Our amazing somewhat free economy – econlib

Last Saturday, I woke up at 1:45 feeling sick as a dog. I didn’t get back to sleep. I had a bad cold, stuffy nose, headache and lots of phlegm. (I apologize if this is TMI.) When my wife woke up, she told me I should take Advil. I’m careful not to overmedicate, and so I only took one Advil. Within an hour, I felt better, not good enough to do anything but sleep, but better. My headache went away.

Because I had time to reflect, I told my wife that I didn’t remember taking Advil as a child. He said it didn’t exist then. She was right. Ibuprofen, of which Advil is a specific brand, was not available in the United States until 1974, when I was in my early twenties. It got me thinking about the huge range of high-quality cheap products available in this economy. Of course, since I’m an economist, it reminds me of what it takes to continue making these products and for better ones to replace them. What we need is a fairly free economy. Virtually every government action to make that economy less free, whether through regulation, government takeover of an industry, or higher taxes, will reduce our economic progress.

This is David R. From Henderson, “Our Amazing Little Free Economy,” Defined conceptsOctober 6, 2022.

Another quote:

A sad case of public ownership in recent years is the publicly owned water system in Jackson, Mississippi. In a March 2021 article Mississippi Today, Anna Wolf tells how the water system has deteriorated over the years. He blamed the decline on “a shrinking city, aging infrastructure and racism.” But he’s a good enough reporter that, not fully seeing the significance, he landed on a quote from University of Wisconsin professor Manuel Teodoro about the root cause of the water problem:

“The nature of local politics is that city governments will neglect utilities until they break because they’re literally buried,” he said. [Teodoro] states “One of the perennial challenges for governments managing water systems is that the quality of water systems is very difficult for people to monitor. But value is very easy for them to observe.”

Water system quality is Difficult to observe. But infrastructure quality is difficult to monitor in many profitable businesses, and yet many of these businesses deliver consistently high quality. What makes for poor results is that water system quality is difficult to monitor And That it is run by government officials who have the wrong incentives.

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