Although Russ already linked to it here – and I did so again a bit later – it’s worthwhile to link again to Russ’s remarkable recent essay on trade, an excerpt of which is a “Notable & Quotable” in today’s Wall Street Journal:
From “The Human Side of Trade,” by Russ Roberts, Dec. 11 on Medium.com:
Suppose a scientist invents a pill that once you take it lets you live until 120 with no health issues whatsoever. Once you turn 120, you die a peaceful death on your birthday. Suppose the scientist, in a gesture of good will, charges $10 for the pill.
Should we let the scientist sell the pill? Is it good for the country? It’s good for almost everyone. But it’s going to be very hard on a very large group of people immediately:
Doctors. Nurses. Health Care administrators. People who build hospitals. People in medical school. People who teach in medical schools. People in health insurance companies. Pharmaceutical companies. Researchers. You get the idea. It’s millions of people. This is a very disruptive technology.
What’s going to happen to all those people?
Mass unemployment. All of the skills of all of those people are no longer valued. The past investments made in those skills are now wasted. Incomes of those workers will inevitably plummet overnight. . . .
Most people would argue that the millions of health care workers have no right to stop people from living until 120. And on the surface, that’s the whole story—long life and a very tough transition for millions of people from lives of financial well-being and deep satisfaction to a much bleaker future.
But that’s not the whole story. We’re missing a huge part of the story.
The other important part of the story is that everyone is suddenly a lot wealthier. All the money we once poured into health care will now be able to be spent on other things. What are those other things?
We can’t know. No one can. But a whole bunch of areas are going to expand and some of those are going to soak up the time, talents and energy of former doctors, health care administrators and so on. . . .
And young people who planned to go to medical school or become chemists in the pharmaceutical industry or nurses or data analysts in the insurance business will now turn elsewhere. What will they do instead? There is no way of knowing but they will try to find skills to invest in that lead to financially and psychologically rewarding lives. The dreams of those young people have been shattered. They will have to find something else to do. But their opportunities will now be much wider than just something other than health care. The areas outside of health care are now much wider because the increased wealth we all have can now go into new areas and opportunities.
The above originally appeared at Cafe Hayek.