Great article from Gale. TVs have gotten much better (and cheaper) because of technological improvements. Education, on the other hand, has gotten more expensive. I did a deep dive on this topic some years ago, it is quite evident that government-subsidized loans are the primary factor driving up the cost of education.
When the govt subsidizes something, it will also add regulations. The regs, naturally, favor incumbent players and tend to “lock in” the costly and low-productive nature of the industry.
Imagine what the price of these large-screen TVs would be today if the government had provided $15,000 loans and grants for young people to buy them? ;)
This naturally leads to a discussion of why most products decrease in cost over time, while few do not (particularly health care, education, child care and in some regions housing).
Governments erect lots of obstacles to new knowledge discovery and sharing: Regulations, subsidies, occupational licensing, accreditation agencies, etc.
Agreed. The degree of competition is revealing. A major role of government has been to protect the status quo from competition. Exhibit A: The East German Trabant. Got worse every year from 1957 to 1991. Compare to Porsche, BMW, and Audi.
I would say that we are continually discovering and sharing valuable new knowledge. Capitalism is really about giving people the freedom to create, discover, and share knowledge. As George Gilder has noted "The difference between our age and the Stone Age is entirely due to the growth in knowledge."
Great article from Gale. TVs have gotten much better (and cheaper) because of technological improvements. Education, on the other hand, has gotten more expensive. I did a deep dive on this topic some years ago, it is quite evident that government-subsidized loans are the primary factor driving up the cost of education.
When the govt subsidizes something, it will also add regulations. The regs, naturally, favor incumbent players and tend to “lock in” the costly and low-productive nature of the industry.
Imagine what the price of these large-screen TVs would be today if the government had provided $15,000 loans and grants for young people to buy them? ;)
Don't forget hiding the actual prices behind a variety of fees, offsets, and variable prices for residents and non-residents :)
Love this. I would call it a time-price inversion!
Socialism inverts abundance. Capitalism transforms scarcities into abundance. Socialism transforms abundances into scarcities. Capitalism is Anti-scarcity. ;)
Brilliant!!! Put the socialist in charge of sand making in the desert. We can end AGW.
This naturally leads to a discussion of why most products decrease in cost over time, while few do not (particularly health care, education, child care and in some regions housing).
Governments erect lots of obstacles to new knowledge discovery and sharing: Regulations, subsidies, occupational licensing, accreditation agencies, etc.
Yes, I think it is a combination of:
1) Strong government interventions in those sectors of the economy (and fewer interventions in the others).
2) Those sectors of the economy are relatively sheltered from foreign competition, while consumer goods have strong foreign competition.
Agreed. The degree of competition is revealing. A major role of government has been to protect the status quo from competition. Exhibit A: The East German Trabant. Got worse every year from 1957 to 1991. Compare to Porsche, BMW, and Audi.
Oh, come on!
Who doesn't love the Trabant?
; )
I would say that we are continually discovering and sharing valuable new knowledge. Capitalism is really about giving people the freedom to create, discover, and share knowledge. As George Gilder has noted "The difference between our age and the Stone Age is entirely due to the growth in knowledge."