It’s not just housing

Here’s a tweet by Matt Yglesias:

Is it really that “strange”?  Yes, there’s far too much government planning in the housing sector.

But housing is a laissez-faire paradise compared to America’s second largest sector—health care.

And health care is a laissez-faire paradise compared to America’s third largest sector—education.

And then there’s agriculture.  Law.  Transportation.  I could go on and on.

To be clear, America is a more free market economy than most other countries.  But how often to you see pundits claim that, “Actually, country X is not a free market economy”, and then cite some intervention that is fairly minor compared to the widespread interventions in America’s second and third largest sectors?

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That was then, this is now

Many professors at universities routinely quizzed their students too, although not as commonly as faculty at smaller colleges did.  [In 1910]…a questionnaire of University of Chicago faculty revealed that 25 of 122 replying professors gave some kind of quiz each day; 31 gave them each week, and 10 others did so every other week.  The […]

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Who Said It?

 

Education is not a pure public good. The marginal cost of educating an additional child is far from zero; indeed, the marginal and average costs are (at least for large school districts) approximately the same. And there is no difficulty in charging an individual for use of this service.
Those who seek to justify public education in terms of market failure focus on the importance of externalities; it is often claimed, for instance, that there are important externalities associated with having an educated citizenry. A society in which everyone can read can function more smoothly than a society in which few can read. But there is a large private return to being able to read, and even in the absence of government support, almost all individuals would learn this and other basic skills. Indeed, most individuals would go far beyond that. The question is, given the level of education that individuals would privately choose to undertake were there no government subsidy, would further increases in education generate significant externalities? There is no agreement concerning the answer, but the case for government support based on these kinds of externalities seems, at best, unproved.

This was written by a very prominent American economist back in the late 1980s. He’s still alive and productive.

Who is he?

 

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Why do wealthy parents have wealthy children?

From Andreas Fagereng, Magne Mogstad, and Marte Rønning Abstract: We show that family background matters significantly for children’s accumulation of wealth and investor behavior as adults, even when removing the genetic connection between children and the parents raising them. The analysis is made possible by linking Korean-born children who were adopted at infancy by Norwegian […]

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The Great Walter Williams, Radical Troublemaker

Our colleague, the great Walter Williams, died on Tuesday shortly after teaching his last class–which is exactly how he would have wanted to go. He was 84 and had been teaching at George Mason since 1980. As Don Boudreaux writes in the WSJ: For 40 years Walter was the heart and soul of George Mason’s […]

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American Ph.Ds are failing at start-ups

We document that since 1997, the rate of startup formation has precipitously declined for firms operated by U.S. PhD recipients in science and engineering. These are supposedly the source of some of our best new technological and business opportunities. We link this to an increasing burden of knowledge by documenting a long-term earnings decline by […]

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Window for Change

By Gita Bhatt There are decades where nothing happens, and there are weeks where decades happen. This saying could not be more apt today. The pandemic—which has disrupted the world in profound ways—has prompted countries to roll out significant policy changes that might otherwise have taken years. It has also sped the arrival of technologies […]

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How to Read Economics Research Papers: RCTs

The latest video from MRU is from Josh Angrist’s Mastering Econometrics class and it covers How to Read Economics Research Papers: Randomized Controlled Trials (RCTs). The video is for the student and it will be very useful for teachers of introductory statistics and econometrics.

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Why you should use *Modern Principles* for your class

Alex has had numerous posts on Modern Principles, but here is my two cents.  A textbook, as the name indicates, is a book.  It has to be conceived of as a book, and thought of as a book, and written as a book, and ideally it should be read as a book.  There are many […]

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