free markets

In a recent Health Alert I evaluated Paul Krugman’s claim that ObamaCare is going to save “tens of thousands of lives” and the repeal of ObamaCare will lead to the death of “tens of thousands” of uninsured people.

Krugman’s bottom line: Mitt Romney wants to let people die. The economics profession on this same subject: Krugman’s claims are hogwash.

But there is something that does cause people to die: socialism. More precisely, the suppression of free markets (the kinds of interventions Krugman routinely apologizes for) lowers life expectancy and does so substantially.

Economists associated with the Fraser Institute and the Cato Institute have found a way to measure “economic freedom” and they have investigated what difference it makes in 141 countries around the world. This work has been in progress for several decades now and the evidence is stark. Economies that rely on private property, free markets and free trade, and avoid high taxes, regulation and inflation, grow more rapidly than those with less economic freedom. Higher growth leads to higher incomes. Among the nations in the top fifth of the economic freedom index in 2011, average income was almost 7 times as great as for those countries in the bottom 20 percent (per capita gross domestic product of $31,501versus $4,545).

What difference does this make for health? Virtually, every study of the subject finds that wealthier is healthier. People with higher incomes live longer. The Fraser/Cato economists arrive at the same conclusion. Comparing the bottom fifth to the top fifth, more economic freedom adds about 20 years to life expectancy and lowers infant mortality to just over one-tenth of its level in the least free countries.

Continue reading “Socialism Kills”

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As a fan of free markets, I recognize that sometimes intelligent government regulations (not always an oxymoron!) can improve markets by requiring companies to provide consumers with information that will help them make better choices. Informed consumers, after all, are a central ingredient of a successful free market. That’s why even most libertarians support regulations that ban fraudulent advertising.

That’s also why, at first glance, the federal government seemed to be promoting better markets when it passed rules requiring chain restaurants to post calorie counts next to their menu items. Research has shown that many consumers are horribly uninformed about the number of calories in most menu options, often significantly underestimating the amount in their favorite meals. Calorie count information should help these consumers make more informed, and therefore better, decisions.

But recent push-back from groups like pizza companies raises important questions about the proper size and scope of such regulations. More importantly, this controversy should remind all of us that, when debating government regulations, we should be humble, because it is often difficult to set a proper balance between helping consumers while at the same time allowing businesses to prosper.

To understand the push-back, it helps to take a guess – your best shot – at estimating the number of calories in a large Little Caesars pizza.

Stumped? You should be. There is no right answer to this question, because there is no such thing as a generic large Little Caesars pizza. Instead, there are hundreds of possible large pizzas one could buy from this company – cheese pizzas, pepperoni and sausage pizzas, mushroom green pepper and extra sauce pizzas . . . you get the idea. The number of calories in a large Little Caesars pizza depends on how many toppings consumers choose to put on top of their pies. This variability makes it hard for Little Caesars to post calorie counts on its menu.

Continue reading “Man versus Pizza”

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Matthew Holt
Founder & Publisher

John Irvine
Executive Editor

Jonathan Halvorson
Editor

Alex Epstein
Director of Digital Media

Munia Mitra, MD
Chief Medical Officer

Vikram Khanna
Editor-At-Large, Wellness

Joe Flower
Contributing Editor

Michael Millenson
Contributing Editor

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