Monday, August 02, 2010

Out of the Hands of Government

By John Glaser

Matt Yglesias is right to point out that the health care and education sectors have stagnated over the past few decades compared to the technology sector, both for consumers and professionals. Innovations with personal computers, software, the internet, etc have lent Americans unprecedented productivity gains, higher standards of living, and more affordable prices. All the while, health care and education have become way too costly, inefficient, and troublesome.

Interestingly, he fails to point out an important correlation. Health care and Education are among the highest funded, bureaucratically entangled, and most controlled sectors of the national economy in federal and state budgets.

Here at CCAP, we try to illustrate the ways in which this level of government intervention can introduce massive inefficiencies, general stagnation, and can lead to broader social ills. For example, aggressive subsidization of higher education can lead, conversely, to rising costs. Secondary effects of this abound (here, here, and here, for starters).

The consumer and professional technology sector, on the other hand, is one where government funding and control is nil. As a result, Americans get more for less over time. More efficiency, more productivity, more innovation for less cost and less hassle. This is why I've been writing so much about the need to more aggressively embrace technology into the education sector. We need to totally rethink the way we pay for and execute higher education from the beginning. A big part of this is getting it out of the hands of government.

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