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 Tuesday, April 2, 2002

For those that have expressed an interest in the MEDICAL MARKETPLACE, you may want to tune into this PBS program that was sent to me from AriadneCapital. I was unable to find a local listing for tomorrow but it may vary from place to place. If you're not interest in a Market Based Health Care practice, you may like to send an email to be removed from these Medical Tuesday messages designed for physicians in the United States as well as throughout the world that are interested in restoring a patient centered health system as the government based healthcare systems will implode over the next decade.

The following message summarizes the issues in case you are unable to find the PBS program on Economics which are necessary to understand as we restore the Doctor/Patient interface. Welcome aboard.

Date:          Mon, 1 Apr 2002 22:01:40 +0100
From:         "Julie Meyer" <julie@ariadnecapital.com>
 
Let free marketeers of all countries unite

Those whose faith in commerce is shaken by terrorism should remember that expansion of trade is the route to stability, says Amity Shlaes

Published : Apr 01 2002 17:43:04 GMT | Last Updated : Apr 01 2002 17:46:16 GMT

Is terror the flip side of globalisation? Is          Latin America heading for trouble because          liberal economics failed there? Does          September 11 prove the sunny economic          focus of the 1990s naive?

 No, no and no, free marketeers would argue. But even they concede that
making the case for the all-healing powers of commerce has become harder lately.

Beleaguered free marketeers may find useful ammunition in a new television
documentary. On Wednesday evening in the US, PBS will air the first segment of
a mini-series that lays out the free market world view on a scale not seen since
Milton Friedman hosted Free to Choose 22 years ago. UK networks will show the
series soon.

The Commanding Heights* is largely historical, tracing the battle between free
marketeers and central planners from the collectivisation of Soviet agriculture to the
fires of September 11. (The title comes from that great wordsmith, Vladimir Lenin.)

The series also offers a bit of wisdom for the now queasy, war-driven west: never
forget economics. The overwhelming demands of a war - be it the cold war or the
war on terror - must not obscure a simple truth: without the expansion of trade, there
can be no long-term stability.

This is not as self-evident as it sounds. Governments tend to have two modes: the
peacetime mode and the military one. And once the military mode switches on,
economics tend to be subordinated. Free market steps are dismissed as a peacetime
luxury.

Consider, first, the role of war culture and the challenge to markets in the past. Britain's
sacrifices in the second world war created the mood of national solidarity that laid the
ground for its postwar determination to build a better society. Under Clement Attlee
and later Labour leaders this meant the nationalisation of industry and healthcare.
Whatever the motivation behind them, these ideals were eventually a factor in bringing
Britain to its economic knees. It was the fading of the culture of wartime unity that
permitted the rise of that champion of markets, Margaret Thatcher, and Britain's
1990s successes.

In post-colonial India, the nation's awkward cold-war position between two
superpowers led it to focus on self-sufficient modernisation, implemented from the
top down.

"To develop meant to harness science and technology" - not to free them - as the
producers of The Commanding Heights summarise. The British Raj was replaced by
a "permit raj", a protectionist bureaucracy. Only after the cold war had receded did
India liberalise and achieve the growth its over-engineered modernisation had failed
to generate.

Latin America, too, had cold-war challenges to overcome. Soviet and Cuban influence
helped bring to power Socialist leaders who wrecked their economies. Where it took
place, the switch to freer markets was extremely painful for all involved. It is worth
recalling that to reform Chile, economist Milton Friedman had to associate with the
Augusto Pinochet regime and therefore subject himself to a worldwide hate campaign
(some of the best footage in The Commanding Heights shows Mr Friedman's jaw
tightening as protesters disrupted his receipt of the Nobel Prize). But the results
Mr Friedman generated were more humane than socialism: a violent dictator's free
market plan yielded, eventually, the end of dictatorship and a chance of prosperity.

In the case of the Soviet Union, the headquarters of the control culture, we also learn
a few things. The producers of The Commanding Heights interview Oleg Gordievsky,
a Soviet official who spied for Britain. His handlers were interested only in his military
information: "The west neglected the foundation of the argument, the economy" - the
Soviet Union's vulnerable under- belly. Western intelligence reports generally vastly
overestimated the strength of Communist bloc economies. (As recently as the late
1980s, our most esteemed analysts were convinced East Germany's economy was as
big as Britain's.) Cold-war myopia deprived western leaders of vital knowledge.

Last, there were the outliers, the Middle East and Africa - cold-war casualties of
another sort. Some of their territories were cold-war battlegrounds - such as Angola
and Afghanistan. Others suffered indirectly from the cold-war policy of containment,
which tolerated dictatorship in exchange for the promise of secure oil flows (Saudi
Arabia, Iraq). The result was that citizens of both groups were shut out of globalisation,
helping to foster a climate in which terrorism could breed more easily.

And now? In Latin America, liberalisation is again challenged. The Commanding Heights
tells us liberalisers should not be deterred. If, as the programme argues they should be,
property rights are honoured and individual enterprise is rewarded, prosperity is not
impossible.

In the Middle East, the message is that war alone cannot make the rest of the world safe.
Today the spotlights are trained on the chemical stores of Saddam Hussein, as they
once were on Moscow's missile arsenal. But without economic and political liberalisation,
stability will not come.

These points may seem obvious but they are worth rehearsing at this moment of peculiar
uncertainty. However horrible the threat of terrorism, however disastrous the economic
troubles of certain regions, the challenges today are less than those that were presented
by communism.

The concerned guardians of markets should take heart. The lesson here is that hesitation
alone can lose them the spot they have secured on the commanding heights.

* The Commanding Heights (PBS), produced by William Cran, based on the book of
the same title by Daniel Yergin and Joseph Stanislaw (Touchstone)

Del Meyer, MD
DelMeyer@MedicalTuesday.net