The best thing about Kamala Harris's political debut last week was the backlash.
I'm not referring to the political backlash; Harris's attack on “price speculation“It was probably smart politics. It amplified her campaign message that she is”fighting for the people“That economists scoff at the tools she would use in that fight probably doesn't matter much.
However, it is reassuring that Most economists Governments are reluctant to implement price controls. Few lessons from economic history are clearer than the futility of such an approach, as Robert L. Schuettinger and Eamonn F. Butler wrote in their 1979 book “Forty Centuries of Wage and Price Controls: How Not to Fight Inflation.”
Amid the brief debate about private sector “greed” that Harris’s proposal generated, we heard almost nothing about public sector greed.
From almost any point of view, eggs and others staples Food prices have become much, much cheaper over the past century. Recent food price increases were just statistical noise in a broader trend with well-known causes: the COVID-19 pandemic, supply chain problems, bird flu, and general inflation.
Meanwhile, goods and services whose true prices are hidden by government control or interference have become much more expensive. The costs of college tuition, health care, housing, and other goods and services that are heavily regulated by state and local governments have markedly outpaced inflation, while cars, computers, clothing, and other less-regulated goods and services have generally become more expensive. affordable.
The inflation-adjusted average cost of college tuition has increase 130% since 1990. The cost of public K-12 education has rose Also, national health care expenditures increased from $435 billion in 1970 to $4.5 trillion in 2022 (in constant 2022 dollars). While the U.S. population grew by 64% during that period, health care spending increased by 934%.
The left rarely describes these increases as price gouging or attributes them to greed. True, insurance companies are often denounced (usually for trying to keep costs down), while drug companies are often labeled bogeymen. And for-profit colleges sometimes draw the ire of progressives, but affordability crises generated by the public sector are often met with different responses: subsidies to consumers or providers, or debt cancellation at taxpayer expense.
Taxpayers who want to keep more of their own money are labeled greedy, while those who want to take it away are seen as compassionate.
There is no condemnation of universities that have spent huge sums on administrators at the university level. bills Since the 1970s, the number of full-time administrators and other non-teaching professionals in higher education has increased exponentially. Paul Weinstein Jr. of the Progressive Policy Institute found that Caltech, UC San Diego, and Duke have more non-teaching staff than students. The ratio of students to faculty at Georgia Tech is 37 to 1, while the ratio of students to non-teaching staff is 11 to 1. According to WeinsteinMIT has nearly nine times as many non-teaching staff as faculty.
K-12 public schools are doing worse while spending more. Scores in math, civics and reading among 13-year-olds have been decliningYet all we hear from Democrats is that we need to give more money to schools.
This is partly because the education sector is a vital part of the Democratic coalition, having served as a political ATM for the party during decadesIn every election cycle since 1990, teachers unions have donated at least 93 cents of every dollar in political contributions to Democrats. Contributions from higher education and public sector unions generally follow one similar Pattern. This does not include additional political activities boosting the Democrats.
But I don't think crude donor capture is the only explanation, any more than I think conservatives defend the private sector simply because the rich buy and pay for it. If we go back at least to the philosopher John Dewey, education has been regarded as a kind of secular, democratic, religious rite, and a right. Like another right according to progressives, health care, education is regarded as something the state should provide for the betterment of all. Concerns about costs are treated as cruelty or heresy.
Obviously, I have philosophical disagreements with this worldview, but it is not a sinister or indefensible perspective. But it is so myopically obsessed with well-intentioned ends that its proponents are blind to the means. The inhabitants of the public and nonprofit sectors have become a kind of new class who think it is or should be immune to market forces that tend to make almost everything outside the public sector more affordable over time.
The value of exact prices is that they force necessary trade-offs. The progressive approach is to start with the ends—what they think the exact price (or wage) should be—and reverse-engineer the means to fit them. That hasn't worked for 40 centuries.
