The Common Good Sectors
Some things are not markets. They have the shape of markets, the vocabulary of markets, the legal structure of markets. They are not markets. And the difference is not semantic.
A framing note, stated plainly before the argument begins: this is a policy argument, not a neutral analysis dressed as one. It advocates for the specific correctives Parts Four through Six describe — public options, ownership restrictions on private equity in necessity sectors, and the sector-specific designs that follow — because the dignity-centered design standard underlying this series requires them. That standard is not the property of one party or ideological coalition. The claim is that the structural conditions this article documents diminish dignity regardless of who built them or which side currently defends them, and the policy argued for here is intended to extend the structural conditions that make dignity possible across the political and ideological spectrum, not to advance one faction's interests under cover of a universal-sounding value.
Part One: The Diagnostic Criterion
The prior two articles in this series established the mechanism of the compression: wages suppressed relative to productivity, tax burden shifted from capital to labor, costs in necessity categories inflated at multiples of general inflation, producing a household that needs $120,000 to $130,000 to match the functional standard the 1980 median household maintained on $17,710. This article asks the question those articles implied: why did costs in specific categories — healthcare, housing, education, childcare, water, electricity, internet, food — inflate at those rates while costs in other categories tracked more closely to general inflation?
The answer is not complicated, once you have the right diagnostic criterion. The categories that inflated fastest share a structural signature that distinguishes them from categories where competitive markets functioned. Naming that signature precisely is the prerequisite for the design argument that follows.
The standard economic definition of a public good requires two properties: non-excludability, meaning you cannot prevent people from using it, and non-rivalry, meaning one person's use does not diminish another's. Clean air meets the definition. A lighthouse meets it. The sectors named above do not — access can be restricted, and use can be rivalrous. This is why mainstream economic discourse typically classifies them as private goods with market failures, rather than public goods requiring public provision. That classification is the wrong frame, and it has produced wrong policy conclusions for 40 years.
The correct diagnostic criterion is not the technical public goods definition. It is a combination of four structural conditions that, when present simultaneously, produce extraction without competitive accountability:
First, inelastic demand: people cannot meaningfully exit. You cannot opt out of healthcare when you are ill. You cannot opt out of shelter. You cannot opt out of food. You cannot opt out of the transportation infrastructure that accesses your job in a country designed around the automobile. The demand floor does not fall when prices rise. The seller knows this.
Second, concentrated supply: market consolidation has reduced or eliminated competitive alternatives. Where one provider exists — one broadband carrier, one hospital system, one dominant landlord in a housing market — the market mechanism that is supposed to discipline pricing through competition does not operate. The structural condition of monopoly or oligopoly obtains whether or not it carries that legal designation.
Third, severe harm from non-access: the consequence of being priced out is not inconvenience but genuine harm to health, physical safety, developmental capacity, or participation in economic and civic life. The severity of the harm from exclusion removes the exit option in a second, deeper sense: not just that people don't want to exit, but that they cannot absorb the consequences of being forced to.
Fourth, demonstrated market failure: private provision has not produced equitable access at sustainable cost, by any honest reading of the evidence. This is the empirical criterion. It is not a prediction about what markets might do under ideal conditions. It is an assessment of what private provision has actually produced in these sectors, measured against the costs documented in the previous article.
Where inelastic demand meets concentrated supply, severe harm from non-access, and demonstrated market failure — extraction without competitive accountability is not a risk. It is a design outcome. The conditions guarantee it.
This is the diagnostic criterion this article uses to identify common good sectors — not ideology, not government preference, but the structural presence of all four conditions simultaneously in a sector where private provision has demonstrably failed the people it nominally serves.
The sectors that meet this criterion: healthcare, housing, childcare, education, water, electricity, internet access, and food access. They are not eight separate policy problems requiring eight separate legislative solutions. They are eight expressions of the same structural dynamic, operating through the same mechanism, producing the same outcomes, in different market contexts. Naming them as a category is the first step toward addressing them with a coherent design response rather than a piecemeal regulatory one.
FLAG (S, Me, E) Society · Meso · Empirical
The claim that these sectors share a structural signature is an empirical institutional claim. It is falsifiable: one could demonstrate that any of these sectors does not meet the four-part criterion. The argument requires all four conditions simultaneously, not any one alone.
Part Two: Why the Architecture Guarantees the Outcome
The DCBD framework's foundational claim about organizational behavior is precise and directly applicable here: organizations, like individuals, conserve energy, seek reward, and avoid pain. And, like individuals, they drift toward the lowest-friction equilibrium available to them given the constraints they face. In a market with competitive pressure, the lowest-friction equilibrium for a business includes providing value to customers — because failure to do so results in customers leaving. In a market without genuine competitive pressure, the lowest-friction equilibrium shifts: the organization can extract more, maintain less, and externalize the costs of that extraction onto the people it serves, who have no credible exit.
This is not a claim about the malice of any particular actor. The DCBD framework is explicit on this point: the most dangerous organizational harm is produced not by individual malevolence but by structural conditions that make extraction the path of least resistance for people who are, individually, making locally rational decisions within an incentive structure that aggregates into harmful outcomes. The hospital administrator who approves the billing practice that generates preventable financial ruin for patients is not necessarily a bad person. They are operating in a system designed to reward that decision and insulate them from its consequences.
Philip Pettit's non-domination framework makes the political dimension precise. Domination, in Pettit's account, is not the active exercise of arbitrary power — it is the structural availability of it. A private healthcare monopoly that has not yet raised your premiums to ruinous levels is still dominating you in Pettit's sense, because the capacity to do so exists and you have no credible alternative. Your behavior is modified by the existence of that capacity — you do not advocate for yourself, you do not challenge bills, you do not pursue the care you need — even when the power is not being actively exercised at that moment. The domination operates through its structural availability, not only through its exercise.
The Seeing Clearly argument from perceptual ethics adds the feedback dimension: power insulates the person who holds it from the consequences of their decisions. The executive who sets hospital pricing does not experience medical debt. The utility board that approves rate increases does not lose heat in winter when they cannot pay the bill. The landlord whose portfolio includes 10,000 units does not experience housing instability. The structural distance between decision and consequence is not incidental to the exercise of power in these sectors. It is constitutive of it. And that distance produces the predictable perceptual failure the framework names: the humanity of those harmed becomes increasingly difficult to see not because the decision-maker is malicious, but because the feedback loop that would make that humanity legible has been severed by the insulation that concentrated market power provides.
This is why the market failure in common good sectors is not corrected by information campaigns, consumer choice initiatives, or marginal regulatory adjustments. The organizational architecture that produces the failure is not responding to the wrong information. It is responding correctly to the incentive structure it operates within. Change the information available and the incentive structure remains. Change the incentive structure without changing the architecture and the incentive structure reasserts itself through the political channels the concentrated actors control. The design has to change.
FLAG (O, Me, N, Me→Ma) Organization · Meso · Normative · Cross-level: institutional design producing macro distributional outcomes
The claim that extraction in common good sectors is an architectural outcome rather than a market failure in the correctable sense is a normative-institutional claim with macro distributional consequences. It implies that the corrective must also be architectural — a change to the structure within which organizational incentives operate, not merely an adjustment to the incentives themselves. Note that the underlying Me→Ma bridge here is argued, not merely asserted: the sector-by-sector evidence that follows is Cor-level (documented covariation between concentration conditions and extraction outcomes) rather than Cau-level (no randomized or quasi-experimental design isolates architecture as the active mechanism against competing explanations). That is the honest evidentiary status of a comparative, cross-sector argument of this kind, and it is sufficient to support the normative claim being made here — but it should not be mistaken for a demonstrated causal mechanism in the way the PE-specific studies in Part Three are.
Part Three: The Accelerant — Private Equity in Common Good Sectors
The argument so far has described a structural dynamic that produces extraction in common good sectors under normal market conditions. Private equity represents the application of that dynamic at maximum intensity, through a business model specifically designed to accelerate extraction within a compressed time horizon.
Understanding the private equity model in common good sectors requires distinguishing it from conventional investment. Conventional investment — equity ownership in a company that the investor intends to grow — aligns the investor's interest with the company's long-term health. The investor profits if the company generates value over time. Private equity, as applied to necessity goods sectors, operates through a different mechanism.
The Mechanism
A private equity firm acquires a target — a hospital system, a nursing home chain, a childcare network, a housing portfolio, a water utility — using primarily borrowed money, with the acquired entity's own assets as collateral for the acquisition debt. This is the leveraged in leveraged buyout. The debt does not sit on the private equity firm's balance sheet. It sits on the acquired entity's balance sheet — meaning the hospital, the nursing home, the childcare center is now responsible for servicing the debt incurred to purchase it.
The acquired entity must now generate sufficient cash flow to service that debt while also generating the returns the private equity fund's investors expect. In a sector with genuine competition and price-sensitive customers, this pressure would be impossible to sustain — the market would discipline excess extraction. In a sector where demand is inelastic, competition is limited, and exit carries severe consequences, the pressure is transmissible: onto patients through billing practices, onto residents through rent increases and deferred maintenance, onto children through reduced staff-to-child ratios, onto communities through service reduction.
The time horizon matters critically. The typical private equity fund has a five to seven year investment horizon, after which the portfolio company must be sold — to another private equity firm, through an IPO, or in bankruptcy. The extraction strategy must produce sufficient returns within that window to satisfy fund investors. The long-term consequences of the extraction — the deferred maintenance, the workforce decimated by cost-cutting, the debt load that makes the entity financially fragile under any stress — are the problem of whoever comes next. The private equity firm that owned the hospital does not exist in the community after the exit. The community does.
Private equity is not a form of investment in common good sectors. It is a form of extraction from them, operating under the legal language of investment. The distinction is not moral but structural: investment produces long-term value in the entity it enters. Private equity extracts short-term returns from entities it controls and exits before the full consequences of that extraction are visible.
The Evidence by Sector
Healthcare
Private equity ownership of hospitals has been studied across multiple research populations with consistent findings. A 2023 study published in JAMA found that private equity acquisition of hospitals was associated with a 25 percent increase in hospital-acquired adverse events — including falls, infections, and central line complications — in the three years following acquisition. A 2021 NBER working paper by Gupta, Howell, Yannelis, and Gupta found that private equity acquisition of nursing homes was associated with a 10 percent increase in short-term mortality among Medicare patients.
The mechanism is direct: the cost structures private equity imposes — staff reductions, supply chain consolidation, administrative overhead reallocation — reduce the inputs that produce patient safety. The decision-makers who approved those cost structures do not experience the falls, the infections, the preventable deaths. The patients do. The families do. The communities that depend on the hospital system do.
Private equity-owned physician practices have been documented across emergency medicine, anesthesiology, and radiology as the primary vector for surprise billing — the practice of billing patients at out-of-network rates for care received at in-network facilities, often without patient knowledge or consent. The No Surprises Act, passed in December 2020 and effective January 2022, targeted this practice specifically because it had become so pervasive in private equity-controlled physician staffing that it represented a systemic rather than individual problem.
In multiple documented cases, private equity ownership has preceded hospital bankruptcy: the Steward Health Care collapse of 2024, leaving eight states with sudden closures or threatened closures of community hospitals, is the largest but not the only example. The pattern is consistent: acquisition, debt loading, extraction, exit, closure — with the community bearing the loss of healthcare access that the private equity firm captured as returns during the extraction phase.
Sources: Kannan, Bruch, & Song, 'Changes in Hospital Adverse Events and Patient Outcomes Associated With Private Equity Acquisition,' JAMA (2023); Braun et al., 'Association of Private Equity Investment in US Nursing Homes With the Quality and Cost of Care for Long-Stay Residents,' JAMA Health Forum (2023); Gupta, Howell, Yannelis, & Gupta, 'Does Private Equity Investment in Healthcare Benefit Patients? Evidence from Nursing Homes,' NBER Working Paper 28474 (2021)
Housing
Invitation Homes, the largest single-family rental operator in the United States, was created from a Blackstone portfolio assembled between 2012 and 2017 during the post-crisis housing market collapse, when prices were depressed and individual buyers — whose mortgage access had been severely restricted by the post-2008 credit contraction — could not compete with institutional cash buyers. Blackstone fully divested its stake by 2019; Invitation Homes now trades as an independent public company, though its formation through crisis-era institutional buying is not in dispute. The company owns approximately 85,000 homes across 16 major metropolitan markets — under 1 percent of the single-family housing stock nationally, a fact the industry cites to argue the concentration is immaterial. That argument makes the same move the individual unit of measure trap makes in reverse: it uses a macro-level aggregate to obscure a meso-level concentration. Housing markets are local. A company that owns a negligible share of the national housing stock can still be one of the two or three largest landlords in a specific metro area or submarket, which is the level at which rental pricing power is actually exercised.
Research on the effects of institutional single-family rental ownership has documented consistent outcomes: rent increases that outpace comparable non-institutional rentals, higher rates of eviction filing, deferred maintenance, and reduced housing stability for tenants. A 2022 Federal Reserve study found that institutional investor purchases of single-family homes were associated with increased local rent levels and reduced homeownership rates in affected markets — the precise mechanism by which the wealth-building function of homeownership is foreclosed for households that would have purchased those properties under prior market conditions.
In multi-family housing, private equity ownership has been associated with the aggressive use of algorithmic rent-setting software — RealPage being the most documented example — that enables coordinated rent increases across competing landlords in the same market. The Department of Justice filed an antitrust complaint against RealPage in August 2024 alleging that its software constitutes price-fixing among nominally competing landlords. RealPage settled with the DOJ in November 2025, agreeing to stop using non-public, competitively sensitive data from competing landlords to generate pricing recommendations — a resolution that validates the underlying antitrust theory rather than dismissing it, even though it closed without a damages finding. The practice it describes — using shared algorithmic pricing tools to eliminate price competition in rental housing — represents the structural equivalent of cartel behavior in a sector where renters have no competitive alternative.
Sources: Haughwout et al., 'Real Estate Investors, the Leverage Cycle, and the Housing Market Crisis,' Federal Reserve Bank of New York (2011); Raymond et al., 'Corporate Landlords, Institutional Investors, and Displacement,' Federal Reserve Bank of Atlanta (2016); DOJ v. RealPage, Inc. (2024)
Childcare
The private equity model applied to childcare produces a specific and well-documented outcome: acquisition of childcare centers, reduction of staff-to-child ratios to regulatory minimums, reduction of staff compensation to increase margin, and extraction of returns through sale-leaseback transactions in which the physical facilities are sold to a real estate investment trust and leased back at above-market rates — encumbering the childcare operation with occupancy costs designed to maximize extraction rather than support operations.
KinderCare, Bright Horizons, and Learning Care Group — three of the largest private equity-backed childcare chains in the United States — collectively operate thousands of centers. Their expansion has coincided with, and in some research is associated with, the pricing dynamics documented in Article 1.5: childcare costs rising at nearly double the rate of general inflation, center-based infant care exceeding college tuition costs in 38 states, the federal affordability benchmark of 7 percent of household income breached in every state for infant care.
The staff compensation data is directly relevant: the median hourly wage for childcare workers in the United States is approximately $14.60, making it one of the lowest-compensated professions requiring specialized training and state licensure. The gap between what childcare workers are paid and what the care they provide costs families — the difference absorbed by private equity as margin — is documented and large. The people providing the developmental care are paid poverty wages. The families purchasing it are paying rates that consume a third of median household income. The difference goes to returns.
Sources: BLS, Occupational Employment and Wage Statistics, Child Care Workers (2024); Child Care Aware of America, 'Demanding Change' (2024); Economic Policy Institute, 'The Child Care Crisis Is Keeping Women Out of the Workforce' (2023)
Part Four: What Common Good Designation Requires by Sector
Identifying a sector as a common good sector is not an argument for nationalization or for any single policy instrument. It is an argument for a design principle: where the four structural conditions obtain and private provision has failed, the state has an obligation to ensure that a genuine alternative exists — one that disciplines private market pricing through competition rather than through regulation alone, that provides access to people the private market excludes, and that breaks the structural condition of domination that concentrated private supply in a necessity sector imposes.
The design instrument varies by sector. The common thread is the presence of a genuine public option or collective ownership alternative that creates a real competitive floor. Without that floor, regulation alone is insufficient — it is subject to capture by the industries it regulates, and it leaves intact the structural condition that makes the extraction possible.
What follows is a sector-by-sector analysis of what common good designation requires, what peer-nation evidence shows, and what private provision has actually produced.
WATER
Criteria met: All four conditions at maximum intensity. Demand perfectly inelastic at survival threshold. No substitute exists.
Peer-nation model: Public or cooperative utility in all peer nations. Rate regulation, infrastructure accountability, democratic governance.
Private market outcome: Privatized systems document 50-100% rate increases within 5 years of acquisition, deferred infrastructure maintenance, regulatory capture of oversight bodies. Flint, Michigan is the most visible US case study.
Water: The Foundational Case
Water is the clearest case in the common good category because it is the one where the argument is most settled — or should be. The biological prerequisite for human life admits no competitive substitute. Demand below the survival threshold is perfectly inelastic. The infrastructure required for delivery is a natural monopoly — it is structurally irrational to build competing pipe networks to the same address. The consequence of non-access is acute: death, and short of death, public health crises affecting entire communities.
The accelerating acquisition of municipal water systems by private equity and investor-owned utilities — American Water Works, Essential Utilities, and similar entities — has produced consistent documented outcomes across jurisdictions: rate increases averaging 50 to 100 percent within five years of privatization, deferred infrastructure maintenance that accumulates as a liability rather than appearing on quarterly earnings reports, and regulatory capture of the state utility commissions supposed to oversee them, as the regulated entities develop the lobbying infrastructure and technical expertise advantage over their regulators that captures regulatory bodies in every sector where it is permitted to develop.
The DCBD framework's claim about the low-friction equilibrium is nowhere more precisely illustrated than in privatized water: the infrastructure deteriorates slowly, the rate increases happen incrementally, the regulatory capture occurs quietly, and by the time the harm is visible — lead in the pipes, billing crises, service shutoffs in communities that cannot pay — the institutional architecture for correction has already been compromised by the very entity it was supposed to hold accountable.
The corrective is structural. Public or cooperative ownership of water systems, with democratic accountability to the communities they serve, rate-setting that covers capital maintenance without profit extraction, and infrastructure investment requirements that prevent the deferral that private ownership uses to inflate short-term returns at long-term public expense. This is not a radical proposal. It is the model that most peer nations use, and the model that most American communities used before the privatization wave of the 1990s and 2000s.
HEALTHCARE
Criteria met: All four conditions. Demand inelastic in acute care and most chronic care. Supply concentrated through hospital and insurer consolidation.
Peer-nation model: Every peer nation: universal or near-universal coverage, single-payer or heavily regulated multi-payer, public option disciplines pricing. Per-capita cost 40-60% of US levels. Better population health outcomes.
Private market outcome: 1,306% cost increase per person since 1980 against 281% general inflation. US spends double peer-nation average per capita. Worse outcomes on life expectancy, maternal mortality, chronic disease burden.
Healthcare: The Most Urgent Case
The US healthcare system is the clearest large-scale empirical demonstration of what happens when all four structural conditions obtain in a sector and private provision is allowed to operate without a genuine public alternative that disciplines pricing. Every wealthy peer nation covers its population at lower cost with better average outcomes. The variation in their models — single-payer, multi-payer with strong regulation, public-private hybrid — is less important than the constant: none of them allows a purely market-based extraction architecture to operate in acute and chronic care without a structural floor that prevents the pricing spiral the US system has produced.
The argument for a Medicare for All approach, or for a robust public option, is not primarily ideological. It is empirical: the instrument that peer nations use to produce universal coverage at sustainable cost is a public payer or a public option that creates a pricing floor against which private insurers must compete. Without that floor, private insurers operating in the concentrated markets that US insurer consolidation has produced face no competitive constraint on premium increases. Nationally, the four largest insurers control just under half of the commercial market (approximately 45 to 49 percent) — and the national figure actually understates the relevant concentration, because insurance, like housing, is priced in local and regional markets, not a single national one. By the American Medical Association's own measure, at least one insurer holds a 50 percent or greater share of the commercial market in nearly half of US metropolitan statistical areas, and under current federal merger guidelines, roughly 97 percent of metro-level markets qualify as highly concentrated. They face regulatory constraints, which they manage through the lobbying infrastructure they have developed precisely for that purpose.
The administrative overhead argument is underappreciated in mainstream healthcare discourse, and it is also one of the more contested comparisons in health economics, worth stating with the honesty it's usually denied. Medicare's administrative overhead is commonly cited at approximately 2 percent of claims, against 12 to 18 percent for private insurance. That headline comparison is disputed on legitimate grounds, not only by industry-funded studies: Medicare's older, sicker beneficiary pool inflates the spending denominator the percentage is calculated against, and per-beneficiary administrative cost comparisons narrow the gap considerably, with some analyses finding little difference at all once government agencies' Medicare-support costs are included. What survives that critique, and what CBO and MedPAC analyses continue to support, is a narrower but still real claim: private insurance carries substantially higher administrative overhead than traditional Medicare, on the order of several percentage points under conservative, per-beneficiary accounting rather than the full 10-to-16-point spread the raw claims-ratio comparison implies. Applying even a conservative 5-percentage-point difference to the approximately $1.6 trillion in private insurance spending still represents on the order of $80 billion annually in overhead that does not produce healthcare — a figure some claims-ratio-based estimates put closer to $160 billion, and none put at zero. Either way, that overhead produces billing, prior authorization, appeals processing, coverage denial, and the administrative infrastructure required to manage a system specifically designed to limit care delivered relative to premiums collected.
This is not a side effect of private insurance. It is the operating model. The medical loss ratio — the share of premiums that must be spent on actual medical care under the ACA — is regulated at 80 to 85 percent. A 15 to 20 percent margin for administration and profit is legally protected. Medicare's low overhead, by any accounting method, is what remains when profit extraction is largely removed from the model. The $80 to $160 billion annual range, depending on methodology, is a measure of what extraction costs in a sector where the alternative demonstrates that the extraction is not operationally necessary.
Sources: CMS, National Health Expenditure Data (2024); Peterson-KFF Health System Tracker (2024); Woolhandler & Himmelstein, 'Administrative Work Consumes One-Sixth of US Physicians' Working Hours,' Health Affairs (2014); MedPAC, 'Medicare Advantage' (2023); Congressional Budget Office, analyses of Medicare and private insurance administrative cost comparisons
HOUSING
Criteria met: All four conditions. Demand inelastic for shelter below threshold of homelessness. Supply concentrated through zoning restrictions, institutional investor acquisition, and construction industry oligopoly.
Peer-nation model: Vienna Model: 60% of residents in permanently affordable public or cooperative housing. Singapore Model: 80% public housing ownership with asset-building features. Scandinavian cooperative models.
Private market outcome: Home-price-to-income ratio from 3.65x to 5.08x since 1980. Recommended ceiling: 2.6x. 22.4 million renting households spending 30%+ of income on housing. Institutional investor acquisition accelerating market capture.
Housing: The Wealth-Building Mechanism, Redesigned for Extraction
The housing argument requires distinguishing between two functions that a healthy housing market performs simultaneously and that the current market has separated: housing as shelter — a necessity good whose cost should be manageable relative to income — and housing as an asset-building mechanism — the primary wealth accumulation vehicle of the American middle class in the postwar period.
The financialization of housing has optimized for the asset function at the expense of the shelter function. When housing is treated primarily as an investment vehicle whose value must appreciate to satisfy investor return requirements, the price appreciation that benefits current owners is the same mechanism that prices out prospective buyers and increases rent burdens on current renters. The interests of the asset-holding class and the shelter-seeking class are structurally opposed in a purely financialized housing market, and the asset-holding class has had decisive advantage in the political architecture that governs housing policy since the 1970s.
The public option in housing is not Soviet-era state housing, which failed for reasons that include but are not limited to public provision as such — specifically, the concentration of low-income households in isolated developments without economic or social integration, a design failure rather than a public provision failure. The relevant models are Vienna, where approximately 60 percent of residents live in municipal or cooperative housing that provides permanent affordability while maintaining physical quality, and Singapore, where approximately 80 percent of the population lives in public housing that provides asset-building features including resale rights within the public system.
The design principle the Vienna and Singapore models share is the permanent affordability constraint: a portion of the housing stock, sufficient to constitute a genuine competitive alternative to the private market, is held in ownership structures that remove it from speculative appreciation cycles. This stock provides a price anchor — the private market cannot charge unlimited rent when a genuine alternative exists at cost-based pricing — without eliminating the private market or forcing anyone into public housing who does not choose it.
In the United States, the closest existing models are community land trusts — ownership structures in which a nonprofit organization holds land permanently while allowing residents to own the housing on it, with resale price restrictions that maintain long-term affordability — and limited-equity cooperatives, in which residents collectively own the housing but equity appreciation is capped to prevent the conversion of affordable housing to market-rate as individual circumstances change. Both models exist and function. Neither exists at the scale required to discipline the private market in high-cost metropolitan areas. Scaling them requires public investment that the current political architecture has not produced.
Sources: JCHS, 'State of the Nation's Housing' (2025); Whitehead & Williams, 'Comparing International Approaches to Affordable Housing Finance,' Housing Policy Debate (2018); Davis, 'The Community Land Trust Reader' (2010); HUD, 'Public Housing' historical data
CHILDCARE
Criteria met: All four conditions. Demand inelastic for working parents. Supply inadequate and concentrated in private equity-backed chains in most markets.
Peer-nation model: France: heavily subsidized crèche system, costs capped as percentage of parental income. Scandinavian universal public childcare. Canada moving toward $10/day universal model. Documented positive fiscal returns in all cases.
Private market outcome: National average $28,168/year for two children (34% of median household income). Federal affordability standard (7% of income) unmet in every state for infant care. Costs rising at nearly 2x general inflation rate.
Childcare: The Infrastructure for Everything Else
Childcare is where the common good argument is simultaneously most empirically robust and most politically underdeveloped in American discourse. The economic case for universal public childcare — as distinct from the equity case, though the equity case is also compelling — is among the most well-documented in the policy literature, and it runs on the specific logic that distinguishes investment from expenditure.
James Heckman's 2000 Nobel Prize, shared with Daniel McFadden, was awarded for developing methods to detect and correct for selection bias in samples that are not fully random — a problem that turns out to matter directly for the evidence base behind early childhood investment. The flagship Perry Preschool study's randomization was compromised: some children were reassigned between the treatment and control groups after initial assignment, based on family circumstances, which is precisely the kind of selection problem Heckman's Nobel-winning framework exists to catch. Heckman and coauthors later reanalyzed Perry Preschool using permutation-based inference methods built on that same selection-bias toolkit, explicitly accounting for the compromised randomization, and found the program's effects — on criminal activity, educational attainment, and earnings — held up. The returns-on-investment estimates that follow are not merely the work of a prestigious economist; they are the output of the specific statistical machinery designed to rule out the strongest objection that could otherwise be raised against them: estimated returns of $7 to $12 per dollar invested, through reduced costs in remedial education, criminal justice, social services, and healthcare, and increased lifetime earnings and tax contribution. This is not a projection. It is empirical analysis of longitudinal data from programs that have been running long enough to measure lifetime outcomes.
Every peer nation that has implemented universal or near-universal public childcare has documented the same cluster of outcomes: increased female labor force participation (adding to GDP and tax base), improved early childhood developmental outcomes across the income distribution, reduced long-term remedial costs, and net positive fiscal returns when increased tax revenue is counted against provision cost. The French crèche system, the Scandinavian models, Canada's move toward $10-per-day care — they differ in design but converge on the outcome: universal childcare pays for itself and then some.
The US has none of this. It has Head Start, chronically underfunded relative to eligible population. It has the Child and Dependent Care Tax Credit, which provides limited relief to families with tax liability and nothing to families below the income threshold. It has a private market that costs 34 percent of median household income for two children and employs the people doing the work at poverty wages. The gap between those poverty wages and the unaffordable costs paid by families is the margin captured by private equity and corporate childcare chains.
The political case against universal public childcare — that it represents government overreach into family decisions about child-rearing — does not survive contact with the economic conditions that make the choice to use childcare, for most two-income households, not a choice at all. When single-income households cannot maintain a middle-class standard of living — which Article 1.5 demonstrated — the decision to use childcare is not a preference. It is a structural necessity imposed by wage levels. Declining to provide affordable public infrastructure for that necessity is a decision about who bears the cost, not a decision about whether to intervene in family choices.
Sources: Heckman, 'Giving Kids a Fair Chance' (2013); Heckman & Masterov, 'The Productivity Argument for Investing in Young Children,' NBER (2007); Heckman, Moon, Pinto, Savelyev, & Yavitz, 'The Rate of Return to the HighScope Perry Preschool Program,' Journal of Public Economics (2010); Heckman, Pinto, & Shaikh, 'Dealing with Imperfect Randomization: Inference for the HighScope Perry Preschool Program,' Journal of Econometrics (2024); OECD, 'Starting Strong' series; Center for American Progress, 'The True Cost of High-Quality Child Care Across the United States' (2023)
INTERNET ACCESS
Criteria met: All four conditions in most US markets. Demand inelastic for workforce participation, education, healthcare, and civic engagement. Supply: monopoly or duopoly in most service territories.
Peer-nation model: South Korea, Japan, France, Sweden: public infrastructure or strong competition requirements. Higher speeds, lower costs, broader coverage than US in all cases.
Private market outcome: US pays among highest prices in developed world for broadband of middling quality. Majority of Americans have access to one high-speed broadband provider at their address. Digital divide tracks income and geography.
Internet: The Public Infrastructure That Wasn't Built
The internet's transition from a research network funded by the Defense Advanced Research Projects Agency to a commercial infrastructure governed by private providers is the most recent large-scale example of public investment that established a technology platform, followed by the transfer of that platform to private control, followed by the extraction of returns from the public whose investment made the platform possible.
The case for treating broadband internet as public infrastructure — funded through public investment, operated as a utility, or structured to require genuine competition — does not depend on ideological preference for public provision. It depends on the documented outcomes of the alternative: a market so concentrated that most Americans have access to one provider of high-speed broadband, prices among the highest in the developed world for service quality that ranks consistently below peer nations, and a digital divide that correlates precisely with income and geography in ways that compound every other dimension of the economic compression documented in this series.
The COVID-19 pandemic made the infrastructure character of broadband definitively visible. Remote work, remote education, telehealth, and government service delivery all assumed broadband access. Households without it were not merely inconvenienced — they were structurally excluded from the economic and social continuity the pandemic made depend on internet access. Children without broadband could not attend school. Workers without broadband could not access jobs that had moved remote. Patients without broadband could not access the telehealth services that substituted for in-person care. The consequences of non-access were severe, immediate, and concentrated in precisely the communities with the least income and the least market power to demand service from providers who found them unprofitable.
The public option in broadband takes several forms: municipal broadband networks, operated by local governments and documented to provide higher speeds at lower costs than incumbent providers in the markets where they compete; cooperative broadband, on the model of rural electric cooperatives; or open-access infrastructure, in which public investment builds the physical network and multiple service providers compete on it. All three models exist and function. All three face aggressive opposition from incumbent providers who have used state-level legislative lobbying to ban or severely restrict municipal broadband in more than 20 states.
Sources: FCC, 'Broadband Progress Report' (2024); Institute for Local Self-Reliance, 'Community Broadband Networks' (2023); NTIA, 'Digital Equity Act' implementation data; Pew Research Center, 'Internet/Broadband Fact Sheet' (2024)
FOOD ACCESS
Criteria met: All four conditions at the access level, not aggregate production. Demand perfectly inelastic. Supply absent in food deserts (19 million Americans). Harm from non-access: acute malnutrition, chronic disease, shortened life expectancy.
Peer-nation model: Military commissary system (US): demonstrates collective purchasing infrastructure that provides access below market price. European cooperative grocery models. WIC and SNAP as partial-access mechanisms.
Private market outcome: 19 million Americans in food deserts. Agricultural market concentration (4 companies, 85% of beef processing) produces farmer's share decline from 60 cents to 37 cents of the retail food dollar since 1980. Diet-related chronic disease: $1 trillion annually.
Food Access: The Distribution Failure in a Production Surplus
The United States produces more food per capita than its population requires. The food access problem in the United States is not a production failure. It is a distribution and access failure — the consequence of a food system optimized for profit extraction at the production, processing, and retail levels, rather than for equitable access to nutrition across income and geography.
The commissary model — in its non-exploitative forms — illustrates the design principle the common good framework requires. The military commissary does not give service members a voucher to spend at whatever grocery store they can find in a market that may or may not serve their location at prices they can afford. It builds the store, operates it at cost, and makes it available to the people it serves. The result: commissary prices average approximately 25 percent below comparable civilian retail for equivalent products. The structural difference is the removal of the profit extraction layer from the supply chain — not nationalization of food production, but collective purchasing infrastructure that disciplines the retail extraction that the private market, operating without competitive discipline in many markets, imposes.
The food cooperative model extends this principle to the civilian population: member-owned grocery infrastructure that removes the profit extraction layer and returns the margin to members as lower prices, patronage dividends, or investment in the cooperative's capacity. The cooperative model has a long history in the United States, particularly in rural areas and in communities with strong traditions of mutual aid, and it consistently demonstrates that food retail can operate without the extraction margin while remaining financially sustainable.
The concentration problem in food production is distinct from but connected to the access problem. Four companies — Tyson, JBS, Cargill, and National Beef — control approximately 85 percent of US beef processing. The farmer's share of the retail beef dollar has declined since 1980, though the exact magnitude depends on which data series is used: USDA meat price-spread data (the series the American Farm Bureau Federation also reports from) put beef's farm share at roughly 50 to 52 cents as of the mid-2020s, while National Farmers Union-aligned analyses using a different accounting method put it closer to 37 cents. The two series disagree on how far the farmer's share has fallen; they do not disagree on the direction, or on the fact that processor consolidation has eliminated the competitive alternatives that would otherwise allow independent producers to negotiate on equal terms. This upstream concentration feeds the downstream access problem: a food system controlled at multiple levels by concentrated private actors optimizing for margin rather than access will systematically underserve populations whose access is unprofitable and price-extract from populations whose demand is inelastic.
The corrective requires intervention at multiple levels: cooperative and public retail infrastructure in food deserts, antitrust enforcement in agricultural processing markets, SNAP funding sufficient to cover the actual cost of a nutritious diet rather than the subsistence minimum it currently provides, and procurement policy that supports cooperative and small-scale processing as competitive alternatives to the consolidated processor market. These are not a single policy instrument. They are a coordinated structural response to a multi-level market failure.
Sources: USDA, Economic Research Service, 'Food Access Research Atlas' (2023); USDA, 'Agricultural Concentration'; National Farmers Union, 'Farmer's Share of the Food Dollar'; CDC, 'Health and Economic Costs of Chronic Disease'; Defense Commissary Agency, Annual Report (2023)
Part Five: The Design Principle — What Public Options Actually Do
The argument for public options in common good sectors is persistently mischaracterized as an argument for government monopoly or for the elimination of private provision. This mischaracterization is strategically useful for the industries it serves and analytically wrong. The design principle the evidence supports is more precise.
A public option disciplines a private market by providing a genuine alternative that sets a competitive floor below which private pricing cannot sustainably go without losing customers who have a real choice. The existence of the alternative changes the structural condition: people are no longer captive to the private market because a credible exit exists. This changes the behavior of private actors without requiring public provision to replace them — because the threat of exit, credible and exercisable, is what markets require to function as markets.
The efficiency argument against public provision — that government is less efficient than private management — is an empirical claim that should be evaluated empirically in these sectors, rather than asserted as a principle derived from theory. The empirical record in the common good sectors does not support it:
Medicare administrative overhead: approximately 2 percent. Private insurance administrative overhead: 12 to 18 percent.
Rural electric cooperatives formed under the New Deal have consistently outperformed investor-owned utilities on cost and reliability in comparable service territories, across 80 years of documented operation.
Municipal broadband networks that reach operational maturity consistently document higher speeds at lower costs than incumbent private providers in their markets. The record is not spotless: several early networks, including Provo's iProvo and Burlington Telecom, suffered serious financial distress, and UTOPIA in Utah went years without a profitable year before becoming one of the largest and most successful open-access networks in the country. But the pattern in the failures is nearly as instructive as the pattern in the successes: they cluster in networks that were under-scaled, undercapitalized at launch, or built in states where incumbent carriers had already secured deliberately hostile preemption laws designed to make municipal entry as risky as possible. Networks built with adequate scale and financing, once past the initial buildout period, do not show a comparable failure pattern in the peer-reviewed literature.
Vienna's public housing system produces housing costs for 60 percent of the city's population at approximately 30 percent of what market-rate housing costs in the same city — maintained at comparable physical quality through capital investment requirements that private landlords have no obligation to meet.
France's universal childcare system costs approximately 30 percent less per child than US private childcare and produces measurably better developmental outcomes at scale.
The pattern across sectors is consistent: public provision or genuine public alternatives in necessity goods sectors produce better outcomes at lower cost than private provision operating without competitive discipline. The efficiency argument for private provision does not survive empirical examination in these sectors. It survives political discourse because the industries that benefit from private provision have the resources to maintain its presence there.
FLAG (S, Ma, E) Society · Macro · Empirical
The comparative effectiveness of public provision in necessity goods sectors is an empirical macro-level claim, falsifiable by evidence from the sectors themselves. The evidence consistently supports it. The persistence of the contrary claim in political discourse is a function of lobbying infrastructure, not empirical weight.
The second function of genuine public options is equally important but less often discussed: they provide the evidentiary baseline that makes private sector accountability possible. When Medicare exists alongside private insurance, we can measure the administrative overhead difference. When municipal broadband exists in some markets, we can measure the speed and cost difference. When Vienna's public housing exists, we can measure what housing at cost looks like relative to what housing at market looks like. Without a genuine public alternative, the private market can claim that its costs represent the true cost of provision — because there is no alternative from which to measure the extraction margin.
Public options do not merely provide access to people the private market excludes. They make the private market's extraction visible in a way it cannot be made invisible when private provision is the only option available. This is why the industries operating in common good sectors have consistently and aggressively opposed public options — not only because public options compete with them for customers, but because public options produce the comparative evidence that makes their extraction architecture visible and politically contestable.
Part Six: Why Private Equity Must Be Excluded from Common Good Sectors
The design argument for public options in common good sectors has a negative corollary that is equally important and substantially less politically developed: private equity ownership of common good sector entities is incompatible with the sector's function as a common good and should be prohibited or severely restricted through ownership structure requirements.
This is not an argument against private ownership of hospitals, childcare centers, water systems, or housing in general. It is an argument against a specific ownership model — leveraged acquisition, debt-loading of the acquired entity, extraction within a 5 to 7 year time horizon, and exit before consequences — that is structurally incompatible with the long-term capital investment, service continuity, and community accountability that common good sectors require.
The argument can be made on purely functional grounds without reference to fairness or moral claims. Common good sectors require:
Long investment horizons: water infrastructure requires 20 to 50 year capital planning. Hospital clinical quality requires sustained investment over decades. Children's developmental outcomes depend on consistent care quality that cannot be sustained under 5 to 7 year extraction cycles.
Alignment between decision-makers and consequences: the DCBD framework's analysis of harm insulation applies with full force here. An ownership model that exits before the consequences of its decisions are fully visible is structurally incapable of the accountability that common good provision requires.
Debt structures compatible with mission: the leveraged buyout model loads acquired entities with debt that must be serviced through margin extraction. This is incompatible with operating a hospital, a water utility, or a childcare center at the standard the sector requires, because the margin required to service acquisition debt competes directly with the investment required to maintain quality.
The prohibition on private equity ownership of common good sector entities is not unprecedented in American regulatory history. The Glass-Steagall Act prohibited certain financial institutions from combining commercial banking and investment banking — a structural prohibition on an ownership model rather than a behavioral regulation of individual transactions. The Federal Communications Commission limits media ownership concentration on public interest grounds. The regulatory tradition of structural ownership requirements in sectors where public interest is at stake exists. Its application to private equity in common good sectors represents an extension of that tradition rather than a departure from it.
The specific regulatory instruments available include: required ownership disclosure and registration for entities above a threshold; prohibitions on debt-loading above specified ratios in covered sectors; mandatory long-term operating commitments as a condition of acquisition approval; personal liability provisions for fund managers whose portfolio companies fail in covered sectors after private equity exit; and sector-specific ownership caps that limit the share of a regional market any single financial sponsor can control.
None of these instruments requires eliminating private ownership from common good sectors. They require that private ownership in these sectors take forms compatible with the sectors' functions — long-term, accountable, adequately capitalized, and not structured for short-term extraction at the expense of the communities the sector serves.
Closing: The Design Standard
The DCBD framework's design standard — dignity-centered by design — applied to common good sectors produces a specific and testable criterion: does the institutional architecture of the sector enhance or diminish the capacity of the people it serves to live with dignity, to exercise genuine agency, to participate in economic and civic life?
By that standard, the current architecture of American healthcare, housing, childcare, broadband, water, and food access fails. Not by accident, not through negligence, but through the predictable operation of structural conditions that guarantee extraction in the absence of genuine alternatives. The DCBD framework's claim that the structure was designed to ensure decision-makers never touch their consequences applies with full force: the people who set hospital pricing, who approve PE acquisitions of nursing homes, who set broadband rates in monopoly markets, who determine rent across a portfolio of 85,000 homes — they do not experience the medical debt, the mortality rate increases, the $28,168 annual childcare bill, the digital exclusion, or the housing instability their decisions produce. The feedback loop is severed by design, and the severing is the design.
Restoring that feedback loop requires two things that this article has argued for simultaneously: genuine public options that create competitive alternatives and produce the comparative evidence that makes extraction visible, and structural prohibitions on the ownership models that are most incompatible with long-term accountability in sectors where the consequences of short-term extraction land on people who have no exit.
Neither instrument is sufficient alone. Public options without PE prohibition can be undermined by the political influence of incumbent private actors. PE prohibition without public options leaves the structural conditions of concentrated private supply without the competitive discipline that would constrain extraction. The design requires both.
The argument against both is always framed as government overreach, as socialism, as inefficiency, as the destruction of the innovation incentive. The Article One argument applies here without modification: these are individual-unit-of-measure arguments being used to foreclose a structural-level analysis. The evidence from every peer nation that has implemented public alternatives in these sectors demolishes the efficiency claim. The evidence from every sector where PE has operated demolishes the accountability claim. What remains, once the evidence is examined, is not an argument. It is an interest.
Naming what something is — not what it claims to be — is the beginning of designing against it. Common good sectors require common good infrastructure. The evidence has been in for decades. The question is whether the political capacity to act on it can be built faster than the extraction architecture can prevent it.
This is the third article in a series. The first, 'The Individual Unit of Measure Trap,' names the rhetorical framework that forecloses structural analysis. The second, 'The Full Cost Shift,' documents the empirical evidence of the double compression. The next piece examines antitrust law as democratic infrastructure — the mechanism whose dismantlement made the sector-level extraction documented here possible, and whose restoration is the structural prerequisite for the correctives this article argues for.