I discovered this idea recently. Michael Rushton, an economist has a very interesting substack about funding for the arts. He also called it cost disease, which feels less neutral. It made a big impression on me, because it provided an economic justification ( we seem to require those for everything) for programs to ensure children get a good start in life, so they can take best advantage of expensive educational opportunities. Healthy diets, good education, recreational opportunities etc mean less need for expensive healthcare. Good health, good education, social supports and unions to support fair wages mean less crime and less need for expensive prisons. It’s a powerful idea.
Thanks, I should look into him. I have thought a lot about what you mentioned here ever since I lived in the US. I ponder how the US spends quite a lot on welfare but with so much worse results.
What occurred to me is American approach to education, social problems and crime feels a lot like the US approach to healthcare:
It is like you get free hospital access when it is urgent but not in the early stages when your health starts deteriorating.
I read how US spends a lot on births but still has poor infant mortality rates. A big reason is not sufficient follow up during pregnancy. So doctors instead try heroic and expensive procedures during birth to save a child. Often dealing with issues that would have more easily been fixed months ago.
Dealing with social issues seems similar. People are on the streets before the welfare system kicks in often. But once people are unemployed, hooked on drugs etc it is very hard to change them. And very expensive.
In my native Norway, help kicks in at a much earlier stage. Generally long before something develops into a serious problem.
And really it is often hard to call it targeted help. If unions have set e.g. de-facto minimum wage very high it is less likely for people to fall into a poverty that cause them other problems.
And when poverty is not concentrated because cities are designed in a way that mixes income groups you avoid creating concentrated areas of despair where gangs and crime can flourish.
And it isn’t about intelligence. Many great social programs used in the Nordics were developed by Americans in the US. Even great educational programs in Japan was developed in the US. The key difference is political climate. Nordics and Japan have had a political environment that has allowed implementation of programs Americans developed but lacked institutional frameworks to implement.
In the US, federal taxes go down and state and local taxes go up (at least here in Minnesota) over time. However, the rising cost of health care and higher education (which are private expenses for the most part) far exceeds income growth, and taxes don't cover those costs at all (except in the case of in state tuition, partially).
Also in the US, I'm wondering about your measurement of increased average hourly wages. Is this the mean wage, or the median wage? The growth in the median wage is much smaller in the US due to the increasing concentration of wealth at the top.
I think your arguments apply to Norway and Europe much better than to the US.
Finally, fully agreed on your take of economics. I admit I haven't studied much, but from studying physics and how hard it is for a theory to be accepted and correct, I've always felt economists who were sure of themselves were also full of it. I mean imagine where the medical field would be if it were influenced by politics to the degree that economics is.
Yes, healthcare and education rise faster than income rise. That is exactly the point I am making. In countries where those expenses are primarily covered by taxes, those taxes have to grow faster.
Still the US is affected by this as well as Medicare, VA Hospitals and Medicaid is tax payer funded.
Likewise not all of education in the US is private. A lot of it is tax payer funded such as K12, and many state universities receive government funding.
The US has since Reagan reduced taxes I believe. But that isn't because the Baumol effect isn't real but because the US simply cut welfare in real terms making it harder for people, or simply seeing infrastructure decay from years of neglect.
This argument dont work. People do not want to think how things change. And many conservative believe that "golden past" is better. Trump himself is fan of 1920s. Many other want to follow "the Founder" or "Jesus time". People hate ideas that world changes.
This isn't meant as some magic one-punch argument against Trumpism. I am primarily addressing fellow leftists to make them better equipped at tackling popular right-wing talking points.
The point is that you need to have good answers to popular right-wing talking points or you are not going to sound convincing. But this is just one of numerous things you need to learn to take on popular right-wing talking points.
The point is to help people to educate themselves.
I discovered this idea recently. Michael Rushton, an economist has a very interesting substack about funding for the arts. He also called it cost disease, which feels less neutral. It made a big impression on me, because it provided an economic justification ( we seem to require those for everything) for programs to ensure children get a good start in life, so they can take best advantage of expensive educational opportunities. Healthy diets, good education, recreational opportunities etc mean less need for expensive healthcare. Good health, good education, social supports and unions to support fair wages mean less crime and less need for expensive prisons. It’s a powerful idea.
Thanks, I should look into him. I have thought a lot about what you mentioned here ever since I lived in the US. I ponder how the US spends quite a lot on welfare but with so much worse results.
What occurred to me is American approach to education, social problems and crime feels a lot like the US approach to healthcare:
It is like you get free hospital access when it is urgent but not in the early stages when your health starts deteriorating.
I read how US spends a lot on births but still has poor infant mortality rates. A big reason is not sufficient follow up during pregnancy. So doctors instead try heroic and expensive procedures during birth to save a child. Often dealing with issues that would have more easily been fixed months ago.
Dealing with social issues seems similar. People are on the streets before the welfare system kicks in often. But once people are unemployed, hooked on drugs etc it is very hard to change them. And very expensive.
In my native Norway, help kicks in at a much earlier stage. Generally long before something develops into a serious problem.
And really it is often hard to call it targeted help. If unions have set e.g. de-facto minimum wage very high it is less likely for people to fall into a poverty that cause them other problems.
And when poverty is not concentrated because cities are designed in a way that mixes income groups you avoid creating concentrated areas of despair where gangs and crime can flourish.
And it isn’t about intelligence. Many great social programs used in the Nordics were developed by Americans in the US. Even great educational programs in Japan was developed in the US. The key difference is political climate. Nordics and Japan have had a political environment that has allowed implementation of programs Americans developed but lacked institutional frameworks to implement.
In the US, federal taxes go down and state and local taxes go up (at least here in Minnesota) over time. However, the rising cost of health care and higher education (which are private expenses for the most part) far exceeds income growth, and taxes don't cover those costs at all (except in the case of in state tuition, partially).
Also in the US, I'm wondering about your measurement of increased average hourly wages. Is this the mean wage, or the median wage? The growth in the median wage is much smaller in the US due to the increasing concentration of wealth at the top.
I think your arguments apply to Norway and Europe much better than to the US.
Finally, fully agreed on your take of economics. I admit I haven't studied much, but from studying physics and how hard it is for a theory to be accepted and correct, I've always felt economists who were sure of themselves were also full of it. I mean imagine where the medical field would be if it were influenced by politics to the degree that economics is.
Yes, healthcare and education rise faster than income rise. That is exactly the point I am making. In countries where those expenses are primarily covered by taxes, those taxes have to grow faster.
Still the US is affected by this as well as Medicare, VA Hospitals and Medicaid is tax payer funded.
Likewise not all of education in the US is private. A lot of it is tax payer funded such as K12, and many state universities receive government funding.
The US has since Reagan reduced taxes I believe. But that isn't because the Baumol effect isn't real but because the US simply cut welfare in real terms making it harder for people, or simply seeing infrastructure decay from years of neglect.
This argument dont work. People do not want to think how things change. And many conservative believe that "golden past" is better. Trump himself is fan of 1920s. Many other want to follow "the Founder" or "Jesus time". People hate ideas that world changes.
This isn't meant as some magic one-punch argument against Trumpism. I am primarily addressing fellow leftists to make them better equipped at tackling popular right-wing talking points.
The point is that you need to have good answers to popular right-wing talking points or you are not going to sound convincing. But this is just one of numerous things you need to learn to take on popular right-wing talking points.
The point is to help people to educate themselves.