Economic Incentives in Opinion Making.

One of the two basic things you need to know about economics is that incentives matter. They change people’s actions and opinions. A leader in today’s Guardian:

But, as Lisa Harker, who chairs the trust, persuasively argued in these pages yesterday, there is still a hole at the heart of the government’s thinking. The most highly rated experience abroad treats childcare firstly as a benefit for the child. That means huge investment in training and paying staff, which is only kept affordable by large public subsidies.

My thoughts on Ms. Harker can be found here. Let us think, for a moment, about the incentives at work here. an expansion of public subsidies, an expansion of a well paid public workforce. How are these people hired? Via advertisements in the Guardian. Does the Guardian have an incentive to urge the expansion of such subsidies and such a workforce? Having answered that, does the Guardian actually support, even urge, such expansion?
See, incentives matter.
One might also note this: “which is only kept affordable by large public subsidies”. We know what they mean of course, affordable to those who use the services, but there does seem to be an assumption that public subsidies are in some way free money. Absolutely no recognition of the fact that making child care “affordable” to parents means that someone else has higher taxes, which may or may not be “affordable”.

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