The market, by contrast [to state and other nonmarket means of supplying goods and services], rewards the profit-seeking baker according to just how much the consumers feel the bread is worth at solving their nutritional gluten problem. So the market will self-correct. Suppose there is a high social payoff to making bread for consumers – as measured by what consumers are willing to pay – but nobody is producing any bread to take up consumers on what they are offering. Some suppliers in search of profit will start solving the missing bread problem, rewarded by the private payoffs of the revenue per loaf that is aligned with the social payoff to consumers.
-William Easterly ( The Tyranny of Experts🙂
Price is good information – it denotes the risk of providing a service or product, being able to recoup cost, and provides signaling that consumers either want that service or product at that price – or not. As opposed to what we are seeing in the healthcare market where the Federal government is basically using price controls. We all know how that has worked out in the past – and present, as we watch the Socialist command and control system run Venezuela into bankruptcy as NO small cadre of people can be ever adequate or successful in running an economy for hundreds of millions of people. In this, only the people can decide what is most important and most efficient to them.
(H/T: Cafe Hayek)
