Friday, July 22, 2005

Seeking Authentic Value in Human Empowerment

From a recent forum sponsored by The Alliance for Human Empowerment, My response to a comment by John Watkins, host of the Alliance:

"The assumption is that everyone should pay for all the goods and service they receive and learning is part of that. I believe that only through choosing and paying for that which is personally valuable can we achieve complete freedom. So, what has to happen to make it possible for everyone to be able to pay for their life-long-learning?"

Occupational licensure is a remaining major obstacle to an effective market in human capital based on authentic value.

Occupational licensure provides a monopoly rent for those who possess the license. Many high income occupations (including law and medicine) are limited to those who go through extensive university training. This enforces conformism and limits innovation, it raises prices for crucial services (especially legal and medical services) and it prevents talented people who lack formal education from entering these fields.

Most learning is available costlessly for anyone who can read. And Frederick Douglass demonstrated that a motivated person can learn to read for free (in his case even when it was illegal for him to do so) at an age that is beyond the alleged "critical period" for reading (I am highly skeptical of almost all educational research insofar as it claims to measure anything other than present circumstances - it should never be understood to define what is possible).

The worst cost of formal schooling is that it provides false signals about what is valuable to learn. In the absence of government enforced schooling (through goverrnment managed and regulated institutions and occupational licensure) gradually individuals and entrepreneurs would discover ways to focus people on those skills that were truly valuable in the real world at increasingly low costs.

And once it became common public knowledge what they were (I suspect they would include much of the content of Dale Carnegie's "How to Win Friends and Influence People," Napolean Hill's "Think and Grow Rich," Stephen Covey's "Seven Habits of Highly Successful People," and the material of several other such classics, along with high level reading, writing, speaking, listening, reasoning, teamwork, and mathematical skills), then in a voluntaristic society it would be cheap and easy to create subcultures in which these characteristics became free public goods.

The cost of learning English for someone who lives in an English-speaking country is zero for anyone who wants to learn English. And it is easier for younger people.

My children were able to develop very sophisticated intellectual skills through "unschooling," i.e. doing nothing, by osmosis, because they were raised in a household in which intellectual conversation was as ubiquitious as English is in the population at large. I've created schools at which sophisticated intellectual skills gradually become similarly "free" and ubiquitious, although initially these schools are costly because there was a process of selecting and training certain kinds of people as "teachers." And even so, because most highly intellectual people lack the initiative and entrepreneurial skills that are also important to develop in young people, my schools were passing on less-than-optimal investments in human capital (the fact that private school parents usually buy into the notion that universities provide valuable training also biased the process towards the intellectual over the entrepreneurial).

But in a free society, these distortions would gradually disappear, and these sub-cultures would become more universally available at steadily decreasing cost. Just as it is free to learn English in an English-speaking culture, so too we could get to the point at which it was free to obtain an amazing education because the basic cultural infrastructure passed on the crucial memes as freely and spontaneously as English is passed on today.

And in the absence of occupational licensure, these amazingly creative, entrepreneurial, intellectually-developed young people would provide cheaper and better ways for us to become healthy people who live in cooperative, non-zero sum societies (the eventual outcome of eliminating licensure in education, medicine, and law to allow talented, original people to create a better world).

Monday, July 18, 2005

Sources on Economic History

It wasn't until I was in my mid-30s that I realized what a sexy field economic history is. Most people get excited by issues such as globalization and politics. It turns out that, in order to have intelligent understandings of these topics, one really must first study real economic history. In the last thirty years economic historians have shown that most of our common misunderstandings of the Industrial Revolution are false.

The following list was supplied to me by the illustrious economic historian Deidre McCloskey:

Fogel, Robert W. 1999. The Fourth Great Awakening and the Future of Egalitarianism. Chicago: University of Chicago Press.
Fogel, Robert W. 2004. The Escape from Hunger and Premature Death, 1700-2100. Cambridge: Cambridge University Press.
Fogel, Robert W. 2005 "Reconsidering Expectations of Economic Growth after World War II from the Perspective of 2004." National Bureau of Economic Research. Working paper No. W11125.
Hayek, F.A., Capitalism and the Historians (1954)
McCloskey, Diedre, ed., Second Thoughts: Myths and Morals of U.S. Economic History. Oxford University Press, 1992. Paperback 1994.
Mokyr, Joel, The Lever of Riches
Mokyr, Joel, Gifts of Athena

A work that is not economic history, but which does a beautiful job of reminding us of the extraordinary opportunities for working class social mobility in the early Industrial Revolution, Paul Johnson's The Birth of the Modern, 1815-1830.