It is interesting to me that the three areas main areas in America that have become exponentially more expensive are healthcare, construction, and education. It's curious that they have the most government control.
At least in Australia, this is going to go one of two ways - either a user pays system or workers will have to contribute dramatically more tax (it's currently a flat 1%) to the healthcare system to look after people who are no longer working but costing the system a lot. I favour the latter, but the "fuck you, got mine" mentality is insidious and increasingly pervasive.
> Imagine that in 2019 someone invents a perfect artificial heart, which has zero risks or complications, reliably giving 5 or 10 extra years of life to typical elderly patients with heart issues. The downside is that it has to be made out of a giant diamond and so it costs $100 million. How do we decide who gets one?
The point is that somewhere down the line, as our opportunities to spend money on medicine grow and grow (which by itself is a good thing!), we have to come up with some way to draw the "user pays" line. It might be that people with a "fuck you got mine" attitude want to draw the line a lot lower than everyone else, but that's not the same thing as believing that the line exists at all.
Of course there are issues with it. Government inefficiency, people taking up GP time when they don't need to, over-prescription pushed by drug reps as the government pays for it etc. But comparatively I think it's a small cost to pay for avoiding poor people dying because they can't afford to go to the hospital.
Now, it turns out that the difference in productivity between people is so great (think the old 10x-100x programmer) that allocating resources according to contribution creates so much surplus stuff that everybody wins, even the unproductive. And, as a side benefit, everyone has an incentive to be productive.
The flip side is that Government is made up of ordinary people who often ask "what about fairness and status?", and likes to interfere to reallocate from productive people to unproductive people. In mild cases you get a healthy level of support for the disadvantaged, in extreme cases you get Venezuela. But in all cases, since the productive people are given less, they create less and there is less available to distribute. In theory this triggers the laws of supply-and-demand, reduces supply and prices increase.
The flip side is if the productive people consume their wealth instead of producing with it then we probably could tax them without any ill effects, but I think that is rarer than most people think.
Defining people in baskets like 'productive' and 'unproductive' is a fairly cold and callous way of looking at the plight of many Americans ranging from the poor to the elderly.
edit: Also to add onto my point: We've seen in America that people over time have grown more productive, yet wages have stagnated. If your theory was correct that productive Americans are allocated more resources, then presumably we should've seen the economy adjust accordingly.
But the question wasn't what America is doing wrong, the question was why government intervention always leads to price increases.
When the market says that one person is 1000x more productive than another, I'd take that with a 1000 kilo grain of salt unless I know the particular market sector to be sane by some other measure.
... it's a question of ephemeral facts. In a given area, companies who employ software developers, able to retain personnel who perform to those companies' subjective satisfaction, by paying them $X; and analogously for private schools in the same area it is $Y for first-grade teachers. How does $X compare with $Y, today, yesterday, and in all the millions of possible tomorrows?
In other words: the beauty of the free market is that we don't have to answer those questions normatively/prescriptively in any one central place.
Oh, but it is. Quality of education is clearly valued by parents. And depending on which school-district you live in, your property tax rate varies, and the quality of the local public schools correlates rather strongly.
While I don't have personal experience with this situation ... I can easily imagine that a good private school's elevator pitch would be something to the effect of "you and we are both located in $D1, which has cheap property taxes and questionable public schools; by living here you will pay less property tax over your adult life than you would by living in $D2; however, not only can our school make your kids smarter than $D2's acclaimed public-schools can, but we can do that without costing you more tuition than that lifetime-difference in property taxes."
> Capitalism only values something insofar as it can be directly exploited for personal profit.
Personal profit is precisely the best way to motivate humans to do anything that is valuable to society.
If someone is doing something of value without profiting personally, the next question about that activity is "what info am I missing about how they profit?".
Also: "If someone is doing something of value without profiting personally, the next question about that activity is "what info am I missing about how they profit?".
As someone else mentioned, this is frighteningly sociopathic. But it's also ideologically blinkered. It's an elementary fact of anthropology that human societies for most of history have lived on a communal basis without property. People act from personal profit because of the structure and cultural sediment of capitalism, not because humans are inherently selfish.
Interesting. I've assumed that primitive communities were run from the top down with the alpha male effectively owning everything.
I found this:
https://en.wikipedia.org/wiki/Primitive_communism
But it states:
> There is also no agreement among later scholars, including Marxists, on the historical extent, or longevity, of primitive communism.
That is a sociopathic statement that ignores all of human morality, denies any human feeling of empathy or acts of kindness, and pretends culture does not exist. It is certainly the logic of modern capitalism though.
If you saw a child about to fall into a well, and nobody else was around, would you help her? Of course you would. When you are eating thanksgiving with your family, does the strongest member of the family steal the turkey and then charge everyone for pieces of it? What you are saying is patently ridiculous.
Are you comparing poor adults to children about to fall into a well?
This is a sadistic logic. People dying because they can't afford healthcare. "Everybody wins". Living precariously from wageslip to wageslip. "Everybody wins". Internalising the toxic logic that one's worth is directly proportional to one's market value. "Everybody wins". Etcetera.
Several things:
1. If this were so it's strange how so many widely different forms of economic organisation, across the past and present - from post-war fordism in France to the state-owned enterprises in China today - have achieved remarkable levels of growth, stability and innovation. Economies are incredibly historically, sociologically and culturally varied and complex things. They cannot be reduced to a universal and parsimonious law.
2. What is of market value is not what is of social value. Even the most gooey-eyed neoclassical economist admits that a huge number of inefficiencies and distortions separate the two. Many thinkers - Rousseau, Marx, even Rawls - took them to be very far apart. A system in which the majority of people hate their job, have no bargaining power, have no say in their workplace, and are told by society that they aren't worth anything and to be grateful for the Promethean achievements of the rich, is not maximising social value. It's socially and culturally crippling.
3. You are naturalising a contingent and defeasible fact: that people need gratuitously large paychecks to have sufficient incentive to work. It's proven that above £28,000, increased income has no effect on quality of life. People want more money than that because capitalism, like any social system, functionally reproduces itself ideologically; and humans can be extraordinarily sensitive as to their social status and how others perceive them.
At some point everyone dies, and we know somewhere we run up against physical limits of what we can achieve. You'll need o be more specific about what your issue is here.
> Living precariously from wageslip to wageslip.
I've met people on $150,000 who manage to live paycheck to paycheck because they spend all their money in one go. You are probably referring to a real problem, but again maybe be more specific about what the actual problem is.
> Internalising the toxic logic that one's worth is directly proportional to one's market value.
It is impossible for everyone to simultaneously be 10x more productive than average, so I would _strongly_ advise anyone who thinks like this to pick a more achievable standard for measuring their self worth. But the choice of economic system does not determine anyone's mindset.
Several things 1)
Seems reasonable.
Several things 2)
> A system in which the majority of people hate their job, have no bargaining power, have no say in their workplace, and are told by society that they aren't worth anything
I mean realistically this is a value judgment so there is nothing to disagree on, but there are a lot of aspects here that are very negative. Clearly these workers are worth something, being humans, and nobody is seriously going to tell them otherwise. A lot of people are happy in their job, and realistically what is the actual problem with modern jobs? That workers have to turn up on time? That they have to be nice to people even if they don't feel like it? There are some horror stories that come out of retail, but they are caused by bad behavior of customers, not by the economic system.
I've seen a lot of people with lousy jobs who really struggle through life, but often the actual problem is something that is strictly in their personal life. I'm not sympathetic to the idea that somehow because workers don't understand the importance of what they do that they are therefore wasting time.
Several things 3)
> It's proven that above £28,000, increased income has no effect on quality of life
I'm not really familiar with the income and expense situation in the UK so I'll not try to talk about it. I would suggest that once you get beyond lifestyle expenses there are a lot of things that the wealthy do with their money that have nothing to do with their short term quality of life (like investment, or supporting family members or close friends).
Prescription drugs. The FDA has a "no existing alternative first" policy - they work on approving drugs for conditions where no current treatment works before they even start considering competitors to existing drugs. This sounds quite logical, but the effect of it is that every new drug is granted a monopoly for a long period of time before any competitor can even legally sell their alternative, so the drug company can literally charge whatever they want.
Building codes. In my grandparents' day, it was still possible to construct your own house: you bought a plot of land, hired a concrete mixer to come pour the foundation, bought a lot of 2x4s, and spent a bunch of time hammering & sawing. Now, you have to conform to all of the local building codes (which in the Bay Area, I've heard, is an 800-page tome), and you need to get approval for every feature of the design from the city building inspector, who has the power to completely block your construction if you get on his shit list. As a result, the only people who can build housing are ones who have good relationships with the city and the know-how to adhere closely to all the building codes.
Zoning. Even if you have that know-how and relationships, there are some things you just can't do with housing. Own a 1/4 acre with a single family home and want to convert it to a 4-plex? Too bad, it's not zoned for that.
And you can see the economic impact of all of these by looking at situations where they're absent. Consider generic drugs: once a generic has been approved, the price of a drug can fall by 90% or more. Or compare housing in the Houston metro area, where you can get a 3BR2BA for under $200K, to the Bay Area, where the same house will set you back $2M.
It still is. And here in rural Alabama, I have the electrical wiring to show for it.
You think that's government control? Most countries have the government negotiating prices on behalf of it's citizens in a very "take it or leave it" manner. Pharmacists also have to offer a generic if it's available, regardless of what the doctor prescribes.
Those much stronger government controls produce better (cheaper and universal) outcomes.
> Pharmacists also have to offer a generic if it's available, regardless of what the doctor prescribes.
I believe in the US it's actually illegal for a pharmacist to recommend a generic, if the doc didn't check the right box. Maybe just decriminalizing it would have a nice impact :p
EpiPens aren't really medical devices, it's just a drug with a specialized route of administration. it's not any different from an inhaler, a nasal spray bottle, an eyedrop bottle, etc., from a dispensing point of view.
EDIT: it's true that pharmacists aren't always allowed to tell patients when they could save money by buying a generic and paying out of pocket rather than buying a more expensive name brand and paying their share of the full price with insurance. that may be what you heard.
Accreditation is also related to government and can require colleges spend money on things they might not have 50 years ago.
I suspect the biggest cost driver is federally-backed student loans though. When you’re paying with what seems like free money it’s a lot harder to control costs. If students run out of money and drop out of your school, that’s a bigger driver to keep costs down.
Insurance pays for healthcare -> patients care less about how much it costs -> healthcare costs mysteriously rise
Government/lenders pay for school -> students care less about how much it costs -> education costs mysteriously rise
https://www.forbes.com/sites/timworstall/2016/08/31/union-wa...
Besides, isn't this terribly cherry picked? Sewage is a government issue and you don't talk about runaway costs there.
But yes, if you look for the absolute worst 0.05% you will find problems.
Because I promise you, "government" behaves very differently in these two situations.