfect market, there are non-increasing economies of scale and no network effects. In a free market, you have both.



A perfect market is, in short, an economists fantasy. It is purely theoretical, and used as a benchmark to determine which levers are being pulled to move a market. A free market is (unfortunately) becoming more theoretical, as governments step in to try to impose perfect market conditions so that the government can choose winners and losers.

What the government is trying to do with Obamacare is create a "perfect market".

[baltimorepoet]

And why force someone else to haul your body in? You can drown in 3” of water in your own home and not bother others .Don’t be a coward.

Not sure coward is quite the word. Not really afraid of anything, anymore. I used to be afraid of heights (anything much more than 10 feet), but I jumped out of a plane 2 weeks ago.

LOL. When I hit retirement, the general gist is doing it when no one is around to witness, and leaving no note as to where I went. Live in obscurity, die in obscurity. As far as drinking water goes, its a big reservoir, a lot of animals are probably dead in it, and water gets treated.

In about 20 years, I punch my timecard. LOL.

[ctdonath2]

Stupid analogy. There is no looming harm to others. That would imply you’re insinuating they should stop selling the drug because someone not using it might get hurt by others using it.

Better analogy would be that dam providing irrigation or electricity, selling to those paying a high price while others go without and b!tch that he won’t sell it cheaper at a price point convenient for them.

The core point you’re COMPLETELY MISSING:
They don’t have to do it _at_all_.
The pharmaceutical company doesn’t have to create the drug ... so nobody would get it.
The dam owner can just let all that water out or not build the dam ... so nobody gets irrigation/electricity.
Take away the profit incentive, and they just won’t do it. There won’t be the next lifesaving medicine not yet available. There won’t be hydroelectric power or clean consistent water. Drugs & dams are EXTREMELY EXPENSIVE to create (and create to high standards*); they may be easy to benefit from thereafter, but without promise of big payoff (don’t forget the risk of _losing_ $billions if it doesn’t work) it won’t be done.

* - Mosul Dam in Iraq is among the largest in the world. Insufficient effort went into building it. There is no meaningful benefit (profit) in maintaining it. And as a result, the ancient city of Mosul _will_ be washed away this year when it collapses, killing about a half-million people. Interesting lesson in half-assed socialistic economics.

[ctdonath2]

“Basic research and development is more than a crap shoot, but often not much more.”

I used to work for a medical products company (blood analysis).
The core of the product involved a chemical which required 6 months to make, and which the company (150 people) could only afford to make 2 gallons of per year.
If _ONE_ batch went bad (long, complex, sensitive process), the company darned well better have enough cash on hand to keep functioning, with near zero revenue, for a full year.
Yeah those single-use packets weren’t cheap. They didn’t just have to pay for themselves, continued employment of workers, and profit for owners/investors, they had to cover surviving the loss of just 1 gallon of their magic potion without which the business (and all employees, from CEO to janitors) faced collapse.

[RWGinger]

of course that is your choice. I take you have no one who is important to you.
Interesting that because there might be dead animals in the body of water it you think it is ok to add your body.
I feel sorry for you and any family you have.

[Pelham]

OF course Bernie Sanders is dangerous. He’s a friggin communist and never tried to hide it.

http://nypost.com/2016/01/16/dont-be-fooled-by-bernie-sanders-hes-a-diehard-communist/

[AndyJackson]

You are confusing terms. What you are describing is a "Perfect Market" or "Perfect Competition", which is almost the opposite of a free market.

You split a hair that does not exist. Are you that stupid or are you trying to play on the ignorance of others.

[RainMan]

First sign that you won an argument is getting called names, so thank you for the concession.

I have an MBA and minor in Econ, and you gave a definition of a free market that is patently false. What you gave was a quick definition of a Perfect Market, which is also an Economics term. It was you that was playing off the ignorance of others.

[AEMILIUS PAULUS]

I'll bet you would make the same argument before the Pure Food and drug laws were passed. If people are sold poisonous food they can just stop buying it. If they are sold contaminated food they don't have to buy it. If your child would need a cancer fighting drug and it would cost the consumer $50.00 then would choose not to buy it if the manufacture decides to charge $1750.00 per pill and it required one pill per day. Libertarians are ridiculous.

Every pseudo intellectual libertarian would change their tune the instant their child came down with cancer and a drug company was charging "what it wanted."

There is always a rule of reason.

[AEMILIUS PAULUS]

Who said a developer must be forced to sell at a loss? Ever hear of the concept of amortization? How about cost plus 10% over 100 years amortization. You assume that all costs of development must be immediately recovered; does not have to be so. Why do you think there are monopolies given by the patent laws?

No legal system has ever given a property owner untrammeled license to do as they please.

[Rusty0604]

As an accountant and chief financial officer, yes I have heard of amortization. You claim to know what I’m assuming and that I’m not knowledgeable, but maybe you should look in the mirror.

[AEMILIUS PAULUS]

Sorry Charlie setting wages/prices is done all the time. Pure food and drug laws are over a century old and those laws tell companies what to put in their product and what to omit every day. We tell corporations they can't work 10 year old's 12 hours per day six days per week. Prices are set all the time. It is a lack of judgement in regulating rates that causes problems not the concept of regulation per se.

All of the protective laws are based upon experience society had with "Free Markets," "Freedom of Contract," and myriads of abuses by untrammeled capitalism. Once again it is over regulation and ill considered regulation that creates problems.

[AEMILIUS PAULUS]

Pretty standard really. Do you believe that people can so use their property that they can cause harm? Can you even define “property?”

[BlueMondaySkipper]

Do you believe that people can so use their property that they can cause harm?

How is a person "harmed" by someone creating a drug that can save their life?

If you spend some logical thought time on it, when politicians take away the profit incentive and because of that a drug does NOT get invented, the politicians themselves are the one doing harm.

[AEMILIUS PAULUS]

I assume people have more knowledge regarding contract than they really do have.

Have you ever heard of an "Adhesion Contract?" That is where one person has all the power in a bargaining position and the other party is free to pay what is demanded or walk away. Such contracts are controlled and rightly so.

A person would certainly be harmed if the drug company used its bargaining power viv-a-vis the consumer. The flaw in the Libertarian argument is their failure to recognize there is a vast difference in bargaining power among various persons, firms or entities. Imagine you personally going to a giant drug company and trying to bargain their price down for a drug that would save your five year olds life.

[BlueMondaySkipper]

Imagine you personally going to a giant drug company and trying to bargain their price down for a drug that would save your five year olds life.

Why don't YOU imagine being told that EVERY 5 year old with this affliction will die because the drug that could save them was never developed. There was some promising research but the investment was simply too high to proceed.

See how that works?

[AEMILIUS PAULUS]

Show me a real world example of a promising drug that was never developed because the investment was too costly due to governmental interference in setting the price to the consumer. Name the actual drug.