Beating Broke

Personal Finance from the Broke Perspective

Capitalism Requires Participation

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I recently had a small discussion on Facebook with Glen, of Free From Broke.  It started when he mentioned in his status that he had been at the doctors office waiting on his appointment for 44 minutes.  He asked if he should just say to heck with it and reschedule the appointment.  I suggested that he wait it out, then send the doctor a bill for his time spent waiting.  Most people, when I make a similar suggestion, think that I’m joking.  That’s only half true.  I honestly think that if you’re waiting for a long enough time, you ought to send a bill.  I’m not the only one, either.  Check out this article, and this one on CNN.

Now, I’ll be completely honest.  I’ve spent plenty of time waiting on doctors, dentists, and the DMV.  I’ve never once sent a bill.  I’m chicken.  🙂  Really, I think that we’re preconditioned to expect that we’ll wait for a doctor, and since we’re paying them for the service, and we need the service, we don’t dare rock the boat.  But, there’s a couple of good arguments against that being true.  The biggest of which is that capitalism requires participation.

An economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.

Merriam-Webster

Capitalism and the Free Market

In particular, I’d like to point out the last part of that.  “determined mainly by competition in a free market”.  What drives that competition, and as a result, the free market?  The law of supply and demand.  In the law of supply and demand, the prices of goods and services are determined by the supply that exists for a good or service, and the demand that exists for that same good or service.  If demand is high for something, and the supply is low, or limited, the people who have the supply can charge more because the ratio of supply to demand is higher.  But, what about something like a doctors visit?  Doctors aren’t exactly in a low enough supply to warrant higher prices.  While our insurance companies are able to negotiate cheaper prices for services with a doctor, we very rarely will even ask if there’s a better rate.  And, we’ll willingly sit in a waiting room for extended periods of time, which, anyone familiar with the concept of time cost will tell you, costs money.

Participating in Capitalism

In order to change that status quo, we need to start participating in our capitalism.  The clinics and hospitals that many of the doctors work at are requiring their doctors to schedule appointments in 15 minute or 30 minute increments.  How many times have you gone to the doctor and spent more time than that in the exam room?  I know I probably do at least every other time.  Obviously, that’s not a very efficient way to schedule the time.  But, they do it so that the doctors can squeeze in as many patients as possible.  It’s ruled by profit.  The more patients a doctor sees in an hour, the higher the profit is for the clinic.  They’ll never change that unless the profit starts to go away.  How does the profit go away?  Well, either the doctors become so expensive that they’d have to see many more patients in a day than physically possible (they’d just raise rates), or they start getting bills for the patient time they are wasting.

If patients begin billing for the time they spend in a waiting room, eventually, it becomes more expensive to keep patients waiting than it does to change the way they schedule appointments.  Consider the last time you had cable hooked up in your home.  You likely called the cable company to set up an appointment, and they gave you a 4-5 hour window when the technician would be there.  What if you then told them that your time is valuable to you, and that they can expect a bill for every half hour past the beginning of that window that you’re kept waiting on the technician?  Do you think he’d make you wait the full 5 hours?  Not very likely.

The prices of goods and services, including the time those services take to perform, are determined by what the market will bear.  As long as the market continues to pay the cost of the goods or services, the provider can continue to charge that price.  Sometimes they’ll start increasing it.  But, when we begin to value our time, and hold service providers accountable for the cost of time wasted waiting on them to perform a service, we can begin to tell those providers that the market will no longer bear the cost of lost time.  In short, we begin to participate in the free market economy we call capitalism.

Would you ever bill a service provider, doctor or otherwise, for time spent waiting on them?  If not, is it because you don’t value your time, or because you believe that the service provider is truly doing all they can to proved the best services?  Is the service providers time more valuable than yours, and that’s why you won’t bill for your time?

img credit: mishra-ajay, on Flickr

Supply and Demand Goes Both Ways

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Supply and Demand.  We all learn about this tenet of the capitalist market at a rather early age.  It’s a pretty simple concept really.  When one increases the other decreases.  As supply grows, demand diminishes.  As does the price for that product.  As demand grows, supply diminishes.  And price goes up. It’s a function of our market.  And, I think parts of it are broken.

As a frugal blogger, I’m constantly wracking my brain trying to find new ways to be more frugal, and new ways to present that information to you. Part of that includes keeping an eye on the market.  And as such, I’ve come to the conclusion that the law of supply and demand has become more of a guideline than a law.

How so?

Take airfare for instance.  According to this CNN Money article, airfare prices have been raised twice as many times this year as they were all of last year.  And we’re only in March.  What allows them to do that and get away with it?  You keep paying for the tickets.  Gas goes up, and we still fill up our SUVs.  As long as you continue to pay the prices they are asking, the prices will continue to go up.  And, recently, they’ve gone up anyways.

We all know that some of the things that we are buying are too expensive.  I read several articles a day about how expensive somethings have gotten and ways to save money by making your own, or frugally using what you do buy.  And, to some extent, that does work.  For a select few.  But, there are others who are willingly paying that price and then complain about it afterwards.  Why?  They’ve been conditioned to do that.  When was the last time you heard of a boycott based on the price of a good, rather than something the company did to offend you?  Do you think that if even half of the consumers boycotted flying for a month, that prices wouldn’t drop?  They’d have to or they’d have to go out of business.

Why can I buy a ticket from Fargo, ND to Las Vegas, NV for less than $150, but it costs me 3x that much to fly to San Antonio?  It’s not 3x as far.  Why can I buy a bag of malt-o-meal cereal for $2 that tastes exactly the same as a name brand cereal but I can’t buy that name brand cereal for less than $3.50?  The examples of this are plentiful.

We aren’t just consumers.  We have brains and are capable (in most cases) of thinking with them.  It’s time we used them to demand fair prices for products.  We’ve forgotten that supply and demand goes both ways.  We do have some small modicum of control here, but we’ve grown complacent and forgotten that we have it at all.  Many of you are frugalers.  But, we always say that we’re doing it to save money.  And, that’s true, but maybe it’s time we also say that we’re doing it to protest the high prices that we’re being charged.  Oddly, saving money isn’t always a good enough excuse for some people.  Sometimes they need a moral soapbox to stand on.  And, maybe that’s the way to take back supply and demand, and turn it into a working machine again rather than a pleasant theory in economics textbooks.

What say you? (So Say we All.  If you’d watched BSG, you’d get that.)