The Evolution of Everything: How New Ideas Emerge

by Matt Ridley

Is it not striking that the cost of food and clothing has gone steadily downwards over the past fifty years, while the cost of healthcare and education has gone steadily upwards? In 1969 the average American household spent 22 per cent of consumption expenditure on food and 8 per cent on clothing. Now it spends 13 per cent on food and 4 per cent on clothing. Yet the quality and diversity of both food and clothing have improved immeasurably since 1969. By contrast, the consumption of healthcare has more than doubled, from 9 per cent to 22 per cent of household expenditure, and the consumption of education has trebled, from 1 per cent to 3 per cent. The quality of both is the subject of frequent lament and complaint. Cost keeps going up, quality not so much, and innovation is sluggish. As for transport and shelter, broadly speaking the parts that the market supplies – budget airlines, house-building – have got cheaper and better, while the parts that the state supplies – infrastructure and land planning – have got more expensive and slower.