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One common answer for many questions comparing past to present : "More regulations" This is not necessarily a bad thing, but often it is becoming a nightmare o
by foolinaround 6y ago
One common answer for many questions comparing past to present : "More regulations"
This is not necessarily a bad thing, but often it is becoming a nightmare of labyrinthine proportions to navigate, which hinders new entrants.
- xoxoy 6y agohuh? there’s plenty of colleges to choose from and yet costs go up every year. to me it seems like a distortion caused by a Federal Gov that guarantees payment to universities in the form of federally backed student loans.
- peacefulhat 6y agoSubsidized corn is not rapidly and consistently increasing in price.
- grandmczeb 6y agoI don’t necessarily buy the idea that student loans are driving price increases, but there’s a tangible difference between subsidizing producers versus consumers (corn subsidies are generally the former, student loans are the latter).
- xoxoy 6y agoeducation is not a commodity in the same sense as corn and it’s much more of an inelastic good than corn the difference between 50k in tuition and expenses and 55k will not change demand a meaningful amount, and universities exploit the fact that education is inelastic and the money is coming from a guaranteed source regardless of the student’s ability to pay upfront.
- dragonwriter 6y agoThe reason for the subsidies is to support farmers by offsetting what would otherwise be price decreases, so...
- donw 6y agoCorn is an example of subsidized supply. Government money increases the supply of corn, and drives the price down. Hence, corn, and products derived from it -- high-fructose corn syrup (HFCS), corn-fed beef, Nu Metal bands, etc -- are cheaper. College is an example of subsidized demand. Government money increases the number of prospective students, by lowering the financial barrier to attend university. The result being that the cost of a university education has risen, drastically, while the quality of that education has plummeted.
- foolinaround 6y agosupply/demand you are right, the demand is artificially propped up by the govt. as you stated. However, it is tied to the job market, which is more realistic, and we are starting to see the fallout where many of the colleges will be going out of business.
- jdkee 6y agoEducation is now a Veblen good.
- dredmorbius 6y agoI agree that it is presently such. I disagree that it's ever been otherwise.
- josu 6y agoCars and Cellphone service sectors are heavily regulated. Textbooks are not regulated. There is more to it than just "more regulations". Also regulation doesn't necessarily have to come from the government, for example, the Apple App Store is heavily regulated, and yet they have some of the lowest software prices compared to other platforms. In my opinion, competition through trade may have a stronger effect on prices; you can easily buy a TV or a car made in China, but you can't easily attend the University of Shanghai, or be treated in a Hospital in Hong Kong.
- dantheman 6y agoThat is a correct definition of regulation - it captures a feedback cycle; but the parent, was clearly meaning government regulation. If customers don't like a product that helps regulate quality, etc...
- noirbot 6y agoTextbooks aren't regulated in the governmental sense (though they are somewhat at the middle/high school level), but there's certainly been more "regulation" in the sense of schools trying to enforce what books are used for what class for their own enrichment.
- danans 6y ago> there's certainly been more "regulation" in the sense of schools trying to enforce what books are used for what class for their own enrichment. That has little bearing on the prices of textbooks. Also a school can't function without textbook standardization. That's hardly the same thing as regulation.
- Robin_Message 6y agoUK schools don't seem to have textbook standardisation in the way the US does, but the schools seem to function fine.
- 6y ago
- repsilat 6y agoI wonder if it's reasonable to talk about some of these things separately from the rest of the economy. San Francisco can't build a bus lane, but it can build the hell out of some software. (You might argue that our productivity has gone down there too, but I'd say the social impact has never been higher.) Maybe with "hard" infrastructure being a bit old-fashioned, or bogged down in red tape, maybe the entrepreneurial or organising or effective talent moved into other industries? It sounds a little self-congratulatory, so I don't like the idea, but it's hard (for me) to see something like SpaceX as something other than a competent "can do" entrant into a stale old industry. I don't know what lessons we might learn from that, though. Room for small upstart players in industries (especially around government spending) might be one.