What healthcare and education monopolies can learn from internet regulation

by Ryan Streeter on March 23, 2012. Follow Ryan on Twitter.

You don’t usually get into healthcare and education policy in articles about FCC regulation and other internet policy blogs, and vice versa.

But as Kevin Williamson notes in an article at NRO today, healthcare and education could be dramatically improved in America if their policy environment looked more like what the FCC did to make wireless internet possible. His article is mainly about the evolution of wirelessness, though he concludes this way:

The critical thing is not that government engage in no research-and-development activity; indeed, the critical thing is that government does engage in research-and-development activity related to legitimate governmental ends, such as national defense and preventing the spread of disease, and that in all critical sectors market forces be allowed to work. We have cheap and nearly ubiquitous wireless Internet because DARPA and the FCC did their things, but Netscape and AT&T were permitted to do their things, too. The same cannot be said of our monopoly K–12 education system, or of our soon-to-be near-monopoly health-care system. The human costs of that fact are astounding, and they are everywhere to be seen.

He mentions elsewhere in the piece that half of our healthcare transactions and 90 percent of K-12 transactions are not subject to market forces (and of course healthcare will grow even less market-driven as ObamaCare kicks into full effect). One is reminded of Nick Schulz’s and Arnold Kling’s National Affairs essay on how how healthcare and education have become the new commanding heights in our economy at the same time they are  the most government-controlled. The two realities are not unrelated.

Just as consumers in the 1980s had no idea what some FCC regulation they probably never heard of would do to the future of their communication, shopping, and banking habits, most people today can’t conceive how differently healthcare and education would look in the future.

That’s what makes the whole problem so vexing. If people could taste the future, they might pick up the pitchforks and take to the streets. But they can’t, so we’re left with wonks, lobbyists, associations, lawmakers, and commentators duking things out.

That’s why incremental reforms are important when everything-plus-the-kitchen-sink reforms are not. Take education. I returned to Indianapolis after living in Washington and London for a decade and found my hometown much-improved when it comes to schooling options. Before the era of Mitch Daniels’ comprehensive education reform, central Indiana has been quietly progressive for a number of years on the education reform front. Privately-funded vouchers. Dissolved school district lines. A number of super-solid charters. Experimental and affordable private schools. Other stuff, too.

The result? When we moved back, being the urbanistas that my family and I are, we had our eyes on the quality-of-life issues downtown and found that schooling options in Indianapolis are far more advanced than other so-called progressive places we have lived. You can live within walking distance to your place of work and to the hip restaurants, cafes, and bars you like and find a school for your child. Indianapolis has become a place where Richard Florida’s (overplayed, overhyped in my view but that’s a different matter) creative class can also enjoy the suburban-style school quality that often ultimately drives them out of downtown.

Education in Indiana is not perfect yet, of course, but it’s a great example of what incremental reforms can do. They paved the way for the country’s farthest-reaching, market-oriented education reforms under Daniels. And aside from the usual political interests, I don’t hear any parents complaining, regardless of their political ideology.