Here’s an interesting story from the Philadelphia Inquirer (h/t www.smalldeadanimals.com):
The nub of it is that we now (already) face increasing shortages of drugs all across the spectrum….from common anesthetics to key cancer-fighting drugs. Most of the shortages have appeared among generic brands, which have gone out of business because the already-thin profit margins were unsustainable as healthcare costs are squeezed.
What is particularly interesting to me are the letters to the editor. Some readers make the immediate connection to Obamacare. Many others, however, predictably jump to the conclusion, however illogical, that it is “Big Pharma” that is manipulating these shortages in order to (drum roll) boost profits. You see, it’s all about profits!
In arguing with such people, one’s arguments must be distilled to utter simplicity, so here goes: profits are good! Profits are great, actually. We need more profit.
Profit is a measure of added-value. If I build a house and can only sell it for the sum of the material costs, I have not created new value. There is no incentive for me to build any house other than my own. However, if I can sell it in an open marketplace at a huge profit, that means that I have created commensurate value. Products that do not earn profit reflect no added value. Take away “profit”, you take away new value.
By contrast, if we look around us…to our country and everything that we enjoy about it, it was all brought to us by the incentive of profit…the foods we eat, the fabrics we wear, the vehicles we drive, the warmth in our homes, the activities we enjoy. All this is the product of “profit”.
Take away “profit” from the history of Mankind and we would be still be scratching out our livings through the use of pointed sticks and oxen, most likely as serfs to others.
If you want more of something, make it profitable. If you want less, take away the profit. The solution to the generic drug shortages should be obvious: make them profitable again.
Obviously, there are many people on the Stateopian Left who deeply resent the idea of “profit”. The only way that I can rationalize this position is if they somehow feel entitled to the goods and services provided by others at cost, if not for free. How can that be? How do they get to this perspective?