Cost disease socialism

Cost disease socialism is a proposed concept by Steven M. Teles, Samuel Hammond, and Daniel Takash of the Niskanen Center, a free-market think tank.

"Cost disease socialism" was termed by Steven M. Teles, Samuel Hammond, and Daniel Takash, in their 2021 report published through the Niskanen Center.

Cost disease socialism happens when essential goods or services are subsidized through government or philanthropy, with limitations or regulatory constraints on new supply.

[10] Senator Bernie Sanders added a provision to the Build Back Better Plan to increase government subsidy for hearing aids.

[12] The Niskanen Center holds that supply of essential goods is often constrained by regulation;[7] critics, such as Noah Smith, cite that overregulation is not a complete explanation of why higher education is so expensive.

[17] The Build Back Better plan proposed in 2021 was called Hammond, Takash, and Teles "an extreme example" of cost disease socialism when it came to child care.

Elastic supply with increased demand. Under these market conditions, when demand is increased due to subsidy, both the quantity provided and the price increase.
Inelastic supply with increased demand. Under these market conditions, when demand is increased due to subsidy, the quantity provided remains limited and the price increases more than it would have if the supply were elastic.