Insurance is critical to our economy and our lives and, taken as a whole, surprisingly big. Americans spend nearly as much each year on insurance coverage as on food. But insurance rests on a promise that, if the worst happens, you will be protected. Why should we believe that promise? Because for nearly 200 years, state governments have audited insurance companies’ books and watched their payment records to be sure they keep their word.
State governments began licensing doctors, lawyers, engineers, and other professionals in the late 1800s. They did it because colleges were turning out highly trained people who found themselves surrounded by con artists and quacks. The professionals turned to the states for help. In the century and a half since, licensing has raised professional standards and given us some assurance that those we depend on for expert advice are trained and acting in our best interests. For this, we can thank government.
In the 20th century a remarkable partnership between the federal government and the states and localities transformed American farming by teaching farmers about new crops, methods, and technologies. Imagine what something like cooperative extension could do in the 21st century for people living in cities and suburbs. Here’s why this government program worked so well in the past, and why it might be a model for our times.
Air and water quality are not where they should be in America, and we have not yet halted climate change. But the air in our cities is much clearer than it was 50 years ago, dangerous chemicals have been eliminated, and urban rivers no longer catch on fire. For these things, we can thank government and learn how it accomplished these things.
It took a quarter-century for America to establish the minimum wage in 1938. It quickly became one of the most popular things governments do. So why hasn’t Congress raised the minimum wage in more than a decade? Because economists are divided about its impact. But the reason citizens support a higher minimum wage may have nothing to do with economics. It may be about fairness.