Businessman's Self-Defense Kit
By Nicholas Provenzo
(Note: the following is an excerpt of an address given by CAC Chairman Nicholas Provenzo to the Colorado Medical Society on May 4, 2003)
Ladies and Gentlemen, Good Morning. I thank you for your kind attention this morning and I thank the staff and directors of the Colorado Medical Society for providing me the opportunity to speak with you about the injustice you face under antitrust.
The theme of this weekend’s conference is “Physicians are Not Criminals.” I applaud you for having the courage to say it, especially face to face with those in our government whose actions against you indicate that they believe all too differently.
I, for one, would like to take the sentiment that physicians are not criminals one step further: I say physicians are heroes. There is a clear correlation between the work of physicians in providing healthcare and the health, comfort, and quality of life of their patients. Your dedication and professionalism has brought good health to our people in a way unprecedented in human history. I believe it is truly a shame that we as a people do not take more time to contemplate the greatness of your professional achievements and the means by which you achieve them.
Yet for all your virtues and the benefits you bring to your patents, you are under attack. As Chris Unrein said yesterday, so powerful and vicious is this attack that one of your own peers was unable to bring himself to speak of it before you this weekend. He said that to talk of it made him more physically ill than he could bear. Truly contemplate that, because such is the nature of the attacks made against you today.
You are told that by exercising your economic self-interest as a group with others in your profession, you represent a coercive threat to your patients that must be prevented by the full weight of the law. You are told that you must justify every increase in fees you seek by proving to someone ignorant of your profession a direct benefit to your patients, as if the continued patronage of your patients was not justification enough. You are warned that if you speak to others about the prices you negotiate, in as innocent a venue as a golf club, or here, this weekend, that act could be held against you in an antitrust proceeding—this in a nation that has enshrined the principle of individual rights, free association and free speech in its most sacred of foundational documents.
So at root, you face a conflict between your rights and the rights of consumers. I hold (and this holding is critical) that in a free market, there is no such conflict. But before this can be made clear, because it is far from self evident, we must go for a little walk that this morning I’ll call “Capitalism for Doctors in the Time They Give Me.”
When I was in college, I started a summer business that I named “Value for Value Services.” I washed windows. Armed with my squeegee and my bucket, “Value for Value Services” was the way that I described my relationship with my customers. I charged as much I believed the market would bear, no matter how badly people needed clean windows, and my customers talked me down as much as they could, no matter how badly I needed the money for school. When we agreed on the exchange, I gave them the value I provided in trade for the monetary value they gave me. Each side could refuse the other, but if an exchange was agreed upon, each side benefited from the transaction. If anyone felt ill used, they only had themselves to blame. Sometimes I made great money washing easy houses, and sometimes I got stuck with a lot more work than I bargained for. And yes, I asked my other window washing buddies what they charged their customers. Over time, I got pretty good judging both the market and the work involved, and I was ultimately able to pay for a year of school with my selfishly sought-after profits.
As I alluded to before, you are in the business of providing the value of health and wellness to your patents. How much do you seek in payment for the services you provide? Your attendance at the conference would seem to say this much: you seek as much as the market will bear and not any less. From my conversations with you, you want a government that respects your right to profit from your work.
Why? Because you know that the pursuit of your economic self-interest is not robbing your patents, or exploiting them—it is simply you exercising your right to the best remuneration you can bargain for in exchange for the services you provide. Profit is not evil. It is nothing more than return on investment after expenses, and the justification for it is nothing less than your right to pursue your own happiness by your own work. I should not have to say to men and women who have endured the rigors of medical school and are dedicated to promoting human life that you have a moral right to profit from your work. Yet as we saw yesterday, when we heard to the government’s side of the antitrust debate, that I do.
As much as I oppose the antitrust mission of the Department of Justice, Federal Trade Commission and state antitrust enforcers—as much as they make me physically sick—I’ll give the representatives they sent to us yesterday their due. They told us in no uncertain terms what they believed their mandate against you to be. As assistant director Jeffrey Brennan of the FTC indicated yesterday, his mandate, and the mandate of all antitrust enforcers is to protect “consumers.”
But what is a consumer, and how are his rights different than those of a producer? Let us define our terms. A producer is someone who creates. He puts his mind to the question of human existence in as many different ways as there are people, and he shapes the materials nature provides him and his own knowledge in a way that benefits human life. You are physician-producers. I produce the value of a rational defense of the principle of individual rights. Others produce homes, entertainment, make cars, raise children, or even serve as sources of spiritual inspiration; so and so on.
Contrast this with a “consumer” A consumer qua consumer (and don’t be shocked by this—please hear me out) is a parasite. A consumer consumes, and if we believe that words have meaning, he does nothing else. You wouldn’t hesitate a minute to cut out a parasite if it threatened the life of one of your patents. I do not hesitate to cut out a parasite when it threatens you.
I hold that everyone in the free market is a producer, or someone who has the fruits of someone else’s productivity bestowed upon him. Accordingly, I hold that to understand the principle that animates the free market, it is inappropriate to look at the people in the market as either producers or consumers. I’m not a producer from 9 to 5 and a consumer the rest of the day. Neither are you. We are all producers who seek trade with other producers on mutually agreed upon terms, to mutual advantage.
Understanding that the market is made up of producers—that is, Bill Gates, you, me, your patients, and anyone else who is productive—will help us as we now define the rights of producers.
The proper principle to guide all economic and political relationships is the principle of individual rights. And to you, I say this: In the field of economic relationships, the principle of individual rights is as important to us all as the scientific method is important in your work as doctors. And just as their are charlatans in medicine who claim that the horn of a rhinoceros is a good cure for disease, there are charlatans in the law that claim that antitrust is good for the free market.
Yet I hold that the principle of individual rights says this: We have a right to our life, and the right to take the action necessary to advance it. We have a right to our individual freedom, which means that we as individuals have the right to take the steps necessary to secure our own ends, unshackled by the whims of others. When producers come together to form a market (because there could never be a market of true consumers), we all meet as free and equals entities, whether we meet as individuals, as a labor union negotiating with a multi-national corporation, or any other such combination or so-called "conspiracy." Whatever our size or numbers, we meet as traders, and each of us has a right to pursue his own self-interest, even if it results in higher prices, or no trade at all. "Restraint of Trade" implies a right to trade. Yet no one has a right to the unearned.
Yet it is the unearned the government antitrust enforces seek in the name of the rights of “consumers.” Now drawing back to the question that faces us this weekend, we must ask, as far as a true consumer goes, by what right does the productive efforts of others fall to him?
Under the antitrust laws, their need is sufficient right alone. Under antitrust, we do not have individual rights, but consumers’ rights. And that is why, while assistant director Brennan was flying on a plane so he could tell you that he is "here to help" by enforcing the federal antitrust laws, the regulatory agency he works for announced that it was breaking up an association of doctors in New Mexico for having had the audacity to negotiate as a group with a government-created monopsony affectionately known as an HMO.
What assistant director Brennan truly provides is “charity” for consumers, of the government mandated kind. His agency demands that doctors accept less payment for their services than they would accept if they were free to do something as simple as talk to their peers. Add a host of other businesses and professions under their yoke—from Microsoft to ice cream manufacturers to computer chip makers—and you have modem day antitrust enforcement.
But notice that the antitrust enforcers are never honest enough to refer to themselves “charity enforcers.” Instead, they make the oft-repeated and lofty claim that they are “protecting competition,” a value they have determined to be the “bedrock of our economy” as we we were told yesterday.
Yet contrary to popular misperception, competition is not the bedrock of our economy, but only an after product of the free market. In a free market, producers trade with one another by voluntary means. A businessman associates with whomever he chooses, shares information with whomever he chooses, “colludes” with whomever he chooses, and no one has a right to question otherwise. All that said, he still can not evade the fact even the prospect of potential competition and substitutes compels him to check his prices—and those businessmen that fail to do so lose ultimately economic power. Market power can only sustained by those businessmen who effectively supply their customers with goods and services, not those who act against them.
The only institution in America that can truly restrain competition in a way that threatens us is an institution not of economic power, but of political power. Only the government, the same people who brought us the US Postal Service, can outlaw competition. And as Andy Dolan adroitly recognized yesterday, when the government created Medicare, it created a powerful price signalizing institution that the other powerful government-created institutions, the HMO’s, have slavishly followed. You doctors seek nothing more than to negotiate with these government-created HMO’s on equal terms, and for this, the government has sicked its antitrust dogs upon you.
You do not deserve this. It is said we need to educate the Bureau of Competition about the problems doctors face. I say, (and I say this knowing all the political hurdles such an endeavor must overcome): we instead need to abolish the Bureau of Competition and the FTC. It’s no longer time to see how we can fit within their system—we need to free ourselves from their system outright. We need to starve it of its funding. We need to take away its legislative mandate and kill it. Millions for defense—but not one cent in tribute. We need to affirm once and for all that producers have rights, and free, unfettered markets are the only means by which these rights are truly protected. Let the government regulators get physically ill over their government-granted livelihoods being taken away from them, but not one more doctor.
Now I want to put my remarks in some context. I wager that what I say to you today in your defense will be more controversial among many of your peers that what those who regulate your lives with impunity said yesterday. I deliberately name my principles up-front because this is the stage we are at in defending the rights of producers against the attacks made against them. When I accepted this invitation, I asked myself what is the most important thing you as victims of antitrust do not know about the assault waged against you. It is not technical minutia—as much as that has its place. It is the fundamental principles that drive antitrust, and the antidote against them. That is your doctor’s tool kit. If I was only able to convey this to you in the most limited sense, you are infinitely better armed than you were before.
The founder’s application of the principle of individual rights to America created the greatest nation in the history of humankind. As the recipients of this legacy; we should demand a more perfect application of these principles to our relationships. The great John Hancock, signer of the Declaration of Independence and financier of the revolution has this Latin phrase engraved on his tombstone: “Obsta Principiis” –Resist the first encroachments. Antitrust has been around for 113 years. It is not too early to start resisting this unjust encroachment.
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