Dental Economics

I go to Guatemala City for dental work. I just had the posts put in there for three implants. The bone has to grow around the posts to make them solid. In six months I’ll fly again from Washington DC to Guatemala to get the actual teeth installed.

But why Guatemala? Because Francisco Marroquín University, a wonderful and liberal private university, where I am an honorary professor, and where I have lots of friends, has a superb school of dentistry.

But why not here in the U.S.? Because exactly the same procedure, less well done, costs in the U.S. fully four times more. It’s why “medical tourism” expands. Los Algodones, Mexico, a few miles south of the Rio Grande, is known as “Molar City” because it has so many dentists serving Canadian and American tourists.

Especially Americans. Why?

One reason of course is that Americans are richer than Mexicans, and much richer than Guatemalans. The U.S. economy is very productive. Professors are not more productive than they were in the time of Socrates. I still teach with “chalk and talk.” But U.S. farmers are vastly more productive than old Greeks. They grow with fertilizer, hybrid corn, tractors, irrigation pipes, and on and on. The greater productivity of modern agriculture spills over into all occupations. If professors and farmers did not make comparable incomes, young people choosing occupations would flood into one or the other, until the incomes were comparable. So dentists in Mexico and especially in Guatemala make much less than American dentists. That’s elementary economics.

But there’s another reason. It’s also elementary economics.

American medical care of all sorts is tied up in strong monopolies enforced by the government. The Federal, state, and local governments protect dentists, doctors, nurses, hospitals, pharmacies, drug companies, medical insurance companies, and anyone else who might want to cure you of what ails you.

After all, medical care is dangerous. (Uniquely?) Medical professionals have asymmetrically more information than their patients. (Unlike all exchanges?) Therefore, doctors need to get a grade of A in a university course in organic chemistry. (Huh?) Therefore, dentists need licenses. (Unlike economists?) Therefore, nurses must have university degrees. (Why?) Therefore, most medical schools must be closed to keep them up to high standards. (So, all auto companies except Mercedes should be closed?) Therefore, midwives should be prohibited from delivering babies. (Because they are women?)

You get the point. U.S. dentists run a racket with government help.

A bit of economic history: In the 1930s, medical doctors made about the same as professors, lawyers, and business managers. Then the factions got the government to step in and impose monopoly. By the 1950s, doctors made three times more than other professions.

Monopolies are seldom “natural.” Mostly they are government-run rackets. If dentists could move across borders, U.S. dentistry would be cheap, in the way of free trade in any good or service.

Guess who stops that.