Michael C Hogan

Agile Product Development & Innovation Strategy


“Free Markets” are Fictional

In his article “Why health insurance is the problem and not the solution” Dr. David Mokotoff argues we need to return health insurance to the free market:

Health insurance is not sold in a truly free market, like home, disability, and life insurance products, etc.

Here’s the problem, nothing is sold in a free market. All products—especially insurance products—are sold in regulated markets. The free market is an idealized scientific model that works under ideal conditions where consumers have perfect information about product pricing and no regulations exist.

Here’s a great video that illustrates the difference between the real world and ideal scientific laboratory conditions using the age-old example of the feather and bowling ball drop experiment.

Just like the feather and the bowling ball, we don’t live in a scientifically ideal world, we live in the real world where some people are better educated and others lie, cheat, hold information secret and steal. The purpose of market regulation is to equalize all of that real-world human behavior.