Archive | May 2014

Cancer and Genetics

In the year 2013, the number of estimated deaths caused by cancer was of 580, 350. In which 306,920 were of men and 273, 430 were of women.

Cancer attacks the smallest structural unit of human life in the body, the cell. It corrupts the substance that genetically defines who we are, our DNA. When certain cells in our body are affected or mutated, if their reproduction is not controlled, they will cause all sorts of disorders. Factors like, tobacco, infectious organisms, chemicals, radiation, inherited mutations, hormones, immune conditions, and mutations that occur from metabolism are the ones that mainly impact our genes and are very capable of developing cancer.

Mutations can be inherited when organisms reproduce. In human reproduction for example, when the sperm of the father fertilizes the ovum of the mother, one of the gametes of either parent can be carrying the pair of genes containing the altered ones. When the zygote is formed and developed, it is likely to be totally contaminated with carcinogenic cells. Nevertheless, inherited mutations are less probable of developing cancer. They must combine with other factors, like bad habits (E.g. smoking) to form cancer. If the disease was not inherited, though, the victim will have acquired it during the progress of a lifetime.

How does cancer alter our genes? Each gene carries part of our DNA codification. There are different types of genes in the human genome that take care of the tasks within a cell. Those that control the cell growth are the ones that cancer uses to develop. When cell growth gets out of control tumors and mutations will result. When the mutations accumulate over time in the different genes of cells, they will ultimately become cancer cells. These altered cells are alive and reproduce rapidly. It is important to note that because cancer occurs within the genes of cells, it is not contagious.

The genes that take care of cell growth are known as proto-oncogenes. Specifically, these genes are the ones that identify the kind of cell and have the code that tells the cell how often to divide. Cell division plays one of the most important roles in the cell cycle because it is the one that passes the DNA of the cell to its daughter cells. Proto-oncogenes tell the cell how and when to start the division. When these genes become defected or abnormal, they might turn on the cell or activate it when it is not meant to be. This will ultimately cause irrepressible growth of cells that presumably leads to cancer. Proto-oncogenes are known to be dominant at the cellular level, because in order to form tumors, only one pair of the proto-oncogenes has to be mutated. A mutated proto-oncogene is called an oncogene and they are normally acquired, not inherited.

Other types of genes that lead to cancer are the tumor-suppressor genes. These genes normally control the activity of cell division by slowing it down; this, in turn, controls the cell growth. They also govern protein activation, the repairmen of DNA mistakes, and the cell’s death (known as apoptosis). Using these processes, these genes can also remove or suppress the development of tumors. When they are mutated, however, they can promote the creation or growth of tumors. Tumor-suppressor genes, when mutated, become inactivated and speed up cell growth and division. Mutations inn these genes are usually acquired. Both pairs of genes have to be mutated to cause tumors and cancer, thus, are known as recessive in the cellular level.

The difference between oncogenes and tumor-suppressor genes is that oncogenes are the result of the uncontrolled activation of proto-oncogenes and the other cause cancer when they are inactivated. Cancer is caused by many factors and it involves different alterations of genes. Therefore, it is not simple to find one single cure to heal all the diseases caused by it.

 

Equiano in the Navy

Eloudah Equiano was kidnapped from his home in Africa and sold to be taken as a save into the New World.  He started to witness things he never would have imagined at a very young age. He sensed the stench of slave ships packed with men and women living amongst their own cull. This took him to be extremely disgusted, enough to not want to eat. He saw how the African race was treated in those slave ships and in the Americas. They were chained, beaten, sickened, and killed. Eloudah was astonished to what his eyes saw and he lived with fear at all times, he felt he could trust no one, and was tormented by the things he would see. He wanted to flee and run away from that whole system of slavery.

Nevertheless, his attitude changed. He had been sold to be the slave of a high-ranked soldier and became part of the British Navy. He was about fifteen years-old and wanted to be part of a battle. He wanted to mature and become a man through war. He gives the impression that at the moment his wish got granted, he started to view the navy with some sort of loyalty. Eloudah had begun to see his ship-mates as a band of brothers. He saw them as people fighting together in agreement for one same cause. He almost believed they would give their lives for each other, including him. He viewed them with respect and appreciation. Equiano practically felt some sort of honor to be part of the British Navy and that he shared that honor with his mates.

Notwithstanding, one day Eloudah Equiano faced reality when he was drastically sold by his master. That was a move that took him by absolute surprise and brought disappointment to his life.

Why Notes for an Autobiography?

To write a more precise autobiography it is important to take daily notes about what happens every day of your life. This is kind of like what you do in a diary. In the same way you need to take very good notes to study accurately, remember the information, and succeed in a test, you also need to take good notes for your life’s story book to succeed.

Inside those notes you must include dates, places, explicit descriptions of the places and surrounding circumstances in your personal life, family, neighborhood, community, city, state, nation, continent, and world that are influencing your way of life. You must file the names of the people you talked with and descriptions of their characteristics and traits like, physical, emotional, and spiritual. Conversations that were of relevance that day, which you had with the people around you or heard them having, are very important to archive. The specific thoughts you had, emotions you felt, and the point of view you had towards certain problems are essential to take note of. Finally, not every day might be important to write about in your autobiography. Therefore, keep a look out for extraordinary days that shaped you for the rest of your life. Don’t forget to really describe every event that happened in those highlighted days in your notes.

Why bother to write notes? Simple, because not every day you live through will be perfectly memorized in your head. Thus, it is important to describe the people, things, and events around you going on in your daily life to create a more complete and attractive autobiography.

Who Do You Look Like?

Have you ever wondered why your mom has brown eyes, your dad blue eyes, and you have green eyes? I know what you are probably thinking, “Is that even possible?” Well, in biology we can analyze and predict the probability that offspring will inherit certain characteristics or traits from their parents, all the way from the genetic or cellular level. Before we start, remember that in the reproduction of cells, daughter cells come out identical to their parent cells. However, with us humans, who are multicellular organisms, there is always something that differentiates from our parents.

In human reproduction, the sperm of the father fertilizes the ovum of the mother in order to begin the process that will give shape to who you will become. After spending nine months in the mother’s womb, a really cute and small human being will birth and the question that everyone will ask themselves will be, “Who does he or she look like?” In the process of human reproduction and of almost all living organisms there exists a transference and combining of specific genetic traits and characteristics residing in our DNA that will define head-shape, eye-color, body-size, body-shape, and will practically define all that you will be in spirit, soul, and body. By analyzing these genes in the different generational lines we are able to identify, or at least predict what the next generation will look and be like.

Certain scientists have studied these phenomena and have come to very accurate conclusions that have given an open door to more research that has expanded knowledge to a broader and greater level in the areas of genetic inheritance and reproduction. The first of these scientists was Gregor Mendel who tested the inheritance of pea plants. What this man found was that in reproduction there exist two types of traits, a dominant and a recessive. The dominant trait will be the one that defines about 75% of the characteristics and traits of the offspring. For example, your dad has brown hair and your mother red hair and we want to predict what type of hair color the child will have, well, it will all depend on which of the parents has the dominant and recessive traits. Let’s say the brown hair is the recessive and the red is dominant. In this, we will use a model called Punnet Square to come to the conclusion that there will be a 75% chance of the child having red hair.

The sperm and the ovum are gametes or the cells involved in the reproduction of human beings and each gamete from the parents has one allele and when these gametes fuse together in reproduction, they form the child. Each trait of a child is determined by an allele, which is a specific version of a gene, and a gene is the one that controls the characteristics of the offspring. Now, the child will have two alleles, or specific versions of genes, by inheriting only one from each parent and will exhibit the traits of the dominant allele, in this case, the red hair from the mother.

If you read my essay titled, “The Reproduction of Cells”, you will notice that the process used for cellular reproduction is called Mitosis. In human reproduction and in the great majority of organisms, however, the process of reproduction occurring at the cellular level is called Meiosis. Meiosis is very similar to mitosis with some exceptions, for example, in Meiosis the daughter cells will not be genetically identical and the process of cell division that occurs here, divides in two phases, Meiosis I and Meiosis II.

Most multicellular organisms have two sets of chromosomes that have a copy of one allele in each and are used in reproduction. The two sets of chromosomes are called a diploid. In meiosis segregation occurs, and the diploid is divided and reduced to one set of chromosomes, also known as a haploid. When the gametes carrying now one set of chromosomes of both father and mother fuse together in the fertilization process of reproduction, the two half sets of chromosomes (one half of the father and the other from mother) will restore in a new cell or zygote that will have two alleles newly formed, where the offspring will, in time, express the dominant traits of the dominant alleles or genes in father or mother.

The father and mother, each also contains two sets of alleles they can be heterozygous, where they have one dominant and one recessive allele, or homozygous, where they have two dominant alleles. By knowing which kind of alleles each parent has, we can use two kinds of models called Punnet Squares and Pedigree, with which we can predict what trait the child will exhibit or phenotype and what disease it might carry in his or her DNA. As I said before the child will usually have a three to one probability of exhibiting certain phenotypes.

Common Belief vs. Reality

Part 2: Antitrust

Most people believe that antitrust is made to follow the general public’s interest and protect consumers from companies that restrict their output, misallocate economic resources, retard technological advance, and increase prices. The claim is that, in the free market, businesses could prosper greatly by eliminating competition through mergers and acquisitions and by “monopolizing in restraint of trade” or by practicing “deception” and “unfairness”. However, where do people base the ideas that there exists a monopoly issue in the free market? Are they even based on reasonable facts or are they simply made arbitrarily? Historical cases show us that antitrust is really just anticonsumer. Allow me to explain.

In the free market, the attempt to control the whole supply of raw material, products, or services would mean that you would have to buy all of them. If this action were to be committed, it would take lots of money to achieve and therefore, it is inconvenient. Just imagine being a dentist and you try to control all the raw material, all the products and all the services (monopolize) of dentistry in your city. You would have to buy all the dentists, all the clinics, all the material dentists use for treatments, etc. to become the only one capable in your city of supplying the medical services.

Then, by monopolizing everything and restricting output to raise prices of your medical services, you would give competitors from other cities the opportunity to come to yours, be free to innovate, free to increase supply, free to increase output, free to better the services, all at the lowest cost and price, and end up destroying you economically. Free consumers would go after the better products or services that are given for the lowest prices. This is possible in the free market. Any attempt to monopolize in the free market would give profitable opportunities to competitors and potential competitors. Of course, this is done by assuming that the market is legally open to new suppliers and consumers are legally free to support the new suppliers.

When consumers choose to favor a specific firm, they do so in the means that it is the one that satisfies them the most. If consumers “monopolize” a business because it is the best to allocate resources and offers products or services at the best quality possible and at the lowest price, then I bet that this “monopoly” has nothing to do with antitrust laws for it was consumers who chose to favor that business and make it a temporary monopoly supplier. It will be a monopoly until other competitive firms can obtain the raw material at a lower cost and be able to supply the product at the lowest price in that specific market.

Also, the criticism that declares some companies use predatory pricing (lowering prices to the maximum without counting costs to ruin competition) is without a firm foundation. When a consumer sees the price of a product extremely lowered (for example a tooth paste that costs two dollars lowered to one dollar), the consumer will buy more of that product and in the future it will buy less of it. Why?

Assuming that the predatory pricing prevailed long enough to momentarily ruin the competition, the firm that engaged it might pretty well have these problems. First, it ran out of input and/or output supply. Second, the consumers bought enough of the product to last months. Third, counting the first two problems, when the company raises prices to their normality once again, it will barely have enough of the product to offer. If they produce more of it, no one will buy because the consumers have stuffed themselves with it. In the end, that company would end in economic ruin and allow competition to most certainly prosper in a near future. Therefore, predatory pricing is a thoughtless strategy no one would dare to enforce in a free market economy.

When in the free market a business becomes a monopoly, it does so, because it promotes consumer welfare. For this reason, it is not necessarily a hazard and does not fit antitrust regulations. The benefits of a free market temporal monopoly are low costs, greater outputs, lower prices, and free consumer choice. Antitrust reduces and sometimes shatters preferential consumer choice and keeps prices high.  There are historical cases that prove antitrust is a fallacy used by the government to eliminate companies that supposedly “restrained trade” and raised prices to limit competition, but actually, lowered prices, increased output, and stimulated free consumer choice.

Then, out of the free market the government takes charge in monopolizing a company in a specific industry (like a cab company) and places a law that does not allow any other competition to arise or even come into existence. This type of government regulation is a disadvantage that directly affects the consumer. When a company is the only one that exists they will have no incentive to better the product, innovate, lower prices, increase output, and the consumer will obviously be hurt.

Before I present the cases, I want to mention that the government says that it is good to have lots of competition. It is good to have competition because it lowers prices, however, too much competition, as the government proposes is absurd. If we had 100,000 car companies and each sold about 500 cars, they would never recover from their tremendous investment and immediately go out of business. It is better to have a fewer amount of businesses to not injure the economy on a whim.

I have mentioned before, that we should never guide ourselves by what they (most people or everybody) say. We should search deep for the truth until we are certain that it is the truth. Well, one of the most misunderstood and propagated with false information of monopoly cases is the one of the U.S. vs. Standard Oil of New Jersey in 1911.

The popular view is that the company totally monopolized not just the petroleum refinery, but the whole production, transportation, refining, and distribution of the oil industry, through predatory pricing and by raising prices. Something that is practically impossible by reasons mentioned previously. So, what really did happen?

First of all, Standard Oil never monopolized anything. Its market share was actually declining over time, years before the case. In addition to this, it had 134 competitors in oil refining (like Shell, Gulf, Texaco) in 1911, the year of the antitrust case. Standard Oil never engaged predatory pricing. I think they would have been more mindful than to do that. Neither the trial court nor the Supreme Court ever found anything specific that proved the guilt on the charges of predatory pricing over the company.

What really happened is that the production of the company was increasing and the prices were declining for decades in the time when the company was supposedly monopolizing. The main product of the industry was Kerosene and in 1869, it was worth 30 cents per gallon, a price that fell to almost 6 cents a gallon in the times of the trial.

Nevertheless, the company was accused of “attempting” to monopolize the industry and broken up by the Supreme Court through this accusation. No proof of harm to consumers was found and if the company had tried to monopolize the market, they had never succeeded. What was the real purpose of the trial? A mere whim. Yet, most people have commentated and said that antitrust policy is supposedly efficient because of what they say in the success of the case presented with Standard Oil.

Next, there exists the case of Alcoa (Aluminum Company of America) in 1945 vs. the United States. This is a renowned embarrassing “antimonopoly” case admitted by those in charge of enforcing antitrust laws. The government had followed the company for two years, when in 1939, Judge Caffey,  in charge of the trial dismissed about 150 separate government charges against Alcoa . Part of the charges was that the company had supposedly taken control of waterpower sites to produce electricity and monopolized raw material from which aluminum is made. The judge also said that Alcoa innovated quickly, expanded its outputs, its refining capacity was extended, and had been lowering ingot prices for the last 50 years.

However, in 1945 the company again was taken into trial, now before the Supreme Court. Someone decided that increasing output and lowering prices excluded rivals from the opportunity to compete and therefore, it was an illegal activity against antitrust laws. If Alcoa would have not been an efficient consumer provider and, in this way, had given competition opportunities to compete, they would have not been accused of monopoly. In other words, Alcoa had to produce horribly in order to not be a monopoly, its economic efficiency was against the law.

This is what Judge Learned Hand said, “It was not inevitable that it (Alcoa) should always anticipate increased in the demand for ingot and be prepared to supply them. Nothing compelled it to keep doubling and redoubling its capacity before others entered the field. It insists that it never excluded competitors; but we can think of no more effective exclusion than progressively to embrace each new opportunity as it opened, and to face every newcomer with new capacity already geared into a great organization, having the advantage of experience, trade connections, and the elite of personnel.”

In 1949 came another similar case to Alcoa. It was the United States versus American Can. The company had convinced consumers to sign long-term leases where it offered large price discounts for large can orders. The court alleged that the company had “coerced” its consumers into accepting the leases. Think about it, if a company “coerced” you to accept something, would you accept it or not want to buy anything form the company and never hear from it again? Yet the court stated that the company had to raise its prices to make the industry more competitive. Why? Because it had been generous in offering discounts to its consumers and become an efficient firm economically. In the end, it was the wallet of the consumers who felt the decision of the court the hardest.

Other examples of the fallacy of antitrust laws are IBM who was harassed for 13 years because it held 65% of the market share. When the government finally gave up on the case, its competitors had already overtaken the company. In the beginning of 1937 General Motors made it part of its policy for the next two decades to not gain more than 45% of the automobile industry because of the fear of being prosecuted by antitrust. My last example is that in 1962 the government prohibited the Brown Shoe Company (which had a “monopoly” of one percent of the market share) to not acquire Kinney Shoes, who also had a “monopoly” of one percent in the market share.

Antitrust is not what we have been made to believe it is. It is truly a policy that attacks mainly the companies who increase their output, lower their prices, benefit the consumer in a great manner, and are made a monopoly because of free consumer choice, not predatory pricing, not restraining trade, and not monopolizing through mergers and acquisitions.

“American business is being harassed, bled, and even blackjacked under a preposterous crazy guilt system of laws, many of which are unintelligible, unenforceable, and unfair. There is such a welter of laws governing interstate commerce that the government literally can find some charge to bring against any concern it chooses to prosecute. I say that this system is an outrage.” – Mid-20th century, Cowell Manson, Federal Trade Commission

 

Common Belief vs. Reality

Part 1: Health Care

“Health care is indeed such a wonderful relief to your wallet. I do not know what I would do without this insurance; it is such an auxiliary resource. This insurance allows me to be calm when my children are at play. If any member of my family is injured I am confident that we will always receive the correct medical treatment and at almost no expense. I just know health care will always be accessible, physically and economically.” Are you sure you sure about this? Here are some reasons why you should stop believing that.

The origin of health care insurance and nontaxed employer-provided medical care goes way back to the 1940s. In World War II millions of men were drafted into the army, there was a shortage of labor, and wages were frozen because the government had said they could not be raised. Businesses had to do something different to attract labor. During this time, firms came up with the idea and created employer-supplied medical insurance. Employees would now be partially covered medically by the firms they worked for. The government saw this and it did not consider it a wage increase, thus, there was no extra tax charged for it.

When the war ended, labor unions made this type of medical insurance part of their contract demands. This, of course, placed pressure upon employers who did not want to be unionized to supply the same type of benefits. Labor unions basically narrow down the freedom in options employers have to wage, improve working conditions, hire workers, etc. This ultimately leads to slower economic growth. Today, unions can also control the decisions workers make in a company to join or not join a union and/or pay dues, because of the majority of votes. Therefore, companies that didn’t and don’t want to be unionized, for obvious reasons, felt and feel forced to also provide medical insurance.

Now, the matter of fact is that if I am paying, say, 80% of a car’s price, any car you want, and you are only paying 17% of what it costs, will you be more or less conscious of the price of the car? Also, if you own the car company and you know that your customers will care the same if a 30,000 dollar car costs 15,000 dollars more than its original price, would you prefer to win 30,000 dollars or 45,000 dollars out of the car’s sale?

The same thing happened when people started to become accustomed to get their health care paid by a third party, in this case, the company’s benefit. Gradually, medical prices began to increase as employers paid for the employees’ expenses. Why? As I said, when there is someone else paying for us, we are very likely to be less mindful of the cost, and choose the first thing they place in front of our face without comparing prices and researching which things are more convenient to our wallets and to our beings.

Now, you may ask, “Why doesn’t the company stop the employee?” Well, it is not that simple, because privacy concerns do not allow companies to keep a watch on which specific medical treatment the employee obtains and at what price. It is not like in a business trip, where if the employee chooses all the most expensive amenities, he can get reprimanded by his employers for doing such things. In the matter of health care, it is practically impossible for companies to advise the employee into taking or not taking certain treatments. In this way, they enable employees to keep deciding where and which medical treatment to take and at a price they will not pay much attention to. This, in turn, will keep medical prices growing and growing, along with insurances.

Another fact to take into account is that when you pay the full amount for something, the person or people providing you with such product or service will give you exactly what you need and it will be more difficult for them to deceive you on a price. I have heard doctors’ testimonies, specifically of those who work in neighboring countries with the United States. They said that when Americans came to attend themselves with these foreign doctors and showed them the medical treatments they were offered and told to need in the United States, the doctors were astonished in witnessing that almost half of the treatments were not needed by the patient. In addition, let’s say that the treatments were going to cost 20,000 dollars total in the United States, and in these neighboring nations the same treatments would only cost 5,000 dollars and at the most expensive price they could offer.

When special tax funds for medical services and other third party payments exist, we notice that the people receiving the treatments are less careful of prices, and the people offering the services will charge at higher rates and practically not care about the patients’ absolute wellbeing. These are highlights from the 2009 Drug Abuse Warning Network (DAWN) related to drug emergency department visits. The last one proves that doctors are probable to being careless on telling the patient what they need when the patient itself is not completely paying.

  • In 2009, there were nearly 4.6 million drug-related emergency department (ED) visits of which about one half (49.8 percent, or 2.3 million) were attributed to adverse reactions to pharmaceuticals and almost one half (45.1 percent, or 2.1 million) were attributed to drug misuse or abuse
  • In 2009, ED visits resulting from the misuse or abuse of pharmaceuticals occurred at a rate of 405.4 visits per 100,000 population compared with a rate of 317.1 per 100,000 population for illicit drugs
  • ED visits involving misuse or abuse of pharmaceuticals increased 98.4 percent between 2004 and 2009, from 627,291 visits in 2004 to 1,244,679 visits in 2009
  • ED visits involving adverse reactions to pharmaceuticals taken as prescribed increased 82.9 percent between 2005 and 2009, from 1,250,377 visits in 2005 to 2,287,273 visits in 2009

Medicare and Medicaid programs of governmental medical supply are perfect examples of third party payments. As we already know, the money the government spends to provide health services comes from taxpayers who unwillingly gave their money away. Who knows what the taxpayer could have done with the money if he wouldn’t have been taxed? Let me tell you something, he or she could have either saved it to benefit the economy in the near future or spent it in something that would have nourished the economy in the present, whatever the case, we will never know because it has been taken away from them.

Anyway, back with the health care subject, in the year of 1960 the government through Medicare and Medicaid only covered 21% of medical expenditures with consumers paying 55% of them. This evidently meant that the government was taxing less for health care services and that the people were a bit more cost-conscious of medical services. However, in the year 2000 the government now covered 43% of the services and consumers only 17%. Consequently, this meant that people became more careless of prices and this took prices to keep rising.

The federal government also tried to push these costs onto others and now doctors and hospitals were not being paid what they were owed by the government. Thus, the people offering the treatments began to charge private insurance companies a lot more than what was accustomed. If someone is charging you more for something, then you need more money to pay, so this caused insurance prices to increase dramatically.

The demand of medical services has also been expanding astonishingly, obviously, because when you pay less for something, then you are going to demand more of it. If I gave you a chocolate bar for 50 cents but someone else paid 40 cents for it and let you pay only 10 cents, you are going to want at least 4 more chocolate bars to equal the price of one chocolate bar. Nevertheless, as demand has increased, the supply of doctors and medical services has been kept artificially low.

The American Medical Association, for example, restricts the number of medical candidates by means of its accreditation process for medical schools, with its decisions being ratified by the state government. In other words, in order for a medical school to be recognized as legitimate, it has to be approved by the American Medical association, who also has to be approved by the state government. In the end, everything ends up being the intervention of the state. This intervention is excused by the claim that we need to make sure that we have the best doctors available for the people. Although, I bet most people don’t know that 19 states are limited to having just one medical school, this limits the outcome of doctors available and as logic can soon let us know, when there is less of something, like gold, the value of it is greater and the accessiblity is lesser.

But wait, there is more. There exists a “certificate-of-need” (CON) regulation that establishes an authority to existing hospitals to decide whether or not the town needs a new hospital and restrict new competitive opportunities. If I own an ice cream store in one of the hottest places in the nation and I am the only provider of such refreshments within miles and I had the opportunity to apply a CON regulation to other men and women that would want to open an ice cream store near me and compete, I think that the great majorities answer would be, “No we don’t need a new ice cream store, or hospital, or whatever. Thank you very much.” Without competition and in a very hot place, you can charge high amounts of money for your ice cream that no one will bother paying and become a very wealthy person just by selling ice cream.

That is not all. Also, Americans may not purchase medical insurances that originate outside of their state, this narrows down the possibility of competition, and competition is good because it lowers prices. The state government then applies upward pressure on insurance companies’ policy prices by giving them mandates that require the companies to cover particular disorders and/or treatments. This creates higher premiums and less consumer choice. People forcibly must “insure” against the need for hair implants or massage therapy, which are examples of state mandates.

Not all people are bald, or stressed out, every organism is different and every person is unique. Hence, everybody will need different policies to choose from and be able to insure against things he or she really needs and pay the amount required to supply those specifications. However, they can’t because the state has mandated the insurance to obligatorily provide these treatments. How many mandates has the state made? Well, between 1979 and 2009, the number of mandates rose from 252 to 2,133; this will obviously increase insurance prices.

Today we have Obamacare, such a wonderful proposal by the government to offer small businesses and less wealthy people the opportunity to buy insurances. Notwithstanding, none of the plans offered by Obamacare provides only catastrophic coverage. All plans cover even the routine health expenses, but it is the same thing as insuring against something you know is going to happen. This will out of doubt make everyone less cost conscious as ever.

Who insures just to be measured in height, weight, and blood pressure? More specifically, who buys a huge package of insurance to pay for things you will never need or to pay for things you can pay out of your wallet? Don’t you think you could save a lot more money by just buying a pack that covers catastrophic health events, like a heart attack, a car accident, and things like these? Don’t you believe that if there was a high-deductible and a plan that covered only for catastrophic health occurrences put downward pressure on insurance prices; people would become more cost-conscious; and still receive the necessary amount of care that people with more standard insurance policies receive?

The free market would lower costs of health care and make people more cost-conscious and make doctors care about the wellbeing of their patients. If we offered employees the opportunity to choose from continuing to receive the employer-provided medical insurance or get tax-free cash that equals to the average amount of insurance it would give them more freedom of what to do with the money. If they offer you an insurance of ten thousand dollars, they can give the option of keeping the insurance and not have the money in cash or have the ten thousand dollars extra in your salary without going through taxation (taxation would end up making the ten grand a total of about six thousand dollars). Instead, you get to keep the whole ten thousand in your pocket and decide what the best thing to do with them is.

This would help employees realize that insurance is not free, but taken out of their salaries. By now being able to choose from having the money in cash, they would become more mindful of costs than ever before and begin to search for the most economic services. This would ultimately lower health care prices in a substantial manner.

There are many solutions that enable a more proper way of handling health care and insurances like offering people at age 65 the choice of giving up all federal entitlement benefits in exchange for complete immunity from income taxes, estate taxes, and gift taxes for the rest of their lives and live out of their salary. All solutions are only capable of being performed in a society where there exists little to no government intervention, like the one the free market proposes.

 

Shocked

When Douglass was about seven or eight years old, he was transferred from a plantation in Talbot County to Baltimore. When he was at the new home Douglass, a black slave, saw something unique in his new mistress, a smile directed to him. The woman was kind to the young slave child and began to teach him how to read. However, a time came when the husband of the woman found out and forbade her to teach him, because it was against the law and a slave that could read would be able to know the reality of his or her condition. This encouraged Douglass for the rest of his life (literally) to never give up and find freedom.

Like Douglass, when I was 15 years old I received an impact in my life that marked me forever. We had missed out a lot of days of school, not consecutively, but one day yes, two days no, then, two days yes and three days no. It was like our second month doing this. Due to the circumstances we were going through (too complicated to explain in detail here) my dad called us to the living room and said, “I think you will have to drop out of school. The school keeps calling and asking why, you are not assisting constantly, I have told them the circumstance and I will meet with your principle tomorrow to drop you out.” Shocked at those words, I remembered my thoughts in one of the chats I had had with one of my friends a year ago.

His name was George and he was telling another classmate and me about a friend of his that had dropped out of school at the age of 15 and was not studying anymore. At that moment, I thought with a firm stronghold in my mind, “Poor kid, he just ruined his life, I can’t imagine what will be of his life in the future. He will probably have no career, no college, and end up working in a McDonalds or something that pays a wage I do not want to earn. I want to have a family, a nice job, a nice home, and know that I have gone through school successfully.”

Now my dad was telling us we were going to have to drop out of school and this declaration was causing earthquakes with hundreds of increasingly strong aftershocks that begun to shake the strongholds in my mind. However, I did not think that the worst was about to come, but my next thoughts were the certainties that something new and extraordinary was about to happen in our lives. I knew God was with us and training us for the days we were about to live in the weeks and months to come.

This circumstance that, in turn, gave open doors to a chain of different effects shaped me for life, because they broke down and turned to dust all the lying and preconceived strongholds I had formed within my mind.

Basic Free Market Principles

Part 2: Working Conditions

“The government must intervene to improve working conditions.” Well, isn’t this claim interesting? Let’s analyze it, shall we?

As I mentioned recently, the government is running out of excuses to tax the people and get away with it. The arguments the government presents and that people sometimes believe about the improvement of working conditions have no firm foundation. They ultimately claim that the free market is incapable of improving working conditions for itself. Therefore, the government must provide the resources and create the laws that oblige firms to improve the conditions of labor. However, most people do not realize that this hurts businesses and the people.

First of all, as I mentioned in part one of this essay, the government does not and cannot ever function as a business, so, where do they get the money to provide resources and how do they know what people want? The government basically has to plunder the people to be able to supposedly “improve” working conditions.

Imagine that a new device has been made. Let’s say it is a new gadget that writes down everything you speak to it in a computer or, also, in paper. Now the government and all businesses acknowledge that this new piece of technology will help increase the amount of things written and in a short period of time, this will increase the creativity of people and new ideas might come faster, it will make the taking of notes a lot more accurate, it will let your eyes rest from looking to much at a computer screen, it will let your hands rest from typing or writing, and it might just allow people to do something else while “writing”. Hence, this apparatus will raise the efficiency of the workers who work in companies that use it and, perhaps, also enhance the production of those firms.

Nevertheless, there is only one problem, because it recently has been put into sale, it costs thousands of dollars to obtain just one gadget. Many companies will not be able to afford it, at least for a certain period of time. Even so, here comes the government and makes a new law that says all companies must have this gadget and those that do not have it, will be fined or the government will simply just take the firm away from them.

As I explained in the first part of this essay, the government does not have a way to receive feedback from the public, some governments might not even have a price system. Threfore, it does not know at what pace, amount, and in which companies it will be convenient to place the improvements of working conditions, like the gadget, for example. If they force every single company to have it immediately, more than half of the firms would probably suffer terrible economic consequences. Some businesses might only be able to afford one gadget for the whole company, others only for 50% of their employees to have one at first, and others might not even be able to afford having such luxury. The government can’t ever know what businesses really need and it ends wrecking things up.

Now, in the free market, the reality of competition and the fact that some firms will be able to afford the improvement will leave less capable businesses with a need to act intelligently that they may not lose all their employees to the competition. This is when companies that cannot bring the improvement compensate their workers. Maybe a company will not be able to have the device and make workers labor risking their eyes to the light of computer screens and make them type or write on paper. However they will offer a 15 to 20 percent more in wages than the other companies with the gadget to make up for the less attractive working conditions. This is called “compensating differentials”. Although, sooner or later, the employer will come to realize that it is economically more attractive for the company to buy the improvement than to keep on paying higher wages, than what their competitors who have the better working conditions do.

In this we can see that the free market provides a proper balance in the pursuit of safety in the workplace. Because in this economic system we have a price system that provides accurate feedback from the public, you can truly know at what pace, amount, and in which companies you can bring out a better working circumstance, one that does not damage employees and provides greater comfort. While you are upgrading the workplace, you can still steadily grow economically and not go into bankruptcy because of the intervention of meaningless laws.

Facts that I know will interest many is that since the Occupational Safety and Health Administration (OSHA) was created in 1970, boosters have claimed that workplace injuries have fallen. What they do not tell us is that these types of injuries had already been in the decline before 1970 and have not fallen any faster ever since OSHA was formed. As a matter of fact in the quarter century before OSHA was created the fall of workplace fatalities was at 70% faster than the quarter century that followed after the administration.

It is important to note what economists Thomas Kniesner and John Leeth point out, that “The most optimistic figures show OSHA currently creating three times more costs than it generates in benefits.” Let’s also say that forty percent of recent “workplace” deaths are related to transportation, half of which occur in the highway.  Another 20% of fatalities involve assaults and violent revolts at work. Therefore, only two fifths of workplace fatalities are the kind of incidents that most people associate with “workplace fatalities”. Companies nowadays, spend 1600 times as much on compensating differentials and on workman’s compensation than on all of OSHA’s fines combined. Dear reader, do we need more government intervention?

We can also apply the free market in maximum-hours legislation. I have written in my “A Capitalist Economy” essay, in the section where I speak of improving the standard of living, that by today’s standards we work far much less hours than what people worked exhaustingly in the past. When productivity is low, a supply of consumer goods that can satisfy the expectations or needs of the public will require people to work longer hours in order to provide the enough amount of goods. As the productivity of labor increases, so do wages and this takes people to prefer additional free time than to continue working the long hours of the past. If someone who once worked 80 hours a week now prefers working for 60 hours (which is three quarters less) and is willing to accept less than three quarters of his previous wage as a premium for the free time he will now enjoy, it makes sense for his employer to propose these things.

All this can only be done by gaining lots of capital goods. Capital goods are the things you use to create consumer goods, like the baker using flour to make bread. Remember that calculating the correct amount of capital goods that you will need to produce the correct amount of consumer goods can only be achieved with a price system. The price system can only be effective when there exists no government intervention.

Basic Free Market Principles

Part 1: A Price System

This is what the free market does; it helps us to receive feedback of profit and loss through a price system that we can use to calculate.  A price system tells us specifically were the losses are coming from and adjust our sales according to what we receive in feedback. Through pricing, we can know which one of our products the customers think has a fair price in relevance to its quality and how much demand there exists of it. It is like an auction, where in this case the best bid wins. In other words, there exists a voluntary agreement between buyer and seller in the price of a product. There is also an agreement in the buying and selling of the input supply for companies. This ends up increasing the economy and creating efficiency in the use and allocation of resources.

Pure socialism lacks this calculation efficiency. Why? Well, because in the socialist commonwealth, a central planning committee owns all the means of production and there can’t be any buying and selling of them. Therefore, if a baker establishes the prices of his products through the calculation of what the flour, eggs, milk, butter, cocoa, etc. (which are means of production owned by the government) will cost and they have no price at all because they are owned by the government, how will the baker know at what price to set his products or where to do it? What if the baker sells more strawberry cupcakes in his area, a few chocolate ones, and none of vanilla, and the government keeps supplying him with much more vanilla than strawberries or chocolate?

When the government owns and controls all the means of production, they cannot calculate which products are sold in all areas of society. Therefore, and most probably, they might supply less input to products that are sold a lot or might supply a bunch of input to make products that are sold very little. In the free market, if a baker is selling more chocolate cupcakes and no vanilla ones, he stops baking vanilla cupcakes and focuses all his resources to obtain specific input supply and make chocolate cupcakes, not wasting resources, and making rational economic decisions. A government that owns the means of production has simply no idea of how to manage these things because it can’t calculate them or compare his capital goods (means of production) with consumer goods (products).

Now, some may say, “Yes, that is true, but we don’t live in a socialist economy.” I say, ok, maybe your nation has a price system, meaning that the government doesn’t own all the means of production and knows that chocolate cupcakes are highly valued and vanilla ones are not. However, all government spending encounters calculation problems, because the government does not have a profit and loss feedback mechanism, it has no way of knowing, where, how much, and what to produce, because it has no genuine revenue. The government doesn’t sell goods to the public; therefore, they don’t know how the public is responding to their production. The government’s income comes from plundering the people through taxes, so it can’t tell what people want.

The government doesn’t even know how many judges the people needs or how many police officers there should be in the city. Do they need one judge per town or 500? Two cops per street, or one per dog? The government can’t ever know because there is no feedback mechanism coming from the people. In the end we have more police officers looking out for robbers than solving homicides. A private security firm would know what laws to enforce, what criminals to look out for, for they receive feedback from their buyers in the products or services they voluntarily buy more or less.

This is why the government can’t be run like a business, because it is not financed like one and has no voluntary feedback from the public. The government doesn’t know how to supply things in the right amount, because it has no revenues taken voluntarily from the people and that is why you see long lines in all the places that give governmental provision. Today’s governments are run by bureaucrats making arbitrary decisions.

Note: In order to have a broader understanding of what is here written, the reading of the essays Price Control, Price Controls are People Controls, and A Capitalist Economy is recommended.

Events of My Autobiography

“As far as I can remember and what I have witnessed through pictures, ever since I was a little baby, until I turned about ten years old, I always shared a bedroom with my little sister. This was because my family and I went through years of economic lack and had not been able to afford a home with at least three bedrooms. I did not know why, but it seemed like all the hard work didn’t pay off for my dad, who was and is a dentist. He would go from door to door asking for the job and many doors would not open. Those early ones that did, only paid enough for us to barely eat, wear third rate clothing, and sleep on cardboard, but under a roof, of course.

However, all that hard work and loud knocking finally paid off, and after living lots of years of despair and lack, God allowed a season of joy to arrive, during the days I had entered the fifth grade. This season of our lives was of tremendous change and of wonderful economic growth. The total of rent was of 1,900 dollars a month, but we had two cars that were being paid, we would buy nice clothing, we owned cable, we paid all the bills, and we still had enough money to travel. Therefore, with a new home of 4 bedrooms, we were all somewhat happy, that is, until the instant I was told I now had my own bedroom to sleep in.

I slowly swallowed my saliva at the hearing of those shocking words, for I quickly knew what they meant. How could I sleep in my own room and without company? I had never done such thing and I can assure you it had never crossed my mind. These words might seem astonishing to many, but even though I used to sleep in the same room as my little sister, I sometimes felt so terrified of night, nightmares, and horrible imaginations that I ended up running away from my bed into my parents’ room, sweating from the nervousness, adrenalin, and heat generated from my sheet coverings that had once been the fortress of my protection.

All because fear, the greatest illusion, the expectancy of the worst, the demand of the unknown, and the walking in darkness would grab hold of me at certain nights, so much that my sleep was interrupted and I could not remain with my eyes closed. Even with the company of my sister or all the lights on, the grabbing hold of peace seemed unreachable without my parents’ assistance.

Therefore, if the company of my sister was not enough to help me sleep, sometimes, how could I afford to do it now, all alone? As much as I did not want time to pass by that day, the inevitable night came and I had to soon face the reality of change and the illusion of my fears…”

These are events I should include in my autobiography:

  1. How we lived in poverty.
  2. How we came out of poverty.
  3. And how I faced drastic changes in my life.

I believe that these three events will be stories that will help reveal what specific people thought, lived, problems they faced, and how they dealt with the problems. They will also help demonstrate how my family and I achieved important things, like getting out of poverty, something that is not easily achieved by the majority. I believe that these stories could become page turners and of relevance to the readers. If after what you read above, you do not think they are page turners and of relevance, please share your opinion with me.