Spending your money on yourself: You are careful about both cost and quality to get the best value.
Spending your money on someone else: You are careful about how much you spend (cost) but less concerned with the quality or suitability for the recipient.
Spending someone else's money on yourself: You are very concerned with getting high quality, but you do not care about the cost.
Spending someone else's money on someone else: There is no incentive to be concerned with cost or quality. Friedman famously identified this as the mechanism of government, which often results in waste.
Friedman summarized the core idea as: "Nobody spends somebody else's money as carefully as he spends his own".
I think the case of USPS and other government services that function relatively well is that most of their funding still comes from operations rather than taxes.
Probably the more the service relies on taxes the poorer quality the service.
So are there any ideas how to bring market into school? things that come to mind: provide pupils with coins which they can use for books and education and get coins and money for good grades. Has anybody proposed a concept in that direction?
Your coins suggestion is sound until factoring in the folks concerned with kids 'self-esteem', the ones demanding 'no child left behind', the ones who want schools to provide breakfast, the ones who refuse to recognize that success in school (academically and socially) is the best precursor to success in life.
Professor Caplan, I’m trying to understand a thread running through your perspective across these chapters. You seem energized by the monopoly-inefficiency arguments. But you also, in your caveats, seem to accept something like standard market failure theory. Public goods, externalities, and the like can justify government provision in principle yaddy yaddah
What I can’t figure out is how you weigh those against each other. Or if they’re even competing hypotheses for you? Auxiliary hypotheses? 2 things true at once? what’s your threshold for when a market failure is large enough to clear that bar to justify monopoly provision over competitive?
Milton Friedman did it in one table:
Spending your money on yourself: You are careful about both cost and quality to get the best value.
Spending your money on someone else: You are careful about how much you spend (cost) but less concerned with the quality or suitability for the recipient.
Spending someone else's money on yourself: You are very concerned with getting high quality, but you do not care about the cost.
Spending someone else's money on someone else: There is no incentive to be concerned with cost or quality. Friedman famously identified this as the mechanism of government, which often results in waste.
Friedman summarized the core idea as: "Nobody spends somebody else's money as carefully as he spends his own".
I think the case of USPS and other government services that function relatively well is that most of their funding still comes from operations rather than taxes.
Probably the more the service relies on taxes the poorer quality the service.
So are there any ideas how to bring market into school? things that come to mind: provide pupils with coins which they can use for books and education and get coins and money for good grades. Has anybody proposed a concept in that direction?
Isn't school vouchers a marketizing of school?
Your coins suggestion is sound until factoring in the folks concerned with kids 'self-esteem', the ones demanding 'no child left behind', the ones who want schools to provide breakfast, the ones who refuse to recognize that success in school (academically and socially) is the best precursor to success in life.
> most notably Singapore
Therein lies the rub: people don't scale.
Why does the note "This post appeared first on Econlib" appear? I thought this was Substack original.
Professor Caplan, I’m trying to understand a thread running through your perspective across these chapters. You seem energized by the monopoly-inefficiency arguments. But you also, in your caveats, seem to accept something like standard market failure theory. Public goods, externalities, and the like can justify government provision in principle yaddy yaddah
What I can’t figure out is how you weigh those against each other. Or if they’re even competing hypotheses for you? Auxiliary hypotheses? 2 things true at once? what’s your threshold for when a market failure is large enough to clear that bar to justify monopoly provision over competitive?
Which 6-page-chapter are you talking about?
The hyperlink points to an summary of the book.
Fixed the link. In this edition, Chapter 10 is actually 8 pages long.
The one in the post title:
"Bet On It Book Club: For a New Liberty, Chapter 10"