The argument against forcing the market to recognize costs that it currently does not. For example, what if the cost of doing business included costs for disposing of waste:
A representative of the auto industry warned that adopting the new California standards would be “counterproductive,” raising the price of cars, costing jobs and imposing inconsistent auto emissions standards around the country.
Or what if the cost of labor increased:
MARRIOTT: If we don't get the workers, the growth in the hospitality industry, the restaurant industry is going to slow markedly. And I think it could cause labor costs in this country to escalate tremendously. We can have runaway inflation and we could, at the same time, have a recession. We could have the worst of all worlds on the economic front.
Oh no, economic failure! The market can't handle more costs. We need to avoid paying for these things. It's too much of a burden on the system.
But wait, isn't the market designed to drive down costs? Isn't that the strong point of free market capitalism?
The benefits of competition and free choice are driven home in the first few pages, when Cannon and Tanner describe experiences with some of the few medical services where patients pay, rather than the government or private insurance.
For instance, in the cosmetic surgery market, "patients pay directly and therefore must weigh the costs and benefits of each procedure. As a result, inflation-adjusted prices have fallen every year from 1992 to 2001," they note.
The authors add, "Patients also weigh the costs and benefits of laser eye surgery, another highly competitive market where prices have fallen dramatically. ... It is also notable that these falling prices occur despite the fact that more than 80 percent of Lasik patients search for an experienced surgeon with a strong reputation, rather than just the lowest price."
I'm so confused now. Thank goodness there are smart people thinking about this for me.
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