With all the buzz about Obamacare and socialized medicine, I thought it'd be prudent to discuss a couple problems I see with regulated services and products.
There is a marked decline in quality when a product or service is regulated. This is due to the issue of regulation vs. quality. Ordinarily(in a free market), the costs of the company go toward making a product that will allow them to have the greatest customer retention. This means they need to make a good product relatively cheaply. Trial and error will come into play, along with consumer review and feedback. Eventually, the kinks and issues with the product will sort out and you're left with a real, quality item.
By definition, a "regulated" economy imposes "regulations" upon products and services. These regulations are intended to have safety and quality control in mind, but end up being detrimental to both. When a regulation is imposed, it provides a boundary and a limitation on the product being regulated. This regulation MUST be met, or the company will face legal penalty. When a company is meeting a regulation, the time and money that would've been spent on independent trial and error and customer feedback is now being spent meeting the regulation. As more and more are imposed, the company finds that all of its labor and capital is going toward meeting the regulations, rather than taking the time to make a quality product. Therefore, when a product or service is regulated, the quality goes down because there is no room for trial and error.
In a free market, there is one way and one way only for a company to generate a profit- its customers. There are no safety nets, no fall-backs, no bailouts. You either create a quality product that customers want, and want to keep, or your business fails. It's that simple. It's Darwinism at its finest, and it's an organic approach to economics. After the unsafe, bad, or unnecessary products are weeded out, you're left with products and services that are the highest quality and the best value.
In a regulated economy, there is an effect I'd like to call the "Law of Diminishing Labor Efficiency***". When a business exists inside a socialized or regulated economy, a new way to generate money arises- the state or regulator. The state does not allow businesses it deems important to fail, so it will use revenue from taxation to support a business. When a business does not solely rely on customer input to survive, it begins to become complacent. The attention is taken away from the quality of the product and is focused on the cost of the labor and capital. To put it simpler, the boss knows he's still going to have a job even if he puts out crappy stuff, so he's more concerned with making a quick buck by cutting corners and making things as cheap as possible. This leads to a drastic decline in quality, which is of course detrimental to the consumer.
In either case, the customer loses and the state and mega-corporations win. For those of us who understand what this entails, Obamacare is a dark cloud looming over America.
(***If there is already a name for this, feel free to let me know! I am familiar with concepts, not names.)
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