Health and Free Trade
Tea Party Economist
by Gary North: The
New World Orderís Money Scam: A Huge Poker Game
tell me I'm terminal, I'll look for a quack." ~ Murray Rothbard
For over 250
years, economists even before they were called economists
have struggled to solve a problem: how to persuade people
that trade really is positive and that restrictions on trade really
are negative. This is one more attempt.
Let us assume
that your physician informs you that you have cancer. The type of
cancer that you have is invariably fatal. He utters those words
that estate planning lawyers thrive on: "You should get your affairs
You go home.
After thinking about your situation, you go online in search of
a solution. You come across an article on a proposed new cure. There
is hope. But you find that the cure is experimental. It has not
been approved by the Food and Drug Administration. The estimated
cost of getting through the FDA's legal hoops is $100 million. It
will take seven years.
You do not
have seven years.
Do you believe
in free trade in proposed cancer cures? Now you do.
What if you
could sign a legal waiver taking full responsibility for your actions?
What if you are willing to let the discoverer off the hook legally
for any negative outcome of the treatment? Sorry, no can do. That
would be illegal.
it be illegal?
There is a
simple reason: "Because it would reduce the power of the Food and
Drug Administration." If every Tom, Dick, and Harry were willing
to sign a waiver, then the FDA could not control drugs. This degree
of open entry into the health care field would enable producers
of health-care to get together with customers to arrange mutually
this open the door to quacks? Yes. Wouldn't this open the door to
snake-oil salesmen? Yes. Wouldn't this expose the public to scientifically
unsubstantiated claims made by profit-seeking charlatans? Yes. Then
why should the government allow it? Because this allows the free
flow of ideas. By "free flow" I do not mean zero-cost. I mean legally
unrestricted, as in "I get to think this. I also get to share my
ideas. Someone else gets to think it, too."
says the Congress of the United States. "You may think anything
you want. Just don't ask anyone to pay you for your idea. To get
paid for your idea, you must be licensed by the federal government."
At every level
of civil government, there are politicians who pass laws and legally
tenured bureaucrats to enforce them. One purpose of these laws is
to restrict the free flow of ideas. Another is to create monopolies
for large corporations with teams of lawyers. These firms have the
money to get through the hoops established by the bureaucrats.
Some of the
senior bureaucrats then retire with full pension benefits and go
to work for the corporations that are the beneficiaries of the regulations
written and enforced by the bureaucracy.
This is normal.
We know it's normal. We are told that this is the price the public
must pay to secure safety.
what? Safety from the free flow of ideas.
do not have a lobby in Washington. They do not need one. But if
they did have one, why would it promote laws different from what
we now have?
I have presented
here the basic case of free trade in ideas, which includes the implementation
of these ideas in the form of products.
Am I speaking
hypothetically? No. I am speaking from personal experience.
"BLACK BOX" (WHICH WAS GRAY)
My wife in
1987 began to suffer from an ailment. It had many names: Epstein-Barr,
chronic fatigue syndrome (cfs), fibromyalgia. Whatever the name,
it was widely dismissed by physicians as merely psychological. "It's
all in your head." This is a code phrase for "You are desperately
sick, but I have no clue as to why. Because we physicians can't
define whatever it is that you have, your insurance company does
not insure it. Please pay by credit card or check before you leave."
A 1987 book
by a pair of husband and wife sufferers was titled Waiting to
Live. It was a depressing book. My wife had many of the symptoms
it described. She was in constant pain: headaches. She was constantly
exhausted. She sometimes slept 16 hours a day. She could not recall
anything she had just read. Driving over 15 miles an hour seemed
like speeding to her. There was no relief.
I heard of
a man who had a machine that seemed to cure people of numerous diseases.
Her disease was one of them. He had a clinic. Officially, it was
a pain clinic. Unofficially, it was a miracle clinic. As a pain
clinic, it was legal. The way it reduced pain was to cure the diseases
that caused the pain.
In the summer
of 1988, I sent her to this clinic in California. She took three
treatments, each lasting 8 hours a day. The symptoms disappeared
at the end of the third treatment. They have never returned.
The man who
invented the machine told me that this was the most rapid recovery
from chronic fatigue syndrome that he had ever seen.
patient was the actor James Coburn. He had lost
his career as a movie action hero. As he told me when I interviewed
him, it is hard to be an action hero when it hurts too much to comb
your hair. If you look at his hands when he deals cards in Maverick,
you will see what he had faced. His fingers remained gnarled, but
he could deal the cards.
In 1991, the
U.S. government impounded the machines temporarily in his new clinic
in Nevada. My wife then loaned him $10,000 to hire a lawyer. (She
never got her money back.) But the Feds made a very big mistake.
The impoundment order lapsed on day 30. The government's agents
showed up at the clinic on day 31 to remove the machines, only to
find an empty clinic. The machines wound up in England. (They are
no longer in England.) I have written about all this before.
is hostile to any arrangement based on money transfers between a
caregiver and a sufferer.
establishment is equally hostile. Its above-market income has been
based on government restrictions on entry by non-licensed practitioners.
This 100-year arrangement is about to backfire. The government has
lured the doctors into the trap. Now it is about to spring it.
the Medicare bureaucracy cuts payments to physicians and hospitals.
Every year, Congress delays the implementation of these new regulations.
Sometime, possibly on January 1, 2013, the new regulations will
go into operation. Having made the medical establishment dependent
on government regulations and Medicare money, the government will
slowly take the medical establishment off life-support: government
saw this coming in 1978. Now it's almost here.
Let us assume
that you want to get that experimental treatment, despite the fact
that the Food and Drug Administration has not yet authorized its
sale to the American public. You continue to research the matter.
Lo and behold,
a clinic in Mexico is offering it. So, you call the clinic and schedule
an appointment. You fly there and get the treatment.
Let us say
that it works. You go to your oncologist. He gives you a clean bill
of health. He says it is a case of spontaneous remission. What is
spontaneous remission? It's just one of those things, just one of
those crazy things.
You have a
choice. You can say nothing. This is the safest course of inaction.
You can say you got treated in Mexico. He will think "quack." He
will still attribute it to spontaneous remission. Or maybe he will
decide to invest part of his pension money in the Mexican firm that
produces the product. It's hard to say what he will do.
Let's go the
whole nine yards. What if it's a pill? You can administer treatment
yourself. Anyone can.
What if someone
could buy the pills online? They would be shipped by Federal Express
to his door.
What if the
Food and Drug Administration finds out?
It can take
remedial action. It can impose heavy penalties on anyone who buys
the pills. Or maybe the FDA can say that the supplier is a Mexican
drug lord. Any FedEx packages from the address will therefore be
By whom? How?
Where? How will the FDA enforce this restriction?
Can the FDA
impose sanctions on the seller? No. Can it somehow block the money
transfer? Maybe, but at what cost? Can it follow the money when
the seller shifts banks?
The FDA could
then contact some international regulatory agency. It could go to
the World Health Organization, the source of the Codex
Almentarius. This code regulates the sale of health supplements
across borders. But these agencies cannot enforce anything that
respective nations refuse to enforce. They have no meaningful sanctions
of their own.
As the cost
of communication falls due to the World Wide Web, the ability of
the U.S. government to control the flow of information is collapsing.
As the cost
of package delivery across borders falls, the U.S. government finds
it increasingly expensive to stop the flow of goods. At some price,
it can reduce the flow of products, but this price keeps rising.
Why is the
price rising? Because of increased trade. The more goods that cross
borders, by way of Federal Express and UPS, the more costly it is
for the government to identify and intercept a single package. The
haystack keeps growing. It gets easier to conceal the delivery of
cannot control the flow of ideas, goods, and digital money. The
gatekeepers stand at the gates, but the walls have collapsed, like
The wife of
an old friend of mine suffers from a lot of pain. He has a friend
who occasionally would drive to Mexico. The person would buy the
pills, bring them back, and send them to him by mail. This is no
longer necessary. They buy the pills online. Bottles are delivered
to their door.
if you cross the Alabama border and buy a bottle of Sudafed, you
can go to prison for eight years.
Here, we see
political insanity in action. The idea that legislation securing
a border can somehow protect people from charlatans is itself one
of the most important ideas in the history of charlatanism. Politicians
are the charlatans. When it comes to snake oil, can any private
manufacturer rival the U.S. Congress?
program available to veterinarians allows them to diagnose the health
of animals by doing a simple blood test. The program costs $1,000.
It probably costs a lot less from some "pirate" site in China.
It is illegal
for the vet to run a test on anyone in his family.
Let me write
some science fiction. In a decade, you will be able to walk into
a clinic at Wal-Mart and get the test for (say) $50. A licensed
para-nurse will administer the test. She will make $20 an hour.
This will take at most 10 minutes, most of which will be devoted
to filling out a form. The digital data will be sent to a specialized
diagnostic firm in India. There, a licensed physician will look
at the program's analysis and offer his assessment. This will be
sent to your email address.
this is implausible. With the Federal Reserve running things, it
will cost more than $50.
What is to
prevent this, other than the AMA, the FDA, the FTC, the FBI, the
CIA, or whatever agency or agencies assert primary jurisdiction?
Take the government out of the picture, and what do we get? Better
health. Cheaper health. Innovative health.
If we are
talking about digits, things get cheap, fast. Things also get fast,
this be bad for consumers? It wouldn't. Why would this be bad for
American physicians' incomes? I don't have enough time to list the
ways. I can say this: the number of medical school applications
will fall. Anyway, applications to American medical schools. Tuition
rates will fall due to a hundred online medical schools training
people in digital medicine. Most of these schools will be located
outside the USA in a room with a computer. The faculty will be all
over the world.
is about to receive a shot in the arm. It will be driven by price
competition. It will be available to people in clinics that will
serve people too poor to buy medical care today.
be quacks? Of course. Will there be genius innovators the
equivalent of Salman Khan and his Khan Academy? Of course.
be concierge doctors for the rich? Yes. The price will fall, as
today's licensed physicians get out of Medicare delivery and start
serving only non-Medicare patients.
there be better living through chemistry? Count on it.
be long waits in local doctors' offices doctors who still
serve Medicare patients? Yes.
of physicians cease to take new patients because too many new patients
will be on Medicare? Yes.
plans to shift to the medicine of the future. It will be cross-border
medicine. That is where the savings will be. That is where the innovation
will be. That is where the FDA won't be.
North [send him mail]
is the author of Mises
on Money. Visit http://www.garynorth.com.
He is also the author of a free 20-volume series, An
Economic Commentary on the Bible.
2012 Gary North
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