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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Posted by King : 7:42 PM
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