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September 20, 2005

Human Innovation: Many voluntary sector prices in free fall

Politicians talk about free education, free medical care, free this, and free that. But the price tag for these “free” things always seem to be measured in the billions of dollars. Meanwhile, in the voluntary sector . . .

The blog software this site uses was free. I wrote this entry using OpenOffice, a free office suite. I am running OpenOffice on the Linux operating system. It was free. And it works perfectly. I never have to reboot. I will view this blog post on two different browsers to see how it looks: Firefox and Epiphany. Both are free. And they’re about to be joined on my hard disk by another one, Opera, which is now also free.

Technological innovation and business competition is making more-and-more things really-and-truly free. You can, for instance, make an increasing number of phone calls for (yes, you guessed right) free.

And even where things are not free (and most things probably never will be unless nano-technology really revolutionizes the world economy), prices are still dropping steadily. Wal-mart has innovated a powerful distribution system to dramatically reduce the prices on thousands of consumer goods. CostCo has done something similar for higher quality items. Computers are famous for constantly becoming more powerful, but less expensive, and now big screen high-definition television sets are following the same trend. Brash new airlines like JetBlue are bringing cross-country air travel within reach of everyone. And innovative businesses like NetFlix have increased the convenience of renting movies, while reducing the cost dramatically.

Have you noticed? Look around.

And while you’re looking, take note of something else. The industries that perform the poorest in terms of providing better-and-better services for lower-and-lower prices, tend to be those that are the most heavily regulated, and/or heavily subsidized or protected by government. Health care, insurance, energy, and cable television are just a few examples.

Want better products and lower prices? Downsize DC.

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