Liberating the Entrepreneurial Spirit for Good

Women's Empowerment Free Zones

2007-06-03T21:49:00.000-07:00

See the recent paper by Mark Frazier and myself on "Women's Empowerment Free Zones,"

http://www.flowidealism.org/index-project.html

In which we propose the creation of trillions of dollars of wealth by means of free zones, which are then transferred to community trusts to support women and children.

It is at once the largest philanthropic proposal ever made and the best integration of women's issues and free market issues ever created. Mostly Mark's thinking, which I've been following for several years now.

Why School Vouchers are a Civil Rights Issue

2007-04-25T14:04:00.000-07:00

This is why vouchers are ultimately a civil rights issue in which upper-middle class suburban families are pitted against inner city families:

IRRECONCILABLE DIFFERENCES? EDUCATION VOUCHERS AND THE SUBURBAN RESPONSE
by Chad dEntremont and Luis A. Huerta
Occasional Paper No. 137

Will vouchers for disadvantaged students lead to a suburban backlash?
A new paper by Chad dEntremont and Luis A. Huerta discusses the limited use of education vouchers in an era of unprecedented growth in school choice. It is divided into two parts: first, the authors describe policy, political, and legal barriers that limit the expansion of voucher programs. Discussion then shifts to the efforts of voucher advocates to build support among historically marginalized populations frustrated with the performance of public schools and open to limited forms of private school choice. The authors consider the consequences of these strategies and suggest that the very voucher programs that appeal to disadvantaged families may prove most offensive to middleclass and suburban voters who vigorously object to policies that undermine local authority and redistribute local resources. Specifically, vouchers have the potential to erase municipal boundaries, dissolve neighborhood ties, lower housing prices, and upset student enrollments.

New Occasional Papers from the National Center for the Study of Privatization in Education can be viewed at http://www.ncspe. org/list- papers.php

Milton Friedman, A Modern Galileo

2006-11-19T17:11:00.000-08:00

The beginning of a widespread recognition of a beautiful paradigm shift:

http://www.realclearpolitics.com/articles/2006/11/milton_friedman_a_modern_galil.html

Why Democrats Should Become More Libertarian

2006-10-17T18:37:00.000-07:00

Michael Strong, Copyright FLOW, 2006

The current issue of Cato Unbound is devoted to the issue “Should Libertarians Vote Democrat?” The issue includes essays by well-known Democrats articulating the ways in which they see a possible rapprochement. Certainly many libertarians are angry and disappointed with Bush Republicans; one described him as the worst president in the past fifty years. Others are actively encouraging fellow libertarians to vote Democratic. Given the fact that Democrats are increasingly marginalized in elections, it would behoove them to consider additional constituencies, especially one that is angry with Republicans and therefore ripe for the picking.

Although the number of people who vote for the Libertarian Party is small, the number of people who are culturally liberal but fiscally conservative is large. Pew Research comes up with 9% of the population as libertarian based on three fiscal questions and three cultural questions. If the Democrats captured this libertarian swing vote by moving in a more consistently libertarian position, they could re-form an electoral majority. A broader interpretation of “libertarian” will give Democrats an even larger advantage.

A Libertarian Democratic Party that was serious about small government and deregulation, now that the Republicans have shown that they are not, could, if credible in their promises, appeal to Wall Street, business, entrepreneurs, and the middle class. At present, Republicans are winning by pandering to the religious right. What if the intellectual leaders of the Democratic Party shifted it in the libertarian direction so that the libertarian-inclined, who have hitherto either voted Republican, libertarian, Reform Party, or not at all, became inspired to support far more libertarian Democrats?

The Democratic Strategist recently printed an essay titled “Message of Misery,” on how the Democrat’s litany of economic catastrophe is not resonating with voters:

$23,700. That is the household income level at which a white person became more likely to vote for a Republican over a Democrat in congressional races in 2004.

The authors of this article point out that the reason that Democrats have been losing is not because Democrats have been framing the issues poorly (Lakoff), nor is it because voters have been deceived by Republicans into voting against their economic interests (the “What’s the Matter with Kansas?” thesis). Their research shows that voters simply don’t buy the anti-capitalist doom and gloom rhetoric put out by Democrats. Their research shows that 80% of Americans think it is “still possible to start out poor in this country, work hard, and become rich,” and when asked to identify the biggest threat to America’s future 61% chose “big government” compared to 27% who chose “big business.” That 61% is the foundation of a libertarian majority.

Bright young techies are increasingly libertarian; Wired Magazine has libertarian roots and many old Leftists complain about how libertarian cyberspace is. Last year the Wall Street Journal ran an editorial on tech entrepreneurs that described them as embarrassed by the religiosity of the Republicans and by the teachers unions and trial lawyers on the Democratic side. Libertarian Virginia Postrel’s excellent book on the need for a dynamic society, The Future and Its Enemies, was endorsed by Democratic Silicon Valley gurus Steward Brand and Esther Dyson.

Wall Street, and business interests more broadly, are another constituency the Democrats should consider capturing: A recent study by the National Bureau of Economic Research (NBER) analyzed the expected outcome of the Bush – Gore election during the 24 hours of dramatic uncertainty as predicted by the Iowa Electronic Markets and compared the expected outcome with stock market fluctuations during that period. They found that an anticipated Republican victory raised equity values by about 2%. Based on more circumstantial evidence they found historical trends supporting the notion that Republican victories tended to raise equity values by about 2% going back to 1880.

It has long been a stereotype that Wall Street votes Republican. If equity values are 2% higher under Republicans than under Democrats, there is a very powerful reason for this preference. The New York Stock Exchange alone has a market capitalization of about $20 trillion, with NASDAQ adding another $5 trillion out of a global market capitalization of about $45 trillion. Presumably Wall Street takes seriously the anti-capitalist rhetoric and past behavior of the Democratic Party, which has traditionally positioned itself as more eager to tax, spend, and regulate. From a Wall Street perspective, the election of a Democratic president reduces equity market values by about $500 billion dollars - about what we spend on all of K-12 education each year simply vanishes as soon as a Democrat is elected through the anticipated destruction of opportunity.

Fifteen years ago the DLC revived the Democratic Party by moving it towards a more market-friendly direction. Clinton and Gore are policy wonks who understand that markets are fundamentally positive: Clinton, the only Democratic President to serve two terms since FDR, has described himself as a libertarian and has praised Milton Friedman-Prize Award Winner Hernando De Soto as the leader of “the most promising poverty alleviation initiative in the world.” He pushed through NAFTA and welfare reform, both more libertarian initiatives than anything we’ve seen from Bush. While Gore is not Clinton, he recently came out in favor of exchanging payroll taxes for carbon taxes, a move that frankly acknowledges the negative economic consequences of payroll taxes while allowing Gore to remain true to his core issue. Gore is proving that it is possible to be a serious environmentalist and yet take markets seriously at the same time.

Smart policy wonks like Clinton and Gore have found ways in the past to reconcile markets and their identities as Democrats. A new age of libertarian Democrats could continue in this direction and go much further and faster, reviving the Reagan and Gingrich revolutions to reduce the role of government under a Democratic banner that simultaneously ensured that the poor and the environment were cared for.

With regard to the poor, Milton Friedman’s proposal of a Negative Income Tax was the ultimate inspiration for the Earned Income Tax Credit, one of the most effective government-initiated poverty-alleviation moves in the past thirty years. This could be expanded as other government programs were eliminated or Libertarian Democrats could consider Charles Murray’s recent proposal to give every American $10,000 per year and completely dismantle the welfare state. With respect to the environment, Libertarian Democrats could come out in full favor of property rights or environmental trust solutions (as advocated by Peter Barnes) to environmental issues while showing a commitment to repeal counterproductive environmental regulation. The libertarian and economics literatures are filled with thousands of market-friendly policy proposals that show the path to a dramatically smaller government that would actually be more effective at reducing poverty and improving the environment than is the welfare and regulatory state. Partisan bigotry, especially among academics, has prevented or delayed the adoption of many of these prudent and effective measures.

The greatest obstacle to movement in this direction comes from the Left wing of the Democratic Party that remains essentially anti-capitalist. Much of academia and the leaders of many advocacy organizations retain attitudes that are quasi-Marxist in their passion for equality, as they understand it, and their hatred of business, capitalism, and America. Others, perhaps more pro-business and pro-America, nonetheless regard the anti-market policies of FDR and LBJ as successful policies.

The last thirty years have seen the Chicago economics free market perspective largely vindicated in the world of academic economics. About half of economics Nobel laureates have had some association with the University of Chicago. More importantly, many “free market” ideas that were once considered marginal have become mainstream: monetary policy and tariffs did contribute to the Great Depression, whereas inequality of wealth did not; Rent controls reduce the quantity and quality of housing; Increases in economic freedom in the developing world result in increases in economic growth; tradable emission permits are an effective means of reducing pollution. These and thousands of other policy issues have been more or less decided in favor of “free market” economists in the past thirty years. People respond to incentives.

There will always be special interests that oppose free market policies, and there will always be populist demagogues that rally popular support against free market policies. But an increasingly large range of leftist policy notions that were once intellectually credible and morally respectable have fallen from grace in the face of facts. The free market economists have won battle after battle in the past thirty years not because they were funded by right-wing think tanks (though sometimes they were), but because the empirical record has turned out overwhelmingly to be consistent with their predictions.

Because the pain of repudiating FDR and the legacy of the 60s is too great, I don’t anticipate a rapid change of mind among the left-liberal intelligentsia. I’ve experienced this pain myself; when I discovered that the left-liberal establishment was largely wrong on economic issues I became depressed for two years. Everything that I had believed was false: The reviled Milton Friedman is actually a better friend of the poor than is the legendary J. K. Galbraith? Well, yes, he is. Had Friedman’s advice on economic development been followed in 1960 rather than Galbraith’s, billions of human beings would be better off today. Economic freedom, as advocated by Friedman for decades, is positively correlated with GNP per capita. Economic liberalization, as advocated by Friedman for decades, has resulted in dramatic increases in wealth and standards of living in Chile, China, India, Ireland, Estonia, and elsewhere.

A new consensus on globalization is forming in which it is increasingly acknowledged that poor people in developing nations benefit more from job creation than from hand-outs. Oxfam, the global NGO, now supports reduced trade barriers as a way of alleviating poverty. Corporate Responsibility Newswire has acknowledged that new factories built by American companies in Mexico improves the standard of living of Mexicans. The moral high ground is increasingly with globalization rather than against it; even Joseph Stiglitz, famous as the Nobel economics laureate who wrote a book skeptical of globalization, is now clearly in favor of globalization as long as the developing nations reduce their trade barriers first.

While there are continuing disputes in economics and economic development, the scope of the discussion has moved dramatically towards the direction sketched by Friedman, Hayek, and others fifty years ago. While there may well be some elements of the left-liberal economic perspective that survive into the future, by and large the bulk of that perspective, the premises on which the liberalism of the 30s and 60s was built, continues to look weaker and weaker.

For decades now, left-liberals have followed a strategy of denial, reluctantly conceding point after point once the evidence against them becomes overwhelming, while still dogmatically insisting on the rest of their program in those areas where they have not yet been defeated by the evidence. The problem with this strategy is it positions them in a posture of permanent retreat in the face of the facts.

Moreover, there is reason to believe that more retreat in the face of more evidence is still to come, especially from the results of prediction markets. Prediction markets are increasingly being used in businesses to forecast outcomes, and properly designed markets are proving to be remarkably accurate at foreseeing the future, at least compared to the opinions of experts. Prediction markets incentivize accuracy because only the accurate predictions receive financial rewards. By contrast, both academic and public policy debates bias decisions through rhetoric, emotion, status, and popularity rather than empirical validity alone.

It is only a matter of time before prediction markets will be set up to evaluate the prospective outcome of public policy initiatives. At that point, we will be more focused on the actual outcomes of proposed policies and we will receive information about the outcomes of those policy initiatives more quickly than is the case at present. Again, some left-liberal policies may survive the test of real-world outcomes, but I predict that much will not: Will increasing teachers’ salaries increase test scores? Will expanding government health care coverage improve health? Will government job training programs increase the earnings of the poor and unskilled?

As we continue to focus on the real results of policies, rather than academic promises, we will continue to discover that government is rarely an effective agent. Most of us, the 61% who said that “big government” is the greatest threat to our future, already know this. An increasing number of wise, but chastened, Democrats understand this as well. Libertarian Jonathan Rauch’s excellent popular account of public choice theory, Government’s End, was endorsed by David Broder, Patrick Moynihan, and Senator Bill Bradley. In the 1960s, bright young idealists aspired to be civil servants; now they aspire to be entrepreneurs. Although people still rally to the cry of “national health insurance,” when it comes down to it no one is inspired by government action anymore. The alternative to a more libertarian Democratic Party is to simply wait for the Democrats to complete their self-destruction and then have it out between the conservatives and the libertarians.

Democrats like to believe that they are intelligent people who care about the poor and about the environment. For most of the past hundred years, they have also believed that free market advocates are people who don’t care poor or the environment and that the smart liberals must use government to create a more just society. But consider: 70% of inner-city African-Americans are for school choice.footnote Opponents of charter schools claimed they would cream away the best students; in fact, charter schools cater disproportionately to poor, minority, and at-risk students, those who are currently being least well-served by our “public” schools. Many urban areas are experiencing black flight from urban public schools; Detroit Public Schools lose about 20,000 students per year to charter schools, and by 2008 a majority of students in Detroit will attend charter schools. Why can’t those who care about the poor and the environment focus on pragmatism rather than an obsolete party identity?

As Gurcharan Das said of Nehru’s policies in India, “We set out to create socialism but instead created statism.” Social entrepreneurs and socially responsible corporations are fulfilling the aspirations of the left without government involvement. The idealism and passion for the good that inspired the Left is valuable. Government was just the wrong means. It is time to admit this openly and move on.

A Democratic Party that authentically appealed to libertarians could be as socially liberal as it pleased; gay marriage, medical marijuana, abortion rights, and other issues are currently supported by many people who are unhappy with the Republican Party but who do not currently consider the left wing of the Democratic Party to be sane when it comes to government and the economy. Libertarians are often among those who are most committed to civil liberties and to the avoidance of war. A sincere and sustained commitment to reducing the size of government, by any party, could bring forth new funding and new voters, and result in a burst of economic growth and dynamism that will benefit all Americans; indeed, it would benefit the entire world.

The Sex Strike

2006-09-26T12:39:00.000-07:00

The Sex Strike
September 20, 2006
Alvaro Vargas Llosa

WASHINGTON—A group of women have started a sex strike in Pereira, a city in western Colombia, to persuade their men to give up violence. They will make love again only when their husbands and boyfriends make peace. A catchy song put together by the women is blasting out of all the local radio stations to persuade other females to send their partners to the sofa.

The Greek playwright Aristophanes, who 2,500 years ago invented the concept of the sex strike to achieve peace, must be celebrating somewhere in the afterlife. In “Lysistrata,” a group of women who are sick of so much death and destruction, try to force their men to put an end to the Peloponnesian War by declaring their bodies off-limits.

It is not the first time real life has honored Aristophanes. The sex strike was tried in Colombia itself in the late 1990s at the behest of an army chief. And in a Turkish town, some women used the same tactics to force their lazy partners to restore the water supply. Success ultimately eluded the strikers both times, but some short-term results were achieved.

In the current case, the move was preceded by some interesting research. In a city that is considered the most violent in Colombia and where nine out of 10 victims are between the ages of 14 and 25, violent men apparently consider sex more enjoyable than snuffing their neighbors. Many of them partake in the gang culture because they think it makes them sexually attractive. More significantly, a number of women thought so too—until it dawned on them that they held to key to the peace.

Julio Cesar Gomez, the security official at Pereira's local government, says, “this is about changing the cultural parameters: Some women thought that men wearing fatigues and holding guns looked more attractive, and most men are members of gangs not because of financial necessity but because killing is associated with power and sexual seduction.''

Why is this story so seductive? Because it involves the greatest lesson in the time of terrorism: The ultimate hope for halting indiscriminate violence lies in civil society. Unless there is a grass-roots effort to uproot violence, terror cannot be stopped. It will merely be replaced by another type of terror.

http://www.independent.org/newsroom/article.asp?id=1820

Public Choice Theory and Liberating Markets in Happiness and Well-Being

2006-03-13T09:24:00.000-08:00

I just ran across Martin Seligman's "Presidential Column," when, in his capacity as president of the American Psychological Association, he describes a decision by the American Psychiatric Association as "shameful." The context was the psychistrists' decision not to participate in a joint academic journal designed to facilitate communication and share research findings between the psychological community and the psychiatric community. Seligman's account of the demise of this journal is telling:

"We published our first article and commentary in September 1997. You can read it on the web at http://www.journals.apa.org/treatment.

The dream has ended. In December 1997 the American Psychiatric Association’s Board of Trustees, acting in a closed-door meeting, withdrew from the collaboration (see article on page 42). They cited the need for a “broad review of the costs and benefits of electronic publishing projects.” This, of course, was not the whole story.

In August I began getting messages from their leadership that their board, led by the California trustees, might end their participation. In September, they put their cooperation on hold, citing the “state of the relationship between the two associations.” I was informed that APA’s policy of seeking prescription privileges for psychologists was the central problem. What publishing this scholarly journal had to do with that issue was not clear, but we crafted a disclaimer that reading Treatment did not qualify one to prescribe. It was clear, however, that their final decision to end the collaboration was political. Many of their trustees were worried that any collaboration with APA would legitimize the efforts of psychologists to obtain prescription privileges." http://www.apa.org/monitor/feb98/pres.html

Both the psychiatric and psychological guilds would be outraged by my notion that we need to legalize markets in happiness and well-being, especially once they realized that that would involve the elimination of occupational licensure. Guilds exist to protect legal prerogatives.

They would also, most likely, ridicule public choice theory. Public choice theory, which is widely accepted among economists, is merely a means of analyzing government action by pointing out that most of the time most voters, lobbying groups, politicians, bureaucrats, and judges act in alignment with the information and incentives they face. Public choice theory is a helpful reminder that modern nation-state democracy is not a town meeting in Vermont.

Often academics, outside of economics, dismiss public choice theory on the grounds that they believe in their own high-minded rhetoric. But the interaction described above between the American Psychiatric Association and the American Psychological Association is far more typical of political realities, even among academics. Groups of people protect their turf. Moreover, they often disguise their rationales and motives in their public pronouncements, just as the psychiatrists tried to disguise their real rationale by cancelling the joint publication project on the grounds of the need for "a broad review of the costs and benefits of electronic publishing projects." As Penn & Teller would say, "Bullshit!" - and kudos to Seligman, Mr. Positive Psychology, for describing the psychiatrists' groups' behavior as shameful.

The next step forward in consciousness is for positive people such as Seligman to realize that the behavior of the psychiatrists is the norm, whether the group involved happens to be teachers' unions, local zoning boards, manufacturers' associations, public employees' unions, defense contractors, HMOs, the AARP, or whatever. As James Madison knew, democracy is primarily about factions jockying for power and influence, and the words used in political debates and pundit's columns reflect only a tiny fraction of daily political reality. Daily political reality is made up of closed-door meetings in which influenced is silently wielded on behalf of existing powers. Moreover, often the jockying for power is far from the halls of legislature; if any of us would have proposed ex ante that the psychiatrists were so power-hungry that they would refuse to collaborate in an on-line journal project with the APA for fear that they would therefore grant credibility to APA efforts to break into the AMA's monopoly on writing prescriptions, we would have been ridiculed for our paranoia and cynicism.

Charlotte Twight elegantly documents the extraordinarily byzantine ways in which groups hide their tracks as they acquire power in her Dependent on D.C.: The Rise of Federal Control over the Lives of Ordinary Americans, http://www.amazon.com/gp/product/0312294158/002-3116092-3066425?v=glance&n=283155.

Legalizing Markets in Happiness and Well-being

2006-03-09T16:36:00.000-08:00

"What do you mean by "marketing happiness", and why
do you think it is now illegal? What specific
practices are against the law which would enable
happiness to be freely bought and sold?"

There is a distinction between "decriminalized"
markets in, say, prostitution and drugs, as compared
to full legalization. In Holland, for instance, while
it is legal to sell small quantities of cannabis
products, it is not legal for these retailers to buy
wholesale quantities nor to advertise. A commercial
market in cannabis remains illegal; the cannabis
industry does not benefit from the investment capital,
economies of scale, professional agricultural and
manufacturing, public relations and marketing, etc.
that are characteristic of alcohol, tobacco, computer,
or toilet paper industries.

Similarly, while we are free to teach or heal or
advise friends on many issues pertaining to happiness
and well-being, and sell many products and services
which are likely to increase the happiness and
well-being of others, there are severe restrictions on
the type and scale of well-being products and services
that are sold. Thus one might say that while
interactions pertaining to happiness and well-being
are largely decriminalized, full blown markets in such
services are not yet legal.

Education: Private education is highly regulated in
many states; in Pennsylvania private academic schools
must be staffed with certified teachers, in Maryland a
private school must operate on at least an acre of
land, etc. A friend of mine who opened a private
school committed to humane education in PA had to hire
certified personnel rather than her first choice of
staff, another humane educator in Maryland who tutors
homeschoolers in art and music and consults on
curriculum in core academic subjects is very careful
not to "teach" core academics lest he be shut down for
operating a school illegally.

In Oregon, there are bounty hunters for turning in
students who don't attend school
http://www.honestedu.org/essays/novello/compulsory.php
though they might be doing something better for them.
In New Jersey, there are bounty hunters who try to
catch students who sneak across district lines in
order to get a better education,
http://www.usatoday.com/news/nation/2002-12-04-bounty-hunters_x.htm.

In principle, it is legal for me in Florida, Texas,
and California to open up a private school and offer
almost any kind of educational program. That said, I
have had public school officials actively discourage
parents from sending their kids to the excellent
Montessori schools with which I've worked on the
grounds that "they may have a hard time adapting to
the public school when they return because they will
probably miss some curriculum." I am well educated
enough to not to be intimidated by this, but there are
many good-hearted parents listening to the authority
of such government officials who, in their eyes, speaks
with authority regarding their child's well-being. Who wants to
risk their child's future prospects on an education that the
authorities tell you will damage the child in the official system?
When I ran a school that taught middle
school students to pass Advanced Placement science
tests, parents would sometimes say in fear "But won't
my son miss 7th grade science?," having been
well-trained to believe that the "official" curriculum
has some critical status. Is intimidation by public
officials equivalent to illegality? Well, no, but . .
.

Meanwhile, collectively we are forced to pay about
half a trillion dollars each year for
government-managed institutions which are actively
damaging to the intellects and spiritual vitality of
about two-thirds of our children (generously I'll
assume that one-third are ok in these institutions).
In addition to this amount, people who aspire to be
educators face very strong incentives to obtain a
"teaching license" in order to get a job teaching;
even if they teach at a private school in Texas they
might move to a state like Pennsylvania at some point
where they will need a credential even in private
schools. Support for these education departments and
student loans and grants to support aspiring educators
who are forced to take these programs which do very
little towards increasing authentic well-being
probably costs us another $100 billion or so while
taking four years of life from people who could be
learning something valuable or contributing to
society.

An idealistic educator who wishes to work outside the
system, in private Montessori or Waldorf schools, must
get a different credential, usually not offered at
universities, for which they are not eligible for
student loans and grants. Thus our young idealist
pays $5000-10,000 out of her own pocket and foregoes a
year's income before embarking on a career at mostly
small, poorly funded schools where they will earn
lower salary and benefits, work longer hours, have
less job security, and have fewer opportunities for
relocation or promotion. The foregone earnings over a
forty year teaching career could be on the order of a
million dollars, while paying taxes out of her
inadequate salary to support a system that she
believes is less effective in supporting well-being.

Thus someone who cares first and foremost about the
well-being of children and decides to commit her life
to doing what is right for children may well have a
successful career; the option she has chosen has not
been criminalized; but cumulatively numerous obstacles
are preventing such people and their love for children
from flourishing.

But with a separation of school and state, educational
tax credits, or minimally regulated education
vouchers, we would no longer be forced to support a
system of control and intimidation that damages
children while forcing many of our most caring
educators to live in the margins of our society.
Large educational enterprises would be launched which
could devote these enormous sums directly towards
human beings and activities that would be focused
keenly on that which is in the best interest of
children.

While the "winners" in an educational market would not
immediately be purveyors of well-being, over time
educational consumers would become more discerning,
just as a refinement exists in all markets.
Skateboards today are vastly more sophisticated than
were the early skateboards of the 1970s, sneakers are
more sophisticated, toothbrushes have become ever-more
elegant and nuanced. People need to learn to
understand the dynamism of market processes and not
look at the schools, public or private, that we see at
present.

Opportunities for gambling and pornography have
proliferated and are flush with capital because there
are active, dynamic markets in these activites. It
is, at present, easier to create a dynamic, innovative
enterprise offering gambling or pornography than it is
to devote oneself to humane education. The legal
environment has very substantially contributed to this
circumstance.

I believe that people passionately whan to do what is
good, want to provide services to others that
represent quality, want to seek out that which is best
for themselves and for their children. If we who want
to supply that which is better and healthier are
constantly crippled and harassed, then it might
appear, as it does to some, that people don't desire
that which is good. And my reply is: Well, before
coming to that conclusion, let's look at the asymmetry
of power between the kind of education that is
supported by law vs. the kind of education that is
marginalized by law.

A similar version of the foregoing could be done for
health care, broadly construed. A woman who has a national
following as a therapist wanted to try her new therapeutic
techniques on drug addicts and had a "cease and desist" order
served against her in the midst of a drug rehab retreat because
she did not specifically have a credential that allowed her to
provide drug rehab programs. The illegality, or
quasi-illegality, of many alternative treatments, the
restrictions on who can provide what kinds of
counseling services or medications, etc. all contrain
the full-blown development of professional enterprises
devoted to well-being.

See also Joel Salatin, "Everything I want to do is
illegal,"
http://www.acresusa.com/toolbox/reprints/Salatin_Sept03.pdf.

I close with the conclusion of my "The Creation of
Conscious Culture Through Educational Innovation,":

The argument of this book may be summarized by means
of twenty propositions on education and wellness:

1. Culture, habits, and attitudes are the most
important prerequisites to education.

2. Historically traditional cultures have varied
widely; human variability due to culture is
extraordinary. That variability is currently being
lost through the force of those technology-based
monocultures that are sweeping the world.

3. Over the course of 13 years of formal education,
the average high school graduate is exposed to 14,000
hours of K-12 schooling. It is possible to have a
considerable impact on the habits, attitudes, ideals,
aesthetics, aspirations, and culture of the students
over that time if that were to become the primary
focus of educational institutions.

4. Habituation in new cultural norms may be
successfully cultivated in the young only when they
are educated by adults who consistently,
moment-by-moment, support and enforce the new forms of
habituation and personally exemplify the new virtues.
In order to do this, the adults themselves must
exhibit a consistent form of habituation. New
cultures can not be created by innovations in
textbooks or software.

5. Except for those few educational approaches that
have distinctive teacher training programs
(Montessori, Waldorf, and some religious school
systems) combined with schools that actively support
those pedagogies, existing teacher training does not
even begin to ensure consistent habituation. The most
consistent habituation faced by K-12 students in
government schools today is habituation in passivity
and dependence.

6. Cumulatively, deliberately inculcated habits and
attitudes may provide a foundation for new cultures.
The Jesuits deliberately created a more disciplined
and intellectual European culture out of the chaos of
medieval education. Montessori and Waldorf education
are nascent examples of new cultures being formed
today.

7. The existing government-controlled education
system acts as a monopolistic standard with a market
share far greater than that held by Microsoft's
Windows standard. Unlike the Microsoft dominant
standard, the government schooling standard is
enforced legislatively and financed coercively.

8. Only when this dominant standard collapses will
great educational innovations begin to be launched.

9. Freedom has been necessary for innovation in the
world of ideas, the world of technology, and the world
of entrepreneurship. If Galileo had more effectively
been censored, Newton and modern physics might not
exist. If government had regulated the invention of
electrical devices in the 19th century, Thomas
Edison's "invention of invention" would never have
come into being. If tech entrepreneurs had needed
government licenses to do their work, Silicon Valley,
the microcomputer and the internet, would be a pale
ghost of their present selves, if they existed at all.
Likewise, educational freedom will be necessary for
educational innovation.

10. Only visionary organizations, designed and built
by a commitment to a distinctive vision, can
consistently create distinctive cultures that are
powerful enough to compete with the teen culture
defined by the media. A distinctive, long-term vision
can only be implemented institutionally in a
voluntaristic institution. Visionary leaders must be
able to hire, fire, and promote faculty based strictly
on their own perception of quality.

11. Markets will supply those goods desired by
consumers.

12. Parents want their children to be healthy, well,
productive, and happy.

13. Therefore in a free educational market there will
be a demand for schools that can supply a healthier
culture.

14. Innovative educators employed by private,
visionary organizations will gradually develop
increasingly healthier and more positive versions of
teen culture.

15. Peer culture is a more powerful influence on
teens than are parents. Currently teen culture is the
biggest obstacle to parental ability to raise their
children well. Conversely, a positive teen culture
could compensate for many of the weaknesses of poor
parenting.

16. Culture by its very nature produces "neighborhood
effects," or externalities; once we have created more
sources of positive teen culture it will spread to
those who don't originally pay for it or even choose
it.

17. Many of us develop critical habits as teens; a
healthier teen culture will result in a healthier
adult culture.

18. "Healthier" may be construed widely; the
foregoing analysis applies to any positive cultural
characteristic.

19. Cumulatively, the long-term effects of an
innovative, competitive market for adolescent
well-being may produce cultural consequences as
profound as, or more profound than, the long-term
effects of technological innovation.

20. Cumulatively then, just as technological
innovation has had a dramatic impact on the economic
standard of well-being, so too cultural innovation
will have a dramatic positive impact on our social,
emotional, and moral standard of well-being.

It has been said that the greatest invention of the
19th century was the invention of the invention. While
there had certainly been inventions prior to the 19th
century, only gradually did tinkerers and
experimentalists begin to become conscious and
deliberate about the act of invention. A magnificent
turning point was Thomas Edison's creation of a
laboratory specifically for the sake of creating
inventions.

The worlds of martial arts and eastern spiritual
practices contain innumerable lineages, each with a
revered founder. The founders of new branches of
lineages are rarely described using the rhetoric of
innovation, yet that is precisely what they are. They
are individuals who have achieved a new advance on a
particular discipline or practice, resulting in new
techniques that are then passed on to subsequent
practitioners of the lineage. Similarly, the founders
of monastic orders, such as St. Francis, St. Benedict,
etc., are not usually perceived as "cultural
innovators," despite the fact that they launched new
cultural institutions that have survived for
centuries.

In western education, individual educators are
recognized as leaving a legacy from time to time.
Thomas Arnold is renowned for creating a distinctive
culture at Rugby School in England in the 19th
century. Maria Montessori is well known for founding
Montessori education, as is Rudolf Steiner for
founding Waldorf education. Older alumni to this day
feel a powerful attachment to the "Hutchins' College,"
the program at the University of Chicago during the
tenure of Robert M. Hutchins as college president,
1930-1950. As with the saints, gurus, and martial
artists, with the exceptions of Montessori and Steiner
these educators are not usually conceptualized as
"innovators."

The haphazard cultural inventions that have taken
place hitherto, in eastern and western cultures, are
analogous to the occasional inventions that
characterized western society prior to the 19th
century. By means of radical school choice combined
with a conscious recognition of the power and
importance of creating new school cultures, the
greatest invention of the 21st century may be the
invention of new cultural models that continually
allow human beings to adapt ever more effectively to a
world of ongoing creative destruction while allowing
for ever deeper levels of happiness and well-being for
people of all races, cultures, classes, and abilities.

The Champion of Hong Kong's Freedom

2006-03-06T09:31:00.000-08:00

Thanks to Leif Smith and the Explorers' Foundation for this:

"The Champion of Hong Kong's Freedom", by Christian Wignall
Sir John Cowperthwaite, Hong Kong, 1941 to 1971

http://explorersfoundation.org/archive/295t1_hong_kong_2003.pdf

A talk given at Free Exchange, November 15, 2003. Presented here as unfinished notes, courtesy of the author, Christian Wignall, March 3, 2006.

The psychology of the Chinese in the post war decades was that Hong Kong was a port in a storm, a (hopefully) temporary refuge. They did not feel themselves to be citizens, with a stake in Hong Kong's future. They felt only too lucky to be let in at all. Only with the passage of time has the sense of belonging and with it the pressure for democratic representation emerged.

Because government officials were appointed, not elected, they had no temptation to court short term popularity with bread and circuses, they took the long view. Because government officials were not elected but appointed it was possible for some quite unlikely types of people to rise to positions of great authority. It was in this manner that someone with ardently libertarian beliefs came to be one of the most powerful people in the government in the nineteen-sixties. His name was John James Cowperthwaite.

...

... Yeung Way Hong, publisher of Hong Kong's most popular Chinese language magazine, "Next," has suggested erecting an heroic-scale statue of John Cowperthwaite.

'I am absolutely certain that his personality and upbringing are responsible for Hong Kong's prosperity.' was the verdict of one observer.

...

Professor Alvin Rabushka, described Cowperthwaite thus: "[He was] brilliant, well-trained in economics, suffered no fools, and was highly principled. He wouldn't have lasted five minutes in a similar post in Britain, since he was not predisposed to compromise any of his principles - only the constitutional structure of Hong Kong allowed him that power."

And what exactly were those principles? Again, I quote: "True to the ethics of Scottish Protestantism, he hates to spend money - especially if it belongs to someone else (like the taxpayer). For example, he never spent any money on the upgrade of his official residence in HK. Though he had a budget to do so, he refused. His successor turned [the official residence] into a palace, because - as he said to Sir John -, 'he believed in luxury'. Sir John did not. For him his job was a duty, not a ticket to luxury and riches. So there we have it: 'true to the ethics of Scottish Protestantism'. This man was a philosophical son of another Scotsman, Adam Smith."

Catfish Wars: Why Is U.S. Blocking Capitalist Progress in Vietnam?

2006-02-19T09:28:00.000-08:00

An excellent article by Radley Balko showing how protectionists use the whole array of regulatory structures, ostensibly created to protect the people, to protect their own interests:

http://www.foxnews.com/story/0,2933,183522,00.html

Where are the protestors on issues like this?

What would most transform the world would be the recovery of the sense of joy . . .

2006-02-15T08:57:00.000-08:00

From the poet Frederick Turner, one of the last great humanists in a letter to Yasuhiko Kimura, one of the great contemporary philosophical mystics - though if we follow Fred's suggestions, he may later be re-considered instead one of the first great humanists of the belated 21st century humanistic revival:

"My question to you is this: What is the theme/objective that you think would be the most impactful? In the historic context of our time with a multitude of issues and problems, what can a small group of committed people accomplish in 10 years that has a significant impact on the transformation of the world? What is the issue the resolution of which by a small group of people will have the greatest impact?

It struck me first that what would most transform the world would be the recovery of the sense of joy. In the midst of amazing and unprecedented general prosperity and technological progress--increases all over the world in life expectancy, health, education, per capita earnings, indeed every objective measure of human welfare--the impression is of huge sadness, disappointment, rage, bitterness, and despair. Such feelings are not good for human beings.

Further analysis showed me that the recovery of joy must be based on a recovery of hope. Only with hope can one embark on life with a spirit of enterprise and a pleasure in work. Your beautiful remarks that for a truly enlightened and wise person, who sees the Beethoven side of the embroidery earthly striving and effort hardly seem necessary--why should one not sit on the mountain and contemplate the bamboo leaves? But this is for the old and wise, not for the young and passionate, who need hope and the courage that comes with hope. The young must meet and win their beloved, must have children, must by their work improve the world and so justify the expense of their upbringing and the pride of their culture. All over the world the young are starved of hope--the "mammone" of Italy who never leave home and live on their mothers, the young shut-ins of Japan, the depressed and anorexic young of America, the miserable and drunken unemployed young of Europe. But their culture tells them their civilizations are evil or false, their history is flawed and evil, their identity as males is oppressive, their identity as females is to be victims; and their more numerous elder generation tells them that their future role in life is to support through government coercion the old age of their parents and grandparents.

The missing factor is courage--these young people are no longer reproducing themselves, they are culturally and politically cynical and apathetic. What is needed for them is grand narratives that can inspire hope, great projects that can call forth courage--and it is the job of the wise to provide such stories and make sure that they are of such a kind that will lead them eventually to the kind of serenity that you have so beautifully shown us. Beethoven's music is not only mystically transporting for the old and wise, it is also stirring and exciting and grand for the young and untested. It looks to the future as well as the past. What we need is splendid and challenging futures for our children and grandchildren to live in and explore when we are gone. This, I think, is part of the theme that we should be exploring.

Fred"

How to make life as easy as possible for those near the bottom

2006-02-10T12:30:00.000-08:00

From a comment on a FLOW group (to join one of our groups,
see www.flowidealism.org):

"I suggest that this means that we should look for
ways to make life as easy as possible for those at or
near the bottom, in the public policy realm."

I agree emphatically. It is easy to talk about the
idealistic consequences of raising four billion poor
in the developing world to our standard of living, but
a direct result of that is likely to be stiffer
competition for those already near the bottom of our
income distribution. It is an unambigous gain in
justice and human well-being for a Mexican making
$3.65 per day in Mexico to enter the U.S. and make $68
per day (the respective average daily salaries for
agricultural laborers), but such dramatic gains don't
help poor Americans.

During this long period of globalization, during which
downward pressure on wages for people with poor
initiative, problem-solving, and reliability skills
will become overwhelming, allowing the market to
decrease costs so that everyone can afford a decent
standard of living is the best path. Wal-mart is an
exemplary hero here; as a previous article points out,
Wal-mart may be saving poor people $265 billion per
year.

Housing costs have increased 72% since 1970. There
are excellent recent studies showing that at least
40%, and probably much more (much of the remainder
comes from "increase in quality" some of which may be
mandated by regulation, and there is evidence that
actual construction costs have decreased), of the
increase in housing costs since 1970 are due to
increased regulation. Worse yet, in a highly
regulated environment, the process of initiating
cost-effective innovations that don't meet existing
regulatory structures won't even be considered. In
the absence of such regulations, I suspect that a
Wal-mart of housing could now be producing housing
units that were 50% (or more) cheaper than in 1970
instead of 72% more.

Housing costs take up 30-60% or more of the household
budgets for poor people (usually a higher percentage
the poorer one is). If someone were to propose a 50%
mandated increase in salaries for the poor,
progressives would celebrate. Yet a deregulated
housing market that allowed entrepreneurs to create
lower cost (and higher quality) housing solutions
could result in household budgets for the poor that
are, in effect, 50% higher.

The mandated increase in salaries is a lot more
compelling emotionally, especially if it involves
taking money away from corporations or the rich to
give to the poor. But there are numerous serious
problems with allowing ourselves such emotional
satisfactions, including destroying the job market for
poor people, accelerating the rate at which
investment dollars move to other places or replace
human labor by technology, creating bloated,
inefficient, and corrupt bureaucracies, and creating
an additional source of animosity towards immigrants
(I think of welfare states as the moral equivalent of
gated communities because they exacerbate a "keep them
out of here so they don't take our stuff" attitude).

Thus a major initiative that FLOW must take on is to
train people that giving in to their self-righteous
Robin Hood instincts is not especially beneficial,
whereas supporting various types of deregulation could
be profoundly helpful. Everything said about housing
applies also to education and health care; I know
that, over time (a decade or so to get it going
smoothly) I could create education that is roughly ten
times as effective as government education, most
especially for poor people, at half the cost.
Government managed schools, together with occupational
licensure, are the greatest obstacles to social
mobility in America today.

For citations see "Empowering the Marginialized" at
http://www.flowproject.org/Community/d-empower-marginalized.html

Peace: Among the Moral Consequences of Economic Growth

2006-01-02T15:19:00.000-08:00

Harvard economist Benjamin Friedman, in The Moral Consequences of Economic Growth, cites page after page of empirical evidence for the correlation between economic growth and political stability:

"Political scientist Adam Przeworski examined the experience of 139 countries over four decades . . . the probability that any individual democracy would be overthrown by a dictatorial regime was nearly four times as great if the country's per capita income was falling than if its income was rising. . . . One classic study found that each doubling of per capita income reduces the probability of a country's experiencing a successful coup by between 40 and 70 percent . . . the authors suggest that countries may fall into a 'coup trap,' in which poverty fosters political coups, which in turn foster more poverty, and hence more coups."

And, of course, democracies tend to be peaceful whereas military dictatorships are much more likely to initiate wars. While the “Democratic Peace” may not be perfect, when we have a world in which all nations are democracies we may well have created a world in which wars no longer take place. At a minimum, such a world would most likely have fewer, smaller, shorter, and less damaging wars.

On the "Democratic Peace," see Rudy Rummel, http://www.hawaii.edu/powerkills/MIRACLE.HTM

From a Discussion with Robin Hanson on Idea Futures

2005-12-15T08:55:00.000-08:00

Robin Hanson:

"You are making a crucial assumption here - that the
main social role and function performed by academia is
to increase knowledge and offer informed assessments.
If this were true, then the customers of academia
might indeed switch to an institution which better
performed such roles and functions."

I agree that academia is driven by many preferences
other than "to increase knowledge and offer informed
assessments." But insofar as at least some funders,
including both philanthropists and the voting public,
believe that the primary purpose of universities is to
increase knowledge and offer informed asssessments,
idea futures create the prospect of driving a wedge
between this one popularly accepted function of the
universities and the actual matrix of preferences
served.

Although numerous agents are able to have their
prestige needs met by means of existing academic
institutions (including donors, students, and their
parents), in effect they are free riding on the lofty
reputation of universities as purveyors of truth and
wisdom. A public social mechanism (such as idea
futures) that introduced a credible wedge between
existing academic pretenses, on the one hand, and
actual intellectual value, on the other, would have
tremendous repercussions for existing academic
institutions. I would bet on it.

Prizes do seem to be increasingly recognized as a
valid form of encouraging discovery. As you point
out, idea futures may be seen as a broader and more
flexible institution - information prizes. As this
approach became a credible means of adjuticating
disputes in areas of science in which it is difficult
to discern truths, such as climatology and economic
development, at some point there would be people
interested in "testing" the claims of academics in
sociology, cultural studies, etc.

There are individual academics in such fields whose
predictions would be seen to have no value. They may
avoid making specific claims, but if they were
continually pushed to make predictions in the areas in
which they alleged some empirical insight or
expertise, but refused to put their money on the
empirical implications of their claims, their
credibility (such as it is) would rapidly erode to
zero.

I am struck by the way in which in the market at large
there is a relentless ongoing pursuit to maximize
value. This does not mean that everyone everywhere is
always seeking to obtain as much value as possible,
but it does mean that entrepreneurs who offer greater
value than competitors can always find a niche in
which they will be successful. Idea futures would not
instantly change academia, but there would be at least
some suppliers of "knowledge and informed assessments"
who offered superior products and there would be at
least some consumers of "knowledge and informed
assessments" who would "purchase" such products
(philanthropically or as students).

These early adopters would recursively encourage the
exploration of new frontiers of value-added
intellectual advancement; new generations of such
suppliers and of such consumers would have ever-more
refined means of supply quality and perceiving
quality.

Perhaps some of our universities would adapt and
survive. Perhaps some would not. A new species of
institution might be created (like the joint-stock
company that you mention for pursuing a science
prize). We don't know what these new institutions
would look like, but they would be driven by the
pursuit of valid, "safe bet" knowledge in some manner
that is inconceivable to our current solipsistic
academic paradigm.

Indeed, such institutions would develop an incentive
to innovate ever better means of proving their
superiority over the dying universities. As they
obtained sufficient capital and talent, including
marketing and p.r. departments, they would find ways
to publicize their victories as compared to their
competitors. At some point thirty years from now,
perhaps "The Safe Bet Truth Corporation" (based in
China?) will challenge the Harvard faculty to a
comprehensive series of truth bets - and, in a high
profile case, blow them out of the water.

Tourists will nostalgically visit university campuses
much as they visit medieval cathedrals. And, just as
with medieval cathedrals, services will still be held
there, but the living power and prestige have gone
elsewhere.

FLOW, Let's think visually

2005-11-28T18:39:00.000-08:00

Using Idea Futures to Advance Global Economic Development

2005-11-25T06:11:00.000-08:00

Just as people are rightly realizing that prizes are
an effective means to stimulate projects and research,
soon they will realize that information markets are
the most effective tool for aggregating information.
As such there is a generic sense in which "ideas
futures" is a tool with as many diverse applications
as "prizes." At some point literally thousands of
people will propose thousands of such markets for
innumerable specific claims.

The really big pay-off of a futures market in ideas
would be as a replacement for the
tenure/publication/peer review system in those
empirical fields for which crucial experiments are not
possible. Gradually as observers - including the
media, business community, funders, parents, etc. -
discovered large discrepancies between market
evaluations vs. the self-appraised evaluation of
certain professors, departments and disciplines,
respect and resources would shift away from the more
dysfunctional individuals and institutions.

Instead of headlines on health issues ("Broccoli
reduces cancer risk"), media sources would report
changes in market evaluations more than the results of
"academic research" (though speculators would read the
academic research and factor it into their bets with
appropriate discount factors based on their estimates
of the reliability of the source). All of humanity
would receive more accurate information more quickly;
all would benefit.

Peer review and tenure might vanish altogether; new
individuals and institutions that were more reliable
would establish reputations for truth-discovery based
on proprietary techniques that made them very wealthy.
Institutions would arise which would then teach such
techniques. Both Peter Drucker and Warren Buffett
have mentioned intellectual integrity as a key virtue
for success in the marketplace. Idea futures could
thus provide a much stronger incentive for
intellectual integrity than has ever been seen before.

Much more modestly, below is a specific sketch for a
futures market in those institutions on which economic
freedom depends but which are most accurately
understood locally. Note how the proposal below could
be integrated well both with Mark Frazier's Open World
project and with James Tooley's global network of
private schools in the developing world:

Douglass North, in his recent book Understanding the
Process of Economic Change, acknowledges that we just
don’t know understand the process of economic change.
At the same time, he acknowledges that we have made
some substantial progress. Part of the progress that
we have made is that we know that institutions
matter, but that those institutions are not merely
formal institutions such as banking laws and tariffs,
but that those institutions include “soft
institutions” such as social norms and cognitive
styles. It might well turn out to be the case that
successful economic development depends on several
necessary but not sufficient conditions. Insofar as
judicial independence and even property rights
enforcement may, at the local level, depend on such
soft institutions, it may be very difficult to
implement or evaluate the effectiveness of both formal
and informal institutions from the outside.

Markets are the most effective means of aggregating
dispersed knowledge that we have. It might be that
the best means of accelerating economic development in
poor regions is to create on-line information markets
that allow local speculators to engage in small-scale
bets concerning their nation’s core economic
institutions, including soft institutions such as
trust, entrepreneurial spirit, corruption, etc.

Marshall Stocker has shown that nations that are
increasing economic freedom according to the Fraser
Institute Economic Freedom Index average double digit
rates of return (11%). This seems to be a fairly
robust empirical finding that is entirely consistent
with the expectations of many economists. Insofar as
this empirical finding holds, capital would flow to
those nations in which there is an expectation of
increased economic freedom exists.

Basically, increased measures of economic freedom
correlate with a nation becoming more “capital
friendly” in both a qualitative and quantitative
sense. Nations which are more capital friendly than
other nations will experience greater growth than
other nations due to increased investment combined
with an increased return to that investment (i.e.
real, rewarded investment as opposed to the spurious
“investments” in poor nations made by NGOs and
governments.)

But how to determine whether or not a nation is making
progress towards greater economic freedom, and how to
encourage such progress? At present, savvy investors
may do research on various nations to determine
whether or not such progress is likely. Supporters of
economic freedom and advocates of economic growth in
poor nations might try to persuade political leaders
or other elites to support policy changes towards
greater economic freedom.

But information markets can do better, both by way of
offering information and by way of accelerating the
process. The cost of broadband connectivity, laptops,
and even portable electricity generation is all coming
down rapidly. Global connectivity will allow for
increasing numbers of individuals in undeveloped
nations to participate in the global economy, learn
about entrepreneurship and the formal and informal
institutions required to support it, and to report on
local advances in those institutions.

The best way for them to “report on” local advances in
the formal and informal institutions required for
entrepreneurship would be to participate in a futures
market in which they could be on changes in certain
institutional features. The Fraser Institute Economic
Freedom Index is made up thirty-eight distinct
sub-categories of analysis. Some of them, such as
security of property rights and the extent of
corruption, may be difficult to determine accurately
from the outside (although they are currently rated by
external evaluators). But local individuals, many of
whom may be small scale entrepreneurs themselves,
would have far more accurate and detailed information
concerning progress (or the lack thereof) within the
country.

Because external investors would have an incentive to
obtain good information regarding local conditions in
order to safeguard their investment, they would be
interested in a futures market in local expectations
regarding such key issues. Externally-based
entrepreneurs, corporations, and professional
investors would all be interested in obtaining the
very best possible information regarding local
circumstances. They would also be interested in
helping to provide on-line instruction that would
educate local entrepreneurs and speculators (some of
whom might be savvy children or unemployed older
people) on those aspects of the local culture,
society, political trends, and legal system
developments that were most relevant to capital
investments.

The Fraser Institute measures are based on those
institutions for which external estimates are
possible. Over time, changes in important but more
finely-grained local cultural features (respect for
women, entrepreneurial spirit, time horizons, norms of
punctuality, interpersonal trust, etc.) might be
factored in by means of various creative empirical
proxies.

Thus an on-line futures market in local knowledge on
economic freedom could provide a means whereby local
agents are, in effect, paid to learn what makes their
economy more effective. Better yet, although some
might remain merely as information gathers, it would
be in the interest of outside investors to train local
talent to be successful speculators in the futures
market. Independent local speculators, who could
quite possibly get rich (although starting with very
little capital) by means of providing more accurate
predictions would face very sharp incentives for
discovering the best information on economic freedom.
But why stop at discovery? Why not "be the change"?

Indeed, if such local entrepreneurs were numerous, an
entire social movement could be developed based on
working together to create those conditions that would
result in an increase in economic freedom. It may
take several iterations of trial and error to obtain
the right scale and definition of such markets to
produce optimal results; laboratory experiments in
advance would be desirable to minimize mistakes. But
a society in which many thousands of small scale
speculators were positioned to obtain significant
market returns if and only if economic freedom
increased would be a society with a grass-roots
movement towards supporting those institutions
supportive of economic freedom, economic growth,
prosperity, and the transition to modernity.

The World's Most Potent Opportunity for Doing Good

2005-10-25T20:14:00.000-07:00

Robin Hanson's "Idea Futures" as the Number One World's Most Potent Opportunity:

I am always looking for ways to optimize leverage in doing good. Any system that provided much higher quality information and much more accurate understandings of complex phenomena than we have at present may result in extraordinary large leverage opportunities.

Science, in those fields in which decisive experimental findings are available, is a pretty good system for discovering "truth" in the sense of useful, reliable understandings that allow us to make correct decisions. The reason that we have been so successful in technological innovation since the late 19th century is because we have a reliable body of science and engineering. Engineers can build a bridge and know pretty darn well that it will work.

In those fields in which decisive experimental findings are not available (including climatology and most of social science), the scientific approach might be imitated, but the external anchor of experimental verification is absent. If the institutions which produce knowledge (largely the universities) have non-optimal incentive systems (which they do; see the Hanson quote below), then non-experimental fields may drift in inaccuracy, incompleteness, and inapplicability for many decades. We spend many billions of dollars on universities and rely on them almost exclusively for expertise in many fields. If an academic field is largely defective for decades at a time, the result will be that educators, reporters, political leaders, philanthropic professionals, political leaders, NGO leaders, etc. will be making faulty decisions.

If 90-99% of the decisions being made regarding, say, global economic development are simply false, the result will be that many trillions of dollars might be spent on global economic development ineffectively. If engineers tried to build bridges using calculations in which each calculation along the way was 30% or more off the mark, the result would be bridges that rarely worked. Do-gooders might complain that more bridges were needed, and that "people didn't really care" about building bridges, forcing more people to spend more money on bridges that continued to collapse. Philanthropy based on faulty understandings is largely money being flushed down toilets (or dropped into gorges, if you prefer).

Transparency International is "the leading global NGO devoted to fighting corruption." They just announced that Bangladesh and Chad are the two most corrupt countries on earth.

Vernon Smith has pointed out that corruption in the developing world is grossly exacerbated by, and perhaps largely due to, over-regulation. As a consequence, Smith points out that deregulating economies is one of the most important pre-requisites to eliminating corruption. Although I did not read Transparency's website thoroughly, in half an hour of browsing I discovered no indication that they were aware of Smith's insight.

Mohammad Yunus, father of micro-credit and Bangladesh's most famous citizen, largely understands Smith's point:

"Policies are made in such a way that the fate of a citizen depends on the whims and fancies of an official or an officer. . . . The government officials are not officials any more, they are businessmen. They are involved in the trade of power market. . . Rules, regulations, laws are the ingredients of that trade."

http://www.thedailystar.net/2005/06/01/d506011501118.htm

Why doesn't Transparency International launch a global "de-regulate economies" campaign if they really care about eliminating corruption?

Last spring, Changemakers.net sponsored a campaign for proposals to end human trafficking. Their campaign explicitly excluded proposals that involved increasing economic growth. What if policies that increased economic growth reduced human trafficking faster and more effectively than did the other "social entrepreneurship" projects? If one cares first and foremost about human trafficking, why exclude what might be the most effective set of policies of all?

It really might be true that, had Friedman and Hayek been the most highly respected authorities on economic growth in 1950, that poverty would not exist today - that that one change in perception of opinion could have eliminated numerous wars, billions of human beings in poverty, sickness, and death, human trafficking, child prostitution, etc. Had a futures market in ideas revealed these insights to the wider public in 1950, rather than the gruellingly slow process of academic debate, more human lives could have been improved than by any other plausible philanthropic intervention. Worse yet, although the ideas of Friedman and Hayek were gaining ground in the 1970s when they won their Nobel laureates, their ideas really gained momentum through empirical events in the last forty years - stagflation, the rise of the Asian tigers, the Silicon Valley entrepreneurial explosion, and the fall of Communism, and sustained economic growth in Chile, China, and India in order to become more widely believed.

The Transparency International and Changemakers.net examples are two of many thousands of examples of anti-market bigotry that remains pervasive. But rather than continue to argue, and then engage in costly political warfare, and sponsor philanthropic projects that often cancel each other out (or are merely ineffective), we should support Hanson's ideas so that we have a quick, responsive, and valid means of obtaining important truths concerning complex realities.

Part of Robin's superb analysis of the problem:

"Academia is still largely a medieval guild, with a few powerful elites, many slave-like apprentices, and members who hold a monopoly on the research patronage of princes and the teaching of their sons. Outsiders still complain about bias, saying their evidence is ignored, and many observers [Gh,Re,Syk,Tu] have noted some long-standing problems with the research component of academia. (Teaching is not considered here.)

Peer review is just another popularity contest, inducing familiar political games; savvy players criticize outsiders, praise insiders, follow the fashions insiders indicate, and avoid subjects between or outside the familiar subjects. It can take surprisingly long for outright lying by insiders to be exposed [Re]. There are too few incentives to correct for cognitive [Kah] and social [My] biases, such as wishful thinking, overconfidence, anchoring [He], and preferring people with a background similar to your own.

Publication quantity is often the major measure of success. This encourages redundant publication of "smallest publishable units" by many co-authors. The need to have one's research appear original gives too little incentive to see if it has already been done elsewhere, as is often the case, and neglects efforts to integrate previous research.

Perhaps the core problem is that academics are rewarded mainly for telling a good story, rather than for being right. (By "right" I include not only being literally correct, but also being on the right track, or enabling work on the right track.) Publications, grants, and tenure are based what other insiders think today, independent of whether one's ideas and results are proved correct or valuable later. Even for researchers with a good track record, grant proposals must usually describe in some detail exactly what will be discovered and how; true exploratory work is done on the sly. This emphasis on story-telling rewards the eloquent, who know how to persuade by ignoring evidence that goes against their view, and by other standard tricks [Ci]."

for references and the rest of the article, see Robin Hanson, "Could Gambling Save Science?"

http://hanson.gmu.edu/gamble.html

see also "Shall We Vote on Values, But Bet on Beliefs?"

http://hanson.gmu.edu/futarchy.pdf

Working to Avoid Horrible Wars in the 21st Century

2005-08-30T09:02:00.000-07:00

If you want peace, work for markets.

Although Jeff Sachs' proposal is not a bad thing, and if implemented as he claims it will be it would (a major qualification) it would be a good thing.

But Mark Frazier's Open World is a more effective means of creating global peace and prosperity faster than is that provided by Sachs. The two approaches are in no sense mutually exclusive, and could both be done to the even greater benefit of the world's poor. But it is not an accident that Sachs' proposal is high profile whereas Mark's vision is almost unknown.

The key elements of Mark's vision include:

1. Selling Open World cookbook kits to the diaspora and do-gooders in the developed world. These kits, costing less than $100, would provide specific information on how to help a developing world entrepreneur learn skills in order to participate in the remote services market.

2. Developing world entrepreneurs would need $1500-$2000, access to reliable electricity, and minimal literacy in order to get on-line and thus participate in the Open World project. These funds could either come from micro-loans (high end micro-loans are in this range around the world) or their developed world diaspora or do-gooder partners.

3. Once on-line, curricula need to be developed to provide them with the range of skills needed to be successful. While some of this curricula is already available, much more would need to be developed, and will be by thousands of participants in this project, some on a for-profit basis and some for free.

4. As these thousands of developing world small-scale projects are developing, some of them will become more substantial businesses.

5. As cohorts become more substantial businesses, Open World will work with them to get them to the point at which they can become effective advocates for free zones in their countries along with land speculators. Land in free zones becomes many times more valuable once it becomes free from government regulations and trade barriers. Thus both the businesses and the speculators (who may be the same entities) will have an interest in promoting the free zones.

6. Gradually Open World will thereby seed dozens of free zones around the world, making rich and peaceful Hong Kongs and Dubais in Somalia, Iraq, Afghanistan, etc.

7. The resulting centers of peace and commerce will provide immediate centers of wealth and entrepreneurial expertise that will begin to seed other centers of peace and commerce.

8. As it becomes increasingly obvious around the world that regulation and low trade barriers, in combination with low taxes and rule of law, result in dramatic increases in wealth, predatory governments around the world will become vulnerable to entrepreneurial politicians who make the case to their people that classical liberal principles will result in peace and prosperity (something like this has happened already with the flat tax spreading across the east bloc nations).

9. Research shows (in a forthcoming article this fall in the Cato Journal by Marshall Stocker) that nations that move towards greater economic freedom (as measured by the Fraser Institute economic freedom index) have markets with double-digit rates of equity returns. Futures markets will arise that bet on which nations are moving towards greater economic freedom. The media will report the ways in which the futures markets (and trillions of dollars of capital) respond to statements made by politicians. There will be incredible responsiveness to politicians' statements: Those that promote sound economic policies will result in favorable responses from the economic freedom futures markets, those statements that show support for unsound economic policies will show very unfavorable responses from those futures markets.

10. These forces will result in fulfilling Fred Turner's "Make Everybody Rich" proposal (available through a link at www.flowidealism.com) and the FLOW campus activism plan (available at the same link). Real,solid,sustained global peace and prosperity will happen far more quickly and reliably through this path than through Sachs' path alone.

The race is to make this happen before ever more horrible wars break out in the 21st century.

Opening the World, including increased immigration, free trade, outsourcing, sweatshops, etc. is a good thing (strictly voluntary "sweatshops" such as are ardently desired in many poor nations). Grassroots globalization, as advocated by the Open World project, will make these positive events happen more quickly and more effectively at a grassroots level.

toward a rain forest of free enterprise

2005-08-17T18:05:00.000-07:00

From the inimitable T. Clarke Durant:

Here's a story about being engaged in the enterprise for free enterprise.

My grandfather, John C. Sparks, was one of the early board members for
FEE (The Foundation for Economic Education), and acted as
interim-president after Leonard Read died. He wrote a number of short
pieces during his long involvement with FEE. My favorite is this one,
called "If Men Were Free To Try."

http://www.fee.org/vnews.php?nid=6762

Since the advent of email he has sent out a weekly riff to a list of
friends and family, usually on matters of the political economy, which
is just a dry way of saying "on matters of the briskly unfolding
tapestry of human dreams, purposes, and projects." I always think of
the cartoons where they roll out the red carpet and it just keeps
unrolling and unrolling to an impossible length. I imagine the carpet
of enterprise would start narrow and red (or humble and thin like a
straw mat?), but then the further it unfolds the more sturdy, broad,
elaborate, and colorful it would become, until it seemed less like a
carpet and more like a rain forest. The political economy is the
drama of how ramshackle straw mats of human purpose can be woven by
enterprise into a rain forest of teeming peace, prosperity, and
meaning.

My grandfather wielded his humble green thumb in the service of the
dream of that rain forest. Several weeks ago, hours after penning
that week's "Thursday thoughts," he had a massive stroke. My
grandmother sent out the Thursday thoughts, included below. They
ended up being his last words. His 87th birthday would be this
Saturday. Below his thoughts are the thoughts my grandmother had me
send out the next week.

We live in beautiful world.

T. Clark

Thursday thoughts -- March 24, 2005
[Sorry that I must preface these thoughts, completed Monday, with the
bad news that John had a stroke on Monday and is at Aultman Hospital.
Please, no visitors until he is stable. Just send your positive
thoughts his direction and he will know. Thanks, Audrey]

The average length of life in the USA is about 80 years. One hundred
years ago it was 50 -- a significant measure of progress meriting a
special nod of gratitude to the medical community -- pharmaceutical
research, creative development of medical instruments, and other
supplemental good-health activities.

Even more significant -- but harder to measure, is the creation of
additional time within the years of our lives. There's a kind of
"doubling up" of our personal time. In the early 1900's to
communicate with a person in California, you'd likely write a letter.
If replied by return mail, the communication would take about two
weeks of time. One hundred years later, however, there are several
options, e-mail, cell phone, regular long distance, etc. providing a
choice of communication which can be completed within a few minutes.
Time created? Yes, a few minutes less than two weeks for that one
event. Travel by horse-drawn vehicles and later by the early motor
cars then was infinitely slower than today's 2005 model cars and
trucks, or by jet aircraft. Two more examples of time creation. It
would be redundant, probably impossible, to list thousands of other
time-creation inventions -- washing and drying of laundry, microwave
preparation of foods -- the list is endless -- all time-creation
devices.

What does it mean? What should we learn from this knowledge.
Advancement of humankind comes from the thinkers, creators and
like-minded participants. Advancement does NOT come from those from
who contribute nothing, yet sponge the system. (These observations
relate only to the physical and mentally fit, not the disabled). Many
handicap themselves, however, by refusing to use their brains toward
something useful rather than convincing themselves they are owed a
comfortable life. Typically they manifest their parasitic way of life
by denouncing the producers. They protest, march, threaten, mouth
unintelligent slogans against the producers to influence political
action which, unfortunately, too often ends in submission. Political
parties have succumbed to this evil blackmail, with a few rare
stalwart politicians resisting -- but others blatantly and
irrationally march on, no matter that their chosen road leads to
economic and spiritual depression.

Human advancement is not automatic. It comes from right decisions of
free people with government confined to the protection of free people
making peaceful choices. Events point to a reversal of this healthy
advancement, however. For one, the rapid growth of tort suits
(alleging anything) is causing products to disappear, businesses to go
into bankruptcy, medical doctors to quit -- totally irresponsible
pork spending (looting of tax-$'s paid in). The American people may
withstand this and many other injustices primarily aimed at those who
produce -- "taking it on the chin" -- for a while, up to a point.
Not as readily seen, however, is the greater harm from the onslaught
against freedom to act peacefully and with responsibility. The
engine of human advancement is being scuttled. Creativity ends when
the greedy and the leeches bring their brand of moral delinquency to
overrule freedom in America.

JCS

Thursday Thoughts – March 31, 2005

This week the crimes and corruptions of politicians might unfold with
a little less outrage. This week the bounty and abundance generated
by free enterprise will continue to amass itself all around us, but we
might wonder at it a little less, and take it for granted a little
more. This week our sometimes ruddy sense for the simultaneous crisis
and opportunity of our time might find itself a little more pale,
atrophied, and fumbling. All this MIGHT come to pass. But it need
not and will not come to pass if we let the Spirit of John C. Sparks
animate our hearts and minds.

There seems to be a paradox to that Spirit: a kind of guarded
optimism, or a hopeful pessimism. We normally associate optimism with
the young and naïve, for whom most good things wait in the future;
whereas we partner pessimism with the old and sentimental, for whom
most good things may reside in the past. But the Spirit of John C.
Sparks is a strange and wonderful concoction of both young and old! He
is more likely to be sentimental for the potentials of the future than
for bygone "olden days"! At the same time, the Spirit is too
weathered and wise to maintain a naïve optimism that takes peace,
prosperity, and progress as inevitabilities or entitlements! Indeed,
the Spirit of John C. Sparks is strung taut between "alluring hopes
and haunting fears," as Austrian economist Carl Menger would have it.

And this tension set the pitch at which "Papa" Sparks plucked his
Thursday Thoughts. Such pitch, urgency, and excitement are
appropriate to a world with an open future, with a fate up for grabs.
"Human advancement is not automatic," he said last week in those
serenely appreciative and appropriate Thoughts. Well, even though
human advancement cannot be guaranteed, we can make marginal
contributions upward and onward. Heave, ho! One month earlier, Papa
had pushed our attention beyond policy patches, beyond even
institutional reforms (as of Social Security), to the battle of ideas.
It was on that front, first and foremost, where he sought us as
allies. He said, "If we are to defend freedom, and advance its
concepts, preparation is the prerequisite. This is a battle of ideas.
Read, think, discuss." Let us rise to meet those imperatives with the
urgency they merit. A voice in the chorus of freedom has let its last
notes ring. May that voice's theme resound in our breasts, upon our
foreheads, and off our tongues.

Time for a New Socially Responsible Investment Movement

2005-08-12T08:08:00.000-07:00

"doesn't Disney( --which, incidently, I think, is actually Disney/AOLTimeWarner/General Electric/Viacom) engage in some pretty horrendous child labor practices in other countries?"

This is quite possible. I don't know.

I would be very interested in having someone (perhaps a young FLOW entrepreneur) create a credible system for "socially responsible investing." I like the idea of putting my dollars where my beliefs are.

That said, much of the existing socially responsible investing movement is misguided. Often so-called "sweatshops," which have conditions that we consider to be horrible, including extensive child labor, are actually huge improvements over existing conditions. There are cases in which a U.S. corporation closes down a factory because of accusations of "horrendous child labor practices" and the result is that children return to slavery and prostitution. How do we balance a situation in which children work 14 hour days and occasionally lose fingers and arms (but earns a high income relative to others in their society) against a situation in which children are bought and sold as sex slaves? And I think that it is very important to be clear that, in many places, these are the kinds of alternatives that exist.

Stories like the one about the Taiwanese workers striking for longer hours need to be reported a lot more frequently, especially by publications such as Mother Jones and Utne Reader. At an IHS conference on globalization in which American students were complaining about sweatshops and corporate greed, a Mongolian student stood up and said "Please send us your sweatshops. We need them. We want them."

Although "socially responsible investing" is, in principle, a good idea, to date the "socially responsible investing movement" has often been irresponsible insofar as there has been a propensity to impose western standards and expectations in developing world situations in which such standards are entirely inappropriate.

Even individual outrages at plants owned by corporations are hard to assess. As a school director, I was responsible, in principle, for everything that happened under my watch. And bad things happened while I was director: A boy exposed himself to girls in the girls' locker room, another boy put Ex-Lax in sodas and gave them to others to drink, a teacher made sexually inappropriate jokes to female students, etc. I hate the fact that bad things happened on my watch and tried to make sure that they did not happen. But even in very small schools, with very small staffs, I could not control everything that took place.

Imagine running a corporation with many thousands of employees around the world. Simply on a statistical basis, there are bound to be some really horrible situations.

In judging "the behavior" of large corporations, we need to become much, much more sophisticated in how we make these judgments. We need to understand first of all that, in the absence of a deep local understanding of the options faced by local peoples, we can't know whether or not working conditions are actually "bad" or if they are, relatively speaking, great. And, even when truly horrendous incidents are brought to light, in principle we should try to understand if a given corporation, given its size and industry, has a higher than average rate of such incidents or a lower than average rate.

The "socially responsible investing movement," and those publications such as Mother Jones and Utne that report news as if they were supporting such efforts, are not even close to this level of sophisticated analysis. As a consequence, I fear that more often than not such attacks on corporations at present result in workers in developing countries being harmed more by such do-gooders than they are benefitted. The Taiwanese riots for longer working hours, reported earlier in this blog, may be the tip of an iceberg.

A Letter to the Alternative Education Community

2005-08-06T15:00:00.000-07:00

Letter from a listserv run by AERO, http://www.educationrevolution.org,

When forced to use a label, I would describe myself as a "left-communitarian-libertarian." My ideal goals for the world - peace, prosperity, happiness, and sustainability for all - are very much the goals of the left. I believe that many of the pathologies that we see in modern society (and I do think that contemporary society is mostly pathological) can only be cured by means of deeper communal attachments. And I think that membership in communities can only be voluntary, not forced (thus the libertarian streak). Forced, geographical "communities," from zoned public schools to nation-states, are not communities at all. Coercion poisons everything that is beautiful about community.

The great tragedy of modernity is that innovators and entrepreneurs were allowed to imagine and create amazing new technogical devices and gadgets, but that those who cared about learning, health, wellness, and community were severely constrained in their desire to create more humane enterprises. In an alternative universe in which Horace Mann and his Prussianization movement had never existed, gradually thousands of idealistic education entrepreneurs would have created different kinds of education, different kinds of communities based around different visions of how to educate young people, and different groups of adults based on different ways of life.

In addition to industrialists such as Thomas Edison and Henry Ford, people like Maria Montessori and Rudolf Steiner could have produced very large scale visions of a deeper and more satisfying way to live. And just as there were many dozens of competitors to Ford in the early days, there would have been many dozens of competitors to Montessori and Steiner, some better and some worse. I do believe that parents love their children and, in a world in which everyone was seeking the best education, and in which there were dozens of magazines offering reviews and articles on which education developed young people best, if Montessori and Waldorf were to survive they would have had to become a lot better than they are today - instead of being wonderful museum pieces, they would each have been extremely dynamic and innovative for the past 100 years.

For those who think that poor people would not make good educational choices: Perhaps not initially (and many upper class people would not make good choices initially either). But almost anyone in the inner city knows more about buying cars than I do; they have very sophisticated knowledge regarding how to get a good car at a low price. In an education market, just as upper-middle class soccer moms discuss private schools at soccer games, inner city moms would be constantly comparing private schools to figure out which ones were best. And, just as with cars, they would develop extremely sophisticated understandings of what was valuable.

For those who are concerned with the price of private schools for the poor: In 1800, Joseph Lancaster, an 18 year-old kid, created Lancaster schools with student: teacher ratios of 100:1 or higher. When one looks at a school budget, staff salaries take up 80-90% of the budget. With 100:1 student:teacher ratio, costs plummet and even the working class poor in early Industrial Revolution Britain could afford to send their kids there. Lancaster schools were a tremendous success around the world, with schools in south America, in Russia, among the Cherokees, etc. They were destroyed in Britain by the Anglican church and around the rest of the world by public schools. Their critics claimed that the education that they provided a shallow education; insofar as that may well have been the case, I would suggest that, over time, they could have become far more sophisticated. The earliest versions of personal computers in the 1970s were Radio Shack kits that were not very effective for anything. But in a large, diverse market, innovators and entrepreneurs create better and better versions of everything. Had they had the opportunity to evolve through 200 years of innovation, 100:1 Lancaster schools today would have become dazzling and wonderful.

Most of the pathologies of modern society stem from the fact that young people are being raised without meaningful relationships during the school day, they are "taught" academics in a context devoid of meaning, and thus their habits, tastes, preferences, attitudes, characters, souls, and spirits are being formed in a horrifying meaning vacuum. The media marketeers who then appeal to their unformed appetities thereby win by default, creating the teen culture that we see today, which then goes on to create the adult society we see today.

While one can "blame" capitalism or the market for this, I don't see what is accomplished by such blaming. Such blaming will not stop one media mogul from producing and marketing the next vicious and mysogonistic computer game or the next super-sexualized MTV video designed to appeal to pre-adolescent girls. Even if Hillary Clinton were elected president and filled government with as many "It Takes a Village" feminists (male and female) as she could find I don't think that teen culture would change much. Given meaningless schooling, teen and pre-teen appetites will continue to be manipulated by the marketeers regardless of which politicians are in office.

Meanwhile, if the people on this listserv and thousands like them were educating a significant percentage of our young (say, 30%), and providing them with meaningful relationships, meaningful learning experiences, and meaningful content, gradually cohorts of young people would be raised with fundamentally different tastes and appetites. As someone who loves to learn - intellectually, spiritually, emotionally, aesthetically, physically, etc. - I find that I don't have any time or interest to buy anything at a mall at all. "Goods" are boring once one discovers lifelong self-discovery. Why not allow schools that allow young people to discover this for themselves?

Most of the pathologies of our society are due to the fact that such a large percentage of our population get their ego-needs met by conspicuous consumption, acts of aggression and dominance, addictive substances and experiences (including violent gaming, ripping through the wilderness on high-powered machines, expoitive and manipulative sex, gambling, etc.) If we create a world in which a significant percentage of the population is mindful, conscious, and aware, most of our other problems will become small and solvable. This is why it is important that our movement obtain significant "market share." Teen culture, and later adult culture, needs to reflect the tastes and appetites of healthy, well-formed beings rather than starved and destroyed beings, the way that it does today.

If 90% of the population experienced a K-12 experience that left them whole and well, then "free markets" would in no way whatsover resemble what they resemble today.

One of the reasons why it is unlikely that young people would voluntarily go to an alternative school is that most young people have been experientially indoctrinated in the notion that "school" and "learning" represent boring, humiliating, meaningless, and lifeless experiences. If young people have experiential connotations for "school" that are similar to our experiential connotations for "dog shit," it is not surprising that it would be hard to get them to go to a new and different kind of "school." Perhaps the "school" that you are offering is much sweeter smelling and more inspiring, but insofar as everytime you use the words "school" and "learning," the young people hear the emotional equivalent of "dog shit," it will be hard to get them in the door on a voluntary basis.

The very worst crime that government schools have committed is that they have taken learning, one of the most magical and beautiful of all life's experiences, and they have given it the emotional connotations equivalent to "dog shit" to many under-privileged young people.

At present, isolated, tiny, struggling experiments in new and better ways of learning and living exist. To create a provocative, but apt, analogy: there are places where drugs or prostitution are "decriminalized" but not yet legal. In Holland, for instance, small amounts of cannabis products may be bought and sold. But it is not legal for a large organization to devote substantial investment dollars to researching and marketing of new and better cannabis products: this is the distinction between decriminalization, which allows a small and marginalized market in a product, vs. legalization, which allows open, long-term investment in research and marketing for a product. If we want our society to "value" learning, education, health, and well-being, we have to make it legal and safe for capital to flow into these fields. This is not the case at present.

It is legal for a homeschooling family to provide a better life for their children. It is legal in many states for alternative schoolers to create a better school. But in many states there are severe restrictions even on private schools, and even in those states in which there are not, admissions standards to public colleges (gradually being changed by the homeschool movement) and the fact that occupational licensing unnecessarily forces people to obtain college degrees to many careers severely limits radical educational innovation. Worse yet, the government forces people to pay for a monopolistic "education" system that is mostly harmful, thus making it difficult to market and sell a better type of education that is inconsistent with the mainstream - this is powerful and insidious way to eliminate the possiblity of a legal market in healthy education.

Moreover, there are constant changes and challenges to what kinds of institutions are allowed. It is tempting, at present, to launch a chain of better charter schools in Arizona at present (because they are relatively unregulated except for the despicable NCLB), but the ongoing media hostility to charter schools makes such an investment very risky. Why invest one's savings or one's life in a situation in which the dollars or years might be lost due to a fickle public policy change? Better to wait and see if the environment stabilizies - and this is the catch-22 of school choice - as long as it remains controversial, talented human capital and serious investment funding will remain reluctant to flow in the direction of health and well-being.

It is time to legalize markets in happiness and well-being.

New FLOW Website

2005-07-28T16:46:00.000-07:00

For those of you who have not already discovered it, please see our new website at www.flowidealism.org or www.flowrealism.org.

Seeking Authentic Value in Human Empowerment

2005-07-22T17:12:00.000-07:00

From a recent forum sponsored by The Alliance for Human Empowerment, http://simsoc.org. 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).

Sources on Economic History

2005-07-18T18:47:00.000-07:00

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.

Learning to Be Grateful for the Industrial Revolution

2005-07-15T11:27:00.000-07:00

"Working hours increased radically during the industrial revolution, while the desirability of the work generally declined, being dangerous, toxic, repetitive, noisy, and otherwise unpleasent compared to the far from idyllic but basically acceptible alternative."

I would very much like to receive empirical support for the notion alleged above (and in his comments to my previous post) by Michael Vassar. By comparing the Amish with 19th century factory labor, Michael perpetuates a dreadful illusion founded by Marx, Engels, and Dickens: that rural peoples lived in some sort of idyllic bliss prior to the Industrial Revolution.

The Amish live on exceptionally productive land and benfit in numerous ways from the technological miracles of the Industrial Revolution, including the extremely low cost of any implement or supply they purchase through the modern marketplace. Pre-industrial agricultural people's lives in no way resembled Amish life today.

In Ireland rural peoples often lived in mud hovels that, when it rained, as it frequently did, were wet hell-holes. Imagine raising a baby in a wet hole in the mud. With respect to working hours, agricultural hours during agricultural seasons were as long, or longer than daylight - often longer than factory hours in the sun. It is not clear to me that, on balance, the desirability of work declined. Meanwhile, the Industrial Revolution rapidly made luxuries previously available only to the wealthy into cheap commodities enjoyed by the working classes: Cotton clothing, tea, sugar, books, and newspapers conspicuous among them. The overall desirability of pre-industrial life must include wearing the same wool clothing throughout the year. By the mid-19th century working class peoples could travel to distant cities via cheap rail tickets; a level of cosmopolitanism that was unheard of for the generations of rural peoples who had never left their village.

Social mobility began to increase as well during the Industrial Revolution, as various mechanical jobs (often in factories) became available to talented working class boys. This was the age of the working class inventor, with numerous inventions (and wealth) created by sons of farmers and other working class boys (see Paul Johnson's "The Birth of the Modern" for a great account of this aspect of the Industrial Revolution.)

Why does all of this matter today? Because poor rural peoples around the world continue to be impoverished by righteous do-gooders who attack "sweatshops" and capitalism on the misguided notion that applying our current standards of well-being will help their lives. I've met people from the developing world who state openly "Please give us your sweatshops" because they know that the jobs provided by multi-nationals are almost invariably better paying and working conditions than are currently available locally (including farm labor). If pre-industrial rural conditions are so rosy, why is it that Thai farming families sell their daughters into prostitution?

Prior to the Industrial Revolution, famine was a recurring fact of life for the working classes around the world. The Industrial Revolution, for the first time in history, created such an astounding increase in the standard of living that by 1830 or so, periodic large-scale famine never again occurred in Britain or the U.S. This achievement is strictly due to laissez-faire capitalism. The notion that pre-industrial conditions were "better" somehow fails to take into account the extraordinarily harsh lives of the starving poor prior to the introduction of full bellies, cotton clothing, books, cosmopolitan travel and careers open to talent that represent the amazing legacy of the Industrial Revolution.

Engels and Dickens told compelling stories that were based in actual conditions at the time. Unfortunately they did not provide a realistic account of pre-industrial alternatives. Lives continue to be destroyed by the illusions created by Engels and Dickens.

Empirical Beliefs

2005-07-10T18:15:00.000-07:00

I was convinced that economic liberty was largely beneficial, even for the poor, due to a series of changed factual beliefs. The "heretical" beliefs, derived from academic economics, include:

1. The standard of living for workers rose throughout the industrial revolution. The notion that "the rich get richer and the poor get poorer" was simply false.
2. The Great Depression, like the S&L crisis, was caused by government, not by an unregulated market.
3. In a free-market, monopoly has rarely been a serious problem. Government supported monopolies, such as labor unions, the AMA, taxi-cab medallion systems, public education, public utilities, the postal service, etc. have been (and continue to be) serious monopoly problems.
4. African-American wages increased as much, or more, before civil rights laws were passed as they did afterwards: a growing economy, rather than legislation, has improved the standard of living of minorities. Minimum wage laws and unions have been especially harmful to minorities. Affirmative action laws tend to benefit the wealthiest and best educated individuals within a minority while the least-skilled among the minority may be harmed by legally-mandated preferential treatment.
5. Union gains are largely made at the expense of other, non-union, workers and of consumers rather than at the expense of management and investors.
6. Wage and price controls are harmful, including minimum wage and rent controls. They lead to misallocations of goods (a more serious problem than I had realized) and they harm the poor disproportionately. Relatedly, price rationing is a wonderful policy tool and ought to be used more extensively, as in peak-load pricing of public transit.
7. Running out of natural resources (with the exception of unappropriated natural resources, such as clean air) is not a problem because of technological innovation and the price mechanism. People who ridicule the notion that technological innovation can prevent the horrors of resource depletion do not understand how effective price changes are in allocating resources.
8. The market can sometimes deal with externalities and collective action problems more effectively than can government (Coase theorem and public choice theory).
9. Because of a lack of clear ownership is the cause of externalities, more private property (such as of waterways, fishing rights, air, etc.) is the solution to most pollution and resource problems.
10. Economic growth is the most effective means of reducing the rate of population growth because birth rates collapse as nations industrialize.
11. Most regulatory legislation benefits existing firms, at the expense of potential entrants, and not consumers or workers.
12. The harms from environmental and safety regulation often exceed the benefits. The clear evidence of horrors which may occur without regulation are not ipso facto proof that the gains of regulation outweigh the costs. Liability law may serve as a substitute for regulation in some situations.
13. Most government redistribution is from one subset of the middle class to another rather than from rich to poor. In general it is from the more dynamic, creative, and industrious members of the middle class to a lazier or less creative segment which is in effect relying on law rather than exertion to obtain and protect their wealth.
14. Increasing consumer prices by means of taxes, regulations, etc. amounts to regressive taxation.
15. Advertising does not cause people to have the tastes that they have. Imposing elite tastes on others does not make them happier.
16. By and large, people are being paid what they are worth. If they are not being paid what they are worth, then someone can (and morally should) make a profit by employing them.
17. By and large, the market produces good products. If not, they someone can (and morally should) make a profit by producing better products.

What is interesting about this list to me is that most of the items on this list are largely accepted among academic economists today (including most Nobel laureate economists) whereas most of the items on this list are highly controversial (or are considered false) by most non-economists.

If I had not been convinced by economics that most of these items were mostly true most of the time, I would not be supportive of markets in the way that I am. Changed empirical beliefs were crucial.

A Silicon Valley Operator's Manual

2005-07-06T16:51:00.000-07:00

An excellent article on Silicon Valley political perspectives by Rich Karlgaard in the WSJ:

http://www.opinionjournal.com/cc/?id=110006493

Learning to see the invisible incentive structures that pre-determine our institutions

2005-06-29T07:02:00.000-07:00

Do-gooders need to learn about the nefarious and byzantine ways in which government destroys life.

Often a policy debate is cast entirely in terms such as: Should there or should there not be a law against smoking in bars? Should we or should we not teach creativity and critical thinking in schools? Should we or should we not be living in smaller houses? Should we be saving more? Etc.

These passionate political arguments, for and against, are generally blind to the ways in which the invisible incentive structures in our society, which to a considerably extent determine what institutional options are available to us, pre-determine outcomes. We need to learn to pull ourselves out of existing pro- and con- debates, and learn to observe the ways in which incentive structures have created a situation in which only certain kinds of institutions are viable.

With respect to the example of smoking vs. non-smoking bars: If there were fewer obstacles to opening a bar, there would be more bars, smoking and non-smoking. It would be easier and less costly to try out a new kind of bar. Moreover, it has been suggested that because there are fewer restrictions on opening a bar in Britain, and that therefore there is a pub on almost every corner in certain neighborhoods, that there is less drunk driving than in the U.S. I don't know if this is true or not, but I do know that people who argue about bans on smoking in bars never consider this approach to solving the problem.

Often a claim is made that markets won't solve a problem spontaneously, an argument develops in which both sides argue about whether or not the market could solve the problem, and the reality is that there is an enormous underlying distortion that is preventing the market from solving the problem.

This is analogous to the fact that government schools prevent the development of a market in schools that teach creativity, critical thinking, health, and well-being.

Or to the fact that the mortgage interest deduction promotes large houses on big tracts of land in the suburbs while destroying life in the inner cities and reducing the American savings rate (by encouraging large sums to go into the consumption of housing rather than into investments).

Or to the fact that homelessness in the U.S. is correlated with rent control policies in urban areas. Zoning laws that eliminated Single Room Occupancy hotels in many cities also may have contributed to homelessness.

It is my hunch that, the more we learn how to see the world in this way, the more we will discover that well-intentioned political initiatives have resulted in truly damaging limitations of possibility. Did well-intentioned laws intended to reduce the number of bars, and thus drinking, actually result in more deaths from drunk-driving? Did well-intentioned efforts to provide public education for all actually result in a world in which the most shallow appetites for consumption and addition dominate our teen years and thus our society? Did a well-intentioned effort to make it easier to own a home result in suburban sprawl and the destruction of our inner cities? Did a well-intentioned effort to protect poor renters increase homelessness?

Those who aspire to improve the world need to begin to take these issues seriously.

FLOW aspires to be a much more economically-sophisticated do-gooder movement; a quantum leap forward in how to actually make the world a better place, in how to be a realistic visionary.

Rumi, FLOW, and Love

2005-06-27T09:13:00.000-07:00

"Your task is not to seek for love, but merely to seek and find all the barriers within yourself that you have built against it."

--Rumi

Because of the importance of economic understanding for creating healthy political institutions, sometimes we do not speak often enough about "the other half" of FLOW, so to speak: Love.

I think that everyone who is interested in public policy and political philosophy has had their minds and spirits formed in an atomsphere of conflict - after all, politics is war by other means.

One of our goals is to, as much as possible, eliminate politics and thereby reduce public conflict. Too much time, too many resources, and too much good will is destroyed in political battles in proportion to the good that results (little to none, most of the time).

For me, avoiding politics means encouraging voluntary solutions to problems. There should rarely be talk of coercing others through laws at all. If we see a way in which the world needs to be made better, if we see something that is wrong with the world, then we should either create it ourselves, encourage others to create it, or propose specific changes to the rule frameworks (such as ways to internalize externalities, or to eliminate the government education monopoly) that will allow us to create it ourselves.

Criticize by creating. Create as an act of love.

Wikipedia and the Free Dissemination of Knowledge

2005-06-19T14:15:00.000-07:00

A great article article about Wikipedia. It's a great example of the free, cooperative, innovative, and adaptive dissemination of knowledge:

http://tinyurl.com/4hhwd

School Choice and Liberation of the Spirit

2005-06-15T10:24:00.000-07:00

I am enthusiastic about the current expansion of charter schools and charter school laws as well as tax credit and voucher plans that allow for more freedom in education. I am most distressed by Bush's "No Child Left Behind" law (NCLB) because it exercises federal control over education, including charter schools. This is a very dangerous and constraining precedent. Among other things, NCLB requires licensed teachers, possibly the single worst problem in K-12 education.

The existing K-12 education system, public and private, acts like a dominant operating system that prevents new entries. People often complain about the dominance of the Microsoft operating system, and how difficult it is for Macintosh, Linux, or others to win market share against this monolith. But the K-12 system of curriculum, textbooks, standardized tests, teacher training, transferability of credits and transcripts, and parent expectations has a much larger "market share" than does Microsoft OS and, worse yet, it is enforced legislatively and funded coercively. Imagine how outraged we would feel if Microsoft had the opportunity to force us to use their software and we all got it "free" because the government taxed us in order to pay for it?

All of the schools that I have loved are outside the dominant operating system. I want to have the freedom to create schools at which students become excited by reading, thinking, and talking about ideas; schools at which students can become passionate about programming, or fiction writing, or organic gardening, or anything else, and then pursue those passions; schools at which young people can pair up with amazing singers, carpenters, judges, massage therapists, and others; and so forth. Life is endlessly fascinating; school is not. But in order to allow us to create schools at which students can learn to love life, and to live engaged, alive, spirited, existences, we can't be forced to teach "5th grade social studies" and "7th grade English." The fascinations in life don't exist in those boxes.

Yes, we can expose students to little tiny bits and pieces of them. But compare:

1. Student A who, at the age of 13 spends two years studying with a Zen master.

2. Student B who, at the age of 13, reads a small side-bar in her world history textbook that provides a shallow and inaccurate description of Zen which she barely has time to wonder about while preparing for her multiple choice test on which she will spit back information that she will forget the next day.

There is simply no comparison between the two experiences. And yet our education system, the dominant operating system, is 100% designed to encourage and facilitate the experiences of student B, while making it virtually illegal and impossible for students to have the experiences of student A.

And we wonder why our society is prone to shallow, compulsive appetites and addictions to drugs, alcohol, casual and manipulative sex, materialism, status symbols, and so forth?

"If It Can't Be Abused, It's Not Freedom" Alan McConnell

2005-06-12T05:05:00.000-07:00

I would like to see a sufficiently open voucher plan such that just about anyone (say, as long as they weren't a child molestor) could receive educational vouchers if a parent chose that person as their child's "Educator." At $10,000 a pop (per student, per year), there would be millions of "educational entrepreneurs" inviting a couple of teenagers to hang out with them every day.

In the inner cities, these "educational entrepreneurs," some of whom would be preachers, some coaches, some ne'er do wells, would all begin to compete with schools for those $10,000 vouchers. Some of them would go on to create schools. Some of those "schools" might involve little or no academic activity, but they might encourage a sense of teamwork, leadership, self-discipline, pride, ambition, and community. If no credentials were required at all to set up a "school," there would be ex-gang members and former drug addicts who would provide brilliant leadership for the young in the very worst neighborhoods. These leaders would be more effective at turning around inner city culture than most "credentialed" teachers could ever be. And, at the same time, a few of them might do drugs with their "students" or they might even be current gang leaders who found "educational vouchers" to be a terrific racket: get the whole gang to put in their $10K education vouchers as start-up capital for the gang's business enterprises.

This kind of open-ended approach, which would result in tens of thousands of horror stories about kids not learning anything, would also be the fastest and most effective way for us to reduce the scandalous percentage of young black males who become incarcerated. These extraordinarily spirited and intelligent people don't need "schools" at which they are humiliated everyday - a daily humiliation which leads them to long for a social role outside of schools in which they can be strong, brave, and proud. They need mentors who can, one-by-one, lead them into positive, constructive life roles in which their intelligence and spirit can be rewarded by entrepreneurial success.

I don't expect very many people to take this sort of open-ended, radically free education, no-required-credentials-at-all approach very seriously. For the time being, take it as a thought experiment. At present our society is too attached to the pernicious belief that credentials have some mystical relationship to qualification and expertise to understand the profound potential benefits of allowing just anyone to educate our young. But then again, very few literate people take seriously just how humiliating school is for many of the best young males in our inner cities. We who did not suffer a soul-searing humiliation day after day can afford to believe the superstition that educational credentials have a positive value.

I passionately love fiery, independent, proud, spirited young people. These young people, especially the young men, may be highly intelligent but may not have good academic skills or work habits. When they get to be adolescents, and their hormones develop them into powerful leaders, it is painful for them to go to a classroom every day and be bored out of their minds, while being treated as children, as prisoners, as slaves, and as idiots. In many situations they are forced to submit to a tedious, callow, frightened, bland, rule-following adult towards whom every fiber in their being feels disgust. I have spent time liberating some of these young men; my heart burns when I see how painfully hateful school is to them day after day after day. I'm amazed they stay in school as long as they do. More exhortation from the chattering classes about "the importance of education" is impotent in the face of their daily agony.

At some point in the next twenty years we will come to regard mandatory K-12 government schooling with the same revulsion we now regard 19th century child factory labor.

How can any decent society allow this to happen?

Balancing FLOW's Commitment to the Good with a Commitment to Diversity

2005-06-07T12:43:00.000-07:00

"But isn't the whole point about FLOW that some freely chosen entities are "better" than others because they are more healthy or sustainable or eco friendly or market friendly?"

The great challenge, the great tension, that we face is between:

1. A radical tolerance which refuses to force other people to live the way that we think that live should be lived.
2. A passionate personal commitment to making life for ourselves and others better.

Often tolerance collapses into neglect and even nihilism. Often a commitment to the good becomes dogmatism and a desire to control others.

Personally I combine these two by means of

1. A profound recognition that people are far more different in what makes them happy and well than I can imagine.
2. The realization that none of us really knows what is good in the long run.

I believe that if I was allowed to create the well-being schools that I want to create that many parents would want their children to come to them. But maybe not. Steve Jobs won with Apple and lost with NeXT. The NeXT computer was cool, but it did not win in the marketplace.

I can imagine a world of lifestyle corporations some of which sell new culture/Whole Foods/Montessori lifestyles and others of which sell culturally conservative/country fried food/Baptist lifestyles and who knows which one would bring more happiness to people?

Government Is Best at Simple Objectives, and Education is Not a Simple Objective

2005-05-28T18:29:00.000-07:00

Some people believe that if we devoted the same resources to educating the poor then we would "win" in the same way that we win wars. It is not the case that if we "valued education as we do the military" that outcomes would be successful. Government is at its best when it strive to achieve limited, simple objectives, like winning wars. In the case of the military, national defense is a relatively well-defined objective. Education is not a simple, well-defined objective, although people try to get us to think so. (Discrete skills, such as reading, are relatively well-defined, but education includes much, much more than the teaching of discrete skills).

In education, we face radically different, and passionately held, views on what should be going on there. Once, when I was introducing socratic practice in a public school, a parent confronted me and told me that she was going to make sure that this did not happen in her school district. She then gave me the following syllogism:

1. Confusion comes from Satan.
2. Your questioning causes confusion.
3. What you are doing is Satanic.

And, indeed, she (one vocal parent) stopped the implementation of socratic practice in that district.

This is but one vignette of a profound set of differences in parental views regarding what is appropriate in education: What kind of sex ed should take place? What kind of math ed should take place? What kind of history should be taught? What kind of biology should be taught? And on and on and on.

To complicate the situation further, children really do learn in different ways. People who are educated well enough to debate educational policy are, for the most part, those for whom the system more or less worked. People who are in prison, addicted to something, or miserably poor are not those for whom the system worked. Although I wouldn't quite say that different kinds of schools could save all kids, at present many kids are destroyed by our existing middle schools and that this phenomenon is entirely unnecessary. But we have to be able to create dozens of different kinds of schools that approach life and learning in dozens of different ways and we need to innovate radically on all of these all the time.

Magnet schools were proto-charter schools for the elite. Upper middle class professionals had the political clout to get magnet schools set up so that their kids could escape the local dog food schools. For some of those people to have the nerve to be against school choice reminds me of someone in the Soviet nomenklatura claiming that communism worked.

When people think of "private education" they seem to think of Channel One or McDonald's. But "private education" means that you, if you really want to give back to the community, could begin working on a new, more wonderful type of K-12 experience in conjunction with dozens of other young, bright, cool, anti-authoritarian people. Your schools could liberate dozens of kids, then hundreds, then thousands, then millions.

If a new school model that starts with 100 students doubles every year for 30 years at the end of that time all students in the U.S. would be educated under the new model. Don't think of some mean corporation taking over U.S. education. Think of the very best human beings you know having a blast and doing good and bringing more human beings in because all of a sudden K-12 education is a fun, cool world in which you can be creative and create a better world.

To paraphrase Steve Jobs' pitch to John Sculley: "Do you want to spend the rest of your life programming computers, or do you want to change the world?"

Creating an Innovation Dynamic in Education

2005-05-24T13:15:00.000-07:00

Sometimes people try to convince me that there are very good public schools right now, and very poor private schools right now. I do not disagree with this point at all. Of course there are good public schools and bad private schools.

My core point has much more to do with the importance of creating a large scale process of ongoing mutation and development.

Silicon Valley was built on math, sand, and freedom. The Soviet Union had the best mathematicians and lots of sand, but no freedom. By the mid-1980s a decent U.S. university had more computing power than the entire Soviet Union.

For me, this is a profound parable for educational freedom as well. There were individual Soviet computing projects (i.e. a supercomputer project) that were actually quite good. But while the Soviet system, by means of individual exceptionalities or devoted state power, occasionally did manage to do great things, it was utterly incapable of creating a massive, evolving system of creation that could result in ubiquitious, cheap computer power and ever-more amazing applications and advances.

Sure, there are great individual teachers, principals, and public schools. But a sufficiently open market in education would create an innovation dynamic in education that was just as powerful in education as has taken place in the IT industry in the last forty years.

Bringing Creative People into Education

2005-05-21T08:02:00.000-07:00

After having spent 15 years in K-12 education, starting out as a public school reformer, it is perfectly clear to me that creating a private market education is the single most important thing that we can do to make the world a better place.

For some, "market" has connotations of "for profit" and "greed." For me, "market" has connotations of "cool, creative people can actually get something done for a change." When I hear of those who are concerned about greedy people taking over a market in education, my first thought is "we just need good people to create better alternatives to the sleazy ones." Actually, the market does a pretty good job of this already and would do a much better job if more well-intentioned people became education entrepreneurs.

The absence of a real market in education and health care has created a situation in which talented, ambitious, creative people can have interesting, creative, highly-paid careers if they work for companies that sell liquor, tobacco, pharmaceuticals, and many other things but - if they work in education - they face tedious, bureaucratic, frustrating lives. By allowing government to control education we have created an amazingly efficient filter that forces the most talented and best people out of the system.

Right now, without changing to a market-based system, more money for educator salaries will only mean that the existing people, many of whom I would not hire as educators, get more money. A few more talented people might enter education if salaries were significantly higher, but the real bottleneck is not money: it is the absence of a creative, inspiring, fun professional life. Cool, creative people do not want to work for public schools. When they try it, most of them leave after a few years. We are forcing the best and most dynamic people to stay away from our young people. Why?

We (join me, let's go do it!) can create new kinds of educational organizations that would be a blast to work at! The socratic discussions that I like to lead are more fun than anything that I have ever done! And you can create schools at which kids have a blast creating music, and websites, and screenplays, and gadgets, and more. Nothing about our nihilistic secondary school situation is necessary. Every day that we support "public" education, we thereby make a decision to support bland meaninglessness in the lives of our young people.

People enter other fields because they are cool and dynamic. Freedom is the sine qua non for creative people. Managing schools through multiple, competing, highly politicized, bureaucratic management structures (the national government, state governments, and local school boards, all of which are prey to media shocks, election grand-standing, and complex bureaucratic positioning to hide from the ongoing political firing squad) is simply a terrible, terrible idea.

Designed correctly, in the long run a K-12 education market will unleash more happiness and well-being, especially for the poor, than any other policy change that we could possibly envision, bar none.

Homeschooling as Growing a Nutritionally-Adequate Diet

2005-05-19T15:12:00.000-07:00

If someone proposed that inner-city people should feed themselves by growing their own food they would be called all sorts of names implying that they were cruel and unrealistic.

When I listed the various options for obtaining food (Costco, Safeway, 7-11, restaurants, etc.) I initially balked before adding "growing your own." Indeed, I chickened out and wrote "growing some of your own food." What a ridiculous notion to grow your own food!

But homeschooling is exactly like expecting people to grow their own food and still have a diverse and nutritionally-adequate diet. The fact that some people manage to do this well is testimony to the amazing creativity and resilience of human beings. I suspect if similarly forced into a corner (as were people in communist regimes), people could home-grow their own food and actually do pretty well for themselves. Our pioneer ancestors did as well, of course, but in both cases the lives of the people so living involved harder work than most of us can imagine.

The fact that people homeschool, "grow their own," rather than send their children to be nourished on the free dog food-style education available speaks volumes about the effects of an absence of a market in education.

Envisioning a Market in Education

2005-05-17T08:41:00.000-07:00

Markets provide diverse goods to diverse people. A market in education would provide much higher quality education to the poor at much lower prices. And eventually high-end innovations in education would become available at lower and lower cost to all.

Just as the grocery industry is very diverse, so too would an education industry be very diverse.

The second-fastest growing segment of the grocery market, and the one that will soon have dominant market-share, is the Sam's Club/Costco superwarehouse-style grocery. These places provide groceries that are amazingly cheap. They really do sell groceries at wholesale prices; most small retailers buy directly from these wholesalers. And while their selection may not compete with Albertson's or Safeway, they have a remarkable range of very high quality food at such cheap prices. And, of course, there is Trader Joe's, which is almost a mini-Costo for the gourmet, offering Whole Foods-style groceries at much lower prices. Meanwhile the main grocery chains are learning to provide a broader range of health foods, on the one hand, and lower prices, on the other. And we can buy food at 7-11s and gas stations; we can have it delivered to our doors; we can buy some things via mail order; we can eat at restaurants, we can grow some of our own food, etc. The "Whole Foods" analogy was a vignette of just one of many, many different educational niches that would blossom in an education market.

Right now, there is a for-profit chain that provides education for at-risk students (Ombudsman, http://www.ombudsman.com/). Contrary to the claim that private education will "cream off" students, this chain specializes in educating in those students for whom the system has failed: drop-outs or near drop-outs. Often they rent space in a strip mall, install a room full of computers, and run four "school days," one from 8-12, another from 12-4, and a third from 4-8 p.m. Students complete the work for their high school diplomas by working on self-paced instructional materials on-line. A teacher is available to help the students if they get stuck.
At the one that I visited in San Marcos, TX, several years ago, the students were very focused and loved it. They loved the autonomy ("Don't have to do what the teacher tells me to do all the time."). They loved the self-paced aspect ("I can go as fast or as slow as I want.") They loved the schedule ("I have a job - or a baby - and can't go to school all day.") They were less bored and there were no discipline problems (and remember, these are the "at-risk" students who are usually considered trouble-makers in a normal classroom).

I have seen a lot of conventional at-risk programs run by public school districts themselves, and I would say that this bare-bones for-profit program was better than 80-90% of the much more expensive programs that I've seen run by public schools.

At the time that I saw the school in the mid-90s, the curriculum was relatively dull. But improving on-line curriculum is simply a matter of development, which is often limited by the extent of the market. I'm sure that the materials are better now and, if the market was, say, a $20 billion market instead of a $5 million market, one would see much, much better materials being developed. One of the top officers at a leading educational software company told me explicitly once that they did not design self-paced software that would replace the teacher - all of their software was designed to assist the teacher. He pointed out that public school districts wouldn't buy software if the teachers felt threatened.

And with better electronic teaching, human teachers can increasingly focus on the more human aspects of education.

The KIPP chain of charter schools, http://www.kipp.org/, is widely recognized for having created superior academic schools for inner-city neighborhoods. They have longer school years, better discipline, and better academic performance with the same students in the same neighborhoods. They have a distinctive training program for new principals in which the prospective principal is required to spend a full year as a trainee at an existing KIPP school in order to learn from the inside how to re-create the system at a new site.

I do think that it is very, very important for people to learn how to see how markets provide a simply amazing array of ever-improving goods at ever-decreasing cost. Once one learns to see the world in this way (and it is a way to watch the world around us, how to determine salience), one is constantly astounded. There is every reason to believe that a market in education would be as effective at creating an amazing array of educational options of ever-improving types of education at an ever-decreasing cost.

The poor today in the U.S. have refrigerators, televisions, phones, vacuum cleaners, stoves, and a host of other conveniences. Why don't we let the market produce good educations for them?

Envisioning the Whole Foods Market of Montessori: A Chain of K-12 Montessori/IB Schools

2005-05-13T11:27:00.000-07:00

Link to an article on the recent Whole Foods store opening in Austin:

http://www.usatoday.com/money/industries/food/2005-03-08-wholefoods-cover-usat_x.htm

The store is a combination theatre and playground; grocery shopping as entertainment. I know people in Austin who were more excited about going to the event than they would be if a celebrated new rock concert or smash broadway hit had been coming to town. And I think: Why are we allowed to do this for grocery stores, but not education?!!! We should have celebrated Montessori school openings like this. The reason that we don't is not because people care more about food than they do about education. The reason that we don't is because we don't have a market in education.

As brilliant a businessman as John Mackey is, his task, especially in the early days, would have been far more difficult if food was given away free by the government. His earliest stores, in those days when it would have been toughest to meet payroll and pay rent, would have been competing with free government (i.e. "public") grocery stores.

Worse yet, those free government grocery stores would be putting out lots of propaganda to the effect that if you bought groceries from Whole Foods, your children would get sick and might not be able to digest the healthier, better government food (which was actually quite dreadful). You would be told that you were taking a terrible risk by feeding your child Whole Foods and they just might not recover (Montessori parents have often been told such things by the "education experts" at public schools, all with a sense of ominous professionalism).

And, not knowing what to believe, sometimes you would hear stories of children who had eaten Whole Foods and then, when their parents couldn't afford it anymore and went back to buying public groceries, the child got sick. Look! The professionals were right! Children that eat Whole Foods get sick when they come back to eating regular food, real food. (Sometimes Montessori kids hate conventional education when they return. And this fact is taken as an indictment of the Montessori school.)

The Ph.D. nutritionists would claim that there was no proof that Whole Foods were any better than a healthy public grocery diet and that, because Whole Foods was not supervised by Ph.D. nutritionists, its food probably was dangerous and unhealthy (and look, children were getting sick from good public groceries after their metabolism had been messed up by health foods! Clear empirical proof of how dangerous this health food was!). The entire professional academic research establishment would be devoted to improving the quality of public groceries by means of research studies. Although it tasted like dog food, and despite the fact that the politicized, bureaucratic manufacturing process resulted in such disastrous quality control that really quite horrible impurities were regularly mixed in, the dog food was the officially-recognized standard of health. (The academic establishment ignores Montessori and claims that "licensed teachers," those taught by school of education professors, are better).

Even so, here and there people like John would open up tiny little health food stores where a few people, who happened to care passionately about good food, would shop. Those people would be loyal supporters who believed that health food was better. But when one had to pay taxes to support public grocery stores, it was even harder to be able to afford health food. And, in every financial crunch, one was tempted, and some did, go back to eating public groceries. This made it very hard for Whole Foods to create a reliable revenue stream with which to grow. Bankers and venture capitalists looking at giving Whole Foods a loan to expand would look at how the fluctuations in the economy resulted in fluctuations in sales, and look at how tiny the margins were to begin with, and they would decline to finance Whole Foods. (Small private schools are very vulnerable to fluctuations in enrollment due to economic downturns. Parents do send their children back to public schools when they lose their jobs or take pay-cuts.)

Worse yet, Whole Foods would be trying to work in a frightening regulatory environment in which, every once in a while, a government in one state or another would pass laws that would destroy even the possibility of such an enterprise. In Pennsylvania they might pass a law requiring even health food stores to hire only Ph.D. nutritionists, in Maryland they might pass a law requiring 50,000 square foot minimum size grocery stores because only big grocery stores were believed to be capable of selling healthy food. The tiny health food operators in those states would simply be driven out of business by such legislation.

And, in such a circumstance, over time, many of the people operating and working at health food stores would not be especially capable people. Initially, when the idealism of health food began, many capable and idealistic people entered the business. But as wave after wave of obstacles continued to appear, gradually such endeavors did not strike capable people as a worthwhile vocation in which to invest their talents and their ideals. This might never have come about explicitly and consciously. Instead, the patina of idealism that had orginally surrounded the ideal of health food would gradually come to be associated with a sort of smelly, dirty, unpredictable environment that frankly was not very inspiring. And cynics would point to such pathetic little stores and say: "Look, we were right. This is what happens when you don't listen to the Ph.D. nutritionists."

Now re-read the article about the Whole Foods store opening in Austin, and imagine how, with educational freedom, it could have been a Montessori school opening.

A presentation that I expect to give (together with some partners) at a Montessori conference next November:

"The prospect of tax credits and education vouchers in the U.S. will create a circumstance in which dramatic growth in Montessori education becomes possible for the first time in history. Just as the health food industry moved from a few, small hippy-run stores in the 1970s to the fastest-growing sector in the grocery industry today, so too will Montessori education move from small, often struggling, schools that serve a small percentage of the population to large, very high quality, professional organizations that serve an increasingly large percentage of the population. We envision the process of creating a successful, scalable chain of Montessori K-12 schools with their own curriculum development, teacher training, quality control, marketing, design, and architecture that will become as visible a public institution in education as Whole Foods Market has become in the grocery industry."

(It should be obvious, by the way, that all the dynamics sketched above would also apply to providing cheap, low-cost innovative education a la Target or Costco, merely with a different story attached.)

A proposed FLOW obligation:

2005-05-11T16:17:00.000-07:00

Often when the flaws of existing do-gooders have been pointed out, the perception is that those who are criticizing the efforts of do-gooders are implicitly claiming that all is well and that no effort at improvements are needed.

Insofar as do-gooders rightly believe that not all is well, they feel that the critics of existing efforts to do good are not well-intentioned.

Ideally, therefore, we would cultivate the obligation to promote positive, constructive ways to solve problems every time that we criticize existing efforts to solve problems. This commitment would make it clear that we recognize that existing institutions and behaviors are far from perfect, and that we do believe the world can be made better.

If we do not do this, well-intentioned people will be inclined to continue to support misguided attempts at improving human well-being.

Some people have suggested, for instance, that the "socially responsible" criteria of the William James Institute may be flawed; one particular point is their hostility to hostile takeovers, because such a criteria for "socially responsible" is likely to protect incompetent management.

Ok - insofar as the William James' criteria may be flawed, are there a set of sensible criteria for differentiating good or "socially responsible" business practices from bad? What would those criteria be?

A Fascinating FLOW Juxtaposition

2005-05-09T08:49:00.000-07:00

Two items that nicely reflect the two sides that we are attempting to reconcile:

On the one hand, The William James Foundation, "The William James Foundation, a non-profit organization, seeks out, sponsors, and provides access to start-up capital for new mainstream business enterprises committed to the highest principles of corporate social responsibility." They then list their criteria:

http://www.williamjamesfoundation.org/index.htm

On the other hand, an article reporting on Taiwanese workers rioting (yes, rioting) on behalf of the right to work longer hours. This was a major event last summer involving 1000 workers and requiring 500 police to squelch the event. It seems not to have gotten much press coverage in the U.S. Apparently Nike reduced hours based on the demands of the "socially responsible" movement in the U.S., and the workers themselves were outraged. One suspects that if 1000 workers and 500 police had had a confrontation against long hours at a Nike plant that the U.S. press would have been all over the disruption:
http://www.asianlabour.org/archives/001832.php

Why wasn't this a cover story for Time Magazine?

Somehow we want to acknowledge and support the positive aspects of the "socially responsible" business movement while simultaneously being very wide-eyed about the harms that this movement has caused in its current incarnations. Being a realistic visionary means that one does not substitute romantic do-gooder notions for attention to the actual outcomes of policies.

Great article on the PayPal story:

2005-05-08T15:34:00.000-07:00

"The real challenge of running a business . . . is that you're trying to manage a stream of revenues and a stream of costs, where both are uncertain, you want to make revenues exceed costs, bad decisions can kill you, and you've got to decide quickly. Business schools don't teach much about how to do that."

http://www.techcentralstation.com/031405F.html

Aikido Activism

2005-05-07T13:25:00.000-07:00

Reed Burkhart has created a sort of mirror-image of FLOW from the other side, as it were:

http://aikidoactivism.xwiki.com/xwiki/bin/view/Main/AikidoActivismEssayFixed

Whereas FLOW at present is more free market than social entrepreneurship, Aikido Activism is more social entrepreneurship than free market (indeed Burkhart claims to be hostile to "Free Market Fundamentalism"), but it is an interesting initiative with many parallels to FLOW.

An obvious difference has to do with economic understanding. Tax policy issues do not seem to be a focus of Aikido Activism because Burkart seems to believe that well-intentioned people can make a difference. I certainly want to encourage well-intentioned people to make a difference -but even well-intentioned people will, on average, buy bigger houses due to the mortgage interest deduction than they would if we had a flat tax.

Indeed, a major part of an economic perspective may be the realization that incentives matter more than do intentions. This is counter-intuitive: Our evolutionary history has pre-disposed us to judge people and actions based on the intentions behind the actions.

Intentions do matter, but because incentives are so much more powerful our first priority needs to be to make sure that the incentives are aligned correctly, because if institutions don't provide the right structure for directing incentives, all the good intentions in the world will be useless.

It is by means of focusing on getting both the incentives and the intentions right that FLOW hopes to be both realistic and visionary.

Upwing

2005-04-28T11:21:00.000-07:00

From the web page of Michael Anissimov, http://www.acceleratingfuture.com, thanks to Michael Vassar for the link:

Upwinger. As put by buddy John Smart, a fellow upwinger, "I hold a "political" outlook neither right wing, nor left wing, but "up wing", with positions defined very little by traditional political dialog, but primarily by assessing which choices in science and technology will accelerate us most humanely into a better world." I believe it is naive to think that human political opinions are the primary variable in determining whether humanity flourishes or dies out in the 21st century and beyond. Our fate and quality of life is determined primarily by the successive emergence of ever-more-powerful technologies, the policy attitudes we take towards them, and the application (or lack thereof) of robust, freedom-fostering precautions in early and intermediate development stages (where individual activists and small organizations can actually have influence). Traditional politics is not a feasible "leverage point" for doing good in the world, unless you devote your entire life to it (and even then, you can't be certain you'll have an impact). There are just too many people already in the business. It's just so easy to become fixated on the emotional and psuedointellectual issues of politics; why not try something more challenging for a change?

Microfinance Adventure

2005-04-17T12:39:00.000-07:00

I am in Santiago, Chile, until April 27th at a microfinance conference and to do some Socratic Seminar consulting. No new posts until I get back.

Design Considerations for a World of Educational Freedom

2005-04-11T11:23:00.000-07:00

Once we obtain educational freedom, initally through tax credits and educational vouchers, and later (in fifty years) through the separation of school and state, we will have to think strategically about how to use that freedom to create a better world.

A first draft of this strategic planning, from my manuscript Whole Lives: The Creation of Conscious Culture Through Educational Innovation:

"The problem to be solved is thus

1. To create integrated cultures, based perhaps on a school-like educational experience, but supplemented by other cultural dimesions. The hypothesis is that, as with traditional tribal cultures, it will be possible to reduce many of the ills of modern society by means of a coherent cultural focus.

2. Yet unlike traditional tribal cultures, these consciously developed cultures/schools must, in at least some cases, prepare young people for high-level performance in contemporary society.

3. Also unlike traditional tribal cultures, these consciously developed cultures/schools must, to at least some degree, emphasize a concern for global well-being and the extension of mutual respect to expanding groups of people.

Because of the inherent chauvinism in virtually all traditional cultures, and because of the fundamental tribal character of humanity, this last feature will require particular design consideration."

MyRichUncle.com

2005-04-09T04:54:00.000-07:00

A private student loan program:

http://www.myrichuncle.com/

This and innocentive.com are thanks to Mark Frazier. The number of cool components available to support private initiatives that can change the world seem to be expanding exponentially.

Can FLOW harness and focus all of this energy? Stay tuned . . .

Innocentive.com

2005-04-07T07:23:00.000-07:00

"InnoCentive® is an exciting web-based community matching top scientists to relevant R&D challenges facing leading companies from around the globe. We provide a powerful online forum enabling major companies to reward scientific innovation through financial incentives."

http://www.innocentive.com/

FLOW could offer an analagous web-based set of competitions for social entrepreneurship projects. Instead of, or in addition to, periodic high-profile competitions, an ongoing competitive framework for intelligently-designed do-gooder solutions.

Dubai and Action

2005-04-02T09:12:00.000-08:00

A great article on Dubai below; a free market paradise in the desert.

Through Mark Frazier's Open World project, ultimately part of the FLOW vision for global peace and prosperity is to help entrepreneurs to create free market zones like Dubai and Hong Kong around the world. These free market zones allow any worthless piece of real estate anywhere on earth to become havens of extraordinary prosperity. More importantly, they become anchors for a peaceful world. If the west Bank or Gaza strip became a free zone, conflict in the middle East would rapidly decline. We need free zones in Iraq, Afghanistan, Somalia, and all of the other war-torn disaster areas around the world.

To sketch this aspect of the FLOW/Open World project very briefly:

1. FLOW and Open World accelerate grassroots globalization through broadband elearning and remote services. FLOW recruits entrepreneurial college students to start remote service businesses in conjunction with developing world entrepreneurs. FLOW, Open World and other partners supply the technical and business expertise.

2. As we develop many thousands of these grassroots broadband enterprises, we not only support the entrepreneurs with technical and entrepreneurial expertise, we also integrate free market and civil society principles into the practical, nuts-and-bolts transfer of useful business how-to information.

3. As we develop a global constituency of such entrepreneurs interacting through our support network, we promote free zone competitions: Those groups of entrepreneurs who are best positioned vis-a-vis their governments, to create free zones, would win support from Open World to help create free zones in their countries. Because real estate values sky-rocket any time a free zone is created, there will be significant financial incentives for entrepreneurs to coordinate their actions to promote the creation of free zones in their countries.

4. Ten to twenty years from now, free zones will be exploding all over the world. The explosion of free zones will create dramatic centers of peace and wealth in many of the previously poorest and most unstable regions on earth. At the same time, the explosion of free zones will put pressue on the governments of large industrialized nations to become more responsible and less predatory.

5. In forty to fifty years, lasting global peace and prosperity become a reality for the first time ever. The world now becomes a wonderful place in which people dedicated their lives to discovering ever better ways of living.

All of this begins with our campus presentations next fall in which we launch the first cohorts of college students on Open World entrepreneurial projects.

Thanks to Mark Frazier for this amazing vision.

http://www.dailyreckoning.com/Writers/Casey/Articles/WilltheBoomContinue.html

Open Source as a Return to Free Market Principles?

2005-03-29T08:18:00.000-08:00

"Open source embodies an ethos as fruitful and resilient as the closed capitalism Bill Gates represents: the spirit of democratic solutions to daunting problems. It's the creed of Emerson, who preached independent initiative and advocated a"creative economy." It's the philosophy of William James, whose pragmatism dictated that "ideals ought to aim at the transformation of reality." It's the science of Frederick Taylor, who proved that distributing work could exponentially boost productivity and replace "suspicious watchfulness" with "mutual confidence." It's the logic of Adam Smith, whose notion of "enlightened self-interest" among workers neatly presages the primary motivation for many open source collaborators. Finding the roots of open source in Taylor and Smith is especially significant because the approach isn't, as some insist, anticommercial or anticorporate. Rather, it is a return to basic free-market principles. The open source process fosters competition, creativity, and enterprise."

The complete Wired article: http://www.wired.com/wired/archive/11.11/opensource.html?pg=1&topic=&topic_set=

Adventure Altruism, from Outside Magazine

2005-03-28T07:21:00.000-08:00

I am very interested in creating a world in which doing good is fun, and in which fun is doing good. The "Adventure Altruism" movement is part of the spontaneous trend in this direction:

http://outside.away.com/outside/destinations/200502/volunteer-vacations_1.html

Idealism and the Mortgage Interest Deduction

2005-03-25T10:33:00.000-08:00

After learning to see the world through the lenses of economics, one of the things that most startled me was how different the world looked even though I had exactly the same values that I had had when I accepted the views of Harper's Magazine, Utne Reader, Mother Jones, etc.

A specific case: Why aren't do-gooders outraged by the home mortgage interest deduction? It is an enormous factor in our economy ($779 billion in 1999 vs. around $400 billion total spent on K-12 education) that:

1. Primarily benefits high income people; the higher your mortgage (up to $1 million on up to two homes) the more you benefit. It is a case study in effectively regressive taxation. See http://www.taxfoundation.org/prmortgage.html for how a flat tax that eliminated the mortgage interest deduction would primarily harm those with homes over $300,000.

2. Provides a huge incentive to build or buy bigger homes. Commentators sometimes rant about "real estate porn" when they see ads for enormous homes - and yet, through the mortgage interest deduction the government subsidizes large homes. One would have thought the environmental movement would also be outraged by this - Insofar as one is concerned that we are using too much energy or killing too many trees, one might try to fight this massive payment system that encourages people to build bigger houses.

I can only come up with two reasons why this obvious case of rent-seeking by the wealthy, the real estate industry, and the banking industry has been almost completely ignored by do-gooders:

1. The profound emotional resonance of home ownership is so powerful that either do-gooders believe it (most likely, I'm afraid) or they are strategically afraid to call it into question. What a beautiful emotionally-laden cover for bankers and developers.

2. People become so entrenched in traditional ruts of argumentation that it never occurs to them to quit debating whether or not we should have a flat tax so that they fail to notice this monstrous regressive feature of the existing "progressive" tax code.

One of the reasons that I no longer pay any attention to Harper's Magazine, Utne Reader, Mother Jones, etc. is that they don't usually provide much original thought even regarding the consistent application of their own principles.

To add outrage to outrage, Voith makes the case that the mortgage interest deduction is implicated in the dynamic that creates our disastrous inner-cities, http://www.phil.frb.org/files/br/brma99rv.pdf. This is an amazing argument, brilliant economic analysis that typifies the unintended consequences of a beloved policy (the rhetorical tug of home ownership is right up there with baseball and apple pie). Why don't Utne or Mother Jones report on this stuff!

In the absence of understanding economics, people are prone to believe that somehow Americans simply have the wrong preferences. Do-gooders often wish that people would spend more on education and less on monster houses. But the government is bribing people to buy monster houses while also forcing them to pay for meaningless K-12 education whether they use it or not. In the absence of government influences, houses would be smaller and more would be spent on education.

Moral outrage should not be directed at people's preferences (outrage concerning individual consumer decisions, while satisfying in an atavistic way, is simply not an effective means of changing behavior in a large, pluralistic society) but rather should be directed at those policy distortions that cause those outrages (laws can be changed by means of outraged public opinion).

For more on the mortgage interest deduction, see http://post.economics.harvard.edu/hier/2002papers/HIER1979.pdf, which concludes that there are small positive externalities associated with it (they include local political activism as a positive externality, whereas I suspect that it is usually really rent-seeking) but that it does primarily benefit the rich, banking, and real estate industries while not much increasing levels of home ownership.

The best guess of flat tax advocates in the U.S. is that even if we got one, the mortgage interest deduction would be untouchable.

High Taxes Wither Away

2005-03-23T16:04:00.000-08:00

From a fabulous WSJ article:

"High Taxes Wither Away: Former communist countries lead the way in abandoning progressivity.

. . . In 1994, newly independent Estonia borrowed the idea of the flat tax from highly prosperous Hong Kong, which 45 years before had introduced a dual income tax system, allowing taxpayers to pay a flat rate on their gross income. (In practice, almost everyone in Hong Kong pays the flat tax.) Lithuania and Latvia quickly followed Estonia's lead. Today, all three Baltic states are booming, and, along with Slovakia, a recent convert to the flat tax, they are the least-taxed countries in the European Union.

The success of the Baltics attracted the attention of Andrei Illarionov, Russian president Vladimir Putin's economic adviser. At his suggestion, Mr. Putin implemented a 13% flat tax for individuals, along with a 15% rate for most business income. The results have been astonishing as Russia's black-marketers decided the tax was low enough and transparent enough that it wasn't worth evading.

After struggling for a decade, Russia's economy grew 5% a year after inflation in 2002 and 2003 and 7.3% last year. The flat tax has been a key reason that revenue from the country's personal income tax has grown by 150% since 2001. "This constant expansion of the government tax revenue is the result of less tax evasion and increased incentive to work, save, and invest," noted the Adam Smith Institute in London in a report on the flat tax's success.

Russia's experience set off a wave of imitators. In 2003, Serbia introduced a 14% tax on income and corporate profits along with plans to cut it further. Russia's neighbor, Ukraine then set a 13% rate, with dividends and bank interest taxed at only 5%.

Last year Slovakia junked an old tax system that included 66 exemptions, 19 sources of untaxed income and 27 items with their own specific tax rates. Instead it put in place a 19% flat tax on income and profits. In December Jan Oravec, president of Slovakia's Hayek Foundation, told me that the country's flat tax has helped sustain an economic growth rate of 4.9%, lowered unemployment and led to a surge in surge in tax revenues as people take advantage of the new opportunities to work and invest. Last year, the World Bank named Slovakia the world's top economic reformer in 2004 for improving its investment climate.

It was in Slovakia last week that Mr. Bush privately told Mr. Putin how much he admired Russia's success in implementing the flat tax. Later, in public comments, he praised his Slovakian hosts for their flat tax, which "has helped to attract capital and create economic vitality and growth."

Alvin Rabushka, a senior fellow at Stanford's Hoover Institution who consults with countries all over the world on how to design a flat tax, can barely keep up with all the new adherents. Within two weeks after taking office in December, Romania's new prime minister, Calin Popescu Tariceanu, issued an emergency edict to take effect only three days later: Companies and individuals now pay a single flat rate of 16%. Georgia also adopted the flat tax as of Jan 1.
Europe is becoming so crowded with flat-tax nations that the original proponents of the idea are having to play catch-up. Estonia has just cut its rate to 24%, and has promised to slash it to 20% over the next two years. Mr. Rabushka's book "The Flat Tax" has just been published in Chinese, with a preface by Lou Jiwei, the vice minister of finance. If China were to climb on board the flat-tax train, more than a quarter of the world's population would be filling out their taxes on the back of a postcard. . .

It is . . . ironic that every country that has adopted the flat tax is a former communist nation--except Hong Kong, the modern originator of the concept, which has seen its new communist rulers retain the flat tax as a centerpiece of its economic policies.

Given all this, why should the U.S. allow itself to continue to see its economic potential limited by a Marxist concept that most nations that followed that path are now fleeing from?"

Full article, http://www.opinionjournal.com/diary/?id=110006352

Creating One's Inner Life

2005-03-22T15:46:00.000-08:00

I do believe it is possible to create, even without ever writing a word or painting a picture, by simply molding one's inner life. And that too is a deed. ~ Etty Hillesum

FLOW Ideal: A world of healthy, happy people doing good and having fun.

2005-03-20T07:09:00.000-08:00

I want to do good and have fun doing it. I expect that most people would also like to be doing good and having fun doing it. We can help to create a world in which most of human life, most of the time, consists of doing good and having fun doing it.

In order to do so, we need to dramatically change many of our institutions, not just once, but over and over and over again. We need dramatic, ongoing change in all of the institutions of our society. We need to embrace the process of creative destruction enthusiastically; we need to celebrate the forward motion of an ongoing process of innovation and entrepreneurship that will bring happiness for all into the world.

In Maslow’s hierarchy, once people’s more basic needs for food, shelter, and safety, have been met, they then crave love, esteem, and self-actualization. In the developed countries, almost everyone’s basic needs have been met. In the “emerging economies,” we know that opening the world will allow the basic needs of almost everyone on the planet to be met. Thus the fundamental problem is how to allow people’s needs for love, esteem, and self-actualization to be met more effectively.

At present, many people seem to believe that money, power, and formal status (e.g. a title, “Professor so-and-so,” or “Chief Undersecretary so-and-so”) are required to get their esteem needs met. But this is an entirely arbitrary approach. Human beings are tribal animals that have been genetically programmed to seek hierarchy and status within their tribes. But the wonderful thing about the world today is that we can create new tribes with new standards for the distribution of status.

Some people are perfectly content with existing status hierarchies. For some people, it is utterly okay with them that Donald Trump is respected for being rich and gaudy, or President Bush is respected for being powerful, or Noam Chomsky is respected for being a famous intellectual. Let them enjoy their status hierarchies. Let them be.

Other people are frustrated and unhappy with existing status hierarchies. They believe that there is something morally bankrupt about a society that respects wealth, power, or position. Wonderful! Let them criticize by creating. Let them create new communities, with new ideals, and new status hierarchies.

There are open source communities in which Linus Torvalds is the ultimate hero. There are athletic communities in which Lance Armstrong is the ultimate hero. Riane Eisler wants to create a “partnership” society instead of a patriarchy or a matriarchy. Go Riane! Tim Munson wants to create “new technologies of meaning.” Go Tim!

Is it easy to create new communities with new status hierarchies? Not at all. No one ever claimed that worthwhile achievement was easy, ever. Is it worth attempting? Of course.

The only Greek expression that I remember after two years of Greek is Ta Kala Xalepa: “That which is beautiful or noble is difficult and worth striving for.”

We need to create an honorable, pluralistic ethos according to which we acknowledge that many people are dissatisfied with many things in our society – fine, we welcome dissatisfaction as the source of craving for the good. But we never accept whining or criticizing of others or critiques of “society.” If you don’t like it, go fix it, go create a world, a community, a sub-culture in which your ideals can be instantiated, realized, in which you can show us what your vision of beauty and nobility looks like. Create a new social reality, so that I can see your dreams come true. I want to see a world in which billions of dreams are coming true constantly.

Criticize by creating.

More evidence of the chasm-sized niche waiting to be filled with a new idealism

2005-03-18T11:47:00.000-08:00

In the Feb. 28th, 90th Anniversary edition of The New Republic, which claims to have introduced the term "liberalism" in the American sense, TNR editor-in-chief Martin Peretz has an article titled "Not Much Left," excerpts below:

"I think it was John Kenneth Gailbraith, speakng in the early 1980s, the high point of post-New Deal liberalism, who pronounced conservatism dead. Conservatism, he said, was "bookless," . . . without books, there are no ideas. . .

It is liberalism that is now bookless and dying. . . . Here and there, of course, a university personage appears to assert a small didactic point and proves it with a vast and intricate academic apparatus. In any case, it is the apparatus that is designed to persuade, not the idea.

Ask yourself: Who is a truly influential liberal mind in our culture? Whose ideas challenge and whose ideals inspire? Whose books and articles are read and passed around? There's no one, really. What's left is the laundry list: the catalogue of programs (some dubious, some not) that Republicans aren't funding, and the blogs, with their daily panic dose about how the Bush administration is ruining the country.

Europe is also making the disenchanting journey from social democracy . . . even in the morally self-satisfied Scandinavian and Low Countries, the assuring left-wing bromides are no longer believed. . . .

Liberals like to blame their political consultants. But then, if you depend on consultants for your motivating ideas, you are nowhere. So let's admit it: The liberals are themselves uninspired by a vision of the good society - a problem we didn't have 30 years ago. For several years, the liberal agenda has looked and sounded like little more than a bookkeeping exercise. We want to spend more, they less. . . .

(He goes on to chastise liberals for undermining their own moral credibility by supporting Al Sharpton, Fidel Castro, and the U.N.) . . .

It (the U.N.) is not a magnet for the good. It performs the magic of the wicked. It is corrupt, it is pompous, it is shackled to tyrants and cynics. It does not recognize a genocide when a genocide is seen and understood by all. Liberalism now needs to be liberated from many of its own illusions and delusions. Let's hope we still have the strength."

This, under a cover headline proclaiming "To Liberalism! Embattled . . . And Essential"

The malaise is very deep.

Why Markets Promote Shallow Appetites and What Can Be Done to Solve This Problem

2005-03-16T05:41:00.000-08:00

First, unlike most free marketeers, I do think that there is a propensity for markets to reward shallow appetites rather than deeper ones, and that we should be concerned by the trend towards shawllower appetites.

Unlike those who criticize markets for this, it is clear to me that the reason that this is the case is because government controls health, education, and community formation. If we had a free market in health, education, and community formation, there would exist a significant and growing market in communitarian living experiments that would cultivate an ever deeper and more extraordinary range of human capacities and appetites.

Often market criticisms are based on the existing faulty markets that we have. Because of the political tribalisms that we all feel, there is a tendency for market advocates to reflexively defend existing market outcomes.

But at the same time they are aware that existing markets are often grossly distorted. One example as I understand it: There are laws in the stock market that constrain selling short. These laws are based on a primitive moralistic impulse that believes that it is somehow bad to bet that stocks will go down. An unintended consequence of these constraints on selling short is increased market volatility: If the stock market is viewed fundamentally an information exchange, limits on the ways in which information can be exchanged will create distortions. In this case, the market is not receiving the optimal flow of information on when investors believe that the stock of a particular company may be about to decline. As a consequence, there is an unnecessary "jerkiness" to stock prices that increases overall volatility. Insofar as this is the case (I have no idea of the magnitude of this effect - I'm not sure if anyone does), complaints about stock market volatility, as well as "efficient market" defenses of the existing market that claim that it is not overly volatile, are both misguided.

In the absence of freedom, we don't really know what the outcomes would be. If communism had successfully defeated capitalism, and every nation on earth had become communist in the 1920s, we would be entirely ignorant of almost all technological, social, and cultural developments since 1930. The world would be grey, dark, and Stalinesque, with a few Tito-esque and Castro-esque shades of grey for variety. Mountain bikes, color television, computers, cell phones, the sexual revolution, the counterculture, tai-bo, Nikes, economical air travel for the masses, etc. would all be simply unimaginable.

Historical counterfactuals are difficult to imagine, but to understand the way in which existing markets favor shallow appetites, it will be useful to imagine a counterfactual history.

Humans evolved in tribal circumstances in which there was a coherent culture: Everyone in the tribe held the same cosmological beliefs, everyone adhered to the same morality, everyone respected the same gods, elders, and leaders, everyone had the same manners, everyone ate a similar diet, everyone followed the same rituals, everyone was told and re-told the same myths, everyone raised children in the same way, etc. I am not claiming that in tribal cultures everyone did everything exactly the same way - there was certainly some variation. But compared to our present circumstances, the variation in, say, cosmological beliefs, was truly miniscule compared to what it is now. In a sense that was so deep and fundamental that we can't even imagine it, life had a communal meaning and purpose.

I think that there are good reasons to believe that our evolutionary psychology reflects these tribal appetites for communal meaning and purpose. Today many people use the verbs "crave" and "long for" with respect to the search for meaning. Numerous 20th century artists and philosophers have devoted their lives to, in Jung's phrase, "Man's search for meaning."

In any normal distribution, some will have greater appetites for meaning and some less. I suspect that the artists and philosophers who have devoted their lives to a search for meaning are the "canaries in the coal mine" at one end of the distribution. The economists and business people who seem oblivious to these needs are at the other end of the distribution.

Until the 20th century, Christianity was the accepted framework for meaning in western civilization. While not as coherent as our original tribal structures, Catholic Christianity, at least, in many respects provided the combination of cosmological belief, moral system, and set of rituals that satisfied many of our visceral impulses for a coherent meaning system (the first significant empirical discovery in sociology was that Protestants committed suicide at a much higher rate than did Catholics).

In the 20th century, however, Christianity increasingly collapsed as a common framework for meaning. Anomie and existential angst among intellectuals, and hedonism and selfishness among more practical people, began to spread as any set of common norms vanished. Since the 1950s, for instance, teenage pregnancy, violent death rates, addiction, suicide, and other adolescent pathologies have increased dramatically. "Capitalism," the Marxist term for the free enterprise system, was blamed by many. Communists believed that they could provide the sense of meaning that had been lost.

"Creative destruction" is the most succinct and insightful description of the free enterprise system. Intellectuals, technology, and markets did destroy traditional ways of life and traditional norms, and continue to do so.

But, when allowed to do so, free enterprise can also create. Indeed, it is a fundamentally creative endeavor. By contrast, governments cannot create. Governments can slow down the process of destruction. But slowing down the forces of destruction is not in any sense a substitute for acts of creation. The result of government control over many decades is merely a dull, ugly reality in which that which is good in the past disappears more gradually, but is still not replaced by anything better.

This is precisely how I would describe the effects of the government education monopoly. As traditional cultures of meaning were increasingly destroyed by secular intellectuals, by technological innovation, and by market forces, culturally-innovative schools, which should have been the locus of new cultural creation, were prevented from coming into being. In the absence of the government education monopoly, as coherent cultural norms and meanings vanished in the 1920, 30s, 40s, 50s, 60s, 70s, parents would have created new forms of education and new communities in which new cultural models would have come into existence. Many of those parents would have created traditional schools to preserve the past as best they could; though even those attempts to preserve tradition would have been far more adaptive than our public schools have been.

There would also, however, have been some entrepreneurs, whose work would appeal to some parents, who would have created new cultural models. Initially, these cultural models might have been not too dissimilar from existing ones. But as the pace of life quickened, in a sufficiently large market, very interesting experiments would have come into being.

It is a basic truism of economics that, in choices between two goods, if the cost of good A decreases relative to the cost of good B, a larger quantity of good A will then be consumed. Alternatively, with costs constant, if the quality of good A increases relative to the quality of good B, again a larger quantity of good A will be consumed.

Assume, broadly speaking, that "good A" above represents those goods the appetite for which does not depend on a deep, culturally coherent upbringing, whereas "good B" above represents those goods for which one's appetite does depend on a deep, culturally coherent upbringing.

We live in a circumstance in which goods which do not require training of the appetites, such as sensational television, fast food, internet gambling and porn, video games, virtual reality, etc. are rapidly become more intensely stimulating, more widely available, and cheaper. In contrast, because of the government school monopoly, it is virtually impossible to create the kind of deep, culturally coherent upbringing that would develop the appetites needed to sustain a market that is supportive of wisdom, love, kindness, truth, beauty, intimacy, etc. Relatively speaking, "good A" has become dramatically cheaper, largely due to technological change, whereas "good B" has been virtually outlawed by government control of schools. So of course consumption of good A relative to good B has been increasing - and will continue to do so until we liberate schools.

Happily, human beings are resiliant, and so certainly good things do continue to exist in our world. But on the assumption that some goods require no significant training of the appetites whereas other goods to do require precisely such a training, then the economics of the situation clearly and unambiguously predicts a steady trend towards shallow appetites.

The irony of the situation, which the Left has utterly failed to understand, is that government is completely impotent to alter this trend. Indeed government control of education, health, and community formation exascerbate this trend far, far more than anyone realizes.

Because of our evolutionary psychology, and because I am among those who have an appetite for greater "meaning" than the market at present provides, I am an entepreneur who is deeply confident that if education, health, and community were liberated, that we entrepreneurs of meaning and purpose would win in the marketplace. This is confirmed by the widespread craving for meaning as exemplified, again with the Whole Foods phenomenon. Quite aside from the characteristics of the groceries that they sell, I think that Whole Foods is so successful because they sell groceries with meaning. Smith & Hawken tools, Ben & Jerry's ice cream, Rumi's poetry (best selling poet in America), are just a few other examples of strong markets in "meaning products."

Those, like Nevitt, who are dissatisfied by these examples, in my view rightly long for deeper meaning. And my reply is: That is precisely why we urgently need to eliminate all government involvement in education, health, and community formation. Indeed, there is an inexorable logic to the parable of "good A" and "good B" above (I would be grateful if someone could convince me otherwise).

My greatest goal is to wake up those people who do care about meaning and show them that hostility to markets, and reliance on government, has been a lethal miscalculation on their part. They are unintentionally abetting and accelerating the destruction of that which they love.

FLOW Priorities

2005-03-12T11:33:00.000-08:00

Offline a FLOW member asked about FLOW priorities for world betterment. Although he was thinking of aLomborg-like list (e.g. “Should potable water come before or after global warming?”), I have found it useful to approach the problems from a higher level of generality. For instance, if we open the world in the manner suggested below, the people themselves will solve their potable water problems rather quickly. The following list was selected based on the dramatic leveraging effect of each item.

FLOW Priorities:

In order to most rapidly create a world characterized by peace, prosperity, happiness, and sustainability, our most urgent focus should be to:

1. Open the world.
2. Free education.
3. Recreate the academies.
4. Create institutions to prevent “tragedy of thecommons” problems.

I will explain each in turn and why each will lead to dramatic improvements in human well-being.

1. Open the world: Free institutions based on the rule of law have allowed individuals to create truly staggering gains in human well-being while creating ever-growing spheres of stable peace. Our top priority must be to increase the rate at which these institutions are developed around the world.

While various top-down forces, including multi-national corporations, the U.N., the U.S. government, IMF and World Bank, and others have attempted to impose institutions on nations, a bottom-up approach is likely to be more powerful and more sensitive to local conditions. The best way to release the powers of a widespread bottom-up approach is to reduce or eliminate restrictions on the global flow of goods, services, capital, and people across borders. Restrictions not only limit the growth of wealth, they also favor vested interests within wealthy nations and favor large multi-nationals in the developing world (unlike individuals, large corporations have the ability to get around restrictions).

Opening borders would allow billions of individuals to sell their services on an open market more easily. By participation in a global market, these individuals will begin creating significantly more wealth than they create at present which will provide immediate benefits to their locales. They will also create a related market in human capital development as people around the world discover which capacities lead to dramatic increases income. And finally, they will create a bottom-up initiative that supports stable government.

Mass participation in the market-dimensions of the civil society of the developed world will seed an understanding of and demand for the kinds of institutions that have allowed for the creation of wealth in the developed world. This mass demand for rule of law, education, and civil society, in combination with massive mutual dependence on global trade, will create a steadily thickening culture of peace around the world. This bottom-upapproach, with the implied gradual irrelevance of national borders, is the fastest and surest approach to lasting peace on earth.

FLOW idealist action items:

A. Support massive entrepreneurial creation through microfinance, De Soto property rights reforms, cyber off-shoring and cyber education, and ever-expanding free enterprise zones around the world.

B. Greatly increase immigration into all developingnations, with the eventual goal of open borders around the world.

C. Reduce or eliminate all tariffs and subsidies in the developed world.

D. Support structural changes as outlined in theFraser Institute’s “Economic Freedom of the World” report.

2. Free Education: Just as government control of the“commanding heights” of the Soviet economy left theSoviet economy in a shambles, government control of education is leaving human life in a shambles. It has been abundantly shown that governments lack the capacity to make millions (or billions) of individual decisions wisely. Institutions, including educational institutions, which are the spontaneous outcome of billions of individual human decisions will be vastly more responsive to real human needs than are collectivist educational institutions.

Existing educational institutions egregiously fail to educate many young people; do a mediocre job of educating many more; and provide a limited, one-dimensional, and often soul-destroying job of educating even those who appear to succeed within the system. As billions of human beings become exposed to global market forces, they have a right to the best possible education. And only by means of billions of individual decisions, each reflecting specialized local circumstances, can adequately responsive educational institutions come into being. In order to reduce the inevitable backlash against global competition, it is crucial to allow everyone an opportunity to obtain an education that will allow them to earn a decent income. As long as governments remain the dominant player in the educational marketplace, most people will be handicapped by a sub-optimal educational experience.

FLOW Idealist Action Items:

A. Reduce or eliminate government involvement ineducation at all levels.

B. Reduce or eliminate all government restrictions tooccupational entry.

C. Support entrepreneurial initiatives in education at all levels.

3. Recreate the academies: Although the allied institutions of rule of law, property rights, and an entrepreneurial civil society remain the core foundations for the creation of ever-increasing levels of human well-being, the production and dissemination of new knowledge through formal institutions has at times resulted in truly remarkable advances in human well-being, especially in the realms of science and technology.

Unfortunately, outside of the realms of science and technology, the academies have largely had a negative influence on human well-being, at least in the 20th century. By means of the support and dissemination of truly dreadful Marxist thought, through the support and dissemination of less dreadful but still misguided paternalistic and infantilizing social policies, and through the ongoing support and dissemination of attitudes of impotence and anger, on balance academic humanities and social science fields in the 20thcentury have led to few gains in human well-being and remarkable harms.

This need not have been the case. It is possible to re-imagine academies that were useful and responsive to human life, and that contributed in a positive way to human development. By making the academies more responsive to the needs of those who want to learn and improve themselves, the academies could once again play a positive role in human life. Changing the academies may be, however, the most difficult and intractable of the problems that we face today.

FLOW idealist action items:

A. Reduce or eliminate all government financial and legislative support for universities (including, again, university-monopolized occupational licensing).

B. Encourage new entrepreneurial entrants into the post-secondary education and intellectual research markets.

C. Encourage private philanthropists to be far more judicious concerning their gifts to existing universities.

4. Create institutions to prevent “tragedy of the commons” problems: If the world is opened up in the manner recommended above, global wealth and economic growth will increase at a truly remarkable rate. In any circumstance in which there are resources that are not owned by private entities, those resources are likely to be destroyed due to the “tragedy of the commons” problem.

Our oceans and our atmosphere are probably the two most significant unallocated resources at present, though there may be others. In order to ensure that ongoing economic growth does not result in widespread environmental degradation, it is important that we develop a system for assigning property rights to unallocated resources. In addition, unallocated resources may trigger old-fashioned wars even as peace is spreading around the world through commerce. Therefore it is important to begin a process of creating institutions that will allocate those resources that are currently unallocated.

FLOW idealist action items:

A. Investigate proposals to allocate global resources to prevent tragedy of the commons problems.

B. Support entrepreneurial efforts to create institutions that support the best of those proposals.

Conclusion

By means of focusing our energies on achieving these four goals, we can rapidly create a better world. The first one will result in dramatic increases in global prosperity while spreading peace around the world. The second one will distribute the benefits of prosperity to those who would otherwise be trampled in the global competition while simultaneously allowing people to re-create lives based on meaning and community. The third one will reduce the rate at which academies prevent good things from happening and, over time, will give us universities that actually add value in realms other than science and technology. And the fourth one will ensure that the dramatic rate of global growth does not result in serious environmental degradation or resource wars.

FLOW:

1. Open the world, and let goods, services, capital, and people flow across all borders.
2. Free education, and let authentic learning and well-being flow into the human community.
3. Recreate the academies, and let authentic knowledge flow into minds around the world.
4. Create institutions to prevent “tragedy of the commons” problems, to ensure that ever-increasing global flows are peaceful and positive for humanity.

Replacing Failed Ideals with Realistic Strategies

2005-03-10T06:10:00.000-08:00

"you younger libertarians would be well advised to focus your intellectual energies on the problem of uneven outcomes. What gave socialism much appeal to educated people was its promise that no one would be left desperately poor and neglected."

The "problem of uneven outcomes" is distinct from the "promise that no one would be left desparately poor and neglected."

Thomas Jefferson was beloved by the great 20th century liberal intellectuals because he affected democratic manners; John Adams was despised because he longed for the trappings of royalty. Larry Page and Sergey Brin, the founders of Google, are beloved billionaires because they forced Wall Street to conduct a more democratic IPO. Larry Ellison of Oracle is despised because he flies his private jets into San Jose in the middle of the night, laughing at the $10,000 fines as if they were parking tickets.

As long as people are respectful of other people (which they often are not), inequality of wealth and status is much less of a problem than when they are high-handed about their wealth and status. I do think that it is important that FLOW entrepreneurs practice respect towards all.

And in the voluntaristic communities to which I would belong, I would enthusiastically support minimal welfare vouchers that would ensure that poor citizens (who followed behavioral guidelines) had adequate food and lodging.

But neither of those responses are likely to address the more visceral craving for ideals that sustained communism through 70 years and 100 million murders.

I would invest the aspiration to transcend existing social flaws in the entrepreneurial creation of new and better cultures, starting with new schools. I share most of the moral frustrations of the Left: It is offensive to me that those born from some families are less likely to succeed, that many men treat women badly, and that lying and deception are so often rewarded. There are many, many morally offensive aspects of society as it stands today.

And I don't think that government action can do very much to improve those aspects of society that are morally offensive.

Each of us can, of course, work on ourselves first; always a good rule of thumb. But I will also encourage idealistic young people to work as educators and thereby work on the young. Do you think that the poor are not given adequate opportunities? Create a school to solve that problem. Do you think that women are not treated well enough? Create a school to solve that problem. Do you despise the lying and deception that are prevalent? Create a school to solve that problem.

I have spent fifteen years working on these and other problems, and I am deeply familiar with the concrete difficulties involved in creating a better classroom culture (and subsequently a better school culture).

The communists aspired to change human nature to eradicate selfishness. I have tried to change classroom culture to increase niceness. Their task was a horrible failure. With a great deal of effort, educators such as myself have been able to make some progress: It is possible to create school cultures in which students treat each other more decently than they do at mainstream public schools. But it is very slow going at present, three steps forward and two steps back.

Marxists believed that their theory and their passion could change society. They were deluded. I believe that my classroom practice and school structure can change the micro-societies of the schools that I create. And students and parents have chosen these schools because I was able to deliver, however partially, on these ambitions.

Changing classroom or school cultures is a very, very difficult problem; and yet it is possible to make progress even now by means of entrepreneurial educational projects. At present these tasks are inordinately difficult to solve, but when we have educational freedom and are allowed to create larger corporations, with large research and development budgets with which to approach these problems we will make more substantial progress.

While it may be a lot more fun to be an "activist" and feel good about oneself while partying, I hope to inspire young entrepreneurs to commit themselves to the long, hard, gratifying work of creating great institutions. Some of those institutions will be businesses such as Google and Whole Foods at which the work culture is considerably more positive and less hierarchical than is the work culture at old style corporations. Some of those institutions will be schools or health networks, in which fundamental social norms need to be changed.

But unlike the idealism of activists and the idealism of government action, the idealism of entrepreneurs can result in very specific, definite progress. And, when the venture fails, one is held directly responsible for the failure. I consider this type of idealism to be a great deal more satisfying than was the old idealism.

There will also be an element of storming the barricades, especially in encouraging the destruction of the existing educational and credentialling system. It is perfectly clear to me that the existing system of education, that rewards a particular set of social norms and a particular species of cognitive competence, was designed by the upper-middle class to favor the upper-middle class. It will be relatively easy to show how "public schools" and professional licensing requirements harm the poor. With practice, one can learn to see an expansive world of opportunity ready for the creating. Once young people understand that they can be the creators of a more humane, just, and beautiful society, if only the teacher's guild and their academic cheerleaders get out of the way, then we will see a real rage against the machine.

Depoliticizing Friedman, Mises, and Hayek

2005-03-08T14:46:00.000-08:00

From an article on the death of Robert Heilbroner, a lifelong socialist economist who acknowledged that his side had been wrong (http://www.reason.com/hod/db012105.shtml):

"Capitalism has been as unmistakable a success as socialism has been a failure. Here is the part that's hard to swallow. It has been the Friedmans, Hayeks, and von Miseses who have maintained that capitalism would flourish and that socialism would develop incurable ailments. All three have regarded capitalism as the 'natural' system of free men; all have maintained that left to its own devices capitalism would achieve material growth more successfully than any other system. From [my samplings] I draw the following discomforting generalization: The farther to the right one looks, the more prescient has been the historical foresight; the farther to the left, the less so."

Robert Heilbroner's history of economics, The Worldly Philosophers, is one of the most widely published books on economics. For decades it was required reading in thousands of economics courses across the country. The economic world-views of literally millions of educated adults who are in power today were defined by Heilbroner's socialist spin on the history of economics. His recantation is especially important and should be more widely known.

Part of the task of FLOW, and everyone who cares about human well-being, is to transcend the notion that there is anything "right-wing" about Friedman, Hayek, and Von Mises. They were, and are, simply correct. One hundred years of "left-wing" economics and political theory were simply wrong. The continued hostility to the ideas of "free market" economists results in persistent poverty and misery around the world.

For many years, Chicago economists have denied that there is anything distinctive about "the Chicago school of economics." From their perspective, there is good economics and bad economics, and they have been practicing good economics for a very long time - which is why they have won so many Nobel prizes (according to wikipedia they have won almost half of all the prizes, http://en.wikipedia.org/wiki/Chicago_school_(economics) .

Friedman, Hayek, and Mises should be regarded as heroes of intellectual courage across the political spectrum, the Galileos of the 20th century, who withstood tremendous abuse and ridicule for the sake of intellectual integrity - and who were proven correct in the end. The PBS documentary "Commanding Heights" does an excellent job of this with respect to Hayek. I believe it was just last year that Harvard finally added Hayek to the required reading list of its introductory social science survey course.

From this more rational foundation we can build a coherent idealism that is apolitical. We can now begin working from a solid intellectual foundation to help the poorest of the poor, to spread happiness and well-being, and to create a world in which people are valued more for their humanity and authentic virtues rather than for arbitrary characteristics such as race, gender, and place of birth.

Mario Vargas Llosa's "Confessions of a Liberal"

2005-03-07T14:00:00.000-08:00

A wonderful speech:

http://www.aei.org/news/newsID.22053/news_detail.asp

An Airtight Rationale for Markets?

2005-03-05T07:23:00.000-08:00

Offline someone remarks: "I remain very interested in learning more about an airtight rationale for market theory."

A few thoughts:

The law of supply and demand, or that people respond to incentives, is the basic market insight: all else is elaboration. But much of that elaboration is unexpected and surprising in its implications.

The economic theory of regulation, for instance, tells us that regulators will tend to prefer regulations that are simple to apply and that do not appear to be controversial (i.e. the cost of applying the regulations is low). This results in regulatory structures that are not identical to the public interest and, because these regulatory structures are made at the administrative level, beneath public debate, this propensity in the direction of regulation is usually invisible (see http://www.mercatus.org/pdf/materials/560.pdf for a great article on this).

Thus insofar as people judge proposed public policies based on the ostensible arguments made in public debates, those arguments fail to capture the fact that policies are almost never implemented in the manner originally debated. This application of economic theory is known as "public choice theory," or the theory of government failure, and it is a potentially devastating critique of most proposed legislation.

My understanding of public choice theory was the single factor most inclining me to simple rule-based market solutions rather than command-and-control government solutions. Ironically, many critics of capitalism point to the ways in which corporations corrupt government to promote their self-interest. The public choice theorists agree, and go one step farther: One can make confident social science predictions to the effect that corporations (or unions or environmental groups or any concentrated special interest) will be more effective at promoting their self-interest than are voters. Sometimes one hears the witticism "If one wants to keep one's appetite one should not observe the making of laws or sausages too closely." Public choice theorists have spent decades watching how legislation actually gets passed and implemented, and conclude that concentrated interests will always get their way, if not in the legislation then in the administration.

Scientific American and others argue that the FDA should be more independent in their reviews of drug policy. The public choice theorists look at such moral exhortation ("The FDA should . . . ") and see it as short-sighted naivete. Even if, due to a flurry of op-ed exhortation by Scientific American and others, the public forces the FDA to be more independent for a few months, over time the attention of the public and the pundits will go elsewhere. But the attention of the drug companies never, ever goes elsewhere. They have billions of dollars riding on FDA decisions and, as a consequence, they are very, very focused on what happens at the FDA and how. And, meanwhile, small innovators in health and medicine have absolutely no hope of getting an innovation through the costly FDA apparatus. This state of affairs is known as "regulatory capture," which means that the vested interests inevitably "capture" the regulatory apparatus in order to promote their own interests. And economists point out that the asymmetry of incentives is what makes this process inevitable: Inevitably the drug companies have an incentive to focus on legislation that is often millions of times greater than that faced by others. Complaints about "greed" are impotent to change this fact.

This is one of several arguments against the FDA.

But in the absence of the FDA, won't the drug companies do bad things like promote and sell thalidomide? Yes, sometimes they will, and mid-wives and doctors will make bad medical decisions that result in deaths, and the promoters of dietary supplements will encourage people to take remedies that result in death and disease, and spiritual gurus will promote quack cures for cancer, and so forth. The relevant question is not "Will bad things happen in the absence of the FDA?" The relevant question is, on net, will things be better or worse without the FDA?

Which leads me to another argument against the FDA, and for freedom: Regulatory agencies not only tend to protect vested interests, they also cause immense harms by preventing innovations. Most European countries make drugs available far more quickly and far more cheaply than does the FDA. Insofar as delays in availability of drugs mean that people die who, statistically speaking, probably would have lived, economists estimate that the FDA is responsible for far more than 50,000 deaths (http://www.fee.org/vnews.php?nid=4725).

In the absence of government regulation, bad things will happen. In the presence of government regulation, bad things will happen. The question is, on balance, under which circumstance is it more likely that more bad things will happen?

Moreover, it is important to remember that there are voluntary regulatory structures such as Consumer's Union that can fulfill the positive role of regulatory agencies without the negative consequences (the FEE article cited above explores this).

As someone who is an aggressive believer in the power of innovation, I suspect that we vastly underestimate the harms that exist due to the absence of opportunities to innovate. EBay is now one of the largest economies on earth, larger than many nations. It is also one of the most democratic economies on earth: anyone with a computer and an internet connection has instant access to this economy. Millions of women can now earn an extra income at home selling on EBay. And yet in France EBay was originally illegal because auctioneers were required to be licensed. Had this been the circumstance in the U.S., none of us would have received the immense benefits due to EBay.

I see this as a vignette for millions of amazing stillborn innovations that, had our government in the last 40-70 years been less regulatory, would now be making our society a much better place. As you know, first and foremost among these stillborn liberations in my view is the educational system that could have been had we not had the government system that has so damaged us for the last 70 years (the timing of the onslaught of universal government-controlled secondary education in the 1930s). The scale of benefits due to the cycle of creation, innovation, and entrepreneurship is unbelievably immense. In the absence of this cycle, life would still be nasty, brutish, and short for all of us. I am certain that if we had more freedom, life would be significantly less nasty, brutish, and short than it still is.

I wouldn't say that there is an "airtight rationale for market theory." I would say that once one understands the insights of public choice theory and regulatory capture, and how government intervention no matter how well-intentioned tends to support the status quo and tends to thwart innovation, if one also believes in the creative powers of innovators, then the relative advantages of government action begin to decrease and the relative prospective benefits due to markets increase. For me, especially as I have focused more and more on creative possibility, this imbalance has become immense.

Likewise, rather than spend a lot of time arguing for markets, I believe that if we simply cultivate and promote young creators and social innovators, they will demand freedom to do good. Arguing, the professional work of academics, tends to favor theoretical solutions to problems that appear to be constructive, but which fail to take into account human realities. Such was the tragedy of communism, the favorite political theory of intellectuals for 100 years.

Sometimes "free markets" are destructive. There have been straightforward problems with the ways in which markets have been structured in the past. If companies (or individuals) can get away with polluting at no cost, whereas it is costly to stop polluting, companies and individuals tend to pollute. The "market" solution is to find a way to include the cost of polluting in the calculations made by the companies (or individuals) so that they have an incentive to reduce the extent to which they pollute. This is a complex area, but the simple insight is that markets do need to be structured so that the costs of pollution are internalized and, where this is not the case, pollution is rampant. Ultimately FLOW supports a combination of engineers, lawyers, economists, and scientists working on creative solutions to internalize externalities. The outcome is more likely to be a combination of innovative property rights, innovations in liability and contract law, and innovations in science and engineering rather than traditional command-and-control regulation.

In obtaining an understanding of how we think about markets it is helpful to review a brief history of common understandings of markets:

1. In 1776 Adam Smith made the case that free markets bring wealth to society.

2. In the 19th century tremendous wealth was indeed created by markets, but many people recognized that there were nonetheless tremendous social problems despite this wealth creation. (Including the erroneous belief that in the 19th century the "rich got richer and the poor got poorer." In fact, throughout the industrial revolution the poor also got richer. It was because of the amazing novelty of a world-historical increase in wealth that the age-old discrepancy between rich and poor suddenly received the attention of social reformers on a widespread scale for the first time.)

3. Economists in the early 20th century developed a theory of market failure to explain why markets did not always make things better: Monopolies, the failure to provide public goods, externalities, and consumer irrationalities and short-sightedness were used to justify government interventions. In the meantime, many leading intellectuals were enthusiastic admirers of communism, and much of history, journalism, and academic research in the social sciences was written from a more-or-less communist-friendly perspective.

4. Economists in the late 20th century developed a theory of government failure to explain why government was not successful at solving the problems of markets. They also began developing an understanding of the pre-requisites to the successful functioning of markets to explain why in some cases markets worked well and in some cases they did not.

Because most of the history textbooks, journalism, and policy analysis that most of us learned from are relics of step 3 of this historical process above, part of the task of FLOW will be to disseminate the newer understandings of step 4. Indeed, most tenured professors in academia, outside of the field of economics, are still stuck in stage 3: They were educated in the 1970s when Step 4 was still being developed in specialist economics journals.

Step 4 is far from complete; we are still trying to understand and articulate exactly why markets work well in some circumstances and do not work well in others, as well as where and when and what kind of government actions might be successful, and how the media contributes to this cycle. But step 4 is most certainly a more mature and balanced perspective than we have had in the past.

Private Schools for the Poorest of the Poor

2005-03-01T06:09:00.000-08:00

The E.G. West Centre for Choice, Education, and Entrepreneurship in Education, http://www.ncl.ac.uk/egwest/, has a research project that studies private education in the slums of developing education.

The results are astounding and inspiring. When their research teams talk to government officials, they are told: "There are no private schools there. And if there are, they are dark, dirty, and smelly places." When the research team that goes into these ghettoes, they discover an illegal private school virtually on every street corner.

In fact, there is a proliferation of illegal private schools in developing world ghettoes. This research team marks off specific regions and goes block to block to count them. In one zone of approximately 10 sq. kms in India, they found 320 government schools, 214 legal (registered) private schools, and 335 illegal private schools. Both the legal and illegal private schools result in dramatically better academic performance than do the government private schools, with better facilities, lower teacher:student ratios, and higher test scores. What is remarkable is that these kind of results seem to be robust across very different countries, including India, Nigeria, and China.

In the poorest neighborhoods, even when free public schools are available, there are parents finding a way to send their kids to private schools. And even in these small, private, proprietary schools run by a struggling entrepreneur, 9% of the students are given free tuition.

For more detail see their paper: "Serving the Needs of the Poor: The Private Education Sector in Developing Countries," http://tinyurl.com/4b2bd

There is a fabulous feature-length documentary to be made on this (I saw a short documentary presented by one of the lead researchers, Dr. Pauline Dixon, who is idealistically passionate about the findings of her work.)

Relatedly, see the following article on "The Hole in the Wall Project," where researchers put a computer terminal in a hole in the wall in the street of a poor neighborhood, and with no instruction kids learned quite a lot:

http://www.ncl.ac.uk/egwest/holeinthewall.html

Make Everybody Rich

2005-02-28T04:56:00.001-08:00

By Frederick Turner

"Why don’t governments enact policies that would make everyone rich? Universal prosperity would not make everyone happier, but it would greatly advance the causes of world peace, environmental protection, education, health care, women’s rights, employment, sustainable growth, racial harmony, political liberty, scientific discovery, spiritual renewal and the arts."

An excellent article, completely consistent with FLOW, available at:

http://www.independent.org/publications/TIR/article.asp?issueID=16&articleID=124

FLOW Ideals and the Poor

2005-02-25T14:26:00.000-08:00

If FLOW is to remain true to its first principles, then it is not consistent with a welfare state vision. Insofar as a welfare state vision is the key to the ideals of most on the Left and, indeed, most in the Democratic Party, FLOW faces an uphill battle insofar as de-spirited Democrats are a potential market for FLOW ideals. FDR’s attempt to create a welfare state mark him as the greatest Democratic hero in history; polls of historians place him among the most highly respected of presidents.

Indeed, most political idealists find it difficult or impossible to imagine a political idealism that isn’t based on some type of socialism.

Common Political Ideals

The old dominant political ideal: A society that takes care of its poor, a society that leaves no one behind.

This was the communist ideal and the welfare state ideal. It proved very inspiring for many people in much of the world, though less universally so in the U.S.

Environmentalist ideals: Back to a pristine state of nature; the wilderness as sacred, to be protected at all cost, violating nature is wrong. These ideals are currently very motivating to those who identify as “Green” and, to a lesser extent, they are motivating for well-intentioned people who are seeking some way to make the world a better place. These ideals do not help the poor and often imply policies that are harmful to the poor.

Libertarian ideals: Freedom for freedom’s sake, freedom to let “the market” do whatever it will. This has not proven to be an inspiring set of ideals for most people. Indeed, they strike many as a stupid and immoral set of ideals.

Voluntaristic Caring Communities as an Ideal

The welfare state is a violation of the first FLOW principle, “Voluntary, freely-chosen, rule-based solutions rather than coercive, government-imposed, command-and-control solutions.”

For me, the Golden Rule clearly obliges us to help those who are less fortunate than ourselves. I also think that only each of us individually can best know how to do this. For some people, the noblest way for them to help those who are less fortunate would be to engage in capitalist behavior that results in the creation of a great enterprise. It is clear to me that Michael Milken, strictly in his role as junk-bond king (i.e. excluding his subsequent philanthropic work), did more to make the world a better place than did Mother Theresa throughout her lifetime. Trying to force or even convince Milken to be a Mother Theresa would have been counterproductive. We need to let Milken be Milken and Mother Theresa be Mother Theresa.

Tribal social norms, our evolutionary heritage, insist that we conform to the norms of our tribe, that we support our tribe. The “good” people in the tribe help to enforce the norms of the tribe. In some tribes, helping the poor and the weak of the tribe, leaving no one behind, is the norm (in other tribes, the weak and infirm are left to die). It is from this atavistic perspective that Mother Theresa is a “good person” and Michael Milken (at least prior to his philanthropic stage) was a “bad person.”

Some of us, who may think of ourselves as “good people,” may wish to belong to a political entity in which everyone is committed to, and contributes to, the common good. Fair enough. Is it necessary for these entities to be coercive entities? Why can’t we voluntarily choose which “good” entities to which we belong?

FLOW will allow for, and encourage, voluntaristic societies that take care of their own. Private welfare associations are to be encouraged. It is simply that we do not believe that the coercive apparatus of the state should be used to force people to help others. People are more willing to support caring communities when they feel some bond or commonality with those whom they are helping.

When eco-leftists fantasize about breaking California, Oregon, and Washington off from the U.S. to create an Ecotopia, or to join Canada, as they did after the recent elections, they aspire to re-align their nationalistic caring community with a different nationalistic community (see http://www.truthout.org/docs_04/112504X.shtml). They want the right to voluntarily choose which caring community to which they belong: An imagined Ecotopia or Canada. They thereby implicitly endorse voluntarism as the basis for membership in a particular caring community.

It is important to realize that there are non-nationalistic norms of caring. All indigenous tribes are non-nationalistic units for caring. Religious communities, which may be geographically-dispersed, are non-nationalistic caring communities: Mormons helping Mormons, Catholics helping Catholics, etc. Ethnic and immigrant communities, again sometimes widely dispersed, are non-nationalistic caring communities.

FLOW idealism is passionately committed to the creation of non-nationalistic, voluntary caring communities. Insofar as FLOW appeals particularly to cultural creatives, we will encourage the cultural creatives to think in terms of creating their own caring communities rather than enforce welfare state policies (and taxes) on everyone.

The Nationalistic Welfare State as Gated Community

Welfare states that are defined by national boundaries are the moral equivalent of gated communities. Gated communities, like Denmark, provide wonderful benefits to those within the boundaries of those communities but they fence off outsiders to prevent those outsiders from taking advantage of the community benefits. Gated communities in the U.S. and nation-state welfare states are morally equivalent. Those on the Left who are interested in FLOW must learn to give up the notion that European (and Canadian) welfare states are somehow “morally superior” to the United States.

From a moral perspective, the single biggest problem with the creation of a welfare state is that it increases the incentives that a nation has to exclude foreigners. As is, limits on immigration are one of the greatest moral crimes that a nation can commit against the poor of the world. Access to the legal and economic systems of developed nations, by means of free immigration, may be the most effective means of “distributing” wealth in existence. The foreign aid that is provided even by the most generous Scandinavian nations is a small fraction of the wealth that would be “distributed” to those in the developing world if the developed world had more liberal immigration laws.

“Distributing” is in scare quotes because immigration is not a matter of distributing wealth: It is, in fact, a matter of creating dramatically larger quantities of wealth. Our legal/economic system is a fantastic cash cow with the marvelous characteristic that the more it is milked the more it produces. This is why immigrants repeatedly risk death by trying to enter our nations. The comparison of people dying to enter our country should always be contrasted with that of people dying to leave East Germany; both species of sealed borders are immoral. By allowing immigrants into our country, we increase the wealth of existing citizens while also vastly increasing the wealth of the immigrants (and their families to whom they send remittances).

Populist politicians have always appealed to nationalistic sentiment to limit immigration. The creation of costly welfare states creates an additional reason to limit immigration: each additional citizen is more likely to be costly to the state. And, indeed, resentment towards immigrants is often justified by the claims that “they are costing us money, they are straining our social service systems.” As proud as most Europeans are of their social welfare systems, they rarely acknowledge that those systems create an incentive to limit immigration. The European welfare states are gated communities that have managed to obtain a patina of moral credibility because they are generous to those within the gates.

The last few years have seen a steady increase in racist nationalism among many European peoples. I predict that, to the extent that Europe becomes as multi-racial and multi-cultural as is the U.S., Europe will experience racism that will be as pervasive and ugly as was racism in the U.S. forty years ago. European welfare states were founded on cultural homogeneity: Norwegians wanted to help Norwegians, Fins wanted to help Fins. (Note that this is really no different from Mormons wanting to help Mormons or Catholics wanting to help Catholics). As members of the European dominant cultures increasingly feel threatened by “the other,” racism in Europe will continue to increase and support for the welfare states in Europe is likely to evaporate.

We can wish that it were otherwise, but this is not an issue in which exhortation is adequate as long as there is an economic foundation to the resentments. And despite the overall benefits of immigration and free trade, low-skill, low-wage workers in every nation are those who are most threatened by immigrants and free trade.

As we approach a global situation in which 6 billion people are competing with each other to produce goods and services for other people, the grinding poverty currently being experienced by the 4 billion or so in the developing world will gradually be re-distributed to the 1 billion or so lowest skilled workers on earth. Many of those will reside in developed countries. In a world of economic freedom, in another forty years most people on earth would no longer be in poverty: This would be a glorious achievement, worth celebrating. But an increasing percentage of those who remain poor would include those in developed countries who can’t compete adequately with the more capable and motivated from the developing world.

From a global perspective, the moral course of action would clearly be to relieve the 4 billion destitute through globalization and open borders in exchange for a mere 1 billion of those who would be “poor” by the much wealthier first-world standard. What is to be done with the 1 billion or so losers in the global competition?

A Different Education for the Benefit of the “Working Poor”

Once again, for this reason educational freedom is our most urgent cause. An educational market will develop thousands of different ways to help people add value to their abilities, to invest in their own human capital. Again, our existing K-12 education system is designed to reward those who enter with habits and attitudes compatible with those of the upper-middle class who designed the system. It is harmful and impoverishing for those who happen to come from sub-cultures that are not compatible with the upper-middle class designers of the system.

By forcing young people with the wrong cultural pre-requisites to compete in a dull, meaningless system which they intuitively know does not enhance their lifetime learning prospects, government education steals tens of thousands of dollars in opportunity costs from the children of the working poor. The six years of useless secondary school represents thousands of hours of valuable time that could be used to earn income and invest in valuable additions to their human capital. Government-managed secondary education combines the experience of prison with the reality of publicly-sanctioned theft from the children of the poor. We need to quit stealing their time while teaching them bad habits.

I come from a working class family, some of whom have succeeded in the world and others of whom remain stuck in low-wage tracks. Everyone that I know who is stuck in a low-wage track is intellectually capable of earning a lot more money. The difference between the winners and losers is usually a matter of habits rather than academic skills. Beyond the basic reading, writing, and mathematics skills that should be learned by 6th grade, secondary school as we know it is a harmful waste of time for most students. Just as the former communist regimes devastated the human capital of those regimes by training people to be shirkers and clock-watchers, so too does public education devastate the human capital of those students for whom the system is not appropriate.

Instead of learning self-discipline, initiative, civility, salesmanship, teamwork, optimism, and other crucial life skills, they passively go through the motions of memorizing material that they will soon forget while developing habits and attitudes from school-as-prison that will damage their lifetime earning opportunities. As an educator, I know that these lifes kills cannot be taught by means of a traditional content-based curriculum; they must be taught by means of habituation, and we have no system in place for creating schools that consistently transmit good habits. (see my essay “Why We Don’t Have a Silicon Valley in Education” for more on this).

If people have good work habits, are frugal and avoid addictive behaviors, and if they have positive social skills, they do well in life, regardless of academic ability. See “The Millionaire Next Door,”:

“What are the top five factors most often mentioned by millionaires as being very important in explaining their economic success? . . .

Integrity – being honest with all people
Discipline – applying self control
Social skills – getting along with people
A supportive spouse
Hard work – more than most people”

Anyone who saves $3 per day from their teens onwards and invests it in an index fund will be a multi-millionaire when they retire. Almost anyone with a bit of self-discipline can become rich and create a legacy to pass on to their children.

If people have bad work habits, are spendthrifts, are engaged in addictive and destructive behaviors, and lack social skills, then they usually do poorly, regardless of academic ability. Credentialism masks this truism to some extent by legally preventing those who lack academic training from entering most high-income fields. Schools that focused on the real pre-requisites to success, rather than trying to force students to master meaningless academics, would disproportionately benefit the children of the working poor. (See Deperle’s recent book, “The American Dream: Three Women, Ten Kids, and a Nation’s Drive to End Welfare” for detail on how terrible life skills doom women to ongoing poverty).

In the absence of such schools, life for those with weak skills and poor habits will become increasingly grim over time due to global competition. Global market competition will be blamed for the distortions in life caused by a government education system designed by the elites for the elites. In a competitive education market, entrepreneurs would create niche schools for the working class that would provide them with superb preparation for life.

With the right preparation, everyone can be valuable (very nearly). The best personal trainers, hair dressers, masseuses, personal assistants, gardeners, auto mechanics, etc. earn good incomes. Providing high-end personal services to those with high incomes is a rapidly growing niche. No academic aptitude is required at all. Even those at the bottom of the IQ spectrum, if they are capable of, say, excellent therapeutic bodywork, can earn decent incomes (as long as the credential-demons don’t use government force to require years of education for entry).

Housing for the Working Poor

In the meantime, until we have educational freedom, we need to simultaneously work on other ways to help the poor.

FLOW needs to advocate for low-cost housing options. Slow-growth policies, zoning laws, building codes, and union labor costs in construction are the primary factors resulting in high housing costs. Single-Room Occupancy (SRO) hotels, which used to provide low-cost housing options in the inner-city, have mostly been zoned out of existence across the U.S. We need to promote brilliant design solutions that result in low-cost housing options combined with the legal changes required to make those low-cost housing options widely available.

The Japanese have sleeping closets that can be rented cheaply over night. They are as small and tight as a coffin. At present American society would resist such options. But is it better to be homeless or better to sleep in a warm, safe, quiet, tiny, sleeping closet? There have been numerous points in my life at which I would have happily saved hundreds (or thousands) of dollars per month in rent in order to sleep in a sleeping closet had such an option been available. I have slept in a homeless shelter; while not awful, I would have preferred a sleeping closet.

I recently considered renting an apartment in inner-city D.C.; it was $400 per month. The space could easily have fit 20 sleeping closets, which works out to a per-closet cost of $20 per month. Sleeping closets would require an investment and perhaps a supervisor, which would add cost. That said, the economics of the situation appear to provide for the possibility of an entrepreneurial opportunity whereby housing was available for well under $5 per night.

Although cheap sleeping closets would not be appropriate for women with children, this is an example of the kind of creative thinking that ought to be happening regarding housing issues. There is an entire movement among designers to solve human problems by means of design. See Bruce Mau’s “Massive Change project” for a FLOW-like initiative by a designer to make the world a better place, http://www.brucemaudesign.com/massivechange1.html. Creative designers are working on a variety of living solutions for those in the developing world; with appropriate legal changes, they could work on creative design solutions for 1st world poor.

Inculcating Good Habits Among the Poor

Behavioral issues (including drunkenness, mental illness, and a lack of adequate frugality and industry) are an integral problem with many of the chronic poor (while the issues are complex, I think that Thomas Szasz’s “The Myth of Mental Illness” is worth considering regarding the relationship between bad emotional habits and some “mental illness”). Instead of supporting bad habits, we need an entrepreneurial system that provides cheap, innovative solutions to behavioral changes. One of the biggest reasons for the lack of support for the welfare state in the U.S. is the fact that responsible Americans don’t want to support those whom they consider to be irresponsible and improvident.

The various free 12 step programs and existing church (yes, “faith-based”) programs are one option. For the cultural creatives among us, instead of reflexively rejecting “faith-based” programs as Bush-speak, consider the notion that in our voluntaristic Cultural Creative caring communities we may want to require certain courses or behavioral requirements for those who are not capable of managing their own lives. If the cultural creatives had to pay voluntarily for welfare service for those within their community (instead of voting for welfare programs that forced all Americans to pay for the poor), they would face a serious incentive to cultivate and enforce improved behavioral norms among the poor. Just as many traditional religious organizations supply welfare services to the poor in exchange for behavioral changes, so too would the cultural creatives supply welfare services in exchange for behavioral changes.

There are at present ten-day Vipassana meditation courses available across the country; participants only pay what they can after the course. I took one this summer; they are terrific training in self-discipline. One wakes up at 4 a.m. every morning and meditates, with a few short breaks, until 9:30 p.m. each night. There are two vegetarian meals per day before noon and only fruit is allowed in the evening. One is not allowed to leave the premises during the training. No books or writing, music or musical instruments, computers, games, televisions, radios, or electronic devices are allowed. Only simple, baggy clothing is allowed. One does not speak for ten days nor does one look another human being in the eye or gesture toward another human being. One is forced to strictly to be with oneself in a very demanding regimen of personal change for ten straight days. Educated people flock to this type of experience. It is a wonderful opportunity to change one’s mental and emotional habits in profound ways. The meditation training itself is not mere “reflection;” it is systematic training designed to help one break one’s previous programming and to learn to control one’s consciousness in a manner that develops greater focus and happiness.

It seems obvious to me that people whose lives are out of control should be required to take such a course prior to being allowed into certain housing opportunities. Perhaps they should be required to take such a course several times per year while our Cultural Creative housing community is providing low-cost housing for them. Those who were willing to commit themselves to such discipline would be better neighbors for their impoverished compatriots who also had committed themselves to such discipline. Those who were not willing to commit themselves to such discipline might be required to live in much less desirable free housing. It is unfair for those working poor who do have self-discipline to be forced to live amongst the poor who lack self-discipline. Those who had developed a regular commitment to Vipassana self-discipline would belong to a caring community who would support them in building better lives.

Part of our entrepreneurial effort needs to be to create entire communities that provide effective ways of living for those who are currently capable of earning only a few dollars per hour. The housing suggestions and Vipassana self-discipline sketch above are the beginning of such a vision. By means of such a vision, I can imagine steady improvements in the well-being of the poorest among us. It is hard for me to get excited by more welfare programs simply because, while they help some deserving poor, in other cases they sustain and feed deplorable ways of living that only increase human misery in the long run. Jo Anne Baird’s comment about students who pee on the floor if they don’t like a teacher is all too real; for an extended grim account, read “How I Joined Teach for American and Got Sued for $20 million”,
http://www.city-journal.org/html/13_1_how_i_joined.html.

FLOW ideals and the Poor vs. the Welfare State “Ideal”

Our current policies towards the urban poor cannot and should not inspire anyone, and the expansion of proposed welfare state policies, in the absence of any effective means of transforming dysfunctional cultural patterns, is horribly, horribly wrong.

The combination of:

-Voluntaristic caring communities based on particular cultural principles and beliefs.
-A market in education that allowed the children of the poor to pursue better lives.
-Creative, low-cost housing design solutions.
-Systematic approaches to changing habits, such as the Vipassana self-discipline training described above.

form the beginning of practical, effective, ever-improving possibilities for the poorest among us.

By the means sketched out above, I can see a steadily more beautiful, noble, and wonderful world coming into existence. By contrast, even though I feel badly about the poor in the U.S. at present, I can’t manage to get excited or inspired by the thought of expanding the welfare state.

Sometimes when one is climbing a peak, one discovers that the route that one is on will not allow one to reach the top. One may have to go back down for a while before one can begin climbing back up. I feel as if this is the situation in which we are in regarding our approach to helping the poor. The welfare state approach, despite whatever positive effects it may have had, will no longer allow us to move towards the top. We must change course and discover a new route. In order to do so, it may appear at times as if we must go back downhill. But that is the only way to begin again on a route that will allow us to reach the top.

The Entrepreneurial Heuristic

2005-02-23T06:30:00.000-08:00

If people cannot be persuaded to do something voluntarily, we should not force them.

If institutions are designed correctly, then voluntaristic activity results in the betterment of the human condition.

Thus if we have any complaints about the world, we have an obligation either to solve the problem entrepreneurially or we must specify how institutions must be changed so that we can solve the problem entrepreneurially.

If someone thinks that our current media are failing, then he or she needs to propose an entrepreneurial solution or to specify how current institutions must be changed so that he can solve the problem entrepreneurially.

If someone thinks that people are not respecting the environment adequately, he or she needs to propose an entrepreneurial solution or to specify how current institutions must be changed so that he can solve the problem entrepreneurially.

If someone thinks that teachers are not being paid adequately, he or she must propose an entrepreneurial solution or specify how current institutions must be changed so that he can solve the problem entrepreneurially.

This is the sort of ethos that our movement ought to cultivate and respect. No whining, just do it. Or at least explain intelligently what legislation would need to change so that you (or someone) can do it.

I describe this approach as an “entrepreneurial heuristic” because I see it as a discovery process: This is how we need to think about how to solve social problems. We might not be able to come up with a solution immediately, and I can’t guarantee that we can solve all problems this way. But I do think that a commitment to this approach to solving social problems will help us to break new ground constantly, both in theory and practice.

For instance, I do think that women are, to some extent, undervalued in the marketplace. According to Kirzner’s theory of entrepreneurial alertness, anytime that something is undervalued in the marketplace, there is therefore a profit opportunity available to be made. I think that there are profit opportunities available for someone to create more female-friendly organizations that more constructively manage and utilize female characteristics. I do think that there are numerous organizations that are very much in the process of creating more female-friendly workplaces, and are thereby taking advantage of this profit opportunity; every organization that is a better place for women to work, which successfully attracts and retains disproportionately talented women, is taking advantage of the extent to which women are undervalued in the marketplace. That said, as long as there are women who would work harder, more effectively, and more happily under different managerial circumstances, there will continue to be unexploited entrepreneurial opportunities for those who aspire to create more female-friendly workplaces.

This approach is more honorable, respectful, and effective that is “fighting” for legislation that forces organizations to pay women the same as men. If an organization does not value a woman as much as a man, and is forced to pay her the same, resentment and evasion will take place in the organization and a destructive, controlling bureaucracy will undermine the work of all organizations, even if they had previously been treating women well.

Moreover this is not merely a matter of women. Insofar as some of us believe that human beings in general could be significantly happier and more fulfilled at work, we have an obligation to create such enterprises. Insofar as some of us believe that people could be significantly happier and more fulfilled in their entertainment and consumption habits, we have an obligation to create enterprises that offer more fulfilling entertainment and consumption options. Insofar as some of us believe that young people could be significantly happier and more fulfilled during their school years, we have an obligation to create schools at which students are happier and more fulfilled.

I have created such schools and have discovered that doing so is mostly against the law to do so. I now am working to change the laws so that it will become legal to provide young people with happy, fulfilling educational opportunities.

In the past, we have allowed ourselves to whine and complain about the state of the world. The claim of intellectuals that they are providing useful work by providing a “critique” of society is absurd. Every “social critique” by intellectuals should be transformed into an entrepreneurial obligation. We need to quit the habit of whining and complaining. We need to get busy and do something about it.

If we believe that low-wage workers are “underpaid,” then we need to create a business that pays them “what they are worth.” When we try to do this, I’m afraid that in many cases we will discover that their labor is not worth very much. I have been in the situation of eagerly seeking an office manager and being able to pay this person $45,000. And I have gone through dozens of applicants who were simply inadequate: Their labor was not worth $45,000. If I hired a less than competent person for the job, I would be failing the students, parents, and teachers. I have hired great office managers who have been high school dropouts; higher education is not necessary. But they do need to be bright, motivated, organized, and responsible. As a manager, I can’t and shouldn’t pay an incompetent person more than he or she is worth in the labor market.

When we lose in the marketplace because someone else is providing a better product at a better price, or when we fail to sell our goods and services, we have to acknowledge that we have not done a good enough job. We have a responsibility to improve.

Creating New Ideals

2005-02-21T16:04:00.000-08:00

There are legitimate and difficult tasks associated with re-directing people's ideals. I see it as a slow process, akin to turning an ocean liner around.

One of the keys is to balance a perspective that does acknowledge the virtues of spontaneous market forces with a perspective that includes the valid and desirable human aspiration to make the world a better place.

Thus with respect to a comment on our Yahoo group:

"There has to be something better than dusting off the old "markets will save the world if you just let them schtick"--they didn't and they haven't and they won't--and it's not just the fault of meddling bureaucracies and Chicken-Little activists,"

I very much agree that there has to be something better; that is indeed the aspiration of FLOW. That said, we somehow have to find a way to talk about problems that acknowledges that, to a very remarkable, unacknowledged extent, markets come close to saving the world.

A simple case in point: A commentator in the WSJ estimated that under the rates of growth typical under India's socialist governments, India would not reach U.S. standards of living until 2300, whereas under the rates of growth achieved by more recent liberal (i.e. free market liberal) governments in India, India could reach current U.S. standards of living by 2050. Say what you will about Wal-mart and the spiritual poverty of the U.S., but I can't see any standard of morality that can justify sentencing a billion people to brutal poverty and widespread child slavery and prostitution for an additional 250 years because we don't like the aesthetics of the U.S. marketplace.

Thus while validating the urgent human desire to do good in the world by means of social entrepreneurship, our very first priority must be "to do no harm."

That said, I agree that we should acknowledge problems with existing market outcomes and seek to improve upon the outcomes. In some cases we may need to change the rules of the marketplace; in other cases we may need to be entrepreneurs; and in other cases strategic philanthropy may be crucial.

I do think that a major area of influence for FLOW could be to develop and encourage cadres of market enthusiasts who, instead of simply defending existing markets, emphasize the changes in market rules that would be necessary for social improvements. For instance, U.S. corporations are excessively driven by short-term profits in part because of SEC regulations from the 1930s that force corporations to report results quarterly in a particular manner. Privately-held corporations, not subject to SEC regulation of the equities markets, are not driven by short-term profits to the same extent as U.S. public corporations. Corporations in Germany, Japan, and elsewhere are less driven by short-term considerations because those nations do not have the same regulatory structure that we have. FLOW advocates should support a repeal of these SEC regulations while simultaneously working on an entrepreneurial solution to fill any reasonable social void left by the elimination of the SEC regulations.

"And if Flow starts parroting the smugness so prevalent on Fox and elsewhere, marginalizing "enviros" and other well-intentioned but often off-the-mark groups of activists, while simulataneously blindly extolling the virtues of the existing market--then we will lose a tremendous opportunity to forge something new and different."

I do think that the comment on "smugness" is appropriate; what most alienates do-gooders from market advocates is the apparent tone of smug complacency. We must always substitute a sensible action agenda for those who want to devote their energies to idealistic courses of action. Insofar as many market advocates make it sound as if "everything is okay" when it is clearly not, those market advocates immediately lose credibility among those who want to make the world a better place.

The other rhetorical challenge is to change the connotation of "market." For most idealists, "market," "free market," "capitalism," etc. all have connotations of greed. And yet the system that we want to create is one in which idealistic entrepreneurs demand the freedom that they need to make the world a better place. From a denotative perspective, the schools that I want to create require a "free market" in education. Yet many people imagine that a "free market" in education will result in the crass commercialization of education while also imagining that "public education" somehow results in virtuous civic education. We have to change 100 years of misleading understandings concerning basic terms and institutions in our society.

"For FLOW to succeed, it seems that it must embrace the path of authentic transformation, and resist at every turn the ease and temptation to engage in less meaningful translation--of dressing up old market apologia in new market language."

I would not so quickly repudiate "old market apologia." Mere economic growth has resulted in the most amazing standard of living for the average person that the world has ever seen. Although aesthetically I sympathize with an intellectual misanthrope I met who described Wal-mart as "hell," from a moral perspective I bow my head in gratitude every time I enter Wal-mart and see the amazing range of products available at amazingly low prices. If we had greater freedom in education, health care, and housing markets, it would then be possible to obtain decent education, decent health care, and decent housing at affordable prices. And then the people who work at such low wages at Wal-mart could afford decent lives. Instead, we have created a world in which vast volumes of trivial items are available cheaply, but those items that are most crucial to well-being are unreasonably expensive and inavailable.

One of our challenges is to validate the aspirational goals of cultural creatives to create new forms of social entrepreneurship while also persuading them to be more respectful of the basic needs and aspirations of ordinary people.

This leads to a response to the comments on whether FLOW ideals are new or not: "The sorts of ideals you mention as examples are not new; they are rather typical and conventional."

A few brief thoughts concerning the ways in which FLOW ideals may be new:

I used to despise my grandmother because she bought "Collectible" plates from The Franklin Mint. The Franklin Mint does a tremendous business selling highly-priced plates, statues, figures, etc. and marketing them aggressively as "limited-edition" collectibles. It is a case study of profits by means of deceptive hype. The objects are only "valuable collectibles" because The Franklin Mint hypes them so. The objects are priced far above the price of similar bric-a-brac available at tourist shops. The Franklin Mint would appear to be a case of capitalism at its most wasteful, deceitful, and profit-grubbing worst.

And yet it is undeniable that it makes my grandmother happy to buy these stupid plates. If I were a czar of economic virtue who could close down The (despicable) Franklin Mint, my grandmother would be less happy.

At the same time, I would feel as if I had failed as a father if my children grew up to desire this type of crap. I am pleased that my children prefer books and wilderness activity to kitsch from the mall.

So one sense in which it seems to me that FLOW ideals are new is for us to:

1. Celebrate the fact that ordinary people want and are made happy by Wal-mart, Mcdonald's, The Franklin Mint, and barbecues on 3000 sq. ft. decks. These things really do make most people happier than they would be without them. That's why those who sell them succeed in the marketplace.

While simultaneously

2. Aspiring to change tastes, culture, and preferences by means of voluntaristic choices offered in the marketplace by our culturally creative social entrepreneurs.

Another aspect of ideal #2 is that it forces us to create goods and services that people really want. If we are virtue-mongers, the way most idealists are, then we must take responsibility for making virtuous ways of life more enjoyable and rewarding than are competing alternatives.
If we open a church and people still go to the bar across the street, we have to acknowledge that we have failed to fully provide substitutes for what people get from going to the bar. If we open a meditation center and people still go to the mall, we have to acknowledge that we have failed to fully provide substitutes for what people get from going to the mall. We need to create ways of life that are so valuable that people actually pursue them as actively as they currently pursue existing consumption patterns. Or we need to acknowledge that people actually get something of value from the bar and the mall.

When I was in college, I sold solar energy collectors door-to-door. A friend, who was an ardent environmentalist, worked with me briefly but then quit because he hated door-to-door sales. And yet he would most certainly have supported a law that forced people to buy solar energy collectors. This strikes me as a morally bankrupt position. It is very easy to have opinions and to proudly and righteously support laws that force our opinions on other people. It is much, much more difficult to create an enterprise and make it a success by means of persuading people to give us their hard-earned money in exchange for the valuable goods and services that we provide.

For idealists to take responsibility in this manner also strikes me as a new ideal. Previous idealists have been content to announce that they believe in the right thing - one is reminded of Hollywood celebs arriving in their limos or SUVs to talk about how we are consuming too much oil. A public commitment on our behalf to create new goods and services, and new ways of living, that are so desirable that we can sell them in a marketplace, is a radical departure from previous types of idealism. If we combine a commitment to walk our talk in our personal lives with a commitment only to use voluntarism to bring people along, we will have set dramatically new standards for idealism.

Moreover, this type of responsibility is a bridge to ordinary voters. I think that the Democrats have been losing in large part because the elites who represent them despise ordinary people: they are people like me who despise the decorative plates put out by The Franklin Mint, they are people like my friend the environmentalist who is too good to sell door-to-door but who would happily force people to buy solar energy collectors. It is difficult to win support from those whom one despises.

Ordinary voters in America have a profound respect for personal responsibility. And they want to be liked and respected. If FLOW can balance a commitment to aspirations by means of voluntaristic social entrepreneurship by cultural creatives with an authentic celebration of ordinary Americans, we will be able to gain a following.

FLOW as a Revival of the Feminine

2005-02-18T03:55:00.000-08:00

In order to create better ways of living, we need to find a way to allow distinctively feminine understandings to prevail. In the world in which we have created, a world based on legal restrictions and technological devices, we are controlled by abstract rules and useful gadgets. But the distinctively feminine contribution to life will only flourish when females and males alike are allowed to create better schools, better communities, better relationships, better social norms, and better cultures.

Maria Montessori was an unrecognized genius. She created a mode of education in which children learn spontaneously, happily, in a nurturing environment. Every educated adult should observe classes at a good Montessori school. Her pedagogy is nicely summed up in her quotation: “The greatest sign of success for a teacher is to be able to say, ‘The children are now working as if I did not exist.’”

Children spontaneously teach themselves in a great Montessori classroom. I was once giving an internet executive a tour of a Montessori middle school classroom and he exclaimed, as he observed the students busily working away without apparent guidance “How do you get them to do this? This is exactly what I want my employees to be doing!” This brilliantly designed environment, resulting in initiative and independence, is precisely why Ayn Rand was an advocate of Montessori education as the best education for free human beings.

But Maria Montessori’s work was undermined by the public school system, by education professors, and by militaristic nationalism that preferred conformist indoctrination to liberating education. Montessori education has been crippled for a hundred years by these hostile forces. We now see Montessori pre-schools spreading rapidly (in the Dallas-Fort Worth area, hardly a hippy haven, there are more than 100). In a free education market, liberating Montessori K-12 schools, of the kind that I would like to create, would steadily gain market share.

In the absence of government controls and restrictions, more female geniuses like Montessori would have created more and better ways to learn and to live together. Females are often better than males at constructing humane ways of living and interacting. They are often better at creating environments that nourish the spirit. They have a greater commitment to beauty, to community, to raising children, and to love.

There was most certainly a social prejudice to be overcome: European culture in the early 20th century was aggressively patriarchal. Maria Montessori was the first female medical doctor in Italy, and I’m sure she faced abundant bigotry. Unfortunately, as the battle for female social equality gradually gained ground in the 1960s and 1970s, so called “progressive” thinkers were simultaneously committed to massive government intrusion in our lives.

Just as our society was becoming wealthy enough to allow for more and more entrepreneurial efforts in education and community building, the 60s radicals imposed harsh legislation dictating how life should be lived. They created a confrontational judicial system that encourages lawsuits, they created a vast regulatory apparatus that reduces flexibility in employment, they created a federal bureaucracy devoted to dictating how children with learning disabilities should be taught, they created a welfare system that systematically destroyed black families, and they created a mind-set attached to the notion that academic researchers advising bureaucrats could make our lives better.

I have met many talented women who went into business, law, social work, psychotherapy, and other fields aspiring to do good, aspiring to fulfill their desire to nurture and help others. Surprisingly, in my experience those who went into business are often the most fulfilled in this respect. Many of those who have gone in to law to help women and children have found themselves devoting their time to bitter divorces and dealing with the ugliness of the state child protective services. Those in social work often find that their public agencies can do very little to help their clients; they manage to provide stop-gap measures for some, but there is often little sense of real progress in improving lives. Those in psychotherapy in private practice may find their work rewarding, but those who work for institutions often find themselves to be slaves of a bureaucratic system that systematically prevents them from providing their clients with what they truly need.

Our deepest problems have to do with culture. Culture, in turn, is based on those day-to-day habits and attitudes that shape our lives. It was necessary to destroy patriarchy, and yes, there is still work to be done. But after the destruction had taken place, there should have been an opportunity to create a better alternative. By means of deliberately designed schools, communities, health care systems, insurance companies, and other alternatives, a multitude of new micro-cultures could have been created that successfully resulted in more egalitarian male-female relationships while also creating responsible norms of sexuality and civility. Instead, the 60s succeeded in destroying previous standards of sexuality and civility without replacing them with anything in particular.

As a result, we now live in a world in which the most popular computer game which rewards teenage boys for raping and killing a prostitute; in which rap artists rhapsodize about violating and killing women; in which Mary Pipher reminds us that American teen culture is a “girl-destroying place.” Uncivilized, or inadequately civilized, males are a terrible threat to women and children.

I interpret the rise of social conservatism as a reaction to the irresponsible destruction of social norms in the 60s. Had institutions been created that had allowed for the creation of responsible new social norms, that were more sexually egalitarian and open without being irresponsible, the current reaction would not exist. If, instead of writing essays on the masturbatory aspects of Emily Dickinson and how all heterosexual sex is rape, more feminists had worked as entrepreneurs, creating better schools, communities, and health care modalities, our lives would be vastly better today.

We need to re-feminize our culture by allowing more feminine entrepreneurship in the creation of schools, communities, and health care.

Sales and Pygmalion

2005-02-17T06:52:00.000-08:00

Sales careers allow for upward mobility far more than is realized. And they allow for the creative development of one's self as well.

Two books that provide more surprising reconciliations of these opposing positions than one might at first expect:

1. Napolean Hill's Think and Grow Rich, is a 1930s book that reads like a marvelous combination of 19th century self-help and 1990s new age visionary material.

2. Dale Carnegie's original How to Win Friends and Influence People. The original version of Carnegie's book (again, 1930s?) surprised me by being far more literary than are the contemporary Dale Carnegie advertisements. Almost every chapter included a quotation by Emerson, the arch-advocate of individuality.

As with most dualisms, the dualism between being affable and engaging, on the one hand, and being authentic and individual, on the other hand, is a false dichotomy. I'm sure that most of us have been slighted for being too idiosyncratic and not sufficiently conformist at times - and thus we have the distaste for the obsequiousness that we usually associate with sales and Dale Carnegie. There are certainly oily individuals whom I personally find repulsive who seem to have followed Dale Carnegie's guidelines.

That said, the most engaging people manage to combine deep authenticity with warm personableness. That is, it is possible to be true to oneself and to "win friends and influence people." Doing so may be an art, balancing the yin and the yang, but the fact that it is an art of balance means that we should honor both sides of the balance, and not despise one or the other. In a free society, many dimensions of human behavior that currently seem to be cartoonish and awkward will gradually be developed into amazing and dazzling arts.

In my schools I have always told students that they should strive to be amazing. I believe that there are 6 billion different ways to be amazing, that there are an infinite number of rich niches to be occupied, and that the entire goal of education is to help each young person discover who it is that they can be magnificently better than anyone else. We all have a comparative advantage; we are never allowed or encouraged to discover it.

Another relevant book, by a Jungian psychologist: James Hillman, In Search of Character and Calling, which is a paean to individuality; it is a good book for parents to read to help them appreciate the individuality of their children in the face of the enforced conformism of the education establishment.

“In the final analysis, we count for something only because of the essential that we embody, and if we do not embody that, life is wasted.”

~Carl Jung

Teach Poor Kids How to Sell

2005-02-15T06:01:00.000-08:00

Poor kids are not taught how to sell.

If you look at the classified ads in any major newspaper, the majority of jobs fall into three categories:

1. Jobs that require a credential based on advanced technical education (mostly medical and engineering).
2. Jobs that are low-wage with little opportunity for advancement.
3. Sales jobs: very high potential income, no degree required.

If a person from a low-income household doesn't happen to be technically-inclined, what are they going to do? Get a liberal arts degree at great expense? I know of many bright working class people who think of education as a waste of time.

But what if they really, really learned how to sell? Suddenly numerous high-paying jobs would be open to them. Moreover, successful sales people often rise to higher positions in entrepreneurial sales organizations. Entrepreneurs must be capable of selling their ideas. Expertise in selling one's ideas is crucial to success within most organizations.

In my classroom work I was actively developing students' ability to be articulate. Often times I would explain to students: Speaking well can be your number one source of earning potential. If you can speak clearly and persuasively, you can achieve just about anything.

I have known several poor, uneducated immigrants who came to the U.S. with no connections whatsoever and became wealthy simply by means of their ability to sell. I have known inner-city kids who have the charisma and doggedness to be brilliant sales people - if they only had the cultural savvy and ability to speak the English of the educated classes they could become wealthy.

And yet there is no time in the standard K-12 system to develop such skills. The odd elective speech course here or there simply isn't enough, especially for students from homes in which they are not exposed to the standard English of the educated classes. They need many thousands of hours of training. You can't sell to people with money unless your speech is similar to that of the people to whom you are trying to sell. I could train most inner-city kids to speak like a Harvard graduate; but in order to do so we would have to skip much of the standard secondary curriculum (which is really a waste of time anyway).

Just another way in which existing K-12 education amounts to a cruel means by which well-meaning, earnest elites unwittingly enforce existing class hierarchies. This fact is utterly invisible to most academics because most academics have never had a sales job, have no respect for sales and marketing, and, I suspect, have rarely had to get a job from the classified ads at all.

Entrepreneurizing Do-Gooders

2005-02-13T13:40:00.000-08:00

Intellectuals are notorious for their alienation from bourgeois society. Indeed, one of the greatest mysteries of the 20th century is how so many brilliant people supported communism after Stalin's mass murders, then again after Mao's mass murders, then yet again after Pol Pot's mass murders. All of this was due to idealism: The Moscow correspondent for The New York Times defended Stalin with the "idealistic" slogan "you can't make an omelette without breaking eggs."

Even today, intellectuals are the group that is most alienated from market activity. Campuses may well be locus of the deepest resistence to FLOW insofar as FLOW accepts the legitimacy of most market interactions. (Making campus FLOW groups all the more important).

But as much as possible we want to shift away from the idea of political debate and towards the idea of taking real-world action. I like being able to tell any audience, anywhere, "If you want to improve education, I will help you start a school. Let's get to work on it, right now." Then I can see if they are serious, or if they just want to talk. As Karl Marx famously said, "The philosophers have only interpreted the world in various ways; the point, however, is to change it."

The attempt to change society by means of intellectual debate, political conflict, and bureaucratic directive is increasingly sterile and boring. The attempt to change society by means of direct entrepreneurial action is potentially far more exciting and effective.

Often intellectuals believe that business people are in favor of markets because they are greedy. Yet for those of us who have managed organizations, to a significant extent simply having had managerial responsibilities leads one to realize that it is difficult enough to keep an organization alive and flourishing. One often comes to resent added burdens, many of which are non-sensical.

Thus the strategy of "entrepreneurizing" do-gooders is, in a sense, a very powerful non-political strategy for social change. Simply by means of encouraging more and more idealistic young people to see entrepreneurship as the best means of effecting change, we will create cadres of realistic visionaries. We hope to support and sustain their idealism; at the same time, the responsibilities associated with launching and managing organizations will make them more realistic than their brethern who remain strictly in the world of ideas.

We are now ready to re-consider the earlier Namier quotation:

"What matters most about political ideas is the underlying emotions, the music to which ideas are a mere libretto, often of a very inferior quality."

By means of encouraging and gathering a class of young idealists whose passion is idealistic entrepreneurship, we will develop apolitical movement based on a very different set of political emotions. Instead of the resentment of academics who wish to thwart business people, or the resentment of business people who wish not to be thwarted, we hope to create a class of entrepreneurs whose first emotion is the joy of creation, and who are recognized for this.

Imagine a political movement that was not based on resentment of the other?

The Difference Between FLOW and Libertarian Policy Prescriptions

2005-02-09T08:58:00.000-08:00

"What matters most about political ideas is the underlying emotions, the music to which ideas are a mere libretto, often of a very inferior quality." ~ Lewis Namier

Namier's quotation is a succinct description of why the FLOW movement is necessary.

Certainly the first and third commitments of FLOW are mainstream libertarian:

1. Voluntary, freely-chosen, rule-based solutions rather than coercive, government-imposed, command-and-control solutions.

3. Passionate, radical tolerance of different ways of life.

The second, however, is not often included among libertarian commitments:

2. A personal and professional commitment to human flourishing, well-being, and happiness.

For myself, I see the role of the second as an exhortation to focus our billions of private initiatives in directions that enhance human well-being. In an age of increasing leisure and wealth, in which more and more people have more and more time and money to devote to making the world a better place, collectively directing our private energies to making the world a better place is potentially a very powerful strategy.

The term "libertarian" is often associated with the Libertarian Party (LP), which tends to focus on issues, such as reducing taxes and legalizing drugs, guns, and prostitution, that are not inspiring or idealistic. Thus the term "libertarian" has mostly become associated with marginal figures pursuing marginalized passions. If we move beyond the LP and look at the cultural creatives, there is an interest in exploring private, entrepreneurial initiative as a way to solve problems. This is inspiring and idealistic.

We want to provide a new music, a passion to make the world a better place, and discover as we go what specific policy prescriptions may follow. By and large, I expect that the first-generation solutions will be similar to the best-thought-out market solutions being developed by economists.

For me, in terms of policy initiatives, the very first priority is educational freedom. Until and unless we can liberate the educational process so that all people have access to empowering education, the least fortunate in the U.S. will fall further andfurther behind. In order to liberate education, we need:

1. To eliminate all government-enforced licensing, certification, and credentials for all professional qualifications. Legally-enforced certification results in government enforcement of the status quo, enforcing class hierarchies, reduced access to crucial professional services, and the stultification of innovation.

2. To liberate K-12 education by minimally-restricted charter schools, voucher plans, and tax credits. We should eliminate compulsory education and gradually move towards the complete separation of school and state. Government-managed K-12 education unnecessarily dooms a significant portion of the population to poverty and misery.

All of this is in line with the views of Ivan Illich, a quasi-Marxist, and John Taylor Gatto, who is supported by Lewis Lapham, the editor of Harper's Magazine. Although I am not presently in K-12 education, I am actively working with people to create better ways to educate through large-scale educational entrepreneurship.

Which gets into a broader interpretation of "policy": The most important "policy" changes amount to:

1. Discovering which existing government rules prevent entrepreneurial solutions to problems and then working to change those rules.

2. Developing cadres of FLOW entrepreneurs who can then begin working to solve the problems.

As we have more and more idealistic young people who want to become FLOW entrepreneurs, there will be greater and greater demands for the kinds of freedom that will be required.

Ultimately, fifty to one hundred years from now, I could imagine a truly wonderful world of better cultures and ways of life that is based on something amounting to anarcho-libertarianism.

Thus the FLOW agenda is to be driven by the desire to make the world a better place. Internalizing this new idealism will involve a dramatic and possibly painful gestalt shift for those who come from the Left. The ambition of the Left used to be to create a better society by means of communism. That is gone. There remains an attenuated ambition to create a welfare state or perhaps "sustainable regional economies." Neither of these are particularly inspiring or idealistic. Nor, if partially realized, will they make human life significantly better (In Sweden, the idolized welfare state, one in ten young Swedes now listens to "white power" music, and this sort of racism is increasing across Europe).

At least in large nation-states, government is simply too unwieldy to make the world a better place. But, with adequate freedom, I can create a better classroom, a better school, and a better chain of schools. Even given the severe obstacles faced by innovative educators at present, I can create better, kinder, more wholesome, more intellectual pockets of teen culture.

I am likewise certain that there will be entrepreneurs who will be able to create better communities, better wellness centers, better therapies, better social norms, better forms of recreation, better kinds of entertainment, better policing strategies, better judicial systems, and so on. The human potential movement was never really launched. We need radical freedom of action to launch the human potential movement.

Moreover, in terms of electoral politics, welfare state ambitions are clearly electoral losers in the U.S. and there is every reason to believe that they will become ever more definitively losing strategies in the years to come. The intelligent and witty book, "The Right Nation: Conservative Power in America," makes a compelling case that demographic trends -including rapid growth in the exurbs and the continuing loss of support for the Left among the young – will ensure Republican victories for years to come.

On the other hand, "Right Nation" also points out that these growing "Republican" constituencies often tend to be socially liberal but anti-government: Which is another way of saying that the proto-FLOW demographic is steadily growing. My hope for the FLOW movement is that it creates a conscious choice for idealistic humanists among the American Left:

1. Continue to support welfare-state growth which is no longer credible or inspiring, and which ensures ongoing, increasingly humiliating and devastating electoral defeats for Democrats, while resulting in personal disillusionment, bitterness, and despair.

OR

2. Support FLOW, a realistic vision based on a growing demographic that can lead towards global peace, prosperity, happiness, and sustainability while also either making the Democrats viable again and/or getting the Republicans to tone down the propensity for social conservatism, big government, and foreign aggression that increasingly characterizes them.

To me, this choice seems like a no-brainer and it is just a matter of time before more and more open-minded people on what used to be the American Left buy into FLOW.

Learning to Sail in High Winds

2005-02-08T06:26:00.000-08:00

As someone who very gradually came to accept market mechanisms as a better way to organize society, I would say that along the way I had to let go of a certain type of passion for justice, a certain type of expectation that life outcomes would be based on desert or moral worth.

For instance, often people on the Left are for rent control because they are outraged that a retired person on limited income who has lived in a particular apartment her entire life suddenly has to move at an elderly age, leaving behind a rich life and community in her lifetime apartment. She has done nothing to deserve this sudden loss of well-being. Market forces (sometimes personalized in the form ofa "greedy landlord" who may or may not be "greedy") have changed the rent levels and she must leave.

At an intuitive level, I still find this narrative very compelling and would not wish for events like this to occur. At the same time, I now find the argument against rent control even more compelling: rent control reduces the quality and quantity of lodging available in an area and, ultimately, produces even greater corruption and injustices than do market forces. That said, if private philanthropies, municipalities, or FLOW entrepreneurs want to provide rent vouchers to help out such people, such actions might be considered laudable humanitarian acts.

MiltonFriedman has long made a sharp distinction between policies such as rent control or public schooling, on the one hand, in which government intervenes in the economy, and rent vouchers or education vouchers, on the other hand, in which the poor are assisted but markets are allowed to function properly. I would likewise make a sharp distinction between market-friendly welfare states, such as Finland, compared to highly interventionist anti-market governments, such as France.

But ultimately we want to create a world in which there exists a radical acceptance of choice and personal responsibility in all aspects of our life. Charles Murray suggested a libertarian idealism based on a folksy, American sort of respect for personalresponsibility. A recent op-ed in the WSJ suggests that this is the real sense in which "moral values" determined the recent election:http://www.opinionjournal.com/columnists/pdupont/?id=110005941

In addition to the traditional American respect for personal responsibility, the Cultural Creatives are often very serious about personal responsibility. Tibetan Buddhists such as Tarthang Tulkuand "New Age" spiritual writers such as Anthony de Mello and M.ScottPeck all state directly that each of us is responsible for our own happiness. If we are unhappy, we are not to blame others for our own happiness: We are strictly responsible for our own well-being. Indeed, these and other writers in the Cultural Creatives' canon would state clearly that acceptance of personal responsibility in ourlives is virtually identical with spiritual growth.

In a world in which each of us is responsible for our own well-being, we will not whine or complain about market forces. We will accept personal responsibility for our habits, for our character, for our personal and professional decisions, for our financial choices, for our purchases, etc. We won't complain about rent increases or jobs going over seas. We will realize that we will live our lives in a world which is undergoing an endless process of creative destruction and that change is productive. In the words of Leif Smith: "We must free ourselves of the hope that the sea will ever rest. We must learn to sail in high winds."

FLOW and the Cultural Creatives

2005-02-07T01:59:00.000-08:00

I've been reading an interesting political analysis concerningthe "Cultural Creatives" by Paul Ray, one of the authors of the book by that name. By means of market research ("13 years of survey research studies on over 100,000 Americans, plus over 100 focus groups and dozens of depth interviews"), Ray claimed to have discovered a large population (50 million) of "cultural creatives" who do not fit into traditional left/right political categories.

Major areas of agreement between FLOW and Ray's version of "Cultural Creative" political beliefs include:

The desire "to get beyond left/right"
A distaste for public schools
An interest in direct entrepreneurial action
A distaste for the anger/class warfare attitudes of the Left
A disillusionment with government solutions

Ray believes that these people are alienated by the traditional left, including its "Big Government" paradigm. At the same time, in a two-dimensional political chart that is rather different from the Nolan Chart, he opposes in one dimension Left ("Modernist New Deal Liberals") against Right ("Cultural Conservatives") with the other dimension defined by the "Cultural Creatives" at one pole and the "Profits Over Planet and People Business Conservatives" at the other pole.

Ray claims that the cultural creatives represents 36% of the population and 45% of the voters; that the Left is 12% of the population and 15% of the voters; the cultural conservatives are 19% of the population and 22% of the voters; and the business conservatives are 14% of the population and 19% of the voters (and 80% of the money). If he is correct in his percentages, it would appear as if large numbers of cultural creatives voted for Bush in the most recent election.

In his paper, "The New Political Compass," Ray is explicitly trying to develop a market research-based strategy by means of which his Cultural Creatives can have more political power:

http://www.culturalcreatives.org/thoughts.html
(click on "The New Political Compass" for access to the pdf file)

Assuming that his market research is legitimate, there are several interesting implications for the FLOW project.

The first is that insofar as Ray, and people like him, regard "Cultural Creatives" and "Business Conservatives" as opposite poles of a spectrum, it would seem that our task is very difficult. In part, FLOW was started because John and I are Cultural Creatives who happen to believe that markets are the best way in which to
express our cultural creativity. But from Ray's perspective, we are strange beasts.

I, at least, would counter that in part Ray's perspective is characteristic of people who don't understand how markets work; although Ray explicitly rejects "Big Government" Leftism, he still does not understand how entrepreneurial Cultural Creatives will need exactly the same kinds of freedom that entrepreneurs of all sorts have always needed. From this perspective, our task would be to educate the young cohort of cultural creatives on how they can change the world by means of entrepreneurial activity - along with an increasingly sophisticated understanding of the kind of increasingly simplified government that will be necessary for them to engage successfully in such entrepreneurial activity.

The biggest areas of conflict between the political beliefs of Ray's "Cultural Creatives" and FLOW are on:

1. Different beliefs regarding ecology. While FLOW is eco-friendly, it does not accept the mainstream eco-hysteria.

2. Different beliefs regarding big business. There is nothing wrong with big business per se. Wal-mart, for instance, has probably done more for the poor, through lower prices, than all government programs from FDR onwards.

3. Different beliefs regarding globalization. Ray believes that globalization is harmful, despite abundant evidence that the world's poor benefit (e.g. Oxfam's position that global trade is the only way to eliminate hunger).

4. Commitment to national health care. We would look for more market-friendly approaches to health care.

With both 2 and 3, there is a principled libertarian/FLOW position that is very hostile to crony capitalism. The "Big Business" position which Ray finds so distasteful is in part due to the crony capitalism which libertarians have always criticized. Ray would not understand why/how limited government is the best solution to crony capitalism. According to Ray the Cultural Creatives are also very hostile to the corrupt, well-funded political process, but Ray at least doesn't see how limited government is also the solution to that one.

FLOW Project Proposal

2005-01-29T06:10:00.000-08:00

FLOW Project Proposal

The FLOW Project (Freedom Lights Our World) is dedicated to making the world a better place by means of entrepreneurial endeavor and adherence to three principles:

Voluntary solutions rather than government-imposed solutions.
A commitment to human flourishing, well-being, and happiness.
Passionate, radical tolerance of different ways of life.

By means of adherence to these principles, we intend to promote peace, prosperity, happiness, and sustainability. For more detail see http://www.realisticvisionary.com/. A FLOW conference was held in the fall of 2004 in which supporters of FLOW pledged $250,000 to launch the project. This seed money will be used to:

Support a professional, significantly expanded, community-building website.
Prepare for a public launch at a major national conference in May of 2006.
Support the writing and publication of The FLOW Manifesto by Strong and Mackey.
Create a logo and visual identity for caps, shirts, bumper stickers, etc.

Additional funding is being sought to create a campus movement based on FLOW.

In the past the Left has provided an idealistic framework which bestows meaning and value upon student activism, so that students can become active in a meaningful way. Hitherto, for many students the apparent message of libertarians has appeared to be “The effort to help people is pointless therefore you should DO NOTHING.” FLOW will offer an idealistic movement based on entrepreneurship-as-activism. A Cornell student surveys current student attitudes:

“The climate is overwhelmingly liberal . . more people are libertarians but don't know it. The students I meet are very entrepreneurial and personally responsible and want to do everything by themselves and start businesses and create things.”

We will direct this entrepreneurial energy into a Hayekian framework rather than allow it to be co-opted by the Left. We will start by means of a series of one-day campus events in 2005-2006 to be used to draw students into our community and to launch campus-based FLOW clubs.

The Proposed Campus Activism Project: Detail

The campus activism project will begin with four one-day campus events during the 2005-2006 academic year. The events will be publicized, fun, quasi-theatrical events. They will feature:

An introduction to the FLOW concept by Michael Strong.
A talk by a high-profile entrepreneur, such as John Mackey of Whole Foods.
A talk by a social entrepreneur, such as Hernando De Soto, Muhammad Yunus, etc.
A talk by a venture capitalist or foundation personnel supporting FLOW.
A talk by a classical liberal or libertarian academic.
A FLOW-moderated debate between prominent Leftists and FLOW entrepreneurs.

In the course of the interest generated by the conference, students will be encouraged to register with FLOW so that we are able to create an ever-expanding web community. The number of conferences will increase in the 2006-2007 academic year; the rate of expansion will be based on lessons learned. The FLOW website and conferences will act as a market-maker in idealistic entrepreneurial projects for thousands of ambitious and idealistic college students.

Through key partnerships (details avail), FLOW will emerge as a coordinated movement with:

Access to and expertise with thousands of freedom-friendly people on campuses.
World-class expertise on the institutional changes needed to allow entrepreneurs to make the world a better place.
World-class expertise on how to become a successful entrepreneur.
Immediate access to idealistic, multi-faceted global entrepreneurial projects.
Immediate access to idealistic, multi-faceted U.S. entrepreneurial projects.

The FLOW project meets several unmet needs:

The need for idealism.
The need to convey libertarian/economic ideas more effectively to more people.
The need for idealistic libertarians or proto-libertarians to have something to do.
The need to ensure that the existing movement towards social entrepreneurship moves in a direction consistent with institutions supportive of liberty.
The need to create an effective movement to make the world a better place.

With the help of the identified partners and prospective donors, we can launch a successful movement that makes a difference in the world.

The marginal utility of arguments about ideas is decreasing. FLOW seeks to create cadres of young people who have a class interest as creators, innovators, and entrepreneurs in the institutions of liberty combined with a sophisticated understanding of why those institutions are in their interest and in the interest of all humanity.

Working on my manuscript

2004-06-28T12:44:00.000-07:00

Currently finishing up a complete draft of Whole Lives: The Creation of Conscious Culture Through Educational Innovation. Blog will resume once manuscript is complete.

Readers interested in Whole Lives should request an electronic copy by emailing me at socraticpractice@yahoo.com.

Creating a Market for Happiness and Well-Being

2004-06-24T09:04:00.000-07:00

A concern that many people have about market mechanisms is the fear that, given the opportunity, people will choose poorly and make themselves miserable rather than happy and well. In addition observers often note that an increase in income does not necessarily lead to an increase in happiness or wisdom. Finally, there is a common perception that market activities focus human attention on short-term stimulations rather than on sources of long-term well-being. For those people who care most about human happiness and well-being, these three facts often convince them that an increase in market activity will result in an increase in human misery rather than an increase in human happiness and well-being.

I used to share these concerns myself. I certainly care more about human happiness and well-being than I do about markets.

The most succinct understanding of markets is that they are a source of creative destruction. It is undeniable that "the system of natural liberty," in Adam Smith's language, results in rapid change. Communities are destroyed, traditional ways of life are destroyed, small farmers and store owners find they can no longer make a living in the old ways. Again, many find the destruction so painful that they are hostile to markets.

There are two parts of creative destruction: creation and destruction. The destruction aspect is clear. Creation is obvious in most technological areas: machinery, electronics, aircraft, materials science, medical technology, drugs and medications, etc. Creation is also obvious in entertainment: television, movies, videos, computer games, gambling, pornography, nightclubs, resorts, cruise lines, theme parks, etc. all flourish in a market economy.

The area in which market creation is least obvious is in areas specifically addressing long-term happiness and well-being. It does appear as if markets specialize in short-term stimulations.

This appearance, however, is misleading. After fifteen years of in-the-trenches experience in education, I have finally realized that the reason that markets do, in fact, specialize in short-term stimulations is because markets in long-term well-being are illegal. We need to legalize markets in well-being.

I exaggerate somewhat. For many people, churches provide an important source of happiness and well-being. I am not one of those. I have found a market in well-being through teachers and practitioners of tai chi, meditation, energy therapy, cranio-sacral therapy, bodywork, men's groups, musical groups, alternative educators, outdoors groups, etc. Indeed, I realize that there are thousands of practitioners of wonderful, healthy, exciting, innovative ways of living who are eager to share their expertise. In addition, health food stores such as Whole Foods are flourishing; healthy restaurants are springing up everywhere; bookstores are larger and more diverse than ever; fitness and health clubs are ubiquitous; and people are hanging out at coffee shops instead of bars.

How can I claim that we need to legalize markets in well-being? Because I am certain that all of these positive trends would grow considerably faster and have a much deeper social impact if markets in education and health care were liberated.

I have spent the past fifteen years creating schools that teach happiness and well-being. The obstacles against doing so are enormous. Public schools teach misery and meaninglessness (This is the real message of the Columbine massacre). We need to free parents and educators to create schools at which young people can develop healthy habits and positive attitudes. I pay property taxes to supports schools to which I would never send my own children because they would be trained in cruelty and bad habits there. Meanwhile the healthy schools that I create can barely survive financially because all parents are forced to subsidize the cruelty factories known as public schools.

Nearly 100% of my health care costs for my family are alternative health costs that are not covered by insurance. Meanwhile I pay $6,000 per year for insurance that, while useful in the case of catastrophic illness, I never use. Two-thirds the cost of health care in the U.S. goes to pay for chronic illness most of which can be avoided by lifestyle choices. While paying $2000 per year to alternative health providers that I can't afford (and I would like to spend an additional $2000 per year on alternative health), I am paying $4,000 per year to pay for the costs of people who eat poorly, don't exercise, smoke, drink, etc. Because I can't spend the money on taking care of myself that I would like, I live less well than I know that I should. When I receive bodywork I am less likely to eat poorly and drink alcohol. I live in a world in which bad habits pay and good habits are penalized.

My personal experiences with respect to education and health care are tiny vignettes that illustrate a profound truth about our society: by maintaining government control over health care and education, we have created a world in which there is a thriving market in short-stimulations but one in which long-term happiness and well-being suffers. Surprising though it may be, the best solution to the market's current focus on short-term stimulation is to liberate education, health care, and community creation.

Future posts will show in greater detail how we can thereby create thriving markets in happiness and well-being.

Travel

2004-06-19T16:57:00.000-07:00

Again on the road, this time until Thursday, June 24th.

Time for an End to War

2004-06-18T07:21:00.000-07:00

It is often true that politics is war by other means. And just as war is a costly waste, so too are combative political battles.

At a time in which our nation is so polarized politically, it may be difficult to imagine a reduction in the scale of conflict. But it is worth imagining a path to less conflict simply because we would all benefit from a reduction of conflict.

There are three primary sources of political conflict:

1. International policy
2. Economic policy
3. Moral/cultural issues

I will sketch a path to peace on each of these issues.

1. International policy: Although the war in Iraq is a source of great political passion, it is not clear to me that there is as much disagreement regarding international policy as there appears to be. There was a fairly broad consensus in favor of weapons inspections supported by the threat of force. There is a fairly broad consensus in favor of getting the U.S. out of Iraq sooner rather than later (whatever the wisdom of this). As the world gradually becomes more fully integrated economically, global conflict will decrease. The Millennium Challenge is a great improvement in foreign aid strategy. In the absence of additional unilateral military action by the U.S., there is reason to believe that in the decades to come international policy will be less a source of violent political conflict than it is today.

2. Economic policy: A broad consensus in favor of the reduction of government would benefit most people in the long run. This consensus does not yet exist. But it has been gaining in momentum for several decades now. Although there is a constituency in favor of greater government involvement in health care, with the exception of the health care issue almost no one wants "more government" anymore. As intelligent market solutions for health care are developed, it should be possible to create broad support for market solutions to social problems that would allow us to reduce the scale of government. We need to de-politicize these issues so that large gains are available for everyone. With attainable levels of economic growth, average American incomes could rise dramatically within our lifetimes. By allowing more immigrants into the U.S., we can contribute more to the alleviation of global poverty than any group of humans in history. By means of eliminating the tragedy of the commons, we can combine high rates of economic growth with a constantly improving environment.

3. Moral/cultural issues: At present, both sides are engaged in an all-out culture war. Yet our society has powerful tradition of cultural pluralism and tolerance for other cultures. Why not apply our tradition of cultural tolerance to our internal cultural battles? If some cultures do not want homosexual marriage, let them refuse to acknowledge it. If other cultures want homosexual marriage, allow them to acknowledge it. While this solution sounds simple enough, in practice it would mean very dramatic changes in our cultural identity and in our legal structure. Instead of one national cultural identity, it would mean allowing for radical pluralism of culture. In order to support a radically pluralistic culture, distinctive cultures we need to be able to enforce policies (no abortion or yes homosexual marriage) within their own communities. Vermont and Georgia, perhaps, would need to be allowed to be even more different culturally and legally than they are today. Perhaps the cultural/legal entities would not be states; perhaps they would not even be geographically contiguous.

With both the economic and moral/cultural issues a "live and let live" philosophy could allow for dramatic gains in happiness and well-being for most Americans. Both the Right and the Left would have to give up their desire to force other people to be like them or to support financially certain goals. People would have to let other human beings voluntarily choose their cultures and the goals that they wanted to support. We would have to let other people be themselves in whatever way they pleased. We would have to become more peaceful and tolerant.

Does this sound so hopelessly utopian?

Travel

2004-06-11T08:09:00.000-07:00

I will be on the road until Thursday, June 17.

Until then, Let Freedom Light Our World: FLOW!

A Specific Example of An Important Freedom Lost

2004-06-10T07:07:00.000-07:00

I began my career in education fifteen years ago. I wanted to improve the world by means of education. I believed that it was important to train young people to think independently. I began leading Socratic Seminars in public schools, open-ended discussions of texts bound by the constraints of evidence and reasoning. Students were free to have whatever opinions they pleased, as long as they could defend those opinions cogently.

I discovered that there were some students in some communities who could do this well and many other students in other communities who could not. In order to have a coherent intellectual discussion, it turned out that there were three pre-requisites:

1. The ability to read critically.
2. The ability to participate constructively in a group.
3. An inclination to take ideas seriously.

If any of these three pre-requisites were missing, the discussions were weak. Without the ability to read critically, the discussion could not really use a text productively. Without the ability to participate civilly, discussions turned into a chaotic mess of insults, domination, and irrelevance. Without an inclination to take ideas seriously, the discussions became flat and meaningless.

My colleagues and I then developed an approach to train students in these pre-requisites. It required daily discussions, at least an hour per day. Sometimes the discussions focused primarily on reading techniques, sometimes they focused on group dynamics, and sometimes they focused on why ideas should be taken seriously. Some conversations combined all three pre-requisites.

Leading these discussions was an interesting, engaging, sophisticated art. But after a solid year of such Socratic Practice, as I called it, even inner-city students were able to read much better and engage constructively in intellectual discussions. They felt liberated, they enjoyed the conversations (students love to talk), and they learned crucial teamwork skills for the real world. SAT-Verbal score gains at some sites have been double or even triple the national average.

Given the need to provide students with a better education, one might have thought that such a pedagogy would flourish.

Instead, it is practically illegal to engage in this pedagogy.

The well-intentioned national standards movement, codified by No Child Left Behind (NCLB), puts pressures on teachers to "cover" specific standards in each discipline. While daily conversations that raise SAT-verbal scores and provide useful workplace skills may be intrinsically valuable, they prevent teachers from covering state-required content. While intellectual argumentation was the core educational experience in ancient Greece, in medieval universities (which educated 12 year-olds), aristocratic education throughout Europe, Jesuit education, Jewish education, and the best prep schools in the U.S., extensive use of this core experience of western civilization is practically illegal today.

In addition to the "standards" obstacle, there is the teacher obstacle. I have never had any difficulty finding interesting, intellectually capable adults who are eager to lead these conversations with students. Unfortunately, most of these adults are not credentialed teachers - and most credentialed teachers are not capable of leading sophisticated intellectual dialogue. Again, NCLB forces public and charter schools to hire "highly qualified teachers," which simply means teachers licensed in their discipline. This does not mean that they are capable of leading intellectual discussions.

I attended St. John's College, where all professors are required to teach all disciplines: The Greek Ph.D. must also learn to teach Newton's calculus, Racine's French, Bach's fugues, etc. Almost everyone in our society would regard this as horribly inappropriate: Why allow people to teach outside their range of competence? What happens at St. John's, and at secondary schools that have used this same model, is that the people who are willing to do this (and there are long waiting lists to teach at these institutions) are people who love to learn, who have a passion for learning - in every discipline and in every way. These are the kind of people that I want teaching my kids.

My ideal vision of education would train young people to be extraordinary autodidacts. It has been suggested that the ideal St. John's foreign language exam would be one in which you don't know what language you will be tested in: Perhaps Swahili, or Mandarin, or Polish, or something else. You show up for the exam, are presented with a passage in the language to be translated, and you are provided with a dictionary and a grammar. And you figure it out.

The same type of exam could be extended to science: You are provided with a technical paper in physics, or chemistry, or biology, or something else. You are also provided with suitable technical materials that will enable you to figure it out. And you figure it out.

Or perhaps the exam is a sophisticated software package still in its box. You are required to install the software and figure out well enough to accomplish a specified task.

It is possible to become a more capable, more independent learner. It is possible to train young people so that they can learn on their own. In my view, such an education would be vastly more valuable than the education that students currently receive.

But in any publicly-funded school, it is illegal to provide students with this type of education.

Visualizing a New Paradigm

2004-06-09T08:01:00.000-07:00

I continue to be fascinated with the Scientific Revolution in general and with the transition from the medieval cosmological world-view to the Newtonian cosmological world-view, in particular. So much had to change in men's minds in order for this transformation to be achieved. There were medieval human beings who looked up into the sky and saw small fires in crystalline spheres. Three hundred years later, Newton could look at the very same sky and see earth-like planets and sun-like stars moving in accordance with the same mechanical laws of physics that he observed on earth.

No one scientist, no one piece of evidence, no one argument was adequate to complete this transformation. Copernicus, Galileo, Kepler, Descartes, and Newton were all crucial to this transformation of vision, as were dozens of lesser-known figures. Each saw just a bit farther. Many entered blind alleys. Finally, the old medieval way of seeing the heavens was no longer possible.

The transition from terracentric to heliocentric astronomy played a significant role in this transformation. It is important to remember that one of the clearest, most certain, most pervasively observed, and most indubitable of all physical phenomena is that the earth is stationary and the sun moves. This is perfectly obvious to all who open their eyes. One of the achievements of Copernicus, Galileo, Kepler, and Newton was to take one of the most obvious and certain of observations and show, beyond the shadow of a doubt, that it was false. We, who have been trained since elementary school in the heliocentric hypothesis, can no longer even imagine how outrageous and absurd it is. Our most basic intuitions should shout out to us: The earth does not move, the sun does.

There are many observers of social and economic life for whom the harms of capitalism are so self-evident, it seems certain that no one in good faith could conceded to such a harmful system. Although such people are now fewer and less vocal than they were 20 years ago, many still exist. The popularity of Michael Moore testifies, in part, to the ongoing vitality of this view of the world. Such people seem to believe that if they "expose" the system, if they shout loud enough and long enough, eventually people will wake up, lose their false consciousness, and revolt.

Having once viewed the world in this manner, and having now completed a shift in perspective, I view such people now, sympathetically, as I would a terracentrist around 1680 or so. The terracentrist finds the heliocentrist doctrine to be a gross violation of his most fundamental and most certain beliefs. The empirical proof that the sun moves and the earth does not is utterly obvious. The frustration and outrage at someone who calls black white, and white black, is extreme.

To someone who has visualized the new paradigm, the frustration experienced by someone on the other side is understandable. Yet the "proof" offered is utterly ineffectual. Someone could point to a stationary horizon and a setting sun as much as he pleased, shout about it as much as he pleased, and you or I, or Galileo or Newton, would not find our heliocentric beliefs altered one iota. The evidence presented is simply not addressing the key issues.

Likewise, while I certainly want to help the poor and the unemployed, and to prevent government corruption, when someone becomes animated about these problems and then concludes that capitalism is the problem, I view them much as one would a terracentrist. With compassion, I wonder how I can explain to them that they are not seeing the world as it really is.

My efforts at explaining this paradigm shift in a compassionate way are not helped by the history of political enmity between the Right and the Left. The newer intellectual understanding has been undermined by violent political antagonisms. In order to see the world anew, people need to forget the language of capitalism, communism, and socialism. They need to learn the ideas, if not the language, of "catallaxy" and "spontaneous order."

We need to de-politicize these concepts so that more people can understand them. I seek to show how an authentic idealism is not only possible, but will be far more effective, with an ever-deepening understanding of Hayekian spontaneous order than without.

Filling the World with Fools

2004-06-08T08:44:00.000-07:00

The ultimate result of shielding men from the effects of folly, is to fill the world with fools.

-Herbert Spencer

Although some may take Spencer's quotation above as a witticism, it strikes me as one of the most succinct analyses of social life of which I'm aware.

There is some software being produced by means of evolutionary processes. Instead of programming the software, line by line, as is done in traditional programming, a programmer will create a specified environment and specified outcomes and then write a very simple program that constantly creates new, mutating versions of itself. It turns out that there are some software problems which are extremely difficult to solve by means of deliberate human design but for which evolved software solutions may be created quickly and easily.

Such evolved software results in computer code that is an absolutely incomprehensible mess; it would be very difficult to figure out the resulting "logic." But as long as the resulting software performs well, it doesn't matter how messy it is on the inside.

Clearly, in order to obtain software that functions, it is necessary to specify conditions accurately. Software that evolved in a false environment would not function correctly in a real environment. It would be stupid to evolve software for which there was not hope of it functioning correctly in a real environment.

Although some may find the analogy offensive, there is a serious, non-trivial analogy between evolved software and human behavior. I am not talking about biological evolution here at all: I am strictly referring to the process by means of which young human beings acquire skills, habits, and attitudes which they will later depend on as adults. Many humans in our society have evolved skills, habits, and attitudes which are not optimized for the real world in which they live. Current welfare and education policy seemed design to create human beings who cannot function successfully as adults. It would be comic if it were not so brutally horrifying.

It must be admitted that, with respect to human behavior, we are largely clueless about cause and effect. Although there are large numbers of social scientists, therapists, social workers, public policy analysts, and others who make their living telling us about cause and effect in human behavior, enormous social problems continue. Crime, poverty, addictions, high-risk behaviors, etc. have in no sense been definitively solved by the professionals who study these issues for a living.

At present academics debate the causes of dysfunctional behaviors; then without any resolution to the debate, other people design "solutions" to the problems based on the theories of a particular group of academics; then a politician or private funder backs one of these approaches for awhile. Later, when the problem hasn't been solved, then some other group receives public support and funding. And, meanwhile, by some measures our social life improves and by some measures it worsens.

With fewer constraints on our lives, some of us will do extraordinarily foolish things. Some will die by means of foolish choices. Some will allow their children to die, in ways that could have been prevented by experts, because of foolish choices. But allowing us greater latitude in the choices that we make will also allow us to discover new and better ways to live, individually and collectively.

From the perspective of most societies, our culture's unwillingness to impose censorship is seen as unbelievable stupid. But, as a society, we have committed ourselves to freedom of thought. Freedom of action is the next necessary step. All the advantages of freedom of thought, in terms of allowing a discovery process that can result in new and better ideas, applies 100-fold to freedom of action. For precisely the same reasons, freedom of action will result in new and better ways of living.

The cost of new and better ways of thinking is that foolish ideas and degrading images are pervasive. The cost of those new and better ways of living is that fools will harm their lives and the lives of their children.

But I’m convinced that freedom of thought is worth the cost. And that freedom of action is worth the cost as well.

As Alan McConnell quips, "If it can't be abused, its not freedom."

Mastering the Art of Living

2004-06-07T07:26:00.000-07:00

“The Master in the art of living makes little distinction between his work and his play, his labor and his leisure, his mind and his body, his education and his recreation, his love and his religion. He hardly knows which is which. He simply pursues his vision of excellence in whatever he does, leaving others to decide whether he is working or playing. To him he is always doing both.”

Zen Buddhist Text

The quotation above is an excellent statement of one of my ideals as an educator. In addition to mastering the art of living as described above, I would want my students to be complete autodidacts: Capable of learning anything on their own by the time they are 18. They should be polite and respectful, independent and creative.

I believe that most young human beings can be educated in such a way that most young people, even those from the poorest families, could develop abilities that are superior to those of our most capable adults today. As an educator with 15 years experience in innovative education, I am certain that our existing efforts at education are analogous to medicine circa 1500: Primitive.

How could such gains be possible?

To begin with, when I hire teachers, I look for three things: Do they love young people? Can they set boundaries with young people? Are they truly masters in their area of expertise?

If I were allowed to select students, there would be one criterion: Is this person ready to commit him or herself whole-heartedly, heart and soul, to excellence in the chosen course of study?

Then, in a large, diverse market of seekers of excellence, an innovative dynamic among truly committed expert and novice learners would develop, capital would rush in to support research and development, and new ways of learning would be developed that are strictly unimaginable today. As the learning process began offering real results, more people would commit their lives to excellence in the various learning paths being offered.

Note immediately that, despite massive spending on education and participation in education that the description of teachers and students stated above describes less than .0001% of our existing teacher - student interactions. One would have to conduct a very careful search to discover any such interactions in today's world. Perhaps a music student here and a martial arts student there have relationships with teachers similar to that described above. Such simple and obvious pre-requisites to excellence in education are almost non-existent in today's world.

Suppose that a ruler once read a beautiful love story, in which two hearts' longing for each other was at last blissfully relieved when they found each other, consummated their love, and lived happily ever after.

Then suppose, having read this love story, and thus concluding that love was a good thing, this ruler forced everyone in his land to marry immediately. In order to ensure that marriages happened, police would enforce the law. Experts in marriage, who had received licenses from universities in their expertise, trained each participant using a state-approved textbook on marital happiness. Then people were forced together and required to use the "research-driven" techniques for "marital happiness." Worse yet, the "marital happiness" manuals continually emphasized the importance of "love." Individuals were trained in "love" and certified in "love" based on the scores they received on tests. The tests, of course, were based on "research."

People would come to loathe love and marriage. Young people, forced into their "marital happiness" courses, would hate the courses and rebel. While there would be earnest professors doing their best to write good books on "marital happiness," many people would realize that the whole system was a joke. Or, in terms of last Friday's post, it was all crap.

This is precisely where our education system is. Education should be based on love and a commitment to excellence, a longing for the true, the good, and the beautiful. Education should not be a forced marriage supervised by government-licensed experts.

Former communist nations are going through a long, painful process of re-creating the most basic human virtues and civic institutions. If we dismantled our education system, we would have to go through a similar long, painful process of re-creating healthy educational relationships. But it is important to realize that we cannot get to a better place by continuing in our present direction.

No Child Left Behind is a Kafka-esque extension of the insanity of our existing education system. The nightmare would be that, after it fails, the response is to increase control more, with more specified curriculum and more tests and more dishonesty about what is really happening to the hearts and souls of our young.

I await a time when the Berlin wall of government-controlled schooling is finally shattered, and we can begin to share the art of living with millions of young people in honest, straightforward, real relationships.

A new era of human happiness will begin at that point in time.

Weekends

2004-06-05T09:04:00.000-07:00

Weekends are devoted to completing my manuscript "Whole Lives: The Creation of Conscious Culture Through Educational Innovation." Blog back on Monday.

Making the Human World More Real

2004-06-04T07:28:00.000-07:00

One of my favorite parables is Flatland, in which a two dimensional-being who learns of the third dimension is ostracized and made to feel as if he is crazy for speaking of a third dimension. It is a helpful reminder of the limits to our vision, and how those who see only two dimensions will consider someone who sees three to be insane.

Most intelligent, responsible, educated people more or less believe in our existing social and political arrangements. They believe that there are smart people at Harvard and Stanford and elsewhere who study these things and that the latest, cutting-edge theories for how to improve society are well represented by the academic leaders. They may know personally a top clinician at Johns Hopkins, or a great teacher in Evanston, or they may follow the latest ideas in Harper's or The New Yorker.

There may be a general sense that conservative Neanderthals are harming the country, embarrassing us internationally by foreign aggression and dishonesty, undermining us domestically through crony capitalism, destroying the environment, and pandering to the religious right. The hope remains, among the educated elites, that once John Kerry (or Hilary Clinton) has been elected, and Democrats once again control Congress, that the top clinicians at Johns Hopkins and the great teachers in Evanston can continue their intelligent, responsible approaches to solving social problems.

Because I want to be liked, I would very much like to be able to believe in the good NPR Democrat vision of the world. I feel no affinity for Bush Republicanism; given that I'm not for Bush, my life would be so much easier if I were for "the good guys," the Democrats, the intellectuals, the professional classes.

Worse yet, the notion that "there is too much regulation" or that we should "eliminate credentials and licenses" sounds, frankly, whacko to most people, including the most respected and responsible voices in our society. It would be very helpful to me if I were capable of believing in the existing system.

But no matter how hard I try, I can't believe in the social and political world that has been created. I feel very much like the poor Flatlander who has been exposed to the third dimension: Yes, it seems crazy to believe in a third dimension, and yes, it is difficult to explain the third dimension to people who have only experienced two dimensions. Nonetheless, those facts do not change my belief in the third dimension.

At bottom, the problem is pervasive crap. Yes, I know we are supposed to respect those people at Harvard and Johns Hopkins who believe in the crap. I just can't.

In the former Soviet Union, the joke used to be "we pretend to work, and they pretend to pay us."

In education today, for a large percentage of high school students, a similar joke could be made, "we pretend to learn, and they pretend to teach us." This is crap.

Bill Cosby's recent remarks on the African-American underclass were a refreshing break from crap.

I hate the mean-spiritedness of Rush Limbaugh and Ann Coulter. But the reason that they have such large and enthusiastic audiences is because, despite the fact that sometimes they make ridiculous exaggerations and rude or mean-spirited remarks, on many key issues they cut through the crap. The politically correct, overly sensitive, self-imposed world-view of universities today has led many of the respected voices in academia mostly to speak in terms of crap. If decent, conscientious human beings like Bill Cosby won't be honest (and thank heaven that he chose to be honest), then demagogues like Limbaugh and Coulter will be.

In order to make the world a better place, people need to be more direct with each other and we need a culture that supports greater honesty. Lazy, rude, incompetent people are not going to get good jobs and should not get good jobs. People with terrible habits with respect to eating, exercise, substance abuse, and choices of sexual encounters are not going to have good health and we shouldn't spend inordinate amounts of money compensating for their self-destructiveness. Young people who ridicule learning, who don't respect teachers, who don't study or pay attention in classes, are not going to get an education and shouldn't be allowed to destroy education for others.

Young people love honor and courage. The medieval splendor of "The Lord of the Rings" is appealing to them. They love brave, audacious heroes, people who are not afraid to "tell it like it is." Thus Eminem is widely respected by the young. Although young people would love to admire an Aragon, leader of men in Lord of the Rings, if they can't have an Aragon they would rather have a freakish-but-honest Howard Stern than a full-of-crap Jesse Jackson.

We have created a world that is substantially dishonest. Young people escape into drugs, sex, fantasy, music, and violence instead of striving for excellence with respect to health, education, honor, and idealism.

Not all young people, of course. The children of the elites are most likely to go to good private or suburban public schools, where, with the advantages of a lifetime of parental attention and private lessons, they are more likely to excel in athletics, academics, and a social life the entry to which requires costly cars and clothes. These winners within the system, the children of the professors, diplomats, doctors, and lawyers, seem to validate the system as a whole to the elites. If only Bush would give the poor more money, then everyone could succeed the way that my child succeeds!

Bill Cosby took a great personal risk by being honest. The establishment rewards conformism to the mainstream message and penalizes those who do not conform to the message. Cosby violated the accepted boundaries of decent political discourse. It is a testimony to his personal credibility and undisputed decency that he was able to do so. There will nonetheless be a backlash against him for having done so.

We have very few opinion leaders in any fields that are willing to be honest. The best way to mute the Limbaughs and Coulters is not to launch a Left-liberal radio station with Al Franken – unless Franken is ready to cut through the crap on the Left as seriously as he is willing to cut through the crap on the Right. The best way to mute the Limbaughs and Coulters is for more national opinion leaders to have the courage of Cosby.

Be honest, be real, and then we can begin to solve our problems.

Creation vs. Conflict

2004-06-03T08:29:00.000-07:00

I recently ran across a survey that claimed that 80% of college graduates want work that is "meaningful" when they graduate. As a school administrator, I frequently receive resumes from people in their 40s and 50s who have "retired" from the worlds of business, law, technology, or banking and now want to have a second, more meaningful, career.

As incomes continue to rise, an increasing percentage of our population will have the option of spending an increasing percentage of their work career engaged in employment for which meaning, rather than pecuniary gain, is the primary rationale for their choice of work.

Often college graduates are attracted to "activism" as a meaningful career. Although there is certainly a role for activism, often activism treats symptoms rather than causes. The ultimate cause of poverty is that people don't have adequate marketable skills and sufficiently professional job habits. Until and unless poor people develop the marketable skills and professional job habits required, they will remain poor.

The position of office manager in a school is key: The person who runs the office ensures that all the systems runs smoothly, that parents get the information that they want, that teachers are properly supported, etc. In Palo Alto during the dot com boom, our school couldn't find an adequate office manager for $40,000. Tech companies were paying similar people $50-80K and we couldn't offer a similar salary. This position does not need a college degree, or even a high school diploma. A person simply needs to be smart, organized, responsible, and with good people skills. "Training" programs do not supply these pre-requisites. Basic computer knowledge is also useful, but basic computer knowledge can be taught very quickly to the right person.

While I love education, most education is a ridiculous waste of time. If someone simply wants to earn a living, were it not for government-mandated credentials, there would be numerous career paths for bright people with (or without) a high school diploma. Often sales people earn more than $50K, in many cases over $100K. These positions require no education: just excellent persuasion skills and verbal style that matches the social class to which one is selling. Rather than a worthless high school diploma and a worthless four year degree, bright young people could be taught to speak in a particular manner and make great incomes selling. At no point in our education system is this option recognized.

One of the marvelously democratic aspects of the early tech boom is that no credentials were required. As a consequence, many high school and college drop outs became programming professionals. The last tech expert that I hired was a high school drop out who had been making more than 100K working for Sun Microsystems.

What if activists, instead of fighting zero-sum battles on behalf of the poor, fought battles that resulted in endless opportunities? Credentialism limits access to, and increases the cost of, education and health care. Yes, activists can fight to obtain more funding for education and health care for the poor. They may or may not win. If they win, they may deepen resentment from other taxpayers. They will not have made much of a difference in terms of why the poor are poor. And because they will not have resolved the root causes of poverty, they will feel a need to keep fighting. War is costly, and so are political battles.

The idealism that motivates activists could be re-directed towards creating a society based on creation rather than conflict. What if we were to create lower cost, and ultimately much higher quality, health care options by means of eliminating most (or all) government regulations concerning health care? What if we were to create lower cost, and ultimately much higher quality, education options by means of elimination most (or all) government regulations concerning education? The same applies to housing and community creation.

Looked at from this perspective, a horrifying conspiracy exists to keep education and health care expensive, hard to obtain, and not appropriately designed for the needs of the people. This conspiracy is led by some of the nicest, most conscientious people, including professors at our best universities. Nonetheless, the result is the same: limit quality and access, and raise cost, for those things that are most important to human well-being.

If it were legal to do so, and if there were visionary entrepreneurs who helped to make it happen, the millions of young people who long for meaningful careers, the millions of older people who are ready to retire into meaningful careers, could flood into the fields of health, education, housing, and community and reduce poverty more than any government program possibly can.

"Let us do it" is the true meaning of "laissez-faire." We want to do it, we can afford to do it. We need visionary leaders and we need freedom. Given these pre-requisites creative idealists can begin to improve life for rich and poor alike.

Creating a Better World

2004-06-02T07:43:00.000-07:00

Most readers, on both the Left and Right, are likely to be shocked that I could be outraged by the fact of regulation. The need for government regulation seems to be profoundly and widely accepted across the political spectrum. A suggestion that there be less regulation seems to signal a failure, on my part, to take certain issues seriously.

What such a perspective fails to understand is that there are legitimate alternative to regulation and that a strong case may be made that those alternatives would result in a better, happier, cleaner, healthier society than is possible by means of a regulatory society.

Politics is war by other means. Political solutions often sustain conflicts and attitudes of mutual hostility. It is hard to envision a better world based on endless conflict. Our approach to solving social and environmental problems ought to be to reduce conflict, rather than to increase it.

Pollution trading rights are an effective alternative to regulation for the control of pollution. Pollution trading rights passed in 1990 were described as "one of the most successful programs that Congress has ever put together in the environmental area" by a senior attorney from the Environmental Defense Fund. Although there will be conflict, sometimes bitter conflict, over the initial level at which pollution trading rights are set, once the rights have been set up the result is a system that encourages corporations to invest in creative technologies that constantly reduce pollution. There are better and worse ways to set up such systems; I would not claim that all pollution trading systems are equal. That said, a well-designed pollution trading right system reduces pollution more effectively, with less conflict, than do regulations. Idealists need to educate themselves on strategies like these that will allow for endless positive gains instead of endless battles.

Creativity, innovation, and entrepreneurship have improved human life far more than anyone has ever thought possible. Life five hundred years ago in Europe was similar to life in the third world today: poverty, disease, pain, and misery were the day-to-day norm for most people. Creativity, innovation, and entrepreneurship have utterly transformed everyday life for millions of people in the first world. With wisely designed institutions, all remaining social, health, and environmental problems may be solved by the same powerful formula. What people don't realize is that institutional frameworks determine which problems are amenable to creative, entrepreneurial solutions - and which are not.

"If it can't be abused, it's not freedom." The freedom to create implies the freedom to destroy. It is frightening. People will be hurt. But the net gains are dramatic. As an educator, I can create schools that will ameliorate social problems and poverty to a significant extent. But in order to do this, I would need radical educational freedoms that would, necessarily, result in crazy, whacko schools as well as mine.

Advocates of regulation are especially horrified at the notion that the drug industry would be unregulated. They envision a nightmarish world in which greedy corporations spawn a new generation of thalidomide babies. Meanwhile, the FDA has delayed or blocked drugs and devices that could save the lives of heart attack victims. Because of the FDA, between 20,000 and 40,000 people have died unnecessarily because they did not have access to medical treatments that are widely accepted in Europe. Unlike AIDS activists, who aggressively pushed the FDA to approve life-saving drugs more rapidly than usual, these heart attack victims were dispersed and often were not aware of their risk, thus preventing them from lobbying the FDA to save their lives.

Any evaluation of the value of regulation has to include not only the harms that have been prevented, but also the goods that have been prevented. Both quantities are difficult to estimate. But an overall opinion concerning regulation that does not consider both the gains and losses due to regulation is not an well-considered opinion. When, in a recent issue, Scientific American argued for the regulatory state, they failed to include the costs of regulation. 20,000 - 40,000 deaths is an enormous cost to ignore, and it is but one among many.

Upper class people spend large sums of money to go mountain climbing, which has a higher death rate than almost any activity or substance from which we receive government protection. Our entire approach to risk is highly paternalistic: Educated elites seem to believe that the kinds of high risk activities that they pursue are legitimate somehow, whereas allowing the poor to expose themselves to much lower risks is considered to be immoral.

When my charter school is damaged by regulation, or when fathers in their prime die becaue they are not allowed access to medical treatment, the harms, while relatively invisible to the public, are still available to us at the level of anecdote and statistic. Innovations that have not occurred due to regulations are completely invisible. There is reason to believe that the stillbirth of such innovations, invisible though they may be, is much, much greater than the subtle harms described above.

Auctioneers in France must be licensed. As a consequence, Ebay was initially not allowed to operate in France. Had a similar law existing in the U.S., Ebay would not exist at all. After starting out as sort of global garage sale, Ebay has become a major force in business-to-business commerce as well. Ebay has saved millions of people millions of dollars; it has allowed many thousands of people to create businesses from their homes; it is one of the most democratic marketing mechanisms on earth. Who would have imagined that a small law requiring that auctioneers be licensed would prevent a major force for global market democracy from coming into being? Even the most imaginative of us lack the imagination to envision the ways in which regulations harm us.

In order to create a better world, we need to find ways in which health, wellness, community, happiness, spirituality, transcendent experiences, and other wonderful things may be more effectively made available to more human beings. The elimination of regulations, licensing, and other obstacles is essential in order for us to find creative solutions to life's problems.

Thus my outrage at the existence of regulations is not because I am blind to social problems; it is because the regulations inadvertently prevent wonderful solutions to social problems from coming into existence.

Regulatory Predictions

2004-06-01T10:41:00.000-07:00

Public choice economists, those who study governments, would claim that it is possible to predict that regulatory agencies in government will be "captured" by the industries that they regulate.

Meanwhile, most people are outraged at the notion that regulators are cozy with the industries that they regulate. According to the public service notion of government, conscientious individuals who accept positions in regulatory agencies are there to serve the public good. It is a matter of personal integrity not to be corrupted by the corporations that they regulate. Thus the moral outrage when regulators are corrupted by the corporations that they regulate.

From the perspective of the Left, such outrage is evidence of human decency (much as, from the perspective of the Right, outrage over sexual misconduct, such as adultery, is evidence of human decency). From the perspective of public choice economics, Leftist outrage over regulatory capture is evidence of naïveté, not of human decency (there are likewise economists who would regard outrage over sexual misconduct as a matter of naïveté on the Right).

We evolved in small tribes in which feelings of moral outrage served a useful purpose. In a small tribal environment, those who did not conform to the moral dicta of the tribe were sanctioned communally, often by means of tribal feelings of moral outrage. In such a context, social feeling was itself the primary form of legislation and enforcement.

It is a serious problem of modernity when, where, and why to feel moral outrage. We do not want, and should not want, to extinguish our moral feelings. And yet the situations described above should encourage us to become somewhat thoughtful concerning when and where outrage is a useful feeling. It feelings of outrage no longer serve an effective enforcement purpose, but merely result in personal frustration, then perhaps we ought to learn to temper or redirect them.

In the case of regulatory capture, part of the reason that economists regard regulatory capture as a predictable behavior is due to the asymmetry of interest and knowledge. Industries that are regulated typically have intense incentives and extensive information regarding the issues on which they are being regulated. Ordinary citizens, and even the politicians elected to represent them, typically have very weak incentives and very little information concerning the relevant issues. Often regulation becomes highly technical: how can an ordinary person possibly keep up?

Moreover, the difference between sincere, well-intentioned public servants and corrupt regulatory officials is not as large as is generally imagined. Because regulatory issues are often technical, usually even conscientious regulatory officials represent the existing opinion regarding "best practices" in each industry. But upholding the existing opinion regarding "best practices" in each industry is almost identical to maintaining the self-interest of the more responsible portion of the status quo. Thus, simply due to ordinary circumstances, regulators almost always stifle innovation (This is certainly the case in education; again, endless specific instances are available on request).

Thus I am outraged by the fact of regulation, not by corruption in regulation. From my perspective, conscientious regulation is often almost as bad as corrupt regulation. In practice, relatively few regulators are openly corrupt. It is much more common for regulators to have similar attitudes, interests, and professional standards as the regulatees. The best regulators do come from industry and then receive jobs in industry when they leave their positions. In many particular cases, the moral status is very blurry. Most people believe themselves to be good people. When they are surrounded by like-minded people who reinforce their views, it becomes even easier to believe this. Soon "the public interest" and the views one happens to hold naturally coincide.

I know several of the good people in the State Department of Education who have harmed excellent charter schools, my own included. They are good people, doing what they believe to be right to the best of their ability. And, like many other regulators, they are destroying innovation and good education.

They can't help it. That is what they are paid to do: uphold current best practices.

Creating a New Perspective

2004-05-31T06:51:00.000-07:00

Human beings, including academics, journalists, and political commentators, are incredibly tribal animals. Most individual political perspectives are strongly influenced by the tribalisms of the Left or Right.

I began studying economics as an idealistic Leftist. As I became convinced of the power of economic arguments, I did not lose any of my idealism: I just realized that Leftist strategies for improving the world were simply not very well considered. At the same time, as I became more interested intellectually in economic analysis, I found that most of the perspectives that I studied included a certain "there ain't no free lunch" cynicism. I have found it difficult, in relative isolation, for my thoughts not to be distorted either by the mindless idealism of the Left or by the intelligent cynicism of market advocates. Flow is an attempt to create a community of intellectually sophisticated and intellectually honest idealists that can transcend the magnetic pull of these opposing forces.

Given the fact that "intellectual" was nearly synonmous with "Leftist" for much of the 20th century, it may seem odd or biased from a left-liberal perspective for me to claim that Leftist strategies for improving the world were not very well considered. For those on the other side, the fact of 100 million Marxist murders alone is shocking and horrifying proof that Leftist strategies for improving the world were not very well considered.

Sociobiology provides compelling arguments that a sophisticated capacity for self-deception was genetically useful in the competition for genetic replication. In order to be a realistic idealist, or a realistic visionary, one must take complete cognizance of the depth and pervasiveness of human self-interest and self-deception.

Young people, eager to believe themselves good, and eager to position themselves as morally superior to their elder tribesmen, are thus vulnerable to shallow idealisms. Academics and intellectuals, many of whom spend their lives surrounded primarily by young people, often occupy a social status niche in which they maximize their psychic well-being, at the cost of intellectual integrity, by claiming moral superiority to the rest of society by means of their Leftist politics. There are even sociologists who conduct formal research studies to determine what social and psychic pathologies cause conservative beliefs: surely a healthy, sane, decent human being would share their Leftist political beliefs?

There is pressure from decent, well-intentioned left-liberals to leave the communist murders behind. None of them advocated such murderous regimes and they consider arguments that they were somehow complicit in these murders to be spurious and in poor taste.

Spiritual and emotional maturity has to do with taking responsibility for one's actions. When I was in college in the 1980s, communist enthusiasm among university faculty was common. To a remarkable degree, it still is. Noam Chomsky, the Pol Pot apologist, is still a hero among the Left.

In the eighteenth century, classical liberals developed a sophisticated body of political analysis showing the necessity and the means of limiting political authority. The American founding institutionalized many of these insights. The French Revolution served as horrifying proof of the need for such constraints on power. After the 1790s, anyone who blithely talked about a "dictatorship of the proletariat," as did Marx and his followers, is complicit in murder. Others, who endorse the ideas of such advocates of murder, are also complicit. Che Guevara whole-heartedly endorsed mass murder.

Idealism has been discredited by the 100 million communist murders. In order to create a legitimate idealism, we must purify ourselves by acknowledging wholeheartedly the crimes of idealisms of the past. Until the fellow travellers and communist apologists come clean, the cause of idealism will be discredited as morally corrupt and suspect.

There was a specific intellectual failure: well-educated people, who should have been adequately educated in classical liberal political theory, nonetheless were enthusiastic supporters of those who advocated a "dictatorship of the proletariat." The fact that these nice intellectuals may have envisioned a benign, romantic, idealistic "dictatorship of the proletariat," with lots of comradely poetry and art, is no excuse. Drunk drivers who kill people are often just nice kids out having fun while drinking a few beers in the car. Good intentions do not absolve people of responsibility while driving drunk nor while intoxicated with political ideals.

When an alcoholic becomes committed to serious recovery through AA, one of their first duties is to apologize to every individual who may have been harmed by them while they were drinking. This step of taking responsibility for past actions is rightly considered to be a crucial stage in healing, spiritual growth, and emotional maturity.

In order to create a spiritually clean idealism, it is crucial that the moral contamination of Leftist intellectuals has been fully acknowledged. One cannot build on crumbled foundations.