One of the things I would like to use this journal for is to address concerns about how our society could function without public forms of certain highly important services.
The thing is, I believe that in a society where public services are eliminated, the private sector will pick up the slack unless the government gets in the way. There are two legitimate concerns I’ve frequently heard about this claim. First, there’s the perception that a century ago, before we had such sweeping public services, the gap between the rich and the poor was growing and creating a caste system. I agree that there was somewhat of a caste system in the United States prior to the implementation of public services, but I think this perception is based in a post-hoc fallacy. While social services did coincide with the decline of the caste system, so did massive changes in the structure of the private sectors of our economy. Back in the era of the American caste system, you would’ve rarely heard of concepts like private health insurance, or student loans, or other such private services which we take for granted in the modern world. The development of these concepts has improved our society in a way which would prevent such a caste system from developing again.
The second concern I’ve frequently heard is that the way our private sector is structured now would not support the poor, leaving them unable to afford the basic necessities. However, I’d argue that the reason the private sector of our society does not offer lower cost options to the poor is because there’s no market for it. As long as “free” options (and I use the term lightly) exist, it will always be difficult to sell lower-cost options, resulting in a dichotomy that leaves no room for a middle ground.
To illustrate these points, I would like to discuss our nation’s education system and how services can be improved.
We can start by acknowledging where the problems are.
First of all, public schools are underfunded. They just don’t have money at their disposal to operate. However, throwing more money at them hasn’t seemed to change the value of the schools. This is due to the fact that we have politicians in charge of school boards, who are more worried about the environmental impact of a school, and how many after-school programs are available to students with the lowest grades than they are about how many students to a classroom, or how good of an education they’re providing to the students who really want to learn.
Public schools, in many regions, merely give the illusion of providing an education, while really just wasting the time of students who can’t learn in such a poor environment. Private schools tend to provide better education, but are just too expensive for most people.
So what’s the solution? How do we create a low-cost, high-value educational system?
The answer: Privatize it. Let the administrators of schools charge tuition as they need it in order to make their institutions work. This will improve the situation for a few reasons:
1. Quality of low-end schools will improve. In a privatized system, people will seek out a good product. A private school with a 50% drop-out rate and a 40% literacy rate would never survive, and yet many of our public schools give exactly those results. When a school administrator’s capacity to earn money is tied to how well his school performs, you can bet he will do everything he can to make a school that looks good. If a school starts to fail under the management of one administrator, there will eventually either be a transfer of ownership to someone who can do a better job, or the school will just be replaced altogether. Regardless, a private system works towards producing an infrastructure which the public feels is worth paying for.
2. Prices of existing private schools will drop. The reason private school prices are so high is because that’s what the market can afford. Private schools attract people who want the best education money can buy. However, there’s currently no market for people who would rather pay less for a moderate education, because why pay less when you can pay nothing by using the public system? But now, consider what would happen if all of a sudden, people didn’t have the option of paying nothing. Now, you’ll have a very large number of people who want to buy an education, but don’t want to or can’t pay a large sum of money. This can potentially be a very large, and very profitable market. Somebody will try to satisfy that market by providing a lower-cost education option. And if you think about it, eventually there may be lower-cost options performing better than the higher-cost options, forcing the higher-cost options to lower their prices and adapt to the new market or suffer. Prices will drop, and education will become more affordable. This is how you reduce costs in a service by working with the market, rather than trying to fight it.
3. Each dollar will buy more value. It’s well-known that the government is inefficient. I’ve seen figures ranging from 50% to 70% of your tax dollars are wasted through inefficiencies and corruption. If people are paying directly for services, rather than paying into a government which will then try to find the money to pay for those services, that money will hit its intended mark more often. Private donations will also end up going where educated investors feel they’re needed rather than where emotional voters or corrupt administrators decide to pack all that money.
So, without taking money from people against their will, we can improve our school system while lowering costs. It’s all a matter of doing things the right way, rather than cutting corners and taking short cuts by imposing governmental power.