[fixxer]

Quick question for anyone who actually studied Baumol's theories:

Did he bring into consideration how some services, such as education and health care, exist in an awkward limbo between services we pay for (right/libertarian view) and services we're entitled to (left view), resulting in a smash up of public subsidies and political quicksand?

At face value, his theory is totally reasonable. BUT it seems totally reductionist to claim his drivers of cost are the only drivers (even calling them primary drivers seems foolish to me).

[URSpider94]

The article points out that there are many non-governmental professions that show this effect: musicians (look at the prices for concert tickets), post-secondary education, which is not usually free, though it may be subsidized, restaurants...

[mysterypie]

> post-secondary education

In many places, loans for university education are guaranteed by the government. So universities have no worries for charging absurd prices for useless degrees. Even if the graduates go bankrupt the university still gets their money from the government. (And in some jurisdictions bankruptcy doesn't discharge student loans.)

The GP raises a legitimate point that government involvement in just about everything muddies the analysis.