Commentators such as the CBC blame this plight on everything but the kitchen sink: there are few amenities on the island; it’s too small; the cod fishery collapsed; there are other areas in Canada far more attractive, etc.
Stuff and nonsense. The real underlying cause of the predicament is government mismanagement. To wit, thanks to socialized medicine, doctors are paid roughly the same for their efforts no matter where they are located. .Consider an analogy.
Suppose the supply shortage carried over to plumbers, for example, with too few in this neck of the woods, and, at least relatively, too many elsewhere. Market forces would click into operation. Plumbers’ wages would rise in Fogo and therefore fall, relatively, everywhere else. Adam Smith’s “invisible hand” would entice people who take care of our plumbing needs to “go east young man” and head for Fogo Island.
But this market force does not work for doctors since they cannot be paid enough extra for locating where they are the most needed. True, some provinces, including Newfoundland and Labrador, do offer what amounts to isolation pay for doctors. But salary formulas don’t necessarily get the job done. Sometimes to get where you want to go you gotta pay what you gotta pay.Article content
The price system works in the manner described all throughout the warp and woof of the economy. Assume the ideal proportion between peas and carrots, from the consumers’ point of view, is 50-50. But at present, for some mysterious reason, the economy is labouring under a misallocation of resources of these two goods: We now have 90 per cent peas and only 10 per cent carrots.
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