By Cory Gaines | Commentary, Colorado Accountability Project
I came across the chart mentioned in the first link below during my wanderings about the internet. The link is to a blog post put out by HumanProgress.org, an offshoot of the Cato Institute a Libertarian think tank.
I want to call your attention mainly to the graph embedded in the blog post. This is attached as screenshot 1.
To help you orient yourself, this is a graph of the rise (or fall) in prices for a variety of goods and services in a time series from the year 2000 on. The scale is given as a percent increase (positive numbers), or decrease (negative numbers).
It makes sense that prices change over time (how many of us had grandparents who quoted the price of a chocolate bar, how many of us will be the grandparents quoting that same metric?). In order to cancel out inflation and other effects, the authors chose “time pricing” as their scale. Quoting from the blog post:
“We’ve compared the nominal price change of each product to the change in nominal average hourly wages, from which we can show the change in the time prices—positive or negative.”
If you want to learn more about time prices, I included a Wikipedia explainer page second below, but the short answer (also in the image heading this post) is essentially the quotient of a good’s/service’s price at any given time to the hourly wages at any given time; it’s how long an average person would have to work to purchase that thing.
In reviewing the chart do you notice something about the red vs. blue lines?
The authors put it better than I could:
“What stands out most, though, is that the products becoming less abundant—medical care services, childcare, college textbooks, tuition, and hospital services—are also the ones most heavily influenced by government intervention, whether through subsidies, regulation, or restricted supply.”
There’s more in the report to read, in particular an analysis of the abundance of goods and services over time, but here’s where I want to depart.
It is reasonable that we want government to regulate some things. I.e. I am not a completely laissez-faire capitalist. This regulation has the obvious consequence that prices will go up since it’s a restriction on supply. The same can be said for social services.
The conversation, however, all too often drifts into a dichotomy. The choice (depending on who you listen to) is framed starkly on your behalf: you either want the government in everything or you want it in nothing.
This is a false choice, and like all framing by advocates, ignores the sometimes complicated nature of reality.
The question to me is not whether or not we want government intervention, it’s how much do we want. Surely in looking at that graph, you would struggle to make the argument we want more. This becomes all the more clear when you start to consider the latter parts of the blog post on relative abundance.
Childcare in Colorado is one of the most highly regulated businesses there is (see “Related” below). It also has a fair bit of subsidy behind it, with both of these things increasing with time.
Look again for where it sits on the graph. That line is steeper than the north face of the Eiger.
If Denver follows through on its plan for universal childcare, if Gary Community Ventures et. al. succeeds in their push to get it statewide, do you think that extra involvement will bend the curve down or push it up more?
You can be as conspiratorial (or not) as you’d like about the motivation behind it, but one thing is clear: when the government gets involved, we pay more.
https://humanprogress.org/time-pricing-mark-perrys-latest-chart-of-the-century/
https://en.wikipedia.org/wiki/Time_price
Related:
READ THE FULL COMMENTARY AT COLORADO ACCOUNTABILITY PROJECT
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