People have unrealistically high hopes and expectations for education, health care, financial services, and government. Studies by economists tend to raise doubts about the validity of those hopes: educational experiments almost never show a durable, reproducible gain; as Robin Hanson emphasizes, health care economics is notorious for cross-sectional studies showing that more care does not lead to better outcomes; money managers perform worse than index funds; and government’s failures are well documented.
The quote is from one of the most through provoking things I’ve read recently. These sectors of the economy (education, health care, financial services, and government) are identified as having several common elements. Something I noticed is that the value of these is sectors is variable: you can educate yourself, health outcomes are mostly a matter of genetics and lifestyle choices, you can manage your own money and ignore most financial services, and most of what government does may not impact you at all. But this isn’t true for everyone. Some people need a lot more help than others. At the same time, it’s not clear that all we do to help (education, healthcare, financial regulation, government services) makes much of a difference. Maybe, just maybe, a formalized institutional approach to helping the needy isn’t the best way to actually help the needy.