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Roads to Sound Money

The Atlas Economic Research Foundation has released a new book, Roads to Sound Money. It has essays by some of the other contributors to this blog. You can find the book description and other information on the Atlas Foundation Sound Money Project Web site. (And thank you Alex Chafuen for the mention of my recent book The Bretton Woods Transcripts on the site.)

At the book launch I was griping to an acquaintance, José Joaquín Fernández, about another subject, education. A newspaper article offering President Obama advice on his second term claimed that “we need the federal government to support public education, rather than encouraging schools to privatize or become charters.” And what was the educational background of the writer? Private elementary school, private high school, Yale University, Harvard Law School, currently a professor at Princeton. That is quite similar to the educational background of President Obama  himself, and of President George W. Bush (except that Bush will never be a professor of law). In addition, up through high school Bush’s daughters attended private schools, and Obama is doing likewise with his daughters. Commenting on the difference between what our “education presidents” and their supporters say and what they actually do, José said, “Education is too important to be left to the public sector.” Precisely, and true of other activities as well.

  • W.E. Heasley

    ‘President Obama advice on his second term claimed that “we need the federal government to support public education, rather than encouraging schools to privatize or become charters.” ‘

    ‘José said, “Education is too important to be left to the public sector.” ’

    Let’s see. Public education is a late stage collectivist model. In the main, late stage collectivist models are depicted as increasing inputs with decreasing outputs. True. However, as Harold Demsetz points out in his book From Economic Man to Economic System, the increased input becomes a spongy conduit for the power purveyor of the collective to enrich himself.

    Meanwhile, back at public choice theory, the collectivist power purveyors and associated politicos sell the “benevolence of collectivism” [beneficial conditions]. That is, the system needs to continue as the power purveyors sells the underlying collective organization on their participation in “benevolence” [albeit it a minor participation in “benevolence” as the participants gain little compared to the power purveyors]. In the end, the power purveyors merely brings the collective organization’s participants to the politico as a political constituency building exercise.

    The problem with the formula is that the output, students, become of no real interest to the power purveyor, collective organization’s participants, and politico as the entire exercise is about bestowing resources upon the institution and hence its purveyors and participants as a political constituency building exercise. The “student” is merely window dressing to the greater process.

  • Gonzalo R. Moya V.

    Mr. Schuler, you imply that there is hipocricy -or at least inconsistency- whenever someone from a private school supports public education or vice-versa, but you should really not think that way, as it is fairly common for public schools -such as SJSU, where I am from- to hire libertarian professors who will naturally teach their students with a bias towards this ideology, thus making them think in a similar manner. The converse is just as true as it is often(i.e. a private school that hires a socialist professor and makes collectivist alumni), so the apparent contradiction should not be shocking to anyone. Now, your friend’s conclussion -which you also agree with- deserves another post altoghether.

  • Gonzalo R. Moya V.

    Perhaps more accustomed to debate with non-libertarians, I have heard the converse statement more often (i.e. that industry XYZ is too important to be solely entrusted to the private sector), to which Frederic Bastiat (1801-1850) counter-argued (in “What is Seen and What is not Seen”, Part 4: Theaters and Fine Arts) that if we rank industries according to their necessity or nobility, we will notice a continuous spectrum, where drawing a stopping line is always subjetive. Although obviously not his original intent, this counter-argument also applies to your (friend’s) statement. Furthermore, Bastiat was against subsidizing any industry because those who were arbitrarily encouraged by the govenrment were so at the expense of the industries that were not (via taxation), so that -to be truly fair- all industries should be left on their own in their quests to be profitable (i.e. successful without depending on any government aid). However, Bastiat unintendedly makes a case here as to why the Education industry should be one exception: besides the issue of profitability -which it mainly has no intent of-, the Education industry does generate a positive externality to all others, thus making its subsidy acceptable (as it is corrective rather than distortive).

    • Kurt Schuler

      There is hypocrisy in attending private schools by your own choice or sending your children to private schools and not at least favoring vouchers so that poorer parents can have something of the same choice you do. Here’s a perfect example. In Washington, DC, a federal program offers vouchers to a limited (smaller than the demand) number of children, which parents spend at a variety of private schools. The program produces outcomes that are at least as good as the DC public schools for less than half the cost per student. (Vouchers top out at $12,000 per student; DC public schools spend more than $25,000 per student, when all costs are properly accounted for.) Unlike the Obamas, the parents in the program are not rich and are are often single, so they have a much harder time compensating for the effects of bad schools on their children. Without a good education their children face long odds of breaking out of poverty. It is not merely obtuse, but cruel of President Obama to kill the program as he has been trying to do, and DC community leaders who otherwise support him strongly, such as Kevin Chavous, have spoken out on the matter.