Archive for the ‘Free Market’ Category

Creation vs. Redistribution of Wealth

Free Market, God, USA | Posted by George
Aug 14 2011

Redistribution of wealth is one of the most cynical and self-serving notions of the political realm.

Redistribution of wealth posits that only so much wealth is available and should therefore be equally distributed.  But wealth is created by those with drive, determination, and an eye to the true laws of economics (e.g. sowing and reaping, generosity drives profitability, etc.).  Wealth is not a limited thing, but a thing that can and is regularly created.  Every invention that reduces the impediments to get what is needed creates wealth (e.g. efficiency in farming via better process, better varieties, better distribution; efficiency in production of any good through economy of scale or automation; etc.).  Every time multiple lower-cost components are assembled to produce a higher-than-the-sum-of-the-parts priced item, wealth is created.  Every time a seed is planted and a 100-fold crop is harvested, wealth is created.

Furthermore, there are no laws,  of nature or of God, that suggest that wealth should be forcibly redistributed by government.  (Although God’s law indicates that those who understand how to invest will receive a return and that those who generously assist others in need will be generously profited.)  In fact, it is foolishness and cynicism to take away the “seed” from the one who has demonstrated the ability to be productive and put it into the mouth of the one who has demonstrated a propensity to be unproductive — all become less wealthy by the redistribution of wealth because it hampers the production of wealth.

Western culture that was (sic) based on basic principles of ownership, responsibility, and freedom has created a higher standard of living not only for itself but for an entire globe.  Certainly the wealth is not distributed to everyone evenly, but neither should it be!  But the vast majority of the globe has been enriched by the wealth of the Western way.  However, it would be simple to undo this process.  Simply take all the wealth of the West and distribute it equally across the globe to every person.  Most of the wealth would disappear in a matter of a few meals, and there would not be enough capital to fuel the production of wealth.  This is just one large example of the principle that wealth can in fact be created (and generously distributed) but forcible redistribution destroys wealth.

Why then the political bent toward redistribution?  As above, it is cynical and self-serving.  Power from (not to) the masses is the underlying impetus of cynical, wealth-destroying socialism and its white-washed twin in American politics, economic liberalism.

Fixing Education

Culture, Education Reform, Free Market, Politics, Socialism, USA | Posted by George
Apr 11 2011

Fixing Education

Yeah, it is no real surprise: the US educational system needs fixing.  So how do you fix it?

Well, how do you fix anything that is so steeped in socialism, it hardly knows what to do any more except require more money?

That is a simpler question.  You create competition at every level.  You weed out corruption in the government complex that runs the show – and if government is a necessary component, you create a watchdog that is strongly incented to find and reduce favoritism.  You reduce the regulatory overload that bureaucracy naturally creates. You get information out to the market so that the competition can do it’s job most effectively – with an informed consumer.  And then you let the free market system do what it does best – create a better product at lower cost.

So let’s apply those principles, and make it obvious what the US needs to do.

Create competition at every level. That means that every teacher, every school, every district competes against every other one for the students that will keep their school in business.  That means that every student and every parent will need to compete to get into the schools that best promote the student’s objectives.  And that means that every community and every business will have a vested interest in financially investing in their own future – the students going through their schools.

So let’s get to hard decisions.  What should education look like?

First, you pin a check for $10,000 (to pick a random number in the right ballpark) to the shirt of every child in the US on September 1.  That means that the ingenuity of American educators everywhere would be leveraged to create the best opportunities for their potential clients – kids from age 5 to 18.  Schools would be required to publish information on their students’ standardized test scores, acceptance to various colleges, placement into jobs of various incomes, and other relevant information, allowing students and parents to choose among schools that are succeeding and those that are not, weeding out the poorer schools and increasing the profitability of those models that are helping more children.

Next, you let a school make its own enrollment decisions to promote its approach and image, creating a second layer of competition.  A school can cater to students with certain strengths, particular desires, or certain needs.  Schools could focus on vocation, science, business, or liberal arts. Students or parents who are motivated to attend a certain school will compete on the basis of parent volunteerism or student effort or ability.  Schools would not be required to retain students who create disciplinary problems unless the student or a parent is willing to take immediate remedial action.  Businesses could invest in vocational schools, even guaranteeing employment for successful graduates.  Universities could make agreements with the academically most competent students for rapid advancement similar to current 3+2 expedited masters degree programs.

As a side note, urban centers can have numerous specialized schools, but even students in rural areas could attend schools of their choice via Internet “satellite schools” in which (perhaps volunteer, or other low-cost) room monitors and computers connect the students to a variety of schools taught by central educators online (or via video).  Note also that any student in any location could in principle be part of such a distributed educational classroom – suddenly we do not have to move inner-city kids out or suburbanites in to mix things up; let the Internet do the bussing.  This approach can level the playing field and make opportunity proportional to effort or aptitude instead of location or caprice.  Given the $10K check, only the human imagination is the limit to the educational approach, and many would be willing to provide powerful novel approaches to education.

By catering to older students with special scheduling or family needs, special schools providing alternative schedules – say, weekends and/or evenings – could provide a route to increase graduation percentages.

Schools could be privately held or publicly traded corporations.  In either case, the profit motive would be sufficient to both increase the effectiveness and decrease the cost of American education.

What is the role of the government? The government does not do a good job of most domestic services, but it has two excellent roles here, as well as a few other smaller functions.  First, it can assemble and distribute the funding.  (I would like to discuss the way that the government should fund things, but that’s a bigger question than I want to address here.)  Even in this role, government cannot be trusted and it would be to the taxpayers’ benefit to have a watchdog that is financially incented to find and eradicate corruption.  Second, the government should maintain a minimum level of acceptable output.  Given the dismal state of education in our current system, it might seem that the government could not do even this job well, but it is important that there be care against abuse of children or gross negligence regarding their education, and it is a role of justice that the government can fill.  We need to beware, however, lest the government place so many requirements on the education of student that the businesses become unprofitable – government bureaucracy has a real tendency in this direction – so the real requirement is basic justice and an advocate for parents as the parents and students exercise their choice to maintain real educational accountability of the schools.

For the time being, it is important that the decentralization of the school bureaucracy be unhampered; thus, it is essential that educational businesses be empowered to combat dominant centralized unions.  Businesses naturally resist the inefficiency of unions, so unless the government interferes by requiring them or unduly enabling their continued existence, competition will drive them to the fringes unless and until they become necessary.

Finally, an independent informational service should be created to enforce truth in educational advertising and to provide an information infrastructure for legitimate decision-making for the customers (students and their parents), businesses (the schools), and their collaborators (communities, businesses, and institutions of higher education).

Our educational system has become increasingly socialistic – liberal government bureaucracy and unions opposing any real reform.  And because of its socialistic bent, the system’s costs continue to rise while its effectiveness continues to plummet — that is how socialism works!  It is time to return to our American roots –giving our people opportunity to succeed or fail, leveraging market forces to create a better product at lower cost, and saving our country’s future from the dwindling returns of mediocrity.