Category Archives: Monopolies

Education Is Not One-Size-Fits-All

Kevin Drum recounts a tale of a specific charter school that has had excellent results. He unwittingly makes a good argument for school choice:

In a nutshell, this story explains pretty well why I like charter schools [snip] So I say: fine. If there are some parents who want their kids to go to schools like this, let ’em.

It makes sense to try out different kinds of schools for different kinds of kids and different kinds of neighborhoods. With a few obvious caveats, I’m all for it. But let’s not pretend that any particular one of these charters is necessarily the model for everyone else on the basis of 18 cherry-picked graduates. It ain’t so.

Well, given that he was marginally quoting someone else’s strawman, I’ll let his aside about pretending that any one of these is “necessarily the model for everyone else”. As far as I can tell, most libertarians and most advocates of vouchers don’t think that there’s a one-size-fits-all model.

And Kevin Drum, from these comments, doesn’t seem to think that there’s a one-size-fits-all model.

But the education bureaucracy seems to want to put everyone into a one-size-fits-all model.

Most reasonable collectivists I know are honestly more concerned with making education work than making it uniform. To some extent, they view things as charter schools as laboratories to test new educational methods, which can then be integrated into “regular” public schools. But they forget that there’s an enormous entrenched bureaucracy that is adamantly opposed to doing anything outside of what is best for the unions.

I agree with Kevin Drum that it makes sense to try out different kinds of schools for different kinds of kids and different kinds of neighborhoods. But where I suspect we disagree is in the assumption that the educational bureaucracy will EVER allow charter schools to do this in any meaningful way. They have too much stake in controlling the debate, and charter schools allow the debate to slip out of their grasp.

The only way to fix education is to offer real choice. Allow parents the ability to make the choice where to send their kids on a real widespread basis, not limited by geography or a tiny number of charter schools with far too many applicants for slots. And the only realistic way that I can see to achieve real choice, given the landscape as it currently sits, is through vouchers.

Education is not one-size-fits-all. We need to stop pretending that we can make it so*.
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Obama’s Policy to Fight Mexican Drug Cartels is Doomed to Fail

The Obama administration, rather than dealing with the root cause of the violence along the Mexican border, has decided to adopt a policy to deal with the symptoms. The problem is that this policy will neither alleviate the symptoms nor come close to treating the problem.

WASHINGTON – The Obama administration promised Tuesday to help Mexico fight its drug war by cutting off the cartels’ supply of guns and profits, while resisting the Texas governor’s call for a troop surge at the border to ward off spillover violence.

Let’s assume for a moment that Obama’s policy to prevent Mexico bound firearms from leaving the U.S. 100% successful. Given the fact that the drug cartels can acquire firearms from other sources (such as corrupt Mexican government agents with access to firearms among other sources) the only difference would be that the firearms are no longer coming from the U.S.

The Obama administration correctly identifies that the drug cartels are so powerful because of the profitability of the illicit drug trade. It’s this ability to make enormous profits, particularly in an impoverished country as Mexico, that attracts players into the business and makes corruption on the part of government officials almost irresistible. Unfortunately, though the Obama administration has identified the profitability of the drug trade as the source of the drug cartels’ power, there is clearly a profound misunderstanding of the way basic economics work (as if the bailouts, handouts, and myriad of other government programs were not proof enough).

The steps announced by Homeland Security Secretary Janet Napolitano – 450 federal agents shifted to border duty, supplied with dogs trained to detect both drugs and cash, and scanners to check vehicles and railcars heading into Mexico – amount to a subtle but important shift:

The blockade of contraband will now be a two-way effort. The fence begun under the Bush administration will be completed, to deter smugglers of drugs and workers. But the new emphasis will be on disrupting the southbound flow of profits and weapons that fuel the cartels.

At his televised news conference Tuesday, President Barack Obama said that for now, it’s more important to disrupt the cartels’ access to profits and weapons than to fortify the border with soldiers.

“That’s what makes them so dangerous,” he said. “The steps that we’ve taken are designed to make sure that the border communities in the United States are protected and you’re not seeing a spillover of violence. … If the steps that we’ve taken do not get the job done, then we will do more.”

So what’s wrong with this approach? The basic economic law of supply and demand tells us that whenever a product is in high demand (drugs in this case) and the supply is lower (in this case by successful drug interdiction by the U.S. governemnt), those who supply the given demand stand to profit more NOT LESS! Whether Obama’s policy results in a decrease in the supply of drugs of 1% or 99%, those drugs which do make it to the end customer will pay even more to get them.

I would even go as far as to say that the Mexican drug cartels would cheer this policy. Sure, the cartels might have more difficulty moving their product into the U.S. and their profit and firearms out of the U.S. but for the most clever smugglers, these enhanced drug interdiction efforts would filter out the competition! (And we know how black market operators hate competition).

On some level, I do believe that even the political class understand this but somewhere, there is a disconnect. Just yesterday in her visit to Mexico, Secretary of State Hillary Clinton admitted that the war on (some) drugs over the past 30+ years “has not worked.”

“Our insatiable demand for illegal drugs fuels the drug trade.”

And now the disconnect:

“Our inability to prevent weapons from being illegally smuggled across the border to arm these criminals causes the deaths of police officers, soldiers and civilians…”

Mrs. Clinton apparently recognizes how the war on (some) drugs has been an abject failure fails to realize that the Chosen One’s policies will do little to reverse this trend. If she truly wants to do something productive, something has to be done about what she (correctly) describes as this “insatiable demand” for these drugs. She seems to understand that the “Just say No” campaign didn’t work but does she and others within the Obama administration really believe that more drug hysteria PSA’s will do anything to curb this demand?

Given how the Obama administration has decided to deal with the drug war related violence along the border, I’m not optimistic. If spending billions of dollars annually on this insane war on (some) drugs which has contributed to leading the world in the number of people in prison (imprisoning 1 out of every 100 adults; more than half of the U.S. prison population is there because of drug related offenses) has failed to curb the demand, then perhaps it’s time to try a different approach.

Nothing short of legalizing the drug trade will stop the violence, so why does the politicos, law enforcement, and government bureaucrats at almost every level continue the same “get tough” policy which clearly has not worked? The only conclusion I can come to: they must be high.

Note To Orrin Hatch — 13-0 May Be A Travesty, But It’s Not Congress’ Business

Orrin Hatch is undoubtedly merely responding to his constituents’ demands with this nonsense. The Utah Utes finished 13-0 last season, with notable wins over Michigan, Oregon State, ranked teams TCU and BYU, and a BCS bowl defeat of Alabama. It’s a pretty impressive resume. They were the only undefeated team in Div I-A (FBS). But they’re not the Champion. Florida, who finished 13-1 (with their sole loss being to Mississippi) is the Champion.

I understand the complaint. If a mid-major team like Utah can have the season they’ve had, beat the teams they beat, and still fall behind a one-loss school from a “major” conference, then no mid-major will ever be crowned Champion. Granted, Florida may have been the best team in college football (as the Patriots were the best team in the NFL in ’07-8 despite not winning Super Bowl XLII), but I don’t think the system for determining a Champion is very fair.

It’s not a system I like. It’s also not a system that Orrin Hatch likes, but he’s sticking the full power of the federal government into the debate:

Sen. Orrin Hatch, R-Utah, may be a skinny guy with a high voice. But he’s angrily setting out to tackle the biggest powers in college football, vowing to pound them until they reform the Bowl Championship Series.

He called them out Wednesday, as he and Sen. Herb Kohl, D-Wisc. — respectively the top Republican and Democrat on a Judiciary subcommittee on antitrust — released a list of topics that panel plans to consider this year.

A bit buried on Page 4 of an eight-page list, amid somewhat sleep-inducing reading on oil and railroad antitrust, is a nifty paragraph about the BCS.

“The BCS system leaves nearly half of all the teams in college football at a competitive disadvantage when it comes to qualifying for the millions of dollars paid out every year,” their joint statement says.

Then it drops its first unexpected bomb: “The subcommittee will hold hearings to investigate these issues.”

That is followed by a second: “Sen. Hatch will introduce legislation to rectify this situation.”

I realize that Congress believes it has purview over everything that occurs within our borders, but if their “fixes” for other problems are anywhere near as effective as this one will be, I’m not sure anyone will want to watch college football afterwards. I really wish they’d waste their time ruining something else, because I quite enjoy spending fall Saturdays watching one of the few worthwhile sports left.

An Economy Is Not About Jobs

One of the bizarre fallacies propounded by President Obama, the Congressional leadership, and their intellectual enablers such as Paul Krugman, is the notion that society should be organized to give people jobs, and that if the supply of jobs is insufficient to meet the demand, the government should step in and create an additional supply through economic policies.

Walter Block, restating an argument made famous by Frederic Bastiat, points out that nothing could be farther from the truth.

The purpose of an economy is to align production of goods with demand, so that people have their desires to consume goods satisfied.  Dr Block points out that if we lived in a society where 30% of the population dug holes that were filled in by the other 30%, with the remaining 40% laboring to supply food, clothing, shelter and tools for the hole-diggers and hole-fillers, we would be far poorer than if that 60% were redirected to other forms of labor that produced things useful to the other 40%.

This becomes obvious when you consider a thought experiment.  If you ask people to choose between having a job, and having the enough food, clothing, shelter etc, they will choose the latter in a heart-beat.  People work primarily so that they can produce what they need in order to be comfortable, either by making the stuff they want to use directly, or making stuff that they intend to trade to other people for the stuff they want to use themselves.

Much of the proposed stimulus project is makework that is little better than hole-digging and hole-filling in.  Absent the stimulus spending, the people who will be employed under the stimulus project would have to find tasks to busy themselves with that produced goods and services that people were willing to pay for.  Instead of working to identify what unmet needs were most urgent and in the greatest demand, now they will coast, “earning” a paycheck, while working on either less profitable tasks, or even unprofitable ones, where the resources they consume are greater than the product they produce.

No doubt that some people would read the above paragraph and say, “Aha! But what if they can’t find anything to do?  What if they can’t find anyone willing to hire them, don’t know how to subsistence farm, etc!  What, Mr Free-Market Anarchist, should they just hurry up and die – making sure that they starve to death out of sight?”

At first, this seems like a powerful argument, until one considers what percentage of the population is actually unemployable?  I would expect that they number no more than 5% of adults, perhaps 25 % of the entire population adding in the elderly and young children.  And, these people are probably unemployable even under a government make-work project.  Even if there was a massive shortage of workers, they would be unemployed and dependent on charity.  Rather, most of the people employed under any job-generation scheme will be able-bodied.

Nor will the able-bodied be unable to find work.  We humans live in a universe of scarcity.  We always have unmet needs, we want more shelter, better food, better cars, better streets, better entertainment etc.  Many of these needs are not met not because humanity lacks the raw materials or the land needed to realize these needs, but because there aren’t enough people around to satisfy them.

The only way to find out which of these unmet needs are th emost urgent is via the price system.  People will pay more for labor that is needed to satisfy more urgent demands and less for labor that satisfies less urgent demands.  The higher wages will act as a signal to the unemployed who can do the job to start doing the job.

The temporary unemployment that accompanies recessions occurs becasue the price system requires the passage of time to reach an approximate equilibrium.  Essentially, in a recession, people who were producing things that were not in heavy demand stop that undesired production and spend some finite period of time looking for othe rthings to do.  Simmilarly prospective employers need time to figure out where the shortages are, or to identify opportunities to start expanding production again.

By attempting to sabotage this feedback system, the proponents of the stimulus plan are setting the stage for long-term stagflation at best, and a future crash at worst.  Not only are they shifting the problem of what to do with the unemployed into the future, they are encouraging, though false price signals, people to abandon productive pursuits in favor of the make-work projects being promoted by the state.  If, for example, the state promotes the construction of dams, then people who otherwise would have chosen to become farmers or mechanical engineers or home builders will instead gravitate to civil engineering.  They will then form a political group which strives to keep the emergency programs going indefinitely, much as farmers continue to agitate for the price supports borne from the “emergency” of the Great Depression, of the California Prison Guards’ Union agitates against the repeal of anti-drug laws.  This would be bad enough if government official were to attempt, in good faith, to guess what the unmet needs in greatest demand were.  When one considers the inevitable corruption and rent-seeking that accompany the establishment of such emergency programs, the true scope of the danger to the economy presented by the stimulus project becomes clear.

Barack Obama has been in office less than a month.  The early signs are that he will prove to be a bigger disaster than George Bush.

I am an anarcho-capitalist living just west of Boston Massachussetts. I am married, have two children, and am trying to start my own computer consulting company.

Microsoft Attacked By EU For Same Practices That Apple/Linux Use

Back in the day, antitrust regulators decided that including a browser with an operating system was an unfair competitive measure. But to this day, they’ve only ever enforced this against Microsoft, and the EU is still pushing:

European antitrust regulators have told Microsoft Corp. that the company’s practice of including its Internet browser with its popular Windows operating system violates European competition law, Microsoft said Friday.

The Redmond, Wash.-based software giant (MSFT) said that it’s been presented with a statement of objections informing it that related remedies put in place by U.S. courts when Microsoft settled an antitrust case in this country in 2002 are not adequate for Europe, though a “final determination” hasn’t been made on the matter.

I’ve never really used Apple’s computers much, but I’m pretty sure you can’t buy an Apple PC without Safari pre-installed. I’ve installed a number of Linux distributions (Red Hat, Debian, ubuntu, and even a 50MB distro called DamnSmallLinux), and every single one of them has been bundled with a browser. Microsoft has argued that a browser is a critical part of an operating system, and thus — even though it sucks — it makes perfect sense for them to distribute IE with Windows.

In fact, it’s so pervasive, that I’ve never seen an OS that comes without a browser pre-installed. Is the EU going to go after each of OS distributors next? I didn’t think so.

Hat Tip: QandO

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