Don’t assume that mandates are cheaper

Remember Milton Friedman’s arguments that a volunteer army is more cost effective than a draft?  That is true even though a volunteer army has a higher budgetary cost.  Paul Krugman today does not deny those arguments, but he elides them.  When it comes to mandates he clearly refers to budgetary costs rather than social costs but of course it is the job of the economist to stress that social costs are what matters, not to offer up to the public a comparison of budgetary costs alone.  There are lots of things we could do "more cheaply" with mandates but most of them (not all) are bad ideas.  Today Arnold Kling makes the same point.  Of course Friedman was persuasive on the draft so the argument can be made successfully in a public setting.  Elsewhere Megan McArdle writes:

Now that you are braced for the shock, here it is: comprehensive health care program costs much, much more than the government anticipated.

If you wish to compare notes, here is Krugman’s responseThe piece he links to tells us: "So the “$400 million” isn’t all unanticipated and isn’t all coming from state taxpayers."


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