In two essays — one in the Summer issue of National Affairs, a second in the American — Arnold Kling and Nick Schulz, who are smart, predict that "wealthy industrialized countries such as America will shift their consumption toward education and healthcare over time relative to other goods and services." They may or may not be right about that. But I think they may be on to something with this:
The problem today is that government policy is impeding innovation and job creation in these sectors. Both education and healthcare are already heavily influenced or controlled by federal and local government. That means that the evolution of those sectors is driven by top-down command and control, rather than by bottom-up innovation.
To revitalize these sectors and revive the American job market, we must open up these industries to competition and entrepreneurial reform. This will require tolerating a certain degree of messy experimentation. But entrepreneurial growth in these sectors is what will get the American economy back to work.
And this:
champions of market economics must come to see these two sectors as the front lines in the battle for capitalism....Looking to the coming decades, it will simply not be possible to maintain a genuine free market — or a thriving, innovative, growing economy — if our education and health sectors are controlled by the government....It is not surprising that the debate among the political class focused on questions of allocation. Much of politics is a scramble for existing resources, and so political fights often boil down to questions of control over a fixed set of goods and services. But the long-run success of a health-care system — or any economic sector, or an entire economy — has much more to do with questions of adaptation, new technology, and innovation than with the allocation of fixed resources. The more that we allow our economy to be governed by politics rather than market forces, the more inclined we will be to forget that fact, and so to see our dynamism and prosperity diminish.
