Whatever the Business Titans Claim, The Free Market Works Best

Written by Michael Cummings on February 2, 2018

While big business may make conservative or leftist decisions, at its core it is neither far right nor far left. Big business is, however, self-serving. Use this lens to view and interpret initiatives and campaigns that your favorite company embarks upon.

It’s okay to be self-serving in business – necessary, in fact. Every company’s primary objective is to produce things people want, and do so at a profit. All other matters – job creation, benefits, community image, perks, etc. — are secondary. If you don’t operate at a profit, you don’t operate for long.

So I giggle, wince, and grimace at once when some of the wealthiest people in the world, either alone or with others of their ilk, stand in front of a crowd and spout off on economics in abject contradiction to the principles that made them rich (emphasis mine):

On Tuesday, Jeff Bezos’s Amazon.com, Warren Buffett’s Berkshire Hathaway and Jamie Dimon’s JPMorgan Chase JPM -0.66%, three companies with a collective 1 million-plus workers and a combined market capitalization of over $1.5 trillion, unveiled a non profit healthcare venture targeted at cutting spiraling costs for their employees. The partnership brings together the most powerful players in technology, insurance and finance and they aren’t mincing words about the impetus of their endeavor.

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“The ballooning costs of healthcare act as a hungry tapeworm on the American economy,” said Warren Buffett, in a shared press release. Added Bezos, a master of disrupting industries, “hard as it might be, reducing healthcare’s burden on the economy while improving outcomes for employees and their families would be worth the effort.”

The three companies are going to form an independent, non profit venture spearheaded by Todd Combs, one of Warren Buffett’s investing lieutenants, JPMorgan managing director Marvelle Sullivan Berchtold and Amazon SVP Beth Galetti. Initially, they will focus on using technology to uncover new solutions, and areas where complexity can be eliminated alongside costs. Pooling the power of Amazon, Berkshire and JPMorgan, however, may help cut through roadblocks that have so far led to spiraling costs and frustration from Washington to Wall Street.

The might of the partnership was enough to spook healthcare investors. Benefits manager Express Scripts plunged nearly 9%, while CVS and UnitedHealth fell over 4% in early trading. Aetna, Humana HUM, and Walgreens were all off by over 3%.

Non-profit, eh? How well do you think that will do on the open market? I am not impugning the abilities of these three people and the organizations they run. Considering my attachment to Amazon alone, I expect great things to come from this collective brain trust. However, consider what they could accomplish if they promoted free-market principles for all Americans and not just those within the AmazonBerkshireHathawayJPMorganChase coven.

This isn’t complicated. The causes of our ever-rising healthcare costs can be traced to two sources: The abuse of the tort system, and government. Everyone knows at least one frivolous lawsuit that snuck its way through the court system. So the payout is either in costly administrative and medical tasks in an attempt to cover their rear ends, or an expensive lawsuit that often gets settled in an attempt to mitigate the risk of losing in court.

Second, that local, state, and federal government agencies have any influence in healthcare except for consumer protection against really bad players is no less than a horror story. There are people in all spectrums of the medical profession who wish to make a living by providing goods and services to willing consumers; you, government, only make things more complicated and more expensive. Why should we the people not be able to buy a medical insurance policy on our own, from anyone? Why would you care if mammograms are mandated? Why would you place what you deem are tight (but are actually laughable) information security protocols in HIPAA, when the private market has its own incentive to keep patient records secure? And so on.

In a way and without knowing it, what Nancy Pelosi said in 2012 about Obamacare speaks more to why healthcare insurance should be decoupled from employers, and allowed to operate in the free market:

“We see it as an entrepreneurial bill…A bill that says to someone, if you want to be creative and be a musician or whatever, you can leave your work, focus on your talent, your skill, your passion, your aspirations because you will have health care. You won’t have to be job locked.”

When the left’s hero, FDR, froze wages after World War II, employers had to find a way to attract top talent so they started offering healthcare and other tax-exempt benefits. What we have today is the government incessantly trying to fix yet another problem it created, and the consequences are always bad for everyone but those in government.

Free market principles always results in the best quality, price, and availability for the consumer.

Image: CC by 2.0; Excerpted from: https://www.flickr.com/photos/donkeyhotey/12682081283

Michael Cummings
Michael A. Cummings has a Bachelors in Business Management from St. John's University in Collegeville, MN, and a Masters in Rhetoric & Composition from Northern Arizona University. He has worked as a department store Loss Prevention Officer, bank auditor, textbook store manager, Chinese food delivery man, and technology salesman. Cummings wrote position pieces for the 2010 Trevor Drown for US Senate (AR) and 2012 Joe Coors for Congress (CO) campaigns.

 

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