Civilization is an impossibility - we have to kill the sociopaths first. On Aug 2, 7:36 am, "M. Johnson" <[email protected]> wrote: > Suppose There Were Food InsuranceThursday, July 22, 2010 > byTroy Camplin > Suppose there were food insurance. Rather than everyone paying for food with > their own money, people would pay a certain fee to their insurance company > every month, and in return the insurance company would pay for all of its > clients' groceries. > Sound like a good idea? Perhaps, but what do you suppose would happen if we > had this kind of food insurance? > One thing we should expect is that there would be a general increase in food > consumption, with a particular increase in more-expensive foods. As of today, > who can afford a Kobe porterhouse steak with white truffles and saffron, La > Bonnotte potatoes and Almas Iranian caviar on the side, a Perrier Jouet Belle > Epoque Blanc de Blanc to wash it down with, and a Chocopologie by Knipschildt > and Kopi Luwak coffee for dessert? But if you're paying the same whether you > get this or a hamburger with fries and a soft drink, why not give the steak > dinner a try? > As more expensive foodstuffs become popular, cheaper food will become > repackaged and given higher prices. Which would you pay more for: a can of > green beans, or a can of hand-picked, hand-selectedharicots verts? The French > term for "green beans" just makes you want to spend a few dollars more on it, > doesn't it? > Thus, consumers will drive up the overall cost of food. Indeed, insurance or > not, it is always the consumer who is responsible for upward pressure on > prices. This is kept in check by the fact that consumers have to spend their > own, limited funds. Remove that check, and the check on prices will be > removed as well. > Naturally, farmers will begin to make huge profits from this increased > demand. There will be an expansion of the agricultural sector. More exotic > foods will be introduced, and well-known food will, again, be repackaged and > sold as more exotic in order to compete. > Since demagogues are always on the lookout for situations to exploit, farmers > would then be cast as villains, unfairly profiting off the consumer. People > do have to eat, after all. How can one profit off something people need to > survive? One could expect several decades of demand that the government do > something about rising food prices. > In the meantime, insurance companies will begin trying to figure out how to > cut costs. Premiums will go up, making it harder for poorer people to afford > food insurance. The government will likely step in to offer FoodCare and > FoodAid for the elderly and the poor. Grocery stores will build up huge > bureaucracies to deal with the private and government insurance, driving up > prices still further as they cover those employees' wages. > Both private and government insurance will try rationing, negotiating prices > with stores, and dictating what stores consumers can go to and what those > consumers can buy. Demagogues will start complaining about the insurance > companies, how they are charging high premiums but not allowing consumers to > get what they want. > Eventually, people will begin to think that it's just awful that anyone has > to pay for their own groceries at all. Stores won't display their prices, and > store managers will act offended if you even ask about cost. And as people > pay more to the insurance companies while getting less and less people will > of course have forgotten what it was like before insurance, when food was > cheap and abundant they will demand that someone do something about it. > And someone will. Regulations on agriculture, grocery stores, and insurance > companies will increase, typically exacerbating problems in such a way that > the companies will further be blamed for continued problems. The same > problems will be used to justify more control over each industry. Finally, > socialized food will be proposed. > With socialized food production and distribution come long food lines and > limited rations among limited choices. (That is, when there's even food > available.) > Don't think this could happen? All we need is a wartime excuse to cap wages > on the average worker, giving employers an incentive to come up with > nonsalary compensations such as insurance to attract workers. Something like > the incentives adopted during the wage controls imposed during World War II. > Still think it couldn't happen? Change "food" into "healthcare," "grocery > stores" into "hospitals," and "farms" into "pharmaceutical companies," and > the above narrative can explain why the healthcare industry is in the > situation it is in and why we have moved more and more toward a socialized > healthcare system in this country. > The bottom line here is that insurance of this kind as opposed to > catastrophic insurance like car insurance, which pays for accidents and not > for oil changes and general repairs creates moral hazard. Prices help provide > accurate information, but when you are insulated from the real costs of > something, you receive bad information about that product and no one can make > good decisions with bad information. > The less expensive something is, the more we are likely to consume. For > example, my wife tells me she once had great insurance a ten-dollar copay for > anything. So she went to the doctor over the tiniest sniffle. Today she is a > public school teacher, and as such her insurance is nowhere near as generous, > so seasonal colds are waited out and treated with over-the-counter medicines > that are cheaper (and work just as well). > I have no insurance, so I don't go to the doctor at all. Of course, if the US > healthcare-insurance model had not been driving up prices for the better part > of a century, I could afford to see the doctor anyway. But don't worry about > me. The current federal health-insurance legislation will soon force me to > buy insurance even though I can't afford it and I, as well as those like me, > will contribute to the next mortgage crisis when we are forced by law to buy > insurance rather than choose, as I have done, to pay my mortgage instead. > Troy Camplin teaches English composition classes at Richland College and > Collin College.http://mises.org/daily/4549
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