The Dangers of Tribalism
As I think most United States citizens can agree after the most recent election, our political climate is growing increasingly divisive and tribalistic. For the last couple decades (but not much more than that), the Democratic Party has largely been successful at gaining support from urban populations, minorities, women, younger people, and more educated states (as measured by states where more people have college degrees). The Republican Party has largely been successful at gaining support from rural populations, white people, men, older people, and less educated states.
The reasons are mostly obvious when you consider the platforms. Urban populations reap most of the rewards of public services, whereas rural populations are unlikely to benefit from a tax that pays for more roads in the city. When one party's last two presidential candidates have been Mitt Romney and Donald Trump, while the other's have been Barack Obama and Hillary Clinton, it's pretty obvious which party has put in more effort to reach out to women and minorities. Young people strive for change; old people hate change. Colleges are pretty liberal environments. You get the picture.
Anyway, back to tribalism. The basic premise listed above is what initially divided people. Now, however, people are becoming more tribal about their political party all the way to Congress, where party-line votes are only getting more common. Heck, someone is probably ready to go on a social media rampage at me for having the audacity to point out the statistical fact that college-educated people are more likely to vote Democrat (note that I said nothing about whether a college education actually makes you smarter, but I'm sure they took it that way).
The point is this: people are getting to be defensive, not about their ideas, but about the parties they're affiliated with. Obama deported some unfathomable number of illegal immigrants, more than Bush in his two terms, yet Democrats only complained when Bush did it. Similarly, the federal debt (and more importantly, the deficit) are ballooning under Trump, yet Republicans only thought this was cause for concern when it happened under Obama's watch.
So when I say that the mostly-capitalist United States economy really needs a more-socialist education system, people think of "capitalist" and "socialist" as dirty words. Neither is at all; it's just that capitalism endorses private control of the means of production and socialism endorses public control of the means of production. Each option has its strengths and weaknesses for certain markets.
An Unexciting Truth: Everyone's Wrong
Personally, I think the unexciting truth about economics is that the ideal solution lies somewhere in the middle. The best economic situation America can reach for is a mix of capitalist and socialist markets.
Capitalist markets have their strengths. They are ideal in industries where the good or service provided is non-essential (smartphones), has low barriers to entry (food), or both (toys). In these sorts of markets, it is highly unlikely that you will ever seriously overpay for a product relative to the product's market value, as overpriced products will quickly fail. If a product or service is not required for you to survive, there are lots of options for you to choose from, or the product or service is terrible, you the consumer have sufficient bargaining power with the merchant to drive the price down and the quality up.
In markets like this, it's quite alright for private corporations to compete and try and suck in as much profit as possible. Businesses are designed to make money by providing a service. There's nothing inherently evil about that. Republicans typically endorse capitalist markets because they correctly perceive that in some markets, competition and consumer bargaining will drive the price of a product down to levels the market will support.
However, they are incorrect in their thinking that every market should be a capitalist, competitive one, and here's why.
Socialist markets have strengths that are directly opposite the strengths of capitalist markets. In industries that provide a service that is either essential or is perceived as such (education), has high barriers to entry (wireless telecom), or both (healthcare), it is ideal for there to be a socialist market. The reason is that a citizen's point of bargaining power is different in a socialist market than a capitalist one.
In a capitalist market you vote with your wallet; in a socialist market, you vote with your vote.
If a capitalist market controls a good or service you need to survive, you can't negotiate the price down effectively because you can't really put a price on your life or livelihood. Similarly, markets with high barriers to entry have little competition and therefore little incentive to lower prices and improve quality. A socialist market can solve this because if a government (federal, state or local) is overcharging the people, they can vote their representatives out of office.
This is the hood that's been pulled over the eyes of the American people: in spite of political corruption and divisiveness, in spite of gerrymandered districts and tribalism, we still have the power to control our government. We are not powerless. Therefore, the government providing an essential public service is not evil, but instead the correct approach to solving a lot of our society's problems.
Markets That Are Already (Rightly) Socialist
An ironic example of a socialist market in the United States is the U.S. military. The government controls all of the jobs, all of the supply and demand, and taxes the people in order to fund those jobs.
We also happen to have the world's most powerful military. It's a bit wasteful, as I think even Sean Hannity would admit, but it's literally the best military the world has ever seen. It is therefore proven to be wrong that a good or service is bad because the government made it.
Now let's think about the military and other services Americans enjoy by paying taxes, like the police force and the fire department. These would all be horrible things to put in charge of a capitalist market! Should you only be able to call 911 if you paid your police subscription for the month? Of course not. It should be a public service to call the police because you cannot negotiate the price of your life. If the police do a lousy job, we can fire our commissioner, as a public servant.
How about building roads? Roads are not truly, 100% necessary for anyone's survival, but the cost of building them is super high, and no one likes toll roads. Should you only be allowed to drive your car around if you paid your road subscription to a private company? Of course not. Building roads is a public service, and rightly so.
What about your utility bills? Are they overpriced? With a few exceptions, probably not. Electric, water, gas, and sewage are all pretty cheap when provided as a public service, because again, the government wants the money and does not want to get kicked out of office. The point of bargaining power comes from a citizen's ability to vote.
How about K-12 education? Should children only be allowed to learn to read from their teacher if you pay $15,000/year for them to go to school? That's the proposition for going to college (more on that later), yet that sounds absolutely absurd to just about anyone. Of course first graders should be learning to read! We want a more educated population, don't we? All citizens should be able to pursue the American Dream, start on a level footing with a good education in a safe neighborhood, and pursue the career they desire, right?
Right. All of these should not be privatized. Corporations, by definition, would overcharge for necessities like these things, no matter how competitive the market is and no matter who runs it. The board of directors would fire any CEO who doesn't take the free money that comes with charging whatever you want for someone's education, safety, or health.
Markets That Need to be Socialized
A fairly controversial industry right now that needs to be socialized is healthcare. The reason, as stated above, is that in a capitalist market, you have effectively no bargaining power for how much it costs to get a life-saving surgery if you're diagnosed with cancer. If a company wants to charge you $100 for that surgery, you'll pay $100. If they want to charge $100,000, you'll do everything you possibly can to pay them $100,000 for your surgery (and this is America, so no, that's not an exaggerated figure—many even go homeless trying to pay for those surgeries, or else resort to selling meth). America's privatized healthcare market results in us paying way, way more for our health than anyone else (note the graph in that link), yet our life expectancy is shorter than Greece's, and they barely even have an economy.
Another example is wireless telecom. The wireless telecom industry was essentially a trust that went by the name of Bell Labs until 1982, when it was broken into smaller companies. Since then, those companies have merged back together, slowly but surely, into the big four oligopolists that control wireless telecom: Verizon, AT&T, T-Mobile, and Sprint. The very fact that this has happened (and has been allowed to happen) should be a warning sign that wireless telecom is an industry with barriers to entry that are too high to reasonably compete in for newcomers. Sure, there are MVNO's, and sure you could get a phone from Cricket (owned by AT&T), Virgin (owned by Sprint), or MetroPCS (owned by T-Mobile). But by and large, the reason your phone bill is so high is that there's not enough competition driving the prices down, and until we either turn the wireless industry into Xcel Energy or force these four companies to split into smaller, crappier networks, that bill will stay high.
There are some odd exceptions to these things, like the car industry, which has successfully lobbied to require everyone, by law, to insure their cars, artificially raising the price of a car in the first place. It's a competitive market, yet it is not incentivized to lower prices anymore because you pay an arm and a leg for car insurance in America on top of the car's cost. If healthcare became a public service and included medical coverage for car accidents, and if car insurance were then completely eliminated, the cost of cars would drop like a rock (while quality simultaneously rose) because people would refuse to pay the exorbitant prices they're currently expected to pay. This is why, with few exceptions, when people buy a car today they are essentially buying the same product that was sold 40 years ago with a computer slapped on the dashboard for good measure. I would argue cars should remain a privatized market, but should not reap the advantages of a legal obligation to pay for insurance because we can't vote out the CEO of a car company unless we have lots and lots of shares of the company's stock.
Now we get to one of my (least) favorites: higher education. College is not truly an absolute necessity and has been oversold as a product everyone must get. But because of this thinking, college costs are enormous, which causes serious economic strain on other markets. The so-called "millennial" generation isn't buying houses or getting married as young because they're too busy paying off the $1.1 trillion in student loan debt our country collectively owes. All the while, the cost of college is rising far quicker than inflation, because in-state and out-of-state tuition rates minimize competition, and most people want to get ahead and can't bargain on the price of doing so.
Sure you can argue that you shouldn't go to college for underwater basketweaving, and you'd probably be right that many college students get a useless degree for $30,000+ and four years of existential dread in a dorm room. But that's not an excuse for college costs to be prohibitively high (or financially devastating, or both) to most people.
To be realistic about this situation and give advice to people leaving high school soon, this situation means three things. First, you should only go to college if the career you want to pursue requires it (and there are lots of lucrative careers that don't). Second, you should only go to college if you have a clear idea of what you want to do with your life, not to kill time. Third, you should seriously consider the financial consequences of student loans before you pick your college and your degree; if you don't have any money for college, becoming a doctor could very well be a bad idea, and you probably shouldn't go to Harvard to learn to teach. But since we all know most of our parents didn't save any money for us to face what is likely to be the second-highest expense in our lives (after buying a house), and you haven't been in the workforce and therefore have no money yourself, really you should consider not going to college at all and trying to get an education some other way.
But to be idealistic about the situation for a moment here, it is seriously messed up that the price of admission to get a degree is one of the largest factors for doing so at all. This great American experiment we claim to pursue is supposedly about providing everyone an even playing field for getting ahead in life and making something of our lives if we put in the work. Yet if you want to be a lawyer and your family isn't pretty wealthy to begin with, you're going to be digging yourself out of the financial hellhole that is the cost of a law degree for years to come, in spite of making a pretty decent salary.
In other words, the current education system encourages students to pursue specific, narrow fields that are safely lucrative relative to the cost of attaining them, not to pursue what they actually want to do, unless they're lucky enough for their interests and a lucrative career to align well. This means we are losing out on people who would be passionate, talented social workers and teachers because they can pay rent by being a mediocre software developer or real estate agent. We're missing out on extraordinary lawyers and doctors because financial constraints push them into oil field work or plumbing.
To be clear, there's nothing wrong with any of these jobs. But an individual who's passionate about one career and feels they have to give it up to play it safe is neither realizing the American Dream nor providing their highest value to the market. College need not be free, but it should at least be affordable. Ideally, I feel it should be as much a public right as a K-12 education is for every child in this country, because we're the wealthiest nation the world has ever seen, and we're too busy worrying about our political tribe to help our children realize their full potential.
What do you think? Am I right or wrong? Do you have any ideas on how to implement these things, or do you have better ideas? Hit me up in the comments!
Post number 32.