there are clearly countries that spend less per student than you would expect given their level of per capita GDP, like Iceland, which is labelled, and Italy, which is the unlabelled point more-or-less under Spain. There are also countries that spend more per student than you would expect given their GDP, including Ireland, Canada, and especially the United States.
He is referring to higher education.
Returning to the Oregon Medicaid study, Tyler Cowen writes,
The key question here is how we should marginally revise our beliefs, or perhaps should have revised them all along (the results of this study are not actually so surprising, given other work on the efficacy of health insurance). For instance should we revise health care policy toward greater emphasis on catastrophic care, or how about toward public health measures, or maybe cash transfers? (I would say all three.) One might even use this study to revise our views on what should be included in the ACA mandate, yet I haven’t heard a peep on that topic. I am instead seeing a lot of efforts to distract our attention toward other questions.
Nick Schulz and I have referred to health care and education as the new commanding heights. That is, they are as important in the 21st century as steel and electric power were in the 20th. However, steel and electric power had major scale economies that lent themselves to top-down, bureaucratic management. Health care and education do not.
What I think this means that those who want to apply centralized, technocratic solutions in health care and education (“Obamacare,” “No Child Left Behind”) are on the wrong side of history. Perhaps my views are mistaken. But in any case, I wish that people were less emotionally invested in the technocratic approach, so that if it does prove to be dysfunctional they are able to back off.
Health care, and education to a lesser extent, suffer from near total market failure, from not even knowing prices in the former or values in the case of both. It will require extreme technocratic intervention to undo the damage insurance has done in making it so. Let’s hear it for markets while recognizing they do not exist in these areas and it will take much much effort to create them. It may be easiest to provide universal basic services to allow markets to grow in value added services away from the crushing burden of insurance
Lord, “they do not exist in these areas” because people like you will not let these markets exist, then cry “market failure” when the more accurate description is government failure. “[E]xtreme technocratic intervention,” if you can call it that, is exactly why insurance doesn’t work, because every state mandates covering a list of extremely stupid things, so real catastrophic insurance is not possible, not to mention shopping outside your state. Not allowing parents to choose where their kid goes to school, by using vouchers, does the same; they have to pay twice to send their kids to private school, which many still do.
Well, these are both information markets and the internet is coming. These highly govt-subsidized and regulated markets are about to be destroyed by the internet, just like music and newspapers before them, good riddance.
We are actually seeing attempts to apply enormous economies of scale to education, via the massive on-line courses and computer-aided learning.
Government is not a leading figure in this effort, though there are certainly some government universities involved. (Note: For all intents and purposes, so-called “private” universities like Harvard are as much a part of the US government as say… the Navy.)
Likewise, economy of scale is a huge feature of one of the fastest advancing area of health care, pharmaceuticals.