Though I imagine Roderick Long and I disagree on many questions, I am of the view that the heart of the conservative domestic policy message should be this: the basics of a middle class life — a good-sized home not too far from employment opportunities, medical insurance that can protect against big income shocks, and access to high-quality schools — are way, way, way more expensive than they need to be, and the culprit is a combination of a dysfunctional public sector and overregulation. The traditional approach to making the basics of a middle class life more widely available is to increase the resources devoted to dysfunctional public sector institutions, to increase the number of regulations, and perhaps to create new public sector institutions in the hope that they will escape the sclerosis that plagues older ones. This approach hasn’t turned out very well.

Note, however, the trajectory of various other consumption goods: appliances, automobiles, and amenities; personal services in domains that are not burdened by licensing restrictions; the cost and quality of housing in regions that aren’t severely capacity-constrained by zoning restrictions and other regulations. 

Somehow libertarians and conservatives need to connect these threads, as Nick Gillespie and Matt Welch try to do in their The Declaration of Independents: the assumptions need to flip so that voters start wondering why the public education system isn’t offering higher quality at lower cost, in marked contrast to, say, fast-casual dining chains or the manufacturers of consumer electronics or the purveyors of coffee.

This will strike many of you as a gross oversimplification. But before I give up completely on disabusing you of that notion, let’s connect a few recent threads:

(1) As Ryan Avent argues in The Gated City and as Edward Glaeser has argued in Triumph of the City and, with Joseph Gyourko, Rethinking Federal Housing Policy, a series of federal (subsidies for mortgage debt) and local (zoning restrictions, rent regulations, etc.) interventions have made affordable, high-quality housing scarce in many of the countries most productive and regions regions. One familiar policy “solution” has been to increase direct housing subsidies rather than to dismantle policies that drive price increases.

(2) The economist David Levinson has made the important point that accessibility is a product of both density and speed, i.e., reducing congestion can increase one’s access to employment opportunities by reducing the time cost of reaching them. Resistance to HOT lanes, private toll roads, etc., exacerbates the accessibility problem by forcing us to rely on slow-moving public bureaucracies that face a number of political imperatives that compel them to, among other things, deploy labor inefficiently, devote resources to projects that aren’t cost-effective, etc.

(3) Allowing for more specialized educational providers and providing parents with flexible K-12 Spending Accounts (KSAs) could help drive down the cost of high-quality instruction. New entrants, including blended learning environments and virtual schools, could offer parents more educational options without forcing them to purchase access to “good school districts” via the purchase or rental of real estate that might stretch household budgets to the breaking point. 

(4) By transitioning to competitive pricing in Medicare and catastrophic insurance for all but the sickest and poorest under-65s, we would in theory encourage the emergence of low-cost business models for the provision of medical care, per The Innovator’s Prescription. Controversial ideas like cash-for-care medical indemnities are among the innovations that might, if depoliticized, help reduce systemwide costs. 

(5) Per the Chen and Chevalier research, we could take a number of steps to attack the supply constraints on the number of licensed medical providers, e.g., we could make graduate medical training in the U.S. less strenuous and time-consuming, which is to say more comparable to graduate medical training in every other advanced country. More aggressively, we could further empower nurse practitioners and physician assistants to undertake work that is currently the province of physicians. 

(6) Reform of the FDA could drive down the cost of developing new drug therapies, making them more accessible. 

(7) And I imagine that patent reform would have a salutary impact on middle class living standards in all kinds of unpredictable ways.

If we attack cost increases at the source, we could effectively raise real incomes, thus addressing the anxiety associated with lackluster male wage growth. If the goal is more middle class economic security, getting there by making economic security much cheaper is at least as good as getting there by increasing the tax burden without limit to redistribute income, most of which will wind up in the hands of the medical cartels (medical providers extracting rents, claiming it’s for the sick), the school cartels (teachers and administrators extracting rents from state and local governments, claiming it’s for the children), and the housing cartels (landlords extracting rents, claiming that overbuilding would destroy the landscape). 

Arnold Kling and Nick Schulz are thinking along these lines, as evidenced by their excellent National Affairs essay on “The New Commanding Heights.” All we need is for someone to find a catchy and accessible way of talking about this broad agenda. 

I should note that this approach doesn’t necessarily mean just eliminating regulations. It might involve creating new regulations, to, for example, help structure new education markets or to promote the use of pay-as-you-drive auto insurance. But the bias should be towards creating more room for entrepreneurial experimentation, not towards restricting it.