The Power of Stories

Posted by Marc Hodak on June 13, 2007 under Collectivist instinct | Comments are off for this article

On our flight back from Switzerland, our airline showed a segment from CBS���s 60 Minutes. In my (much) younger days, I was continually amazed at CBS���s capacity to expose human cupidity and folly week after week. How could they do it? So, I finally got an answer���they invented it. And the viewers believe it, as I did before I got an economic education.

This story was about the awesome power of Big Pharma to undermine our democracy. The context was the passage of the Medicare prescription drug plan without the ability of government to negotiate drug prices. The blame for this was placed on Big Pharma’s lobbying spending. If I were quite ignorant about this issue, I would have been awed by this story. Instead, I was awed by what was left out:

�Ģ The pharmaceutical industry, instead of being portrayed as creating a profitable new market for its drugs, could have been seen as acting defensively to protect their profits from a major change in how drugs are distributed in this country.
�Ģ The prevention of a government buyer���s cartel (for which Big Pharma was heavily criticized in this report) might have been worth it for reasons other than preserving drug company profits.
�Ģ The power of lobbyists and the revolving door between Congress and lucrative lobbying opportunities is not owned by Big Pharma, or Big Business generally.

Instead, the CBS reporter was shocked, shocked that all these Washington people were following the money. I was shocked not so much by CBS’s perspective as by how completely one-sided was their presentation. Their unstated premise was that government should be free to use a certain segment of the population (e.g., those involved in producing drugs) to do what is ���right��� (according to CBS���s, selling drugs cheaply enough to undermine their profits), however that certain segment should not so aggressively resist being used.

Even taking the story at face value, a more realistic remedy would be to make government less attractive to all this wealth and influence by reducing the amount of government interference in the economy. But long before anyone could make such a point on a show on CBS, you’d hear the tick, tick, tick, tick, tick…