Trending

Newsletter

Education Is Not a Public Good and We Should Stop Treating It Like One

By: Guest Contributor - Jan 27, 2017, 7:36 am
Education Is Not a Public Good
A classroom in the United States (WNPR)

By Corey DeAngelis

Critics of the proposed policy to expand private school choice in the United States argue that the government must fund and control schooling since it is a “public good.” This may sound accurate, as we label some schools as “public” and some as “private.” Since we have public schools, schooling must be a public good, right?

The Economic Definition

Schooling fails both parts of the “public good” definition.

However, what does “public good” even mean? A public good, according to the economic definition, must satisfy two conditions: 1.) nonrival in consumption, and 2.) non-excludable. In other words, one person consuming the good will not reduce another’s ability to consume the good, and those controlling the good are unable to exclude those that do not pay.

Schooling fails both parts of the definition.

Why Schooling Fails the Requirements

If one student is in a seat in a classroom, they take up another child’s ability to sit in the same seat. As a result, schooling fails the first part of the definition. Second, and perhaps most importantly, it is not difficult to exclude a person from a school, or any other type of institution. If someone does not pay you to educate them, you can simply deny him or her that service. This already occurs with private schools and tutoring services.

Private schools and tutoring services operate effectively because they do not suffer from the free rider problem.

Critics argue that since we are all forced to go to school in the United States through compulsory education laws, schooling meets the non-excludability condition. This is a simple confusion of the economic definition. The definition does not state whether children are or are not excluded from the service in present day.

On the other hand, the definition states that nonpayers can be excluded. This is an important distinction because it rids us of the basic free rider problem. In a true public good scenario, everyone knows they can benefit from the good or service by getting others to pay for it, so no one pays.

An example of a true public good is radio and national defense. It is very difficult to exclude people that do not pay to use the radio service. This is also true with national defense: how can you exclude people from benefitting from keeping the country safe? (Although some argue that even national defense can be considered a private good).

We do not suffer from the free rider problem with schooling because there is the ability for an institution to exclude, if necessary. That is why private schools and tutoring services can operate effectively today.

What is the Role of Government in Education?

A third party benefits from the transaction between educator and student.

It would be more accurate to claim that schooling may have positive externalities. However, this simply means that a third party benefits from the transaction between educator and student. As a result, government may have an interest in funding schooling. However, this is not a sufficient argument for government to operate schools as well. Because of the third-party consideration, individuals may consume less than the socially optimal level of schooling. Additionally, schooling may have negative externalities as well (since education is not the same as schooling), so the size, and the sign, of the overall effect of schooling is unclear.

Since schooling fails both parts of the public good definition, the free rider problem does not exist, and we do not need the government to operate schools. If government is not necessary for the operation of schools, we should not promote policies towards that end. Government’s current monopoly on schooling leads to a lower quality product, at an exorbitant cost. Instead, we should recognize the problems with the existing government monopoly on schooling and promote access to private school choice for all children, regardless of their income.

Corey DeAngelis is a Distinguished Doctoral Fellow, University of Arkansas.This article was originally published on FEE.org. Read the original article.

The Perpetual Failure of ObamaCare and Single Payer Healthcare

By: David Unsworth - Jan 26, 2017, 4:48 pm
ObamaCare and single payer care have repeatedly proven incapable of controlling healthcare costs (

The American Left is fond of presenting the state of American healthcare in the most dire and precarious terms. We are told that before the wondrous implementation of the Affordable Care Act (commonly referred to as ObamaCare) that the greatest moral travesty in our nation was that such a wealthy and prosperous land just left the poor, the elderly, and the children to die due to lack of health care. Nothing could be further from the truth. Before ObamaCare, the federal government still spent hundreds of billions of dollars per year on Medicaid (for the poor), Medicare (for the elderly), and the State Childrens' Health Insurance Program (SCHIP). The United States had a great healthcare system before ObamaCare. What has changed now is the power of government coercion. Read More: What Obama Should Have Said in His Farewell Address Read More: Congressmen Lambast "Shameless" Obama for Ending Cuban Wet Foot, Dry Foot Policy ObamaCare is the ultimate Mussolini-style corrupt bargain between big business and big government. It posits that the solution to any type of social ill, is using the coercive power of the government to force its citizens to buy into a government-controlled plan; in this case healthcare. But the "evil genius" of ObamaCare was appealing to private greed to get the healthcare industry on board: Hospitals, doctors, insurance companies, HMOs, and big government politicians all love ObamaCare, because it expands coverage, without cutting costs. Donald Trump has promised to make repealing and replacing ObamaCare a top legislative priority. Costs have skyrocketed precisely because ObamaCare fails to account for human nature. When you isolate human beings from the economic consequences of their actions, disaster is certain to ensue. Under ObamaCare neither the healthcare industry, nor consumers, have any real incentives to keep costs in check, because they know that the government will pick up the tab regardless. That is outrageous, and it is in direct contradiction to Obama's claims regarding savings through choice and competition. There is no choice. The American consumer is required to buy into a government-approved healthcare plan. And it is demonstrable that competition has greatly decreased, not increased, as insurers have been pulling out of state after state left and right. The only consumers who benefit from ObamaCare are those who never had the least intention of paying for their healthcare anyway. For Americans who actually work for a living, on the other hand, it is highway robbery. If ObamaCare is such a great deal, then repeal the mandate, and allow it to compete with any other health insurance provider on the free market. It is fundamentally unconstitutional to use the coercive power of the government to obligate the American consumer to buy something. googletag.cmd.push(function() { googletag.display('div-gpt-ad-1459522593195-0'); }); Which leads us to the ultimate goal of proponents of ObamaCare: single payer healthcare. We are told on a regular basis by the American Left, that single payer is the golden panacea: it will be morally just, reduce costs, emphasize preventative care, and greatly diminish paperwork and bureaucracy. It has been a dream of the American Left, since Bill Clinton's first term when Hillary championed her healthcare reform vision, which was promptly and soundly rejected by both parties. But the idea has never truly faded away. Each year a group of hard-left representatives still introduces a bill to institute single payer called the US National Healthcare Act, but the idea has never gotten much traction. Enter the tag-team of Vermont Governor Peter Shumlin and well-known healthcare sleazeball and liar Jonathan Gruber of MIT. Gruber, fresh off of signing a $400,000 contract with the state of Vermont for his prestigious "consulting" services, solemnly informed the legislature that the state could be looking at savings of $1.6 billion over ten years. Fantastic, right? Shumlin and his democratic socialist allies throughout Vermont looked as though they were in the midst of a weekend ecstasy binge. The intolerably smug Gruber, meanwhile, assured that Vermont could become a shining beacon for the rest of the nation, as waves of admiring state governors jumped on the bandwagon of socialized medicine, in the wake of Green Mountain Care's incontrovertible success. There was just one problem. Green Mountain Care may go down as the biggest failure in the history of Vermont state politics. While Shumlin began working on single payer in February of 2011, he and his allies delayed and delayed and delayed issuing their report on the costs. Meanwhile, in the wake of public outcry over transparency, Shumlin's special counsel Anya Rader-Wallick gleefully assured Vermont constituents that, "We can move full speed ahead with what we need without knowing where the money's coming from." Wrong! When the final bill for Green Mountain Care was submitted, the word apocalyptic would be an understatement. The program was estimated to cost $2.6 billion in state revenue, in a state that in 2017 had only projected taking in $1.7 billion in tax revenue. That's a whopping 151% tax increase! Put another way, Vermont's single payer health plan was poised to cost one and a half times more than their entire state budget for all other activities undertaken by the state government! And the magical plan to pay for this was a modest 11.5% payroll tax which faced such vehement and vicious opposition from the entire state's business community, that Shumlin was forced to immediately backtrack. First Shumlin proposed a "grace period" for businesses with less than 100 employees. And then, when public furor failed to die down, he sadly admitted defeating, lamenting that, "In my judgment, the potential economic disruption and risks would be too great to small businesses, working families, and the state’s economy." Ooooops! Well, Governor Shumlin gave it the old college try. Millions of dollars and half a decade later, it turned out it wasn't such a great idea after all. But what is truly troubling for a transparent democracy, is the way that Shumlin used state resources, but refused to disclose evidence that would have been damaging to his electoral prospects. He delayed publication of the official report TWICE...during both the 2012 and 2014 elections. Republican Scott Milne would have almost certainly won the 2014 election, had Vermont voters been privy to the true nature of the proposed healthcare reform. Shumlin should be facing a state ethics investigation. But short of that, we can all take comfort in one thing. Neither in Vermont, nor in any other state, are we likely to see another push for single payer health care in our generation. Let's hope that the other 49 states can learn a valuable lesson from their cold, snowy, Northeastern neighbor. ObamaCare and single payer healthcare are doomed to failure because they are in fundamental conflict with human nature. It's a lesson that Vermont, the home of Bernie Sanders and all of his socialist wisdom, should learn: but sadly probably will not. Source: Forbes

Weekly E-Newsletter

Get the latest from PanAm Post direct to your inbox!

We will never share your email with anyone.