Regulating business with competition

Generally we try to protect ourselves from the excesses of capitalism with regulations.  An alternative method may be to increase competition.

Capitalism is known for its disregard for health and safety concerns and for its excessive profits.  To deal with these problems we impose regulations on firms.  As people are good at getting around regulations the natural reaction is to increase the regulations.

An alternative approach would be to increase competition.

One of the myths of our economy is to equate competition and capitalism.  The reality is that capitalism depends upon governments passing legislation which limits competition.  Most economic legislation, while labeled as consumer protection, works to restrict competition.  For example, many manufactured items are subject to strict regulations as a safety thing. .  But these regulations tend to be set so that only large producers can comply.  This means that specialty manufacturers cannot afford to get started as the extra costs have to charged to a small production run.

Health and safety regulations, copyright and patent legislation and licensing requirements all work to limit competition.

Here in Canada we have a strong commitment to separation of church and state.  The result is that the provision of spiritual and religious services comes closer than anything else to the perfect competition model.  When people move into a new area they often go church shopping, even among churches of the same denomination. 

Churches are also the least regulated institutions in the country as their members look after that either by asking their ministers to leave or by leaving themselves.  (Ministers get fired for one of two reasons – they get into relationships their congregations consider inappropriate or they over stay their welcome.)    When the United Church of Canada decided to ordain and marry gays and lesbians a lot of people switched denominations.

This blogger figures  increasing competition in most if not all industries would do a lot to resolve the excesses of capitalism and reduce the need for regulations.

One of the requirements of perfect competition is that all participants have perfect knowledge.  Therefore the only regulation needed is that firms be required to publish all the information customers need to make good decisions.  This would require us to take responsibility for our own lives rather than expecting the government to look after us.

I realize this suggestion is a political can of worms as people don’t like to reveal secrets.  However with internet and smart phone technology more and more information will be easily available.  Rather than trying to increase regulations we should demand that this information be made generally available so that we as consumers can become the regulators – just like church goers.


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Health care greed

This post was inspired by a rather long article on why health care in the United States is so expensive.

As I read the first section I was thinking that when it comes to greed some health care people make Wall Street bankers look like amateurs.  By my values the bankers are higher on the ethical ladder than some medical people because the bankers are conning people who are just as greedy.  Medical people are exploiting people when they are sick and at their most vulnerable.

metalmarious_Medicine_and_a_StethoscopeOne of the more interesting university courses I took was sociology of work in which the professor talked about the professional encounter.  We go to a professional when we are in a crisis situation and because the professional has specialized knowledge which can be used to get us out of the crisis.

This gives the professional a great deal of power over us and according to the article it appears some in the he medical profession take full advantage of it.

How do we protect ourselves from medical exploitation?  Normally I would say increase competition.  But one probably doesn’t want to take time to compare prices when having a heart attack.


To some extent we can choose a family doctor.  More competition would make this easier.  We might get a little more competition if health people were to be certified by associations rather than licensed by governments in that associations could certify more practitioners and more different types of practitioner.

Maybe the best way to protect ourselves is to live a healthy lifestyle – exercise, eat mostly healthy foods and practice defensive driving.  Even so it is hard to imagine anyone getting through life without interacting with the medical profession.

Criteria for a health care plan


With health care likely to become a big issue in the U.S. election and an issue in many other countries here are three points against which I would want included in   a health care plan

First I believe we should have a collective responsibility to ensure all citizens have the opportunity to experience the same standard of living as all other citizens.  That includes health care

The second is that we should be able to make our own lifestyle decisions. Most if not all of us do and eat things which are long-term detrimental to our health and all of us have to take the consequences of those decisions.

The third is that quite a few years ago The Economist reported that 80 per cent of health care spending is in the last six months of life.  This should not be included in our collective responsibility although if a person or family has to resources and wants to go there they should be allowed.

Some years ago there was a story that the Chinese paid their doctors so long as they were healthy.  When they got sick the treatment started and the payments ended. Wouldn’t it be interesting if this concept could be incorporated into a health care plan.


If you liked this post your are invited to comment, press the like button and/or click  one of the share buttons. If you disagree you are invited to say why in a comment.  While I like the idea of sharing this platform, my personality is such that I don’t reply to many comments.

The power of professionals

This week’s The Economist has two articles on medicine and doctors in China which prompted the following thoughts.

One of the more fascinating courses I took in university was on the sociology of work where the professor spent some time talking about what makes a professional.

We go to a professional when we are in a crisis and the professional has specialized knowledge which can help us.

This gives professionals a great deal of power over us and it encourages them to let us think they know more than they do.

It also means some of them are able to take advantage of us and it appears this applies to doctors in lots of countries.

The way for us to deal with this is to try to live a reasonable lifestyle (exercise and good diet) and when our turn comes, try to accept it gracefully.


If you liked this post your are invited to comment, press the like button and/or click  one of the share buttons. If you disagree you are invited to say why in a comment.  While I like the idea of sharing this platform, my personality is such that I don’t reply to many comments.

Treating young adults as children and healthy eating

When I first saw this column I thought it was about our right to make our own decisions about what we eat.  But at a closer look  it was about treating young adults as children.

The column was criticizing conservatives for supporting some high school students who objected to restricted choice of menu items in their school cafeteria thanks to some nutrition guidelines for foods sold in schools.

It bugs me that some people consider others to be children until they are 16, 17 or even 18 years old.

“Remember, though, that students are still students for a reason — they aren’t adults,” says the author of the column.

A year ago while on a cruise through the Panama canal my wife and I did an excursion to a native village  in Panama.  On the way out we were told that generally by the time the girls were 14 years old they had two babies.

I don’t want my granddaughters to have children at that age but I do think that once people reach puberty  we should recognize they are no longer children.

The other issue in this column is that there are always people who want to tell others how to live their lives and they come from all parts of the political spectrum.

Some people have trouble letting others make their own mistakes and taking the consequences.  The most important things in life we have to learn for ourselves.

Probably the best way to prevent health problems is education about what makes for a healthy lifestyle.  However, it is easy to know what to do or not to do but not always so easy to practice what we know.  Most of us do things that contribute to our own demise.

The health and economics of smart meters

A flunky from a contractor to B.C. Hydro came by yesterday and installed a smart meter to monitor our electricity use.

A few minutes later my wife went to her quilting club at the local community hall.  On her return, as usual,  I asked about the gossip in our rural community. Of course the talk was about smart meters and the refusal of some people to allow the installation of these meters.  One lady missed the session so she could ensure the meter was not installed.

There appear to be two concerns – health from radiation and it may be a way for B.C. Hydro to grab more money.

Radiation may or may not be a problem but I know we surround ourselves with lots of devices that emit radiation and electro-magnetic fields. I have for some years been saying electricity is the root cause of cancer because cancer is a lifestyle disease and our lifestyle is based on electricity.

If people are concerned about high electricity rates they should tackle the  company on its bureaucracy and the salaries paid to employees.

In theory smart meters should reduce costs partly through not having to pay meter readers.  The big benefit should come from time-of-day pricing  By encouraging people to use power at off-peak times, the company should be able to reduce its need for more generating capacity. In British Columbia that means we may be able to avoid another hydro dam on a river.

People who refuse the smart meters could end up paying more for their electricity.  The company could charge them extra for meter reading and when time-of-day pricing is introduced they would certainly have to pay the top price for all their electricity.

Who is responsible for our health?

These thoughts started with reading an article about government requirements on food labelling.

To what extent should we take responsibility for our own health and what is the government’s role in encouraging or forcing us to live a healthy lifestyle and to provide medical services?

Most of us do things which may eventually contribute to our demise. It’s easy to know what to do to improve our health but often extremely difficult to do them. It can also be difficult to sit back and watch another person do something we think is wrong. Sometimes even for little things.

He or she who pays the piper calls the tune. When we hand over responsibility for health care,   the government and its bureaucrats could seek the right to dictate our lifestyles. If you smoke you will probably require more  health care and the rest of us have to pay for it – or at least there will be less for other people.

Economics provides partial guidance. Perfect competiton requires perfect knowledge. Therefore governments should require that as much information as possible should be available to all citizens with respect to all aspects of healthy living. This includes food labelling,

If we had a perfectly competitive economy medical insurance would be private and people who smoke probably would have to pay a higher premium. As to drivers with lots of accidents.


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