The fallacy destroyed long ago still lives on strong today.  Mercantilists believe one man’s gain must be another man’s loss.  Exchange benefits both parties involved.  One man’s gain and another man’s loss are only in war and plunder.  The market is not war and plunder.  The mercantilist theory is entirely wrong.  The exchange wouldn’t be made if the parties didn’t expect to benefit.

We will use a physician and patient as an example.  The physician will profit when the patient goes to see him.  The patient can now treat the ailment.  The physician and patient are both better off.  The physician didn’t make the patient sick.  The patient was hurt by being sick, not the treating physician.  Not just anyone is qualified for this role.  The prospect of profits drives those qualified to this disparity.

It’s certainly possible that the physician will not have any patients to treat.  This could be due to a lack of insight.  If those services were needed, the envious man will say the profits are unjustified, maybe price gouging.  They could use any term that doesn’t pass the smell test.  These are nothing more than arbitrary emotional judgments.  It’s surely better for the sick man to pay a high fee than go on being sick.

The market is in harmony.  Not that the market is in a state of nirvana.  The market is always heading towards equilibrium, but it’s never achieved.  The market would be in a state of never-never land if we could all perfectly predict the future.  The only difference between interregional trade and international trade is an arbitrary line.  It’s still a trade of services.  This could be seeing a physician around the corner or buying a shirt made around the world.

If legislation were enacted to prevent physicians from charging high fees doesn’t make medical care cheaper.  The physicians can be driven from the market, and choose another profession.  It takes a lot of attributes to be a physician, there are a small amount of people who are qualified.  So, the available physicians will be fewer and fewer.  Medical care will be harder and harder to come by.  The patient will stay sick, and his family will suffer.

Reference

Ludwig von Mises; Human Action