You hear a lot about free trade and free markets in the news. Today, we’re going to look at what free markets are and a few pros and cons. We’ll also take a look at how free-market thinking can help your dental office.
A free market means that two (or more) people, businesses or countries exchange goods or services without government regulation.
The primary benefit is that it encourages trade, which can be a way to drive down costs. The country or firm that can make a product most cheaply will produce it for everyone and save money for all market goers.
The primary drawback is that the drive to lower prices can cause people to cut corners. This can harm labor rights, the environment, human rights, and other non-monetary things people value.
Now, here’s how free-market thinking can benefit your dentist office. Say you are the best person around at making a crown. You do a great job, and you can do it in half the time as anyone else. But your time is worth $300 an hour.
There’s a lab across town that does an equally great job, but it takes them three times as long. Their techs make only $50 an hour though.
Let’s do the math. Say it takes you an hour to make the crown and it takes the lab tech three hours. Your crown costs $300 in labor and the lab crown costs $150 in labor.
So, with free-market thinking, the crown should go to the lab, and your time should be put toward something you can provide the free market at the best economic value.
This applies to all sorts of products and services. It’s good to take a look around your office from time to time and consider whether there is anything you are doing that can be done by someone else—at a high quality—for a lower cost.