Thursday 24 March 2022

Cost-disease socialism

I love this way of framing things.

When you set a pile of regulations that make supply highly inelastic, and then deal with resulting voter complaints about it through demand side subsidies, you get cost-disease socialism. 

Good piece in Discourse drawing on work by Sam Hammond and the Niskanen Centre. 

Yet notice that the expenses that are relentlessly rising are in areas that have been the object of decades of government efforts to make them more affordable. How did that happen? I call this the “paradox of subsidies,” in which the very same government subsidies that are supposed to make a good or service more affordable just drive prices higher and make it less affordable.

Easy to see it in NZ as well.  

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