Thursday, August 27, 2009
Barack Obama - doesn't understand about profit?
Apparently not.
Profits are the fuel that a free economy runs on.
Profits are the reason behind discoveries, efficiences, and an increased standard of living.
Whether it's health care or chewing gum, we should always want the profit motive to be there...
Profits are the fuel that a free economy runs on.
Profits are the reason behind discoveries, efficiences, and an increased standard of living.
Whether it's health care or chewing gum, we should always want the profit motive to be there...
John Stossel discusses health care and the profit motive at RealClearPolitics.com:
"What Obama says in favor of a public option -- as of today, at least -- tells us how little he understands competition. The public option's virtue, he told Smerconish, is that 'there wouldn't be a profit motive involved.' But as St. Lawrence University economist Steven Horwitz writes in The Freeman magazine, profit is not just a motive. Profit (along with loss) is what enables competition to perform its discovery role:
'Suppose for a moment that we try to take the profit motive out of health care by going to a system in which government pays for and/or directly provides the services. ... (P)ublic-spirited politicians and bureaucrats have replaced profit-seeking firms.'
'By what method exactly will the officials know how to allocate resources? By what method will they know how much of what kind of health care people want? And more important, by what method will they know how to produce that health care without wasting resources? ... In markets with good institutions, profit-seeking producers can get answers to these questions by observing prices and their own profits and losses in order to determine which uses of resources are more or less valuable to consumers. ... (P)rofits and prices signal the efficiency (or lack thereof) of resource use and allow producers to learn from those signals.'
Profit is the key to competition. Anyone who claims to favor competition but looks down at profit has no idea what he is talking about."
