Wednesday, December 25, 2013
  Manwellernomics

Various bloggers have been pointing out that Romneycare depends on the false idea of "shopping around." Economists always start with the bizarre assumption that consumers are constantly choosing all products from an infinite range of options. Supposedly we buy everything based on a precise balance between purposes and prices. If eggs go up too high, we try another store; if all stores have high-priced eggs, we buy some eggs and some cheese instead of all eggs.

This is physically impossible in health care, and it's thoroughly impractical for food and most other categories. The only way to get a lower price for health care is to be part of an insurance plan. Hospitals start with a price that's 10 times higher than necessary. If you're "shopping" on your own, you're stuck. You have to pay 10 times the normal price because the hospital doesn't give a fuck about displeasing you. If you're part of a giant insurance plan, the insurer can throw its weight around to acquire the normal price, because the hospital doesn't want to lose half their customer base at once by displeasing the insurer.

Shopping around does work in a few situations. Gas stations run solely on price. People will drive 20 extra miles to "save" a few pennies per gallon, which they've already lost by driving 20 extra miles.

Sudden realization: It's just like Manweller's Rule.

In politics, Manweller's Rule holds that elections will only happen where elections don't matter. In countries like South Sudan or Central African Republic, the opposing parties have serious differences of policy, and the winner gets serious financial rewards from oil or diamonds. Result: Decision is made by AK-47. In countries like US, all parties slavishly serve Goldman, and the winner and loser get roughly similar rewards because of Polistra's Dog Bowl Rule. Result: Winner and loser are merely symbolic, so we have merely symbolic elections to determine which letter goes on the president's shirt.

Thus in Manwellernomics: Shopping around only happens in situations where shopping around doesn't matter. You're free to choose gas stations by price, because they all sell the same gas and you'll end up using the same amount anyway. You're not able to choose hospitals by price. Only armies (WalMart, pension funds, insurers) can truly choose products by price, because they can kill a supplier whose prices are too high.
 


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