Many, many years ago, the Nobel Prize-winning economist Kenneth Arrow wrote an article about asymmetry of information in medical care (your doctor knows more than you do).  Since then, countless textbook authors, op-ed writers and policywonk briefers have seized on Arrow's observation to argue that a free market  will not work in health care.  Ergo, we need a regulated, institutionalized, bureaucratized market - like what we have in the US and almost everywhere else.

The problem with this line of reasoning is that it commits what logicians call the fallacy of the excluded middle.  The unstated, and therefore unexamined, minor premise is: regulated markets can solve the problem, or at least do better than free markets.  As it turns out, this minor premise is difficult, if not impossible, to defend.

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