Business and the cost of health care

Don Boudreaux has a superb post over at Cafe Hayek whacking the myth that health care costs put America at a competitive disadvantage or that a government takeover per se would lower said costs.  Don puts comparative advantage to good use in this clip:

Even if all American producers suffer production-cost increases of 15
(or whatever) percent, some American firms will nevertheless enjoy a
comparative advantage in production compared with foreign firms.  The
continued relevance of the principle of comparative advantage does not
mean that such cost increases are inconsequential; Americans will be
poorer than otherwise if American producers are burdened with the need
to pay higher costs without any offsetting increase in quantity or
quality of output.  But the problem isn’t international
"competitiveness"; many American firms will continue to export.  The
problem is costs that are unnecessarily high — a problem that
ultimately is reflected in lower standards of living of consumers who
buy from, and workers who work for, American businesses.

But read the whole thing.


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