Tuesday, February 9, 2010

Video: Why monopolies are bad, and why school choice makes sense

Competition promotes innovation and results in higher quality and lower costs. Government-run schools are a tragic example, by contrast, of why monopolies generate bad results. This video uses the example of school choice to explain why competition is a better approach. www.freedomandprosperity.org

Posted by Ed Morrissey via HotAir.Com

The Center for Freedom and Prosperity released another of its Econ 101 video series today, this time with Isabel Santa of Cato discussing the problems of monopolies — especially in regard to school choice. The government-imposed school monopoly squelches innovation and provides an inefficient model for education, Santo argues, much as monopolies in other areas make inefficient use of capital. The problem is that government only reluctantly allows private enterprise to compete with its near-total lock on compulsory primary education by forcing people who opt out to pay into both systems. That creates a situation where only the wealthy and powerful have the option to choose how their children will be educated — although far more of the people who protect the government monopoly choose to opt out of it than the general population:

One can make the same argument about health care, or more closely, the student-loan market, although the latter exists mainly in response to government intervention in the first place. Some services require a government monopoly, such as the military or the use of force in law enforcement. Almost all other issues are better left to the private sector, where competition forces innovation and efficiency — and creates positive employment through voluntary associations, rather than bureaucracies funded through tax receipts.

Besides, any government monopoly that 44% of the Senate and 36% of the House avoid is one that should be either ended or forced to compete on a more even basis with private-sector suppliers.

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