Category Archives: Socialism

Trump’s New Corporatist Plunder Will Cost U.S.

05 Friday Sep 2025

Posted by in Central Planning, Protectionism, Socialism

≈ Leave a comment

Tags

, , , , , , , , , , , , , , , , , , , , , , ,

Since his inauguration, Donald Trump has been busy finding ways for the government to extort payments and ownership shares from private companies. This has taken a variety of forms. Tad DeHaven summarizes the major pieces of booty extracted thus far in the following bullet points (skipping the quote marks here):

  • June 13: Trump issues an executive order allowing the Nippon Steel-US Steel deal contingent on giving the government a “golden share” that enables the president to exert extensive control over US Steel’s operations.
  • July 10: The Department of Defense (DoD) unveils a multi-part package with convertible preferred stock, warrants, and loan guarantees, making it the top shareholder of rare earth metals producer MP Materials.
  • July 23: The White House claims an agreement with Japan to reduce the president’s so-called reciprocal tariff rate on Japanese imports comes with a $550 billion Japanese “investment fund” that Trump will control.
  • July 31: Trump claims an agreement with South Korea to reduce the so-called reciprocal tariff on South Korean imports comes with a $350 billion South Korean-financed investment in projects “owned and controlled by the United States” that he will select.
  • August 11: The White House confirms an “unprecedented” deal with Nvidia and AMD that allows them to sell particular chips to China in exchange for 15 percent of the sales.
  • August 12: In a Fox Business interview, Bessent points to the alleged investments from Japan, South Korea, and the EU “to some extent” and says, “Other countries, in essence, are providing us with a sovereign wealth fund.”
  • August 22: Fifteen days after calling for Intel CEO Lip-Bu Tan to resign, Trump announces that the US will take a 10 percent equity stake in Intel using the CHIPS Act and DoD funds, becoming Intel’s largest single shareholder.

Each of these “deals” has a slightly different back story, but national security is a common theme. And Trump says they’ll all make America great again. They are touted as a way for American taxpayers to benefit from the investment he claims his policies are attracting to the U.S. However, all of these are ill-advised for several reasons, some of which are common to all. That includes the extortionary nature of each and every one of them.

Short Background On “Deals”

The June 13 deal (Nippon/US Steel), the July 10 deal (MP Materials), and the August 22 deal (Intel) all involve U.S. government equity stakes in private companies. The August 11 deal (NVIDIA/AMD) diverts a stream of private revenue to the government. The July 23 and July 31 deals (Japan and South Korea) both involve “investment funds” that Trump will control to one extent or another.

The August 12 entry adds “expected” EU investments with some qualification, but that bullet quotes Treasury Secretary Bessent referring to these investments as part of a sovereign wealth fund (SWF). Secretary of Commerce Lutnick now denies that an SWF will exist. My objections might be tempered slightly (but only slightly) by an SWF because it would probably need to place constraints on an Administation’s control. That might give you a hint as to why Lutnick is now downplaying the creation of an SWF.

I object to the Nippon/US Steel “deal” in part (and only in part) because it was extortion on its face. There is no valid anti-trust argument against the deal (US Steel is the nation’s third largest steelmaker and is broke), and the national security concerns that were voiced (Japan! for one thing) were completely bogus. Even worse, the “Golden Share” would give the federal government authority, if it chose to exercise it, over a variety of the company’s decisions.

The Intel “deal” is another highly questionable transaction. Intel was to receive $11 billion under the CHIPS Act, a fine example of corporate welfare, as Veronique de Rugy once described the law. However, Intel was to receive its grants only if it stood up four fabrication facilities. But it did not. Now, instead of demanding reimbursement of amounts already paid, the government offered to pay the remainder in exchange for a 9.9% stake in the company. And there is no apparent requirement that Intel meet the original committment! This could turn out a bust!

The MP Materials transaction with the Department of Defense has also been rationalized on national security grounds. This excuse comes a little closer to passing the smell test, but the equity stake is objectionable for other reasons (to follow).

The Nvidia/AMD deal has been justified as compensation for allowing the companies to sell chips to China, which is competing with the U.S. to lead the world in AI development. This is another form of selective treatment, here applied to an export license. The chips in question do not have the same advanced specifications as those sold by the companies in the U.S., but let’s not let that get in the way of a revenue opportunity.

While nothing about TikTok appears on the list above, I fear that a resolution of its operational status in the U.S. presents another opportunity for extortion by the Trump Administration. I’m sure there will be many other cases.

Root Cause: Protectionism

The so-called investment funds described in the timeline above are nearly all the result of trade terms negotiated by a dominant and belligerent trading partner: the U.S. My objections to tariffs are one thing, but here we are extorting investment pledges for reductions in the taxes we’ll impose on our own citizens! Additionally, the belief that these investments will somehow prevent a general withdrawal of foreign investment in the U.S. is misguided. In fact, a smaller trade deficit dictates less foreign investment. The difference here is that the government will wrest ownership control over a greater share of less foreign investment.

Trump the Socialist?

Needless to say, I don’t favor government ownership of the means of production. That’s socialism, but do matters of national security offer a rationale for public ownership? For example, rare earth minerals are important to national defense. Therefore, it’s said that we must ensure a domestic supply of those minerals. I’m not convinced that’s true, but in any case, fat defense contracts should create fat profit opportunities in mining rare earths (enter MP Materials). None of that means public ownership is necessary or a good idea.

All of these federal investments are construed, to one extent or another, as matters of national security, but that argument for market intervention is much too malleable. Must we ensure a domestic supply of semiconductors for national security reasons? And public ownership? Is the same true of steel? Is the same true of our “manufacturing security”? It can go on and on. The next thing you know, someone will argue that grocery stores should be owned by the government in the name of “food security”! Oh, wait…

Trump the Central Planner

Government ownership takes the notion of industrial planning a huge step beyond the usual conception of that term. Ordinarily, when government takes the role of encouraging or discouraging activity in particular industries or technologies, it attempts to select winners and losers. The very idea presumes that the market is not allocating resources in an optimal way, as if the government is in any position to gainsay the decisions of private market participants who have skin in the game. This is a foolhardy position with predictably negative consequences. (For some examples, see the first, second, and fourth articles linked here by Don Boudreaux.) The fundamental flaw in central planning always comes down to the inability of planners to collect, process, and act on the information that the market handles with marvelous efficiency.

When government invests taxpayer funds in exchange for ownership positions in private concerns, the potential levers of control are multiplied. One danger is that political guidance will replace normal market incentives. And as de Rugy points out, the government’s potential role as a regulator creates a clear conflict of interest. In a strong sense, a government ownership stake is worse for private owners than a mere dilution of their interests. It looms as a possible taking, as private owners and managers surrender to creeping government extortion.

Financial Malfeasance

In addition to the objections above, I maintain that these investments represent poor stewardship of public funds. The U.S. public debt currently stands at $37 trillion with an entitlement disaster still to come. In fact, according to one estimate, the federal government’s total unfunded obligations amount to additional $121 trillion! Putting aside the extortion we’re witnessing, any spare dollar should be put toward retiring debt, rather than allowing its upward progression.

As I’ve noted before, paying off a dollar of debt entails a risk-free “return” in the form of interest cost avoidance, let’s say 3.5% for the sake of argument. If instead the dollar is “invested” in risk assets by the government, the interest cost is still incurred. To earn a net return as high as the that foregone from interest avoidance, the government must consistently earn at least 7% on its invested dollar. But of course that return is not risk-free!

A continuing failure to pay down the public debt will ultimately poison the debt market’s assessment of the government’s will to stay within its long-run budget constraint. That would ultimately manifest in an inflation, shrinking the real value of the public debt even as it undermines the living standards of many Americans.

One final thought: Though few MAGA enthusiasts would admit it even if they understood, we’re witnessing a bridging of two ends of the idealogical “horseshoe”. Right-wing populism and protectionism meet the left-wing ideal of central planning and public ownership. There is a name for this particular form of corporatist state, and it is fascism.

That Word “Liberal” … I Don’t Think That Means What You Think It Means

03 Wednesday Jan 2024

Posted by in Conservatism, Liberalism, Socialism

≈ Leave a comment

Tags

, , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Leftism has taken on new dimensions amid its preoccupation with identity politics, victimhood, and “wokeness”. Traditional socialists are still among us, of course, but “wokeists” and “identitarians” have been on the progressive vanguard of late, rooting for the deranged human butchers of Hamas and the dismantling of liberal institutions. This didn’t happen overnight, of course, and traditional socialists are mostly fine with it.

An older story is the rebranding of leftism that took place in the U.S. during the first half of the 20th century, when the word “liberal” was co-opted by leftists. Before that, a liberal orientation was understood to be antithetical to the collectivist mindset long associated with the Left. Note also that liberalism retains its original meaning even today in much of Europe. Often we hear the term “classical liberal” to denote the “original” meaning of liberalism, but the modifier should be wholly unnecessary.

Liberalism Is Not “In-Betweenism”

In this vein, Nate Silver presents a basic taxonomy of political orientation in a recent Substack post. It includes the diagram above, which distinguishes between socialism, conservatism, and liberalism. Silver draws on a classic essay written by Friedrich Hayek in 1945, “Why I am Not a Conservative”, in which Hayek discussed the meaning of the word “liberal” (and see here). Liberalism’s true emphasis is a tolerance for individual rights and freedoms, subject to varying articulations of the “nonaggression principle”. That is, “do as you like, but do no harm to others”.

We often see a linear representation distinguishing between so-called progressives on the left and conservatives on the right. Of course, a major hallmark of leftist thinking is extreme interventionism. Leftists or progressives are always keen to detect the slightest whiff of an externality or the slightest departure from the perfectly competitive market ideal. They seem eager to find a role for government in virtually every area of life. While it’s not a limiting case, we can substitute socialism or statism for progressivism on the far left, as Silver does, whereby the state takes primacy in economic and social affairs.

Conservatism, on the other hand, is a deep resistance to change, whether institutional, social, and sometimes economic. Conservatives too often demonstrate a willingness to use the coercive power of the state to prevent change. Hayek noted the willingness of both socialists and conservatives to invoke state power for their own ends.

Similarly, religious conservatives often demand state support beyond that afforded by the freedom to worship in the faith of one’s choice. They might strongly reject certain freedoms held to be fundamental by liberals. Meanwhile, socialists often view mere religious freedom as a threat to the power of the state, or at least they act like it (e.g. see here for an example).

Like conservatives, dedicated statists would doubtless resist change if it meant a loss of their own power. That is, they’d wish to preserve socialist institutions. On this point, witness the vitriol from the Left over what it perceives as threats to the public school monopoly. Witness also the fierce resistance among public employees to reducing the scale of the administrative state, and how advocates of entitlements fiercely resist decreases in the growth rate of those expenditures.

Silver, like Hayek, objects to the traditional, linear framework in which liberals are thought to occupy a range along a line between socialism and conservatism. He objects to that because real liberals value individual liberty as a natural human right, a viewpoint typically abhored by both socialists and conservatives. There is nothing “in between” about it! And of course, conservatives and progressives are equally guilty in their mistaken use of the word “liberal”.

Mapping Political Preferences

Liberty, statism, and conservatism are not exactly orthogonal political dimensions. Larger government almost always means less economic liberty. At a minimum, state dominance implies a social burden associated with public monopoly and monopsony power, as well as tax and welfare-state incentive problems. These features compromise or corrupt the exercise of basic rights. On the other hand, capitalism and its concomitant reliance on consumer sovereignty, individual initiative, free exchange and secure property rights is most in harmony with true liberalism.

For conservatives, resistance to change in support of a traditionally free market economy might offer something of a contradiction. In one sense, it corresponds to upholding market institutions. However, free markets allow new competitors and new technologies to undermine incumbents, who conservatives sometimes wish to defend through regulatory or protectionist measures. And conservatives are almost always too happy to join in the chorus of “price gouging” in response to the healthy operation of the free market in bringing forth supplies.

All that is to say that preferences involving liberty, statism, and traditionalism are not independent of one another. They cannot simply be mapped onto a three-dimensional space. At least the triangular representation gets liberalism out of the middle, but it’s difficult to visualize other ideological positions there. For example, “state religionism” could lie anywhere along the horizontal line at the top or even below it if certain basic liberties are preserved. Facism combines elements of socialism and a deformed version of capitalism that is properly called corporatism, but where would it fall within the triangle?

Big Government Liberalism?

Silver says he leans heavily toward a “big government” version of liberalism, but big government is hard to square with broad liberties. Granted, any well-functioning society must possess a certain level of “state capacity” to defend against private or public violations of individual rights, adjudicate disputes, and provide true public goods. It’s not clear whether Silver’s preferences lie within the bounds of those ambitions. Still, he deserves credit for his recognition that liberalism is wholly different from the progressive, socialist vision. It is the opposite.

The “New” Triangle

Silver attempts to gives the triangular framework a more contemporary spin by replacing conservatism with “MAGA Conservatism” and socialism with “Social Justice Leftism” (SJL), or “wokeism”. Here, I’m treating MAGA as a “brand”. Nothing below is intended to imply that America should not be a great nation.

The MAGA variant of conservatism emphasizes nationalism, though traditional conservatives have never been short on love of nation. For that matter, as a liberal American, it’s easier to forgive nationalist sentiments than it is the “Death to America” refrain we now hear from some SJLs.

The MAGA brand is also centered around a single individual, Donald Trump, whose rhetoric strikes many as nativistic. And Trump is a populist whose policy proposals are often nakedly political and counterproductive.

SJL shares with socialism an emphasis on various forms of redistribution and social engineering, but with a new focus on victimhood based on classes of identity. Of SJL, Silver says:

“Proponents of SJL usually dislike variations on the term ‘woke’, but the problem is that they dislike almost every other term as well. And we need some term for this ideology, because it encompasses quite a few distinctive features that differentiate it both from liberalism and from traditional, socialist-inflected leftism. In particular, SJL is much less concerned with the material condition of the working class, or with class in general. Instead, it is concerned with identity — especially identity categories involving race, gender and sexuality, but sometimes also many others as part of a sort of intersectional kaleidoscope.”

The gulf between liberals and SJLs couldn’t be wider on issues like free speech and “equity”, and equality of opportunity. MAGAns, on the other hand, have some views on individual rights and responsibility that are largely consistent with liberals, but reflexive populism often leads them to advocate policies protecting rents, corporate welfare, and protectionism.

Divided Liberalism

Liberalism emphasizes limited government, individual autonomy, and free exchange. However, there are issues upon which true liberals are of divided opinion. For example, one such area of controversy is the conflict between a woman’s right to choose and the fetal right to life. Many true liberals disagree over whether the rights of a fetus outweigh its mother’s right to choose, but most would concede that the balance shifts to the fetus at some point well short of birth (putting aside potential dangers to the mother’s life). Open borders is another area that can divide true liberals. On one side, the right to unrestricted mobility is thought to supersede any public interest in enforcing borders and limiting the flow of immigrants. On the other side, questions of national sovereignty, national security, as well as social and state capacity to absorb immigrants take primacy.

Don’t Call Lefties “Liberal”… They’re Not!

True liberalism (including most strains of libertarianism) recognizes various roles that a well-functioning state should play, but it also recognizes the primacy of the individual and individual rights as a social underpinning. As Hayek noted, true liberals are not resistant to change per se, unlike conservatives. But modern progressives demand changes of the worst kind: that the state should intervene to pursue their favored objectives, laying claim to an ever-greater share of private resources. This requires government coercion on a massive scale, the antithesis of liberalism. It’s time to recognize that “progressives” aren’t liberals in any sense of the word. For that matter, they don’t even stand for progress.

I’ll close with a quote from Adam Smith that I cribbed from Scott Sumner. Unfortunately, Sumner does not give the full reference, but I’ll take his word that Smith wrote this 20 years before the publication of The Wealth of Nations:

“Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice; all the rest being brought about by the natural course of things. All governments which thwart this natural course, which force things into another channel, or which endeavour to arrest the progress of society at a particular point, are unnatural, and to support themselves are obliged to be oppressive and tyrannical.”

Socialist Supremacy’s Dark History of Culling the Race

26 Wednesday Feb 2020

Posted by in racism, Socialism

≈ Leave a comment

Tags

, , , , , , , , , , , , , , ,

Can you think of a social philosophy steeped in many years of blame-making and hatred for “others”, including massive persecution, more than a passing flirtation with racism, and genocide. Why, that would be socialism! Marion Tupy’s 2017 article on racism and socialism at the Foundation for Economic Education (FEE) blog is a good reminder, just in case you know anyone having a romantic fascination with collectivist ideology. I know too many! And if they subscribe to the notion that socialism eschews racism, they are sadly mistaken. In fact, to put it kindly, socialists ultimately eschew anyone standing in their way. Here are a few excerpts from Tupy’s article:

“… Sidney and Beatrice Webb, who were both socialists and eugenicists, bemoaned the falling birthrates among so-called higher races in the New Statesman in 1913. They warned that ‘a new social order [would be] developed by one or other of the colored races, the Negro, the Kaffir or the Chinese’.

Che Guevara, the Argentine revolutionary and friend of the Cuban dictator Fidel Castro, offered his views on race in his 1952 memoir The Motorcycle Diaries, writing, ‘The Negro is indolent and lazy and spends his money on frivolities, whereas the European is forward-looking, organized and intelligent.’ …

In the New York Tribune in 1853, Karl Marx came close to advocating genocide, writing, “The classes and the races, too weak to master the new conditions of life, must give way.” His friend and collaborator, Engels, was more explicit.

In 1849, Engels published an article in Marx’s newspaper, Neue Rheinische Zeitung. In it, Engels condemned the rural populations of the Austrian Empire for failing enthusiastically to partake in the revolution of 1848. …

‘The Austrian Germans and Magyars will be set free and wreak a bloody revenge on the Slav barbarians,’ he continued. ‘The next world war will result in the disappearance from the face of the earth not only of reactionary classes and dynasties, but also of entire reactionary peoples. And that, too, is a step forward.’

Here Engels clearly foreshadows the genocides of the 20th-century totalitarianism in general and the Soviet regime in particular. In fact, Joseph Stalin loved Engels’ article and commended it to his followers in The Foundations of Leninism in 1924. He then proceeded to suppress Soviet ethnic minorities, including the Jews, Crimean Tatars, and Ukrainians.”

As Tupy notes, socialists are given to dressing-up their repressions as “class struggles”, as opposed to racism when it suits them, ideological eliminationism, and genocidal paroxysm. And these fits have often had pronounced “disparate impacts” on ethnic, racial and national minorities. In this sense, Hitler, the national socialist was no exception. Again, from Tupy:

“Hitler’s hatred of the Jews, for example, was partly rooted in his belief that capitalism and international Jewry were two sides of the same coin. As he once famously asked, ‘How, as a socialist, can you not be an anti-Semite?'”

Socialism is not an ideology of “kindness”. As a practical matter, it is an ideology of coercion, control, and extreme inequality of outcomes. It is antithetical to the ideal of personal liberty, not “liberal” in any real sense of the word. It should come as no surprise that the practitioners of socialism have indulged in virulent intolerance and racism. And it’s not simply a matter of “my way or the highway”. It’s often my way or death for those who don’t fall in line, and a highway to hell on earth for those who do.

How Empowered Bleeding Hearts Do Harden

01 Friday Feb 2019

Posted by in Collectivism, Socialism, The Road To Serfdom, Tyranny

≈ Leave a comment

Tags

, , , , , , , , , , ,

Here’s an empirical regularity: altruists attaining power to collectivize society’s productive machinery do not stay nice for long. In fact, aggressive pursuit of their goals might compel them to participate in brutal tyranny. But why? What happens to these sweet egalitarians who are, after all, imbued with the most earnest desire to elevate the common man by equalizing the fruits of society’s bounty?

Bryan Caplan offers Venezuela as Exhibit A in “A Short Hop from Bleeding Heart to Mailed Fist“:

“When Hugo Chavez began ruling Venezuela, he sounded like a classic bleeding-heart – full of pity for the poor and downtrodden. Plenty of people took him at his words – not just Venezuelans, but much of the international bleeding-heart community. … Almost every Communist dictatorship launches with mountains of humanitarian propaganda. Yet ultimately, almost everyone who doesn’t fear for his life wakes up and smells the tyranny.”

Venezuela’s collapse is merely the most recent in a long history of socialist debacles. Authoritarians certainly come in other stripes, but collectivists seem especially prone to the development of vicious alter-egos. But again, why?

Caplan knows the answer, and in something of a dialectical exercise, he proposes several explanations for the nice-to-nasty phenomenon. It’s not the infiltration of “bad guys”. Plenty of evidence suggests that the same people are at both ends of the transition, and for now let’s give the benefit of the doubt to the nicest elements of the avant guarde, or even those who go simply along on the basis of their idealism. It’s implausible that such humanitarian souls could believe it will be necessary, at the outset, to crush their opposition by force. Moreover, that approach risks immediate outcomes that are far too dire. Might an authoritarian or militaristic turn be necessary to deter hostile foreign actors who might attempt to foil collectivization? If so, it still doesn’t explain why subjugation of domestic citizens is ultimately accepted as a legitimate use of force by sincere altruists.

Caplan moves on to more compelling explanations of the disorder. Perhaps the expression of bleeding heart intentions is propaganda from the very start. Perhaps the rhetoric is really just hate speech disguised as noble intent. Surely those two explanations comport with the behavior of those having uglier motives for collectivism: envy and vengeance. And while those elements are certain to be active in any socialist front, they don’t explain why the bleeders also abecome beaters.

The best explanation for the horrid metamorphosis of empowered altruists is that egalitarian policies simply do not work very well. Caplan says:

“Bleeding-heart policies work so poorly that only the mailed fist can sustain them. In this story, the bleeding hearts are at least initially sincere. If their policies worked well enough to inspire broad support, the bleeding hearts would play nice. Unfortunately, bleeding-heart policies are exorbitantly expensive and often directly counter-productive. Pursued aggressively, they predictably lead to disaster. At this point, a saintly bleeding heart will admit error and back off. A pragmatic bleeding heart will compromise. The rest, however, respond to their own failures with rage and scapegoating. Once you institutionalize that rage and scapegoating, the mailed fist has arrived.” [Caplan’s emphasis]

The compulsory nature of policies advocated by leftists makes their system of social organization inherently unstable. With the imposition of every rule limiting the operation of private markets, with every compromise of the price mechanism, and with every new confiscatory policy, the economy becomes more feeble and inflexible. As several commenters on Caplan’s post note, socialists are people who simply do not understand economics.

The path to collectivism always involves promises that are impossible to keep. Personal concerns must be renounced in favor of the collective. Individuals are denied their freedom to act on creative impulses and their ability to cooperate freely with others in pursuit of personal well-being. Those are human rights that are quite unnatural to part with. That means it is impossible to achieve the collective without an implicit or explicit threat of enforcement through violent police power. Bleeding hearts will actually participate in the inevitable tyranny because they are so convinced of the righteousness of their cause.

Whether you call it socialism or social democracy makes no difference. The latter merely cloaks tyranny in a majoritarian dominance that would have enraged our nation’s founders. They understood the despotism inherent in allowing a majority to dictate the existence of basic rights. However, the bleeding hearts are always sure they know “what’s right” without weighing implications beyond the injustice du jour. That demands the application of force. And when confronted with the catastrophic results of their peremptory whimsy, they have no choice but to use still more force.

The banality of evil is truly a progressive disease. Fortunately, we have a preventive vaccine: the U.S. Constitution. But it will work only if we’re wise enough to rely on the framer’s original intent.

 

Climate Change and Disorders of the Mind

13 Sunday Jan 2019

Posted by in Environment, Global Warming, Socialism

≈ 1 Comment

Tags

, , , , , , , , , , , , , , , ,

Let’s hear from an environmentalist and radical animal-rights activist:

“… the extinction of Homo Sapiens would mean survival for millions if not billions, of Earth-dwelling species. Phasing out the human race will solve every problem on earth, social and environmental.”

Okay then, you first! That is an actual quote of Ingrid Newkirk, the misanthropic president of People for the Ethical Treatment of Animals (PETA), as documented by Tom Harris and Tim Ball in “Extreme Environmentalists Are Anti-Human“. I’m no psychologist, but I believe most shrinks would categorize misanthropy as a condition of general dislike for humanity that usually poses no real threat to others. Not always, however, and by my reckoning the sentiments expressed by Newkirk are the ramblings of a disturbed individual. But she’s not alone in her psychosis, by any means.

The sheer lunacy of the environmental Left is nowhere more evident than in the call for mankind’s extinction, and it is not unusual to hear it these days. Here’s a similarly deranged and tyrannical statement from the Voluntary Human Extinction Movement:

“Phasing out the human race by voluntarily ceasing to breed will allow Earth’s biosphere to return to good health … the hopeful alternative to the extinction of millions of species of plants and animals is the voluntary extinction of one species: Homo sapiens … us.“

The policies advocated by many environmentalists don’t go quite that far, but they nevertheless tend to be anti-human, as Harris and Ball demonstrate. In particular, the emphasis on eliminating the use of fossil fuels over the next three decades would consign most people , but especially those in developing countries, to ongoing lives of penury. Here are Harris and Ball:

“Of course, the poor and disadvantaged would be most affected by the inevitable huge rise in energy costs that would accompany the end of fossil fuels. … By promoting the idea that CO2 emissions must be reduced, climate mitigation activists are supporting the expanded use of biofuels. This is resulting in vast quantities of the world’s grain being diverted to fuel instead of food, causing food prices to rise — also causing the most pain among the world’s poor.“

I am highly skeptical of the risks presented by climate change. The magnitude of climate changes on both global and regional scales, even to the present, are subject to so much uncertainty in measurement as to be largely unworthy of policy action. Climate models based on “carbon forcings” have been increasingly in error, and the risks about which we are warned are based on forecasts from the same models far into the future — taking little account of the potential benefits of warming. The purported risks, and the benefits of mitigating actions, are translated into economic terms by models that are themselves subject to tremendous uncertainty. Then, the future calamitous outcomes and the benefits of mitigation are discounted so lightly as to make the lives of future human beings… and plants and animals, and their hypothetical preferences, almost just as important as those of actual human beings who, in the present, are asked to bear the very certain costs of mitigation. The entire pursuit is madness.

Last spring I had a brief discussion with an economist engaged in research on the economics of climate change at the University of Missouri. I mentioned the uncertainties in measuring and aggregating temperatures over time and place (here is one example). He said, with a straight face, that those uncertainties should be disregarded or else “we can’t say anything”. Well yes, as a matter of scientific principle, a high variance always means a greater likelihood that one must accept the null hypothesis! Yet the perspective adopted by the alarmist community is that a disastrous outcome is the null hypothesis — the sky is falling! If it weren’t for government grant money, I’m sure the sense of impending doom would be psychologically debilitating.

And now we are presented with a “Green New Deal” (GND), courtesy of a certain congressional freshman, Alexandria Ocasio-Cortez, whose apparent media appeal is disproportionately greater than her intellectual acumen. The GND would eliminate fossil fuels and nuclear power (which emits zero carbon) from the U.S. energy mix by the impossibly early 2035. That would require the replacement of 88% of U.S. energy sources in about 17 years, which would cripple the U.S. economy and real incomes. The poor would suffer the most, but of course the GND promises much more than a makeover of our energy sources. In fact, it would mandate the replacement of “non-essential individual means of transport with high-quality and modern mass transit”. Welcome to the new authoritarian paradise! All transportation and anything else requiring power would be electrified, a massive infrastructural investment. Oh, and the proposal calls for a slew of socialist programs: a federal job guarantee, a living wage, universal health care, and of course income redistribution. Interestingly, this proposal is consistent with the agenda described in the most widely-reported climate paper in 2018, which Michael Bastasch describes as a call for global socialism.

Cortez’s desperate hope is that all this can be paid for via reductions in defense spending, high taxes on the rich, and “Modern Monetary Theory”. She really doesn’t understand the latter except that it sounds expedient. Like many other leftist numbskulls, she undoubtedly thinks that printing money offers society a free lunch. But printing money simply cannot be transformed into real resources, and such attempts generally have destructive consequences. So the GND might not reflect mental illness so much as sheer stupidity. Anyone familiar with the history of socialism and the realities of public finance knows that the GND would have punishing consequences for everyday people. The so-called Yellow Vests in France should serve to warn of the affront taken by those oppressed by over-reaching government: their protests were originally motivated by a proposed increase in the fuel tax on top of already high energy taxes and other policies that artificially increase the cost of energy.

The environmental lobby has long promoted doomsday scenarios: population growth would outstrip the globe’s capacity for producing food, and resources would become increasingly scarce. In fact, the opposite has occurred. This is demonstrated by Gale L. Pooley and Marian L. Tupy in “The Simon Abundance Index: A New Way to Measure Availability of Resources“. The index is named after the brilliant Julian Simon, who famously made a bet with the doomsayer Paul Erlich on the likely course of prices for five metals. Simon was correct in predicting that markets and human ingenuity would lead to greater abundance, and that prices would fall. But the deep paranoia of the environmental Left continues today. They are oblivious to the lessons of history and the plain market solutions that lie before them. Indeed, those solutions are rejected because they rely on positive action by the presumed villains in their delusional tale: free people. The demonization of mankind, private action, and markets is not just symptomatic of misanthropy; it reflects a deeply paranoid and manipulative psychological state. These would-be tyrants are a real danger to the human race.

Socialism and Authoritarianism: Perfectly Complementary

19 Wednesday Sep 2018

Posted by in Socialism, Tyranny

≈ Leave a comment

Tags

, , , , , , , , , , , , , ,

The socialist left and the Marxist hard left both deny their authoritarian progenitors. Leftists are collectivists, many of whom subscribe to an explicit form of corporatism with the state having supreme power, whether as a permanent or transitional arrangement on the path to full state ownership of the means of production. Collectivism necessarily requires force and the abrogation of individual rights. At this link, corporatism, with its powerful and interventionist state, is aptly described as “de facto nationalization without being de jure nationalization” of industry. To the extent that private ownership is maintained (for the right people), it is separated from private control and is thus a taking. But the word corporatism itself is confusing to some: it is not capitalism by any means. It essentially means “to group”, and it is a form of social control by the state. (And by the way, it has nothing to do with the legal business definition of a corporation.)

Of course, leftists distance themselves from the brutality of many statist regimes by asserting that authoritarianism is exclusively a right-wing phenomenon, conveniently ignoring Stalin, Castro, Mao, Pol Pot, and other hard lefties too numerous to mention. In fact, leftists assert that fascism must be right-wing because it is corporatist and relies on the force of authority. But again, both corporatism and fascism are collectivist philosophies and historically have been promoted as such by their practitioners. Furthermore, these leftist denials fly in the face of the systemic tendency of large governments to stanch dissent. I made several of these points four years ago in “Labels For the Authoritarian Left“.

I find this link from The Federalist fascinating because the author, Paul Jossey, provides quotes of Hitler and others offering pretty conclusive proof that the Nazi high command was collectivist in the same vein as the leftists of today. Here are a few of Jossey’s observations:

“Hitler’s first ‘National Workers’ Party’ meeting while he was still an Army corporal featured the speech ‘How and by What Means is Capitalism to be Eliminated?’

The Nazi charter published a year later and coauthored by Hitler is socialist in almost every aspect. It calls for ‘equality of rights for the German people’; the subjugation of the individual to the state; breaking of ‘rent slavery’; ‘confiscation of war profits’; the nationalization of industry; profit-sharing in heavy industry; large-scale social security; the ‘communalization of the great warehouses and their being leased at low costs to small firms’; the ‘free expropriation of land for the purpose of public utility’; the abolition of ‘materialistic’ Roman Law; nationalizing education; nationalizing the army; state regulation of the press; and strong central power in the Reich.”

Are you feeling the Bern? Does any of this remind you of the “Nasty Woman”, Liz Warren? Here is more from Jossey:

“Hitler repeatedly praised Marx privately, stating he had ‘learned a great deal from Marxism.’ The trouble with the Weimar Republic, he said, was that its politicians ‘had never even read Marx.’ He also stated his differences with communists were that they were intellectual types passing out pamphlets, whereas ‘I have put into practice what these peddlers and pen pushers have timidly begun.’

It wasn’t just privately that Hitler’s fealty for Marx surfaced. In ‘Mein Kampf,’ he states that without his racial insights National Socialism ‘would really do nothing more than compete with Marxism on its own ground.’ Nor did Hitler eschew this sentiment once reaching power. As late as 1941, with the war in bloom, he stated ‘basically National Socialism and Marxism are the same’ in a speech published by the Royal Institute of International Affairs.

Nazi propaganda minister and resident intellectual Joseph Goebbels wrote in his diary that the Nazis would install ‘real socialism’ after Russia’s defeat in the East. And Hitler favorite Albert Speer, the Nazi armaments minister whose memoir became an international bestseller, wrote that Hitler viewed Joseph Stalin as a kindred spirit, ensuring his prisoner of war son received good treatment, and even talked of keeping Stalin in power in a puppet government after Germany’s eventual triumph.”

Some contend that the Nazis used the term “socialist” in a purely cynical way, and that they hoped to undermine support for “real socialists” by promising a particular (and perverse) vision of social justice to those loyal to the Reich and the German nation. After all, the Bolsheviks were political rivals who lacked Hitler’s nationalistic fervor. Hitler must have thought that his brand of “socialism” was better suited to his political aspirations, not to mention his expansionist visions. Those not loyal to the Reich, including Jews and other scapegoats, would become free slave labor to the regime and its loyal corporate cronies. (It’s striking that much of today’s Left, obviously excepting Bernie Sanders, seems to share the Nazis’ antipathy for Jews.)

Socialism, corporatism and fascism are close cousins and are overlapping forms of statism, and they are all authoritarian by their practical nature. It’s incredible to behold leftists as they deny that the National Socialists Workers Party practiced a brand of socialism. Perhaps the identification of the Nazis as a fascist regime has led to confusion regarding their true place along the ideological spectrum, but that too is puzzling. In their case, a supreme corporatist state enabled its most privileged advocates to exploit government power for private gain, and that’s the essence of fascism and the archetypical outcome of socialism.

New Socialists Fail Socialism 101

02 Sunday Sep 2018

Posted by in Big Government, Socialism

≈ Leave a comment

Tags

, , , , , , , , , , , , , , , ,

Not many self-styled socialists can actually provide a proper definition of socialism these days. That includes the celebrated Alexandria Ocasio-Cortez, the New York congressional candidate who has proven herself to be an incredible stumble-bum in numerous media appearances since her primary victory over incumbent democrat Joe Crowley. Maine Wire‘s Matthew Gagnon calls her “belligerently ignorant” as she tweets what she believes to be examples of democratic socialism. Gagnon dissects some of her flakey assertions. The sad truth is that Ocasio-Cortez is fairly typical of her generation, despite her dual college majors in economics and political science.

Gagnon notes that socialism is public ownership of the means of production. But socialism is somehow regarded as a “soft” version of communism: less authoritarian, perhaps. That premise deserves closer examination. There is only one way that the public sector can take possession of private property: by force. A new, authoritarian regime might simply commandeer property, nationalize it, and revoke prior ownership claims at the point of a gun or a club. The government would ultimately impose new rules under which management of formerly private enterprises must operate, and it would engage in centralized decision-making and planning to a large extent. This is essentially communism. Some personal freedoms might be preserved, but they are likely to be severely curtailed; dissidence is not likely to be tolerated.

There is another mechanism by which society can declare public ownership of productive resources that is nominally less authoritarian: democracy. Citizens or their elected representatives simply vote for the state to acquire particular resources and enterprises, in whole or in part. Enabling legislation might authorize administrative agencies to determine how the former private owners of these enterprises are to be compensated. To one extent or another, this involves takings of private property and rights, and it boils down to a very real tyranny of the majority: we will vote to take possession of your business; we will vote to create a bureau that will determine its worth and your compensation; we will vote that henceforth you may not operate this business on your own behalf, but only in the service of the people; and we will vote on what rights you possess. This is the ugly tyranny of democratic socialism, and it still requires force.

Self-proclaimed socialists are fond of proclaiming that we already have socialism in many sectors of the economy. They cite public parks, roads, bridges, K-12 education, and other goods and services sometimes provided by the public sector. There is a key distinction, however, that separates many of these examples from actual socialism: whether a good is actually a “public good”, meaning that its benefits are non-exclusive, as opposed to a private good that yields exclusive benefits. A more precise definition of socialism, in my view, is public ownership of the means of producing private goods.

The typical example of a public good is national defense: the benefits I receive do not reduce the benefits you receive, so those benefits are non-exclusive. I have little personal incentive to pay for national defense if anyone else is willing to pay for it, as I’ll receive the benefits anyway. But who will pay if everyone tries to free-ride on others? That’s why the provision of public goods is an appropriate function of government, and it is not generally what is meant by socialism. Gagnon is correct that government involvement in an activity is not the same as socialism, and he correctly ridicules some examples of governmental activities (and non-governmental activities like cooperatives) that Ocasio-Cortez believes to be socialism.

In contrast to public goods, private goods are exclusive in their benefits. The development of a private market can be counted upon to fulfill demands for such goods because private individuals are willing to pay. However, when government grants itself an advantaged position as a provider in such a market, such as a monopoly franchise, we can safely describe it as socialism. Many goods are not purely private, having some degree of non-exclusivity in their benefits. This is commonly asserted to be the case for K-12 education, but the matter is not as clear-cut as the public education establishment would have you believe. The bulk of the benefits to education accrue privately. Therefore, it is fair to describe public K-12 education in the U.S. as socialism. And it is largely a disaster.

Is a social safety net rightly described as socialism? Gagnon thinks not and, strictly speaking, the welfare state does not require public ownership of the means of production, only a means of redistribution. It requires funding, so private resources will be extracted via taxes, and the same is true of public goods. Taxes do not make it “socialism”. Let’s stipulate for the moment that there is a true safety net supporting only those unable to support themselves, either on a temporary or a permanent basis. This may yield non-exclusive benefits to the extent that such a “lifeline” reduces crime, begging, and our personal discomfort with the possibility that other individuals might starve. However, on an ex ante basis, some of these benefits represent a form of risk reduction that, in principle, could be arranged privately. To the extent that we vote to provide these potentially private benefits, those parts of the safety net can be construed as democratic socialism. In practice, our “safety net” covers a large number of able-bodied individuals. Unfortunately, it does a poor job of encouraging self-sufficiency. Like most public benefit programs, it is expansive, poorly designed, and has pernicious effects on the private economy that act to the long-term detriment of its intended beneficiaries.

Leftists fancy that socialism is “compassionate” and righteous, despite its predictably harsh outcomes. The misleading conceit that universal alms-giving by the state is always empowering to individual recipients, and potential voters, is an extremely corrosive element of democratic socialism. William Voegeli, Senior Editor of The Claremont Review of Books, writing in Imprimis makes “The Case Against Liberal Compassion“. (I dislike his misuse of the word “liberal” — too many conservatives are willing to cede that label to the Left.) Voegeli notes the “never enough” mentality of welfare statists, who refuse to acknowledge that the expansive growth of the welfare state over the past five decades has failed to reduce rates of poverty. The programs are rife with fraud, waste and bad incentives. If leftists are truly compassionate, Voegeli insists, they ought to take more interest in fixing problems that leave less for the truly needy and create dependencies rather than simply increasing the flow of funding.

Many well-meaning individuals are careless about affiliating with socialist causes because they do not understand what it actually means, and they often lack any historical and theoretical perspective on the implications of socialism. The flirtation is dangerous, and we can only attempt to educate and reason with them. Some will grow into greater wisdom. Some, like Bernie Sanders, will never come around. While we educate, let’s keep their hands away from the reins of power.

Don’t Worry: Your IOUs To Yourself Are In a Trust Fund!

10 Sunday Jun 2018

Posted by in Medicare, Social Security, Socialism

≈ Leave a comment

Tags

, , , , , , ,

The Social Security and Medicare trust funds should offer no comfort as the obligations of those programs outrace revenues. Between them, the funds hold about $3.1 trillion of federal government bonds purchased with past surplus “contributions” from FICA and Medicare payroll taxes. In other words, those surplus contributions were used to pay for past government deficits. Here’s what Warren Meyer has to say on the topic:

“Imagine to cover benefits in a particular year the Social Security Administration needs $1 billion above and beyond Social Security taxes. If the trust fund exists, the government takes a billion dollars of government bonds out and sells them to private buyers on the open market. If the trust fund didn’t exist, the government would …. issue a billion dollars in bonds and sell them to private buyers on the open market. In either case, the government’s indebtedness to the outside world goes up by a billion dollars.”

Therefore, the trust funds do not provide any real cushion against future obligations. As Meyer says, you can write IOUs to yourself, put them in a piggy bank and call it a trust fund of your very own, but that won’t increase your wealth.

As it happens, last week the Trustees of the Medicare (MC) Trust Fund released the latest projections showing that it will be exhausted by 2026. Likewise, the Trustees of the Social Security (SS) Trust Fund reported that it will be depleted by 2036. But again, those trusts do not enhance the federal government’s fiscal position, so they really don’t matter. Even with the interest earned on the bonds held in trust, which is itself owed by the federal government, the trusts are merely placeholders for an equivalent dollar value of unfunded federal obligations. And in a very real sense, these funds hold no more than our own future tax liabilities: that debt is our debt.

Federal spending on discretionary and other on-budget entitlements is deeply in deficit on an ongoing basis, expected to be greater than $1 trillion annually by 2020, according to the Congressional Budget Office. Then add the bonds that will be sold to the public from the SS and MC trust funds, and total government borrowing from “the public” will become that much larger. After the trust funds are exhausted, accounting for the impact of the annual SS and MC system deficits will be more transparent.

The previous use of SS and MC contributions to pay for other government outlays strikes many as a violation of trust. Remember, however, that contributions to these systems are taxes, after all. And despite apparent impressions to the contrary, and perhaps for worse, individual vesting was never part of the SS system. But if the government must borrow a dollar (on a unified basis), is it always better to do it later? That was essentially the decision made (repeatedly) when FICA and Medicare taxes were used to purchase government bonds. The answer depends on whether the government has an immediate uses for the surplus that can be expected to earn returns superior to investment opportunities of suitable risk otherwise available to the trust funds. I would argue, however, that most of the “spent” funds from surplus FICA and Medicare taxes were put toward government consumption, and much less to investment in physical or social infrastructure. In fact, the availability of the SS and MC surpluses probably encouraged that consumption. To that extent, it was a certainly a mistake.

If the question is at what point must the government address the shortfall in its ability to pay future obligations to seniors, the answer is not “2026 and 2034”. It is now. The programs are racking-up obligations to future retirees that will be impossible to meet. The long-run (75-year) SS deficit projected by the trustees has a present value of $13.2 trillion, with an annual deficit growing to about 1.5% of GDP. By then, the Medicare deficit is expected to bring the combined shortfall of the two programs up to 2.3% of GDP. The trustees estimate that SS benefits would have to be cut by 25% in order to eliminate that deficit, with additional cuts to Medicare.

Oh, but those estimates treat the trust funds as if they are meaningful assets, and they are not! Of course, there are other solutions to the funding shortfall, but I truly hope that current workers have realistic expectations. They should adjust their saving rates to avoid excessive reliance on government social and medical insurance programs.

Inferior Schools, Venom For Reformers

28 Monday May 2018

Posted by in Regulation, School Choice, Socialism, Uncategorized

≈ Leave a comment

Tags

, , , , , , , , , , , , , , , , , ,

We all want better K-12 education in the U.S., which has an extremely uneven — even dismal — record of student outcomes. The U.S. ranks below the OECD average in both math and science scores, despite spending 35% more per student than the OECD average. Yet there is a faction that leaps to the defense of the status quo with such viciousness that its members deride sensible reform proposals as classist and racist. Then, of course, they call for additional spending! These antics reveal their self-interest in doubling down on the status quo.

An obvious starting point for reform, and one that would save taxpayers roughly $40 billion (K-12), is to dismantle a federal education bureaucracy that adds little value to educational outcomes. Another element is expanding the set of alternatives available to parents over the way their children are educated. Betsy DeVos, President Trump’s Secretary of Education, favors both of these steps as general principles, though she lacks direct control over either, especially school choice.

Both of these steps are fiercely resisted by the public educational establishment and teachers unions. And no wonder! Who wants to lose their privileged monopoly power over a local market? The public school establishment does not wish to be troubled by demands that schools respond to competitive forces, that teachers be rewarded based on performance, or that schools should be answerable to parents and taxpayers. As for the federal role, the public school cartel seems to welcome federal money, even if it means that the feds impose control in the process.

Choice

For those skeptical of reforming public schools by allowing choice, Don Boudreaux proposed a useful thought experiment that I discussed in my earlier post “Public Monopolists Say Don’t Be Choosy“. It examines a hypothetical world in which supermarkets are structured like public schools. Consumers pay for their food via local taxes and must shop at one local public supermarket, and only one, at which food products are available at no additional marginal cost. However, parents are free to pay their taxes and pay for food elsewhere, at a private supermarket. Most thinking people would probably agree that this is a spectacularly bad idea. Public supermarkets would deteriorate relative to private supermarkets. Rural and inner city supermarkets would likely suffer the most. Public supermarket worker unions would lobby for higher food taxes. And of course proposals for supermarket choice would be met with hysteria. Read the earlier post for more discussion of the likely consequences.

One of the arguments often made in favor of today’s public school monopoly is that K-12 education should be regarded as a necessity, but few would take that as a compelling reason to grant government a monopoly in the retail food business. A better argument for government schools, were it strictly true, would be that education is a public good, yielding significant non-exclusive benefits to the community. And in truth there are some external benefits to society from an educated citizenry. The primary benefits of an education, however, are exclusive to the student. Kevin Currie-Knight offers an excellent treatment of the education-as-public-good question, and he concludes otherwise. And the public-good argument does not imply that parents should be denied choice in their selection of a school for their children. Ultimately, the policy question hinges on whether government schools, as currently structured, do a good job in educating students, and as Corey A. DeAngelis points out, they do not.

There is no shortage of evidence that school choice is beneficial for students and society in several respects, including academic outcomes for students and schools, racial integration, fiscal impacts, and parental satisfaction. This paper by MIT researchers found that school choice improved educational outcomes for special education students and those who were not proficient in English. This essay in Education Week, signed by nine educational researchers, emphasized the preponderance of positive findings on school choice and some additional dimensions of improvement on which they hope the education research community will focus.

The promise of choice is seldom greeted objectively by the public education establishment and its reflexive allies. To their dishonor, distortions of fact and ad hominem attacks on choice advocates are almost the rule. For example, John Stossel writes the following in “Why the Left Hates Betsy DeVos“:

“When she spoke at the Kennedy School of Government, students held up signs calling her a ‘white supremacist.’ … When she tried to visit a school, activists physically blocked her way. … The haters claim DeVos knows little about education, only got her job because she gave money to Republican politicians, and hates free public education.“

Of course, public education is not free! But it is a disgrace that someone so dedicated to the cause of improved education should be treated this way. The DeVos family has given over a billion dollars to various causes over the years, much of it to educational initiatives, and even those gifts, somehow, are seen by critics as a pretext for vilifying Betsy DeVos. But she knows much more about the poor performance of public schools than her critics care to discuss, as well as the dynamism and improvement that choice and competition can bring to education. Her critics disparage the performance of charter schools in DeVos’s home state of Michigan even while the facts show that they have performed well.

The idea that charter schools “hurt” public schools by creating educational choice is the very weakest protest a monopolist can put forward. These critics conveniently overlook the fact that most charter schools are in fact public schools! More importantly, an erstwhile monopolist must respond by adding value for consumers! If it fails to do so, it must be closed or reorganized. THAT is a good idea!

Monopoly public schools do not earn a profit in the way of monopolistic business enterprises, but remember that perhaps the greatest social costs imposed by monopolies are languid effort and a poor product. This is not to dismiss the great efforts of many teachers who toil under trying circumstances, though the current system also tends to protect bad teachers. And much of the waste in government schools is caused by bloated bureaucracy and costs imposed on teachers and schools of complying with regulation. 

The Federal Bureaucracy

Another priority of Secretary DeVos is to reduce the federal role in education. Hurry, please! The unpopular Common Core standards, implemented in 2009, proved a failure. Test scores declined for student cohorts expected to benefit the most (those in the lowest percentiles). At the last link, Nancy Thorner discusses more recent legislation:

“It was in December of 2015 that Congress passed the Every Student Succeeds Act (ESSA), that replaced the often criticized No Child Left Behind Act (NCLB). ESSA, in contrast to NCLB, signified a clear move away from federally prescribed standards. In fact, ESSA expressly forbid federal regulators from attempting to ‘influence, incentivize, or coerce’ states to adopt the Common Core.”

That’s progress, but 36 states plus DC still use those standards. Curriculum mandates are only one area of federal school regulation that must be addressed. “Educational equity” is also mandated along several dimensions, requiring schools to devote a disproportionate share of resources to various subsets of students who might not benefit from the extra instructional intensity. Then there are the administrative costs of demonstrating compliance with these mandates, not to mention the virtual prohibition under these mandates of developing innovative, local solutions to the problem of educating their charges.

There is well-deserved pushback against federal control over school discipline, which requires schools to implement policies that avoid disparate impacts on certain minorities (African Americans, Latino, and special-ed children) such that they are no more likely to receive detention, suspension, or expulsion than the general student population. This is an absurdity, potentially requiring schools to go light on offenders should they happen to belong to a minority. Even worse, if the enforcement of discipline results in an observable bias in favor of any minority, it is likely to be noticed by the minority students themselves, creating a negative behavioral incentive and potentially stoking resentment among non-minority students.

In April, President Trump signed an executive order authorizing a review of federal education rules imposed on states and local school districts. Again, central regulation is costly: it involves rule-making at the federal level to interpret enabling legislation, then review by state departments of education where specific policies are designed, which are then passed down to school districts and individual schools, who must review and attempt to implement the policies, and who then must report back on their success or failure in meeting the mandates. Resources are consumed at every level. In the end, the process creates increased complexity, and the policies have proven to be of questionable value to the goal of good education. While spending on education has soared over the past 30 years, student achievement has remained static, and the same disparities of outcome remain.

Secular Statism

Robert P. Murphy provides a brief history of U.S. public schooling. It is a fascinating take on the history of secularization of education in America. It is the story of the substitution of state for private institutions, including family and church, in the development and socialization of children. Murphy offers a telling quote:

“Thus Henry Brown, second only to Horace Mann in championing state education, commented, ‘No one at all familiar with the deficient household arrangements and deranged machinery of domestic life, of the extreme poor, and ignorant, to say nothing of the intemperate—of the examples of rude manners, impure and profane language, and all the vicious habits of low bred idleness—can doubt, that it is better for children to be removed as early and as long as possible from such scenes and examples.'”

Whoa! The K – 12 public education system, as it now stands, is striking in its failure to benefit the children and families it is intended to serve. Critics of meaningful reform do not acknowledge the abysmal condition and performance of many government schools in America today, except to insist that they need more money. These critics, including the educational bureaucracy, teachers unions, and misguided statists generally, behave as if they accept the attitudes expressed by Henry Brown. They have no respect for private decision makers — families, churches, private schools of any stripe, and private markets in general. They do not understand the power of incentives and competition to allocate resources efficiently and maximize well-being. But they know how to disparage, defame, and propagate hateful rhetoric for those with a true interest in creating a better educational system for all.

Charitable Intent

31 Saturday Dec 2016

Posted by in Charity, Redistribution, Socialism

≈ Leave a comment

Tags

, , , , , , , , , , ,

charity

I’m not accustomed to writing about religious matters, but I must say that I’ve never been persuaded that Jesus himself approved or advocated for socialism and state-enforced redistribution of wealth. Instead, I believe that Jesus would have endorsed the message above: charity inheres to individuals, and it lives in their hearts. It is not a concern that individuals can ever satisfy by promoting public tax and transfer policies, pressing claims on the resources of others.

This week, an essay on this topic caught my eye. It appeared in Lawrence Reed’s “Cliches of Progressivism“, at the Foundation for Economic Education: “#42 – ‘Jesus Was a Progressive Because He Advocated Income Redistribution  to Help the Poor’“. It covers a number of Biblical scriptures sometimes quoted in support of this notion, and Reed’s considered refutation of each. I provide just a few of Reed’s examples below, but read the whole thing, as they say:

“Make my brother share the wealth“:

“In Luke 12: 13-15, Christ is confronted with a redistribution request. A man with a grievance approaches him and demands, ‘Master, speak to my brother and make him divide the inheritance with me.’ The Son of God, the same man who wrought miraculous healings and calmed the waves, replies thusly: ‘Man, who made me a judge or divider over you? Take heed and beware of covetousness, for a man’s wealth does not consist of the material abundance he possesses.’ Wow! He could have equalized the wealth between two men with a wave of His hand but he chose to denounce envy instead.”

“Sell all your goods and share“:

“What about the reference, in the Book of Acts, to the early Christians selling their worldly goods and sharing communally in the proceeds? … In his contributing chapter to the 2014 book, ‘For the Least of These: A Biblical Answer to Poverty,’ Art Lindsley of the Institute for Faith, Work and Economics writes,

‘Again, in this passage from Acts, there is no mention of the state at all. These early believers contributed their goods freely, without coercion, voluntarily. Elsewhere in Scripture we see that Christians are even instructed to give in just this manner, freely, for “God loves a cheerful giver” (2 Corinthians 9:7). There is plenty of indication that private property rights were still in effect….’“

“Render Unto Caesar…“:

“‘Wait a minute,’ you say. ‘Didn’t He answer, “Render unto Caesar the things that are Caesar’s, and unto God the things that are God’s’ when the Pharisees tried to trick Him into denouncing a Roman-imposed tax?” … It’s found first in the Gospel of Matthew, chapter 22, verses 15-22 and later in the Gospel of Mark, chapter 12, verses 13-17. But notice that everything depends on just what did truly belong to Caesar and what didn’t, which is actually a rather powerful endorsement of property rights. Christ said nothing like ‘It belongs to Caesar if Caesar simply says it does, no matter how much he wants, how he gets it, or how he chooses to spend it.’

The fact is, one can scour the Scriptures with a fine-tooth comb and find nary a word from Christ that endorses the forcible redistribution of wealth by political authorities. None, period.“

While I generally agree with Reed’s analysis of this last point, I believe he missed the real message regarding any legitimate claims Caesar might have possessed. It is a statement about the value of material goods relative to faith and acts in the name of God. Obviously, as Reed says, it is not an endorsement of a power to tax and transfer.

The teachings of charity in the Bible have to do with the goodness of voluntary, self-motivated generosity. There are no lessons advocating compulsory taxes and transfer payments. If you say that Jesus would have supported such programs as deeds of a caring society, I would question your logic on several grounds. First, there are always political motives at play in crafting such policies, which usually include vote-buying and scapegoating. In that respect, those policies fall short of the standard for “good works”. Second, as already noted, the power to tax is backed by the police power of government, not quite the sort of “giving” about which Jesus preached. And, by extracting resources from those in a position to give unto others, tax and transfer policies reduce the capacity for private generosity. Granted, a charitable tax deduction might establish an incentive strong enough to encourage a level of continued giving. But then, the “noble” social deed becomes the hostage of tax policy, administrative definitions, rulings relative to recipient organizations, and the whims of self-interested politicians. A presumption is that individuals will not perform good works in sufficient amounts. Therefore, the state must step in, along with an army of bureaucrats and lobbyists who can be counted upon to feed off the taxpayers’ largess. The individual acts of charity encouraged in Jesus’s teachings could hardly be subject to greater convolution.