Rigged Markets Create Shortages

One morning recently, I opened my mail and there they were.

Twenty-one employment offers for general medicine services in my area.

They were all pretty similar in compensation and work responsibilities.

If you’ve made yourself available for recruitment, you know that twenty-one in one day is not unusual, but I figured I’d take the opportunity to test a hypothesis.

I wanted to know if there was a free market for my services.

If you put a product in a high demand out there, the price should go up until there’s only one buyer.  That is, if it’s a free market.

If the market is manipulated, if the price of the service is set either by regulation, buyer collusion or both, then the price should not really budge.

So, I took the time and put myself out there.  I began contacting the offers and began to negotiate.

Some of the working conditions budged (after all, I do help young clinicians analyze their contracts for a living) but the dollars?  Not so much.

When I share this experiment when I speak, the response is usually a collective shrug—“So what?” or “Yeah, that’s no surprise.”

Well it should be— a big one.

You’ve just spent the 11 best years of your life and 280k in treasure, mostly borrowed, to create a lump of pure gold.  And then you try to sell it into a market that’s rigged.

That should concern you greatly.

Rigged markets don’t respond to supply, they respond to the needs of the buyer.  And the need of the buyer in this market is to reduce the cost of the supply.

That means they want to pay you less, and in the market for your services that they’ve created—they can.

Fortunately, the laws of economics are fundamental, they can be manipulated but they can’t be changed.

Rigged markets create shortages.