A little while ago, I noted a strangeness in Sen Bernie Sander’s bill to make colleges
free taxpayer-funded. I noted a similar strangeness the other day talking about medical care.
The question is: why is higher spending per capita on education a good thing while higher spending per capita on health care a bad thing? Many on both sides of the aisle bemoan America’s educational system, and say the solution is to spend more on education (while simultaneously complain the cost of college is too high, which is a head-scratcher, but we’ll talk about that at some other time). Many on both sides of the aisle bemoan America’s health care system, and say the solution is to spend less. But both views are wrong.
Costs are not benefits. Costs are what one has to give up in order to achieve benefits. You cannot judge the value of a thing based upon its costs, but rather by its benefits. America may have the highest health care spending per capita in the developed world, but does that mean our health care system is worse? Not necessarily. One would have to look at the benefits thereof to make a proper call. And same thing with education: the fact that a country spends more/less per student on education doesn’t matter if there benefits aren’t there. By focusing entirely on costs (and either not recognizing they are costs, as in the case of education, or not looking at the benefits, as in the case with health care), it can lead to wrong-headed policy recommendations (for example, price controls. Sure, they’ll lead to lower spending, but also create shortages).