Sanders-Drug-CostThe attached graphic crossed my browser screen today. As you can see, it’s an OMG BIG PHARMA IS EVIL graphic from the Bernie Sanders camp. It asserts that a particular drug is four times more expensive in America than it is in three nations that have socialized medicine. I presume that the message here is that evil Big Pharma is price-gouging Americans, but, as is typical with statists, it ignores some inconvenient realities. The graphic might lead one to conclude that, if America socialized medicine, the government could force Big Pharma to lower its drug prices, and everyone but Big Pharma is happy.

However, since drug development costs money, and development money has to come from somewhere, forcing a company to sell a drug for a lower price will mean less money for new research and fewer new drugs. That doesn’t mean much to people today, but it will a decade or two decades from now. But, that’s not today’s point. The fact is that these other nations are, in effect, freeloading off the backs of American consumers. When another nation skews market prices with government force (the real reason for the disparity), it affects prices everywhere the imposed-upon company does business.

We witness the same phenomenon when it comes to defense spending. America’s global force projection and assumed role as “globocop” has enabled Western nations to underspend on their own militaries for decades. This in turn has allowed them to spend more on their social welfare programs, programs that our domestic statists point at to suggest how things should be here. As with medicines, America, in effect, subsidizes European welfare states.

We also witness a form of this phenomenon in the push for first-world carbon taxes and wealth transfers from first- to third-world nations in order to combat global warming. The underlying presumption here is that the first world nations were the biggest “polluters” (here I use scare quotes as a rejection of the notion that carbon dioxide is a pollutant), and therefore should bear the greatest remediative burden. Where, however, is the compensation for what those first world nations provided to the rest of the world as they emitted that carbon? Thanks to first-world innovation, those third world nations won’t have to reinvent countless wheels. Those third world nations benefit from the technological advances developed in the first world. They don’t have to transition from kerosene lanterns to gas lights to waterpower electrical plants to carbon fuels to nuclear and beyond. They don’t have to transition from steam locomotives to diesels to electrified railways. They don’t have to build copper-based telephone networks. They don’t have to reinvent the Internet or a million other modern technologies. If there’s to be a wealth transfer from first- to third- to compensate third- for that which first- did to the planet, shouldn’t there be a commensurate transfer in the other direction to compensate first- for all the benefits that third- gains from not having to recapitulate the Industrial and Information Revolutions?

“Gotcha” graphics and memes are great for political dabblers, even if they dabble for hours every day. Shallow thinking of this sort is not overcome simply by volume. There is depth and “the other side of the coin” in the vast majority of political arguments and issues, depth that memes rarely go into and oftentimes deliberately ignore. The Bernie graphic is a great example of the latter. It presents a snapshot that’s intended to lead one to an erroneous conclusion that furthers an illogical and counterfactual political position i.e. more government involvement in health care.

Instead of screaming that Xtandi is too expensive in America, we should be screaming that it’s too cheap in the rest of the world. This disparity should first be blamed on the big governments in other nations that subsidize their welfare states with wealth created by and taken from Americans. America subsidizes the rest of the planet, much in the way that Boxer the workhorse pulled more than his share of the weight on the Animal Farm. Stein’s Law says:

If something cannot go on forever, it will stop.

The question of the day is – will it stop when we stop it, or will it stop when, like Boxer, we reach the end of our usefulness and get shipped off to the glue factory.

Peter Venetoklis

About Peter Venetoklis

I am twice-retired, a former rocket engineer and a former small business owner. At the very least, it makes for interesting party conversation. I'm also a life-long libertarian, I engage in an expanse of entertainments, and I squabble for sport.

Nowadays, I spend a good bit of my time arguing politics and editing this website.

1+

Like this post?