Wednesday, September 26, 2007

He gets principles 

At True North, the Policy Guy explains the importance of one of the fundamental lessons of economics:
What we have in single-payer systems � or at least any single-payer system that incorporates enough of the population to have market power � is an attempt to allocate resources without prices. When you don�t use prices, you end up�when government is the purchaser�using politics. And with that comes rationing, political favoritism, misplaced priorities (bridges to nowhere), and a host of other ills.
All scarce goods must be allocated somehow. If you won't use price to do so, then it's first-come-first-served, or equal shares, or some other rationing mechanism. Price allocates according to who is willing to sacrifice the most to get it, using a widely-accepted medium of exchange. If willingness to pay doesn't work for you, tell me please what does.

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