August 25, 2016

Price Chart - Free Enterprise vs. Socialism

Thanks to this article at FEE, the Foundation for Economics Education, here is the price analog to nanobrewer's tabular comparison of goods and services that are delivered by government (or highly regulated by it) versus those that are more freely traded.

prices2-1.png

I'm sure glad that government doesn't consider televisions a "human right." If it did, fewer humans could afford to have them.

Economics and Markets Egalitarian Socialism We're from the government, and here to help. Posted by JohnGalt at August 25, 2016 6:02 PM

Sorry to be the wet blanket around here, but you realize the claim you are making is strictly correlational. In fact the reverse argument could be made. Medical and college costs are WAY up so clearly the government needs to be more involved to FIX them. TV costs are down so government assistance is not needed. Just sayin...

Posted by: dagny at August 25, 2016 6:41 PM

Yes, that flawed argument can be made, and always is made by Keynsians. (Did you know they're from Africa?)

But I believe you are viewing this evidence improperly, i.e. without regard to other proven economic facts:

When controlling for other variables,
1) Competition reduces prices
2) Regulation increases costs, and therefore prices
3) Higher demand causes increasing prices

So no, I'm not surprised to see that goods or services in regulated or competition-restricted sectors are correlated with higher prices, and things that government tends to ignore are correlated with lower prices.

Causation generally results in correlational outcomes, except when other causes coexist which mask said outcome.

Posted by: johngalt at August 28, 2016 5:00 PM | What do you think? [2]