Let’s say that you are the CEO of a big company and that this company has lots of cash sitting around and you need to buy something with it. (Remember now, your job as CEO is to make the maximum profit for your shareholders. You have a legal obligation to do this.) Say one of your employees shows you a pair of shoes that is on the market at $13.50 per unit. The company that owns the rights to these shoes is willing to sell the rights. Your employee tells you that people will still keep buying the shoes if you raise the price to $750 per unit. You buy the rights to the shoes, raise the prices, and make billions. You get on the cover of magazines and your shareholders love you.
In case you didn’t read about it, there’s a guy named Martin Shkreli who is the CEO of company. His company bought the rights to a drug that has been on the market for 62 years and is used to help keep AIDS patients alive. It was selling for $13.50 per pill. Once he got the rights, he changed the price from $13.50 a pill to $750 a pill. People all over are calling him names.
If a lion kills and eats the weakest member of a flock of lambs, no one is mad at the lion. We don’t get angry at the lion for being a lion. The lion is “amoral” because it has no moral values at all: it is like a robot killing and eating whatever is available with the least amount of input cost. If a human being acted in this way, we would call them “immoral” because human beings are moral agents. We recognize that taking advantage of the weakest members of our own herd is against our sense of morality. It is “evil” in that regard.
In a capitalist system (this is what we have in America for you Facebook readers) companies are amoral agents. That is, they are not in business to consider the moral consequences of their actions. We do not call a bank immoral or “evil” for foreclosing on a house and throwing out the people who live there. (Unless we are the ones being thrown out and then we say it, but we know why they did it.) No one should be angry with Martin Shkreli for seeing a situation where he could make a tremendous amount of money and capitalizing on it.
So by now some of you must be thinking to yourself, “Yeah, but these are people we are talking about here and this guy Martin should have a heart and know that his actions were immoral.” I agree. Since I’m a Christian, and my belief is that you are responsible for your actions and that trying to live under the cover of, “I was just doing my job,” will do you no good when you know very well that your actions were immoral, I have a certainty that this was an evil act. I wasn’t in the room when they decided, so I can’t say for sure, but I suspect I would not have done it myself. But that is my point.
Capitalism and healthcare don’t mix. They can’t. Capitalism is based on the idea that everyone will act in their own best interest. If one person makes a product and charges too much, another will produce it at a lower price. The market (the consumers) will set the price of any product because if the product is priced too high, the consumer will not buy it. If it is priced too low, the producer will sell out. So the price will naturally land at the right level for any product or service.
However, when the product in question keeps you alive, what are willing to pay for it? If you have a broken bone, what would you agree to pay to have it fixed? If you are having a heart attack, what would you pay to have them save your life? There is no way to put a price on medical care that follows the standard rules of free markets. The price is going to be whatever the producer chooses. The consumer will pay it because there is no other choice. Capitalism fails completely here because we destroyed all of the underpinnings that make it work.
To really put a fine point on it, if you need critical care, and your life is at stake, the doctor who has your life in their hands could charge you everything you have, and you would have to pay it. (I supposed you could argue that you have a “choice” of sorts in that you could choose to die instead, but that’s silly and I’m going to ignore it.) If the doctor were acting in his own best self interest, he or she would charge you everything you have and they would be following the most basic rule of capitalism when they did. We all rely on the idea that in healthcare, the producer will act as a moral agent and charge a reasonable price. We count on the good will of the healthcare provider, not on all partied acting in their own best self interest. The price is not set by the market. Capitalism does not apply.
So, make your mind up. Either applaud Martin for his genius as an amoral Capitalist Hero, or stop talking about how great free market healthcare is for everyone. Either the prices are set artificially or they are set by the owner. You can’t have both.