How Private Certification Regulates the Market for Piano Teachers

The economic argument for state certification of certain professions rests on asymmetric information. The idea is that consumers might not know enough about medicine, for instance, to tell the difference between a good doctor and a quack. If we let consumers choose their doctors without constraint, so the reasoning goes, we would be overrun with quacks.

This is a decent argument for certification, but it’s not a good argument for mandatory state certification. If mandatory state certification were necessary to combat asymmetric information problems, the world would be overrun with bad piano teachers. Most parents are not pianists; how are they expected to know the difference between good and bad piano teachers? The answer is that they don’t have to know. If they want to know that their kid’s piano teacher is qualified, they just need to hire a teacher that a respected institution like the Royal Conservatory of Music has certified. Parents may not know what makes a good piano teacher, but this only means there is a market opportunity in delivering that information.

Private certification has many advantages over mandatory state certification. The first is that consumers who care less about quality, such as the parent who only wants a piano lesson as a substitute for babysitting and doesn’t intend his child to become a virtuoso pianist, can still choose to hire the cheaper, uncertified service. (more…)

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Radicalism and the Political Landscape

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Last night I had a nice conversation with some other Queen’s economics alumni. When the conversation turned to politics, I said that I didn’t want to follow the next election and that I had promised myself I wouldn’t support the lesser evil. I may have come off as apathetic about politics, but that was not my intention.

The way I see it, there is a tradeoff between having a small (i.e. negligible) influence on present politics, by volunteering for political parties, talking (or blogging) about current political issues, and of course voting, and having a potentially larger influence on future politics. Here is the opening paragraph of Hayek’s essay, The Intellectuals and Socialism:

In all democratic countries, in the United States even more than elsewhere, a strong belief prevails that the influence of the intellectuals on politics is negligible. This is no doubt true of the power of intellectuals to make their peculiar opinions of the
moment influence decisions, of the extent to which they can sway the popular vote on questions on which they differ from the current views of the masses. Yet over somewhat longer periods they have probably never exercised so great an influence as they do today in those countries. This power they wield by shaping public opinion.

Hayek’s view, which I share, is that there is a fundamentally different mechanism at play in short-run politics and in long-run politics: The short run turns on popular opinion, while the long run turns on the forces that shape popular opinion.

Short-run politics is mostly characterized by a competition between very similar alternatives. The differences between politicians and parties often come down to the particular personal characteristics of the individuals and to differences in emphasis on basically similar platforms.  The fact that under a Democratic administration Rush Limbaugh is criticizing the state and Bill Maher is apologizing for it, and under a Republican administration Limbaugh and Maher reverse roles, has more to do with the perceived differences between Republican and Democrat than the actual differences in policy. Limbaugh and Maher focus on different things to complain about and apologize for, so we hear about different things depending on who is doing the complaining and who is doing the apologizing.

Politicians and political parties play to people’s beliefs, but people’s beliefs are shaped, in the long run, by the ideas and information they absorb largely from the intellectual class. This is where the tradeoff I mentioned before, between having a small influence on present politics and having a potentially larger influence on future politics, comes into play. Participating in present politics means communicating to people within the context of their preexisting beliefs.  This means sacrificing the opportunity to plant the seeds of a fundamental change in those underlying beliefs.

For example, I favour open borders. I could hold my nose and speak out for the present politician who I think might loosen migration restrictions ever so slightly. Alternatively, I and my fellow open borders radicals could give that politician the criticism he deserves. If we could force the “slightly less closed border” crowd to address our concerns, they would have to speak out in defense of migration restrictions. That would mean relinquishing the appearance of being pro-immigrant and the moral high ground that goes with it. In a few decades, the entire context of the debate could shift in the direction of open borders.

The entire libertarian movement has pursued a very successful strategy of political irrelevance in recent years. Libertarians don’t form a large enough voting block to enact any of their preferred policies, but they have forced mainstream pundits to address them. It seems like a new article about how crazy and wrong libertarians are comes out every day. As the saying goes, “First they ignore you, then they laugh at you, then they fight you, then you win.” Ordinary people now know what a libertarian is and can ask themselves, “Am I a libertarian?” Even if the answer is no, that’s a huge improvement over total ignorance of libertarian concerns.

I favour the long run strategy in politics. It allows for a single individual to have significant influence. If I talk three people into radicalism, and they each talk three people into radicalism, and each radical shifts the views of five moderates, it doesn’t take very many iterations to dramatically change the political landscape. Those iterations take time, so the further in the future you look, the greater the influence of a successful radical.

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Radicalism and the Political Landscape

Last night I had a nice conversation with some other Queen’s economics alumni. When the conversation turned to politics, I said that I didn’t want to follow the next election and that I had promised myself I wouldn’t support the lesser evil. I may have come off as apathetic about politics, but that was not my intention.

The way I see it, there is a tradeoff between having a small (i.e. negligible) influence on present politics, by volunteering for political parties, talking (or blogging) about current political issues, and of course voting, and having a potentially larger influence on future politics. Here is the opening paragraph of Hayek’s essay, The Intellectuals and Socialism:

In all democratic countries, in the United States even more than elsewhere, a strong belief prevails that the influence of the intellectuals on politics is negligible. This is no doubt true of the power of intellectuals to make their peculiar opinions of the
moment influence decisions, of the extent to which they can sway the popular vote on questions on which they differ from the current views of the masses. Yet over somewhat longer periods they have probably never exercised so great an influence as they do today in those countries. This power they wield by shaping public opinion.

Hayek’s view, which I share, is that there is a fundamentally different mechanism at play in short-run politics and in long-run politics: The short run turns on popular opinion, while the long run turns on the forces that shape popular opinion. (more…)

The post Radicalism and the Political Landscape appeared first on The Economics Detective.