Last Saturday I woke up at 1:45 a.m. feeling sick as a dog. I haven’t fallen asleep. I had a bad cold, stuffy nose, headache and lots of mucus. (I apologize if it’s TMI.) When my wife woke up she told me I should take Advil. I’m careful not to abuse the drug, so I only took one Advil. Within an hour I felt better, not enough to do anything but sleep, but better. My headache was gone.
Because I had time to think, I told my wife that I didn’t remember having Advil as a child. She said it was because it didn’t exist at the time. She was right. Ibuprofen, of which Advil is a particular brand, did not become available in the United States until 1974, when I was in my twenties. It made me think of the huge range of cheap, high-quality products we have in this economy. Of course, because I’m an economist, it reminded me of what is needed to keep these goods going and for better ones to replace them. What we need is a fairly free economy. Virtually any government action to make this economy less free, whether through regulation, government takeover of an industry, or increased taxation, will reduce our economic progress.
This is from David R. Henderson,”Our amazing somewhat free economy“, define ideasOctober 6, 2022.
A tragic case of government ownership in recent years is the government-owned water system in Jackson, Mississippi. In March 2021 article in mississippi today, Anna Wolfe tells how the water system has deteriorated over the years. She attributes the deterioration to “a shrinking city, aging infrastructure and racism.” But she’s a good enough reporter that, without fully seeing the meaning, she lands on the real reason for the water problems, in a quote from Professor Manuel Teodoro of the University of Wisconsin:
“The nature of local politics is that city governments will tend to neglect public services until they break because they are literally buried,” he said. [Teodoro] said. “One of the things that is an ongoing challenge for governments that operate water systems is that the quality of the water system is very difficult for people to observe. But the price is very easy to observe for them.
The quality of the water network is difficult to observe. But the quality of the infrastructure in many for-profit companies is difficult to observe and yet many of these companies deliver consistently high quality. What gives bad results is that the quality of the water system is difficult to observe and that it is run by government officials who have the wrong incentives.
Read it the totality.