Health care and education are two of the most highly debated policy areas today. President Donald Trump has advocated to diminish the level of government involvement in both areas, which are currently at the highest they have ever been in U.S. history. Based on historical trends and empirical and theoretical evidence, increased government involvement in any area where it is not absolutely necessary has served only to decrease the value created by institutions. Arguments that favor greater government control and regulation run counter to objective facts.
The government is supposed to serve the interests of the people who cannot serve themselves. Its existence is justified in areas like national defense and international diplomacy because private organizations and individuals are incapable of developing popular policy solutions to any of the problems in these areas. Instead, their solutions would favor the narrow interests of those who helped shape them. Unfortunately, some kind of government regulation or action is present in nearly every aspect of human existence, well beyond the boundaries envisioned by our founding fathers. The U.S., on the surface, seems to passively go along with this high level of government involvement, but if Americans as a whole wanted the highest living standard achievable, the government would be involved in fewer areas of our lives and to a much lesser extent.
While the government provides adequate services in most areas in which it is involved, it does not provide the best service in any of these areas. Let’s say you are trying to send a birthday present to someone. You could take a chance and rely on the U.S. Postal Service, which will probably deliver it to the right place at the right time. But if you want to be certain that your gift arrives in time for the birthday, you are going to seek out FedEx or another private shipping company to receive optimal service, despite the additional cost. The private postal services supply great value to the consumer, unlike the government-run postal service, demonstrating exactly why consumers do not stand to benefit from government control in any area except those where an alternative isn’t feasible.
When the government becomes involved in an industry, it removes the incentive of private organizations to provide the most valuable product for consumers. Instead of listening to customer demands and following market signals (profit and loss), institutions like the post office reward mediocre performance. Unlike private organizations, these institutions don’t answer to paying customers and thus don’t have to compete with the quality of a competitor’s product. Maximum customer value cannot be obtained because the customer’s preferences are irrelevant.
This happens in areas where government subsidies are liberally distributed. Organizations, instead of devoting all of their resources to creating the greatest value for the consumer, will instead dedicate resources to lobbying local politicians for favorable subsidies and regulations. If more resources, such as time and money, are dedicated to advocating for subsidies, fewer resources are devoted to creating the most valuable product for consumers. Consequently, the products will not fulfill their full consumer-desired potential.
This raises the question of why our society is content to have the government manage our education and health care system. America spends more money on public education than any other country, yet our education system ranks seventh internationally (much worse in math and science specifically).
While current conditions could be worse, decreasing the high level of government control would likely increase the overall quality of our education system. And, if our current education system is an example of the government’s abilities, having the government run our health care system is a much more dangerous proposition. One need only consider the Veterans Affairs provision of health care to recognize the government’s inadequacies in this area. Education and health care would be better served if the government relinquished control and allowed free market signals to regulate them. This will create the greatest value for Americans.
Jack Story is a UF graduate. His column appears on Tuesdays.