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Comment by VladRussian | Hacker News Reader

>the fastest way to find out is free market experimentation

>exposed their schooling system to free market competition

not all things can be effectively put under free market framework. Bottom line optimization and profit maximization, natural main objectives of the known free market implementations, don't work well for nuclear weapons maintenance, law enforcement ... healthcare and education for that exact reason that the main objectives in all these areas aren't the bottom line and profit maximization. For example, private prisons and healthcare in the US is highly profitable enterprises, while they serve their main objectives worse then their non-free-market counterparts in comparably developed countries.

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I'm pretty tired of this argument. Or at least, including education and healthcare in there. Law enforcement is very different than education. A monopoly of the use of force is soooo different than optimal learning. A school that has only profitability as it's goal will be outed as such in a free market, and will not be chosen by consumers that care more about their children's experience. Schools that provide the best long-term experience for the students will have the best profits, no shady practices required. If healthcare really was in a free market, then consumers could choose to avoid the providers that try to bend them over backwards for their own bottomline.

Phoenix Online provides a very good counterexample to your belief that

"A school that has only profitability as it's goal will be outed as such in a free market, and will not be chosen by consumers that care more about their children's experience."

Consumers make bad choices. They do so frequently. Besides there is a moral aspect to this.

Suppose a school is very bad. People discover this and go to a competitor school. In the time it takes for people to wise up to the school's terribleness damage has been done to society. I don't see how the free market would be any better at determining this than the current system in the U.S.

As to healthcare; think cartels. What there is no choice for consumers to choose a provider that doesn't "try to bend them over backwards for their own bottom-line"?

One of the things a free-market education system would offer is competition on reputation - allowing customers to choose schools before ever going there based on short feedback loops of many individual customers attending and reporting. This is already done with the public-private college system we have now - and yet you argue it's not possible to determine the quality of a school without going there, finding out it's bad and then being damaged?

If you don't understand how markets better allocate resources than top down rationing systems I suggest you go take economics at the nearest community college.

One of the concepts in the micro-economics principles class you will learn is that education has positive external benefits (beyond the market). In other words there is a marginal social benefit to education that exceeds the market demand. The best way to address this is not to have public school system monopolies of supply and take the cost to near zero - a much more efficient mechanism is to harness (superior) market resource allocation through demand subsidies.

>If you don't understand how markets better allocate resources

better for what? If you study the economics, you'd know that free market naturally results in the outcomes like "food deserts" and 10%+ uninsured precisely because markets better allocate resources for profit maximization, not for universal coverage (which is a main objective of the public education system and must be, for basic human decency and net positive economical result for the whole society, made an objective of the healthcare system)

The sentence you quoted is poorly phrased, but taken with its following sentence as a whole the meaning is still there.

"A school that has only profitability as it's goal will be outed as such in a free market, and will not be chosen by consumers that care more about their children's experience. Schools that provide the best long-term experience for the students will have the best profits, no shady practices required."

The reason why the first sentence is poorly phrased is because the second sentence says in effect "if a school really has profitability as a goal, it will naturally avoid shady practices because otherwise it will be destroyed." It's a classic example of short-term vs. long-term decision-making, and in this case suggesting that long-term profitability requires that no shady practices are used for long and will beat out short-term profitability employing shady practices.

It's not a towering argument in favor of free market education, but I'm not sure that University of Phoenix is a counterexample. Do you have more information on this? My understanding was that their main evilness is taking advantage of the public non-free-market federal student loans business to get more students and money instead of lowering their prices, which is what some say would happen if you took the government out of the equation for public and private loan backing.

My own view is that education costs are tightly tied to the school brand first (which includes the most general brand of being able to say you're college-educated anywhere, which is very important for many jobs and shouldn't be (the knowledge yes, not the "spent time at this location with these people" part)), administrators next, then professors, and the actual knowledge somewhere further down near the bottom. MIT's OCW is just one of many places showing you're not paying for the information, but for status, facilities, and someone to help you learn. So education costs aren't so much a public/private or profit/non-profit problem but a cultural one.

A school that has only profitability as it's goal will be outed as such in a free market,

A non-government school does not have to be for-profit, and can be very good.

Example: the schools run by the Roman Catholic Church.

Also: the small private school in Dallas my wife taught at for three years.

>Law enforcement is very different than education.

no. Both - right for basic education and right for not being robbed/killed - are just guaranteed rights that the government is supposed to deliver upon.

>A school that has only profitability as it's goal will be outed as such in a free market, and will not be chosen by consumers that care more about their children's experience.

speaking about tired argument. To make your argument stronger you should have added some statement about "tricking down of good education from good school students to the students of bad schools".

Without going into how fast and effectively free market can out a bad school, i'll just note that basic education isn't object of consumption, it is a right of the children.

What's your basis for stating that education is a basic/guaranteed right?

Here in Washington State, it is in the Constitution: "It is the paramount duty of the state to make ample provision for the education of all children residing within its borders, without distinction or preference on account of race, color, caste, or sex."

personally to me it is inseparable part of basic human rights. Legally-wise, the US goes even further - the basic education is compulsory.

Is there a particular philosophy or school of thought (no pun intended) that leads you to this conviction? There's a difference between saying "I personally believe that everyone deserves a free public education," and saying education is a "guaranteed right that the government is supposed to deliver upon."

Or are you just saying that currently education is required by law and should remain so?

ok, you're right that compulsory education isn't equivalent to a "guaranteed right" - in the latter one can opt out, while in the former a child is truely guaranteed to receive it. In both cases, be it compulsion or pure right, the government is, obviously, responsible for the delivery upon it to happen.

Understood. You were referring to what is, not stating an opinion on what should be. The term "right" can get very confusing (e.g. "God-given" vs "constitutional").

It is a bit disingenuous to compare private goods (healthcare, education) with public goods (law enforcement, defense). In the case of public goods, the mechanism of freeloading prevents an optimal level of provisioning of them from a free market.

What mechanism prevents competition and free markets from providing good performance in health care or education?

The private vs public good debate is arbitrary. The social cost of free high quality ___ may vary well be negative based on ____. You have costs and both public and private benefits and that my change based on cost over time.

EX: There is significant evidence the cheapest way to improve the public education system is to provide free, healthy, and tasty foods to students. Students are both better behaved, have better attendance, and are better able to learn. However, people seem more willing to pay for apple laptops than apples.

A good is either rivalrous and excludible, or it's not. If it is, it's private. If it is neither rivalrous nor excludible, it's public.

This has nothing to do with the "social cost" (whatever that is).

Edit: I am aware that's a common economic definition of the term, it's still crap.

The definition breaks down for some of the earliest forms of public goods like irrigation systems. Roads and bridges are either 'rivalrous and excludible' or at best a major grey area. So, unless you want to really twist the definition it's simply a poor metric.

PS: Digital copy's of music is another area where excludible is debatable. Library books are another example where they are considered a public good even though they are both 'rivalrous and excludible'.

The goal of a healthcare system ought to maximizing the health of the people. The goal of an educational system ought to be maximizing learning.

Perhaps a free market system (used very loosely) with the goal of pursuing profits would, as a byproduct, maximize the health of the people or of learning. I see no evidence that this is the case or that it should be the case. Indeed, in the case of healthcare I have very strong evidence that profit seeking isn't a great motivator.

The U.S. spends by far the most on healthcare as a percent of GDP. It spends far more for certain drugs than socialized systems, has worse health outcomes, and far greater health access inequality.

There is also a moral aspect. It is morally wrong for someone to profit from denying someone else healthcare. Unless a free market system can be devised in such a way that maximizing profit = maximizing healthcare then such a system is immoral. Cartels and cartel pricing come to mind as something that would prevent such a system from ever being successfully implemented.

It is morally wrong for someone to profit from denying someone else healthcare.

In that case, you are an evil person, since you have profited by engaging in activities that don't deliver healthcare to others.

A person with even a basic understanding of economics would attempt to assign utility to human health and then measure whether or not a system is utility maximizing.

Personally I attempt to do this via revealed preferences - use people's choices to infer their values. And many people reveal that they don't care a great deal about health. For example, an obese person feels their health is less valuable than the enjoyment they receive from a cake or pie. Why should I assign a higher value to that person's health than they themselves do?

There's a big gap between someone who does something morally wrong and being an evil person. My income is not increased because I made a decision to deny someone health care. I am not profiting from making decisions to deny coverage to someone. Insurance companies do though. At least, for profit ones do.

My statement wasn't that it is wrong to profit from doing something other than provide health care. My statement is the it is wrong to profit from denying someone care. I have not denied anyone care and I have not increased my income as a result of such denial.

You appear not to understand what profit is and your statement regarding a basic understanding of economics is ironic given this. Your response would have been better without resorting to such a tactic.

Your last paragraph is disconcerting to me. There is much wrong with your position. People do things that are against their long term interests. People sometimes do things they don't want to do. People can be manipulated into doing things they regret. Humans, are by and large, not rational. Part of the purpose of a society is having share responsibilities. To share our burdens. It is sometimes advisable for society as a whole to look out for our long term interests and this is a good thing.

I was defining profit = earnings - expenses, but there is no point in getting into a semantic argument about the definition of profit. (Note that there actually is no standard definition of profit for an individual.)

Lets treat profit as income. Your income is not increased, but your potential consumption is increased every time you decide not to buy health care for someone who might benefit from it. Is this immoral? I'm guessing not.

If an insurance company denies someone care (increasing revenue) and spends the money on perks for the CEO (increasing expenses commensurately, for a net profit of $0), would that be moral?

People do things that are against their long term interests.

So your belief is that you know what is best for everyone else, and their choices should be subsumed to your opinions? Um, ok.

You previously equated doing an immoral thing with being evil. Now you equate my statement:

"It is sometimes advisable for society as a whole to look out for our long term interests and this is a good thing."

with knowing what is best for everyone else. You logic is faulty. I used the word 'sometimes' and this is an important word in the sentence I wrote. I also never used the phrasing that I know what is best. I said society. Your conclusions are not logically supported from what I've written or stated.

You make too many leaps and appear to go from one extreme to the other. There is a huge gap between "let everyone do as they please" to "I know what is best for everyone".

> The goal of a healthcare system ought to maximizing the health of the people.

Everybody disagrees with this. A more plausible statement would be that it ought to offer the best health/price trade-off. But even then only crazy fascists think that would be ideal. Go watch that Sliders episode where the CDC rules America.

> The goal of an educational system ought to be maximizing learning.

Really? Lots of people would disagree. You've avoided the question of what's worth learning, and I'd say it's far more important that an educational system instill a strong work ethic and a sense of morality that I can tolerate.

> Perhaps a free market system (used very loosely) with the goal of pursuing profits would, as a byproduct, maximize the health of the people or of learning.

You have created an impossible standard. No system you describe in three words is going to maximize your utility function, especially not one as absurd as yours. Also the free market vs. non-free market dichotomy is completely silly. With all the government funded research and state schools, you can't say that America's universities are a "free market". But they do have an important free market feature that lower-level public schools lack: choice of what school to attend.

> It is morally wrong for someone to profit from denying someone else healthcare.

I profit by not financing a tunnel through the mountain to the hospital. Sometimes an emergency vehicle takes too long to get to the hospital and this causes the patient to die. How is my behavior morally wrong?

> Indeed, in the case of healthcare I have very strong evidence that profit seeking isn't a great motivator.

No you don't.

I don't think Sliders is a good reference for discussions on health care policy. I don't think you not spending money to build an object causes you to profit. Maybe you are using the term profit in a nonstandard way. It is wrong in every instance for someone's income to increase because they denied health care to someone who needs it.

Nope, I'm using profit in the standard way. I'm making money by not building that road through the mountain. And people are dying because of me.

> I don't think Sliders is a good reference for discussions on health care policy.

Why?

Your income increases when a road isn't built? Who pays for the increase in your income when a road isn't built? You are not using profit in a standard way.

> Who pays for the increase in your income when a road isn't built?

My employer, who pays me to write software. As we can see, writing software without seeing to it that the road gets built makes me X dollars, but writing software while seeing to it that the road gets built makes me X - Y dollars, where Y is the cost of seeing to it that the road gets built.

If the idea of me being obligated to spend my personal income on this matter makes you quibble about the definition of income and profit, pretend I'm a contractor with an LLC, and my LLC pays for the road. Either way, that's immaterial. I am letting people die by not building that road.

Well, it's arguable whether public education is a public good. Wikipedia says:

Law enforcement, streets, libraries, museums, and education are commonly misclassified as public goods, but they are technically classified in economic terms as quasi-public goods because excludability is possible, but they do still fit some of the characteristics of public goods.

Since ERs can't turn away indigent patients, health care also has some degree of non-excludability, in practice. Perhaps the question of whether or not it's a public good lies at the heart of the health care debate. Here's the argument in favor: http://www.kevinmd.com/blog/2009/08/is-health-care-a-public-...

The distinction between private goods and public goods is somewhat artificial. It's more useful to think in terms of externalities. Education doesn't just produce a private benefit, like a piece of cake. It produces a large positive externality.

I don't see how law enforcement is more of a public good than education. There is enough wealth in the country, and enough means to provide decent education to everyone and decent law enforcement. Why is education not a public good when law enforcement is?

> I don't see how law enforcement is more of a public good than education. There is enough wealth in the country, and enough means to provide decent education to everyone and decent law enforcement. Why is education not a public good when law enforcement is?

I don't see how law enforcement is more of a public good than donuts. There is enough wealth in the country, and enough means to provide decent donuts to everyone and decent law enforcement. Why are donuts not a public good when law enforcement is?

What, you don't agree with the use of public funds to supply the basic human right of donuts? Too bad, you have to pay anyway whether you like it or not.

If that sounds ridiculous to you, you now understand how many people feel about other uses of public funds that you happen to agree with.

I think you don't understand what a public good is. A public good is not something that is paid for by public funds. Here is a reference.

https://en.wikipedia.org/wiki/Public_good

I understand quite well how you'd like to frame the topic, yes. To use the terminology of the page you linked to: education quite clearly qualifies as both rival (since it has non-zero per-student costs) and excludable (since each student participates in education individually), which makes it not a public good by the definition you linked to.

I never stated a belief about whether or not education is a public good. The person I responded to stated that law enforcement is a public good but not education. I wanted to know why he/she thought this. I don't see how one can be considered a public good and not the other.

While law enforcement has some potentially excludable components, for the most part it seems non-excludable: stopping crimes and criminals protects everyone. Exclusion mostly seems possible geographically, and we already effectively do that at the borders of states and countries. On top of that, unlike education, law enforcement does not have a blindingly obvious solution for how to run it privately. (While I understand that solutions exist for how to "privatize" law enforcement, any attempt to privatize the use of force has huge difficulties and dangerous pitfalls.)

>While law enforcement has some potentially excludable components, for the most part it seems non-excludable: stopping crimes and criminals protects everyone.

that is true only in the ideal situation of unlimited law enforcement resources and the type of crimes affecting everybody. In real situation going after specific criminals or crimes [esp. the ones affecting only specific subset of the society] leaves other crimes unpunished and laws unenforced. Thus any real law enforcement inplementation (not theory) demonstrates rivalness and excludability.

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