Sunday, December 26, 2010

Racism, Cartels, and Jim Crow

It is often claimed that capitalism leads to all sorts of ills, such as racism and cartels (or monopolies). As with most attacks on capitalism, these claims attempt to blame capitalism for the consequences of government intervention into the economy. The Jim Crow laws illustrate this point.

Following the Civil War former slave owners faced a serious labor problem. Prior to emancipation slaves provided a steady and dependable source of labor. The South's agricultural economy was labor intensive, and this threatened the region's economy.

Initially this problem was addressed as free men solve problems--by mutual consent to mutual gain--and a number of solutions developed. Some plantation owners simply hired laborers as they were needed. This presented certain problems, as the planting and harvest seasons created a high demand for labor and the plantation owners were uncertain if they would have sufficient labor when it was needed. They were also bidding for that labor against other plantation owners, which drove wages up.

Another solution that developed was share cropping. The details varied, but under this arrangement the plantation owner essentially leased his land to a tenant. The land owner supplied the tools and materials to farm his land, and the tenant supplied the labor. The crop was then shared between the land owner and the tenant. This too had certain disadvantages to the land owner, as he had to front the expenses in the hope that he would be repaid. But the tenant had a motivation--his own profit--to work the land efficiently and effectively and thus provide a return to the land owner.

Following Reconstruction and the withdrawal of federal troops from the South, Democratic legislators began to slowly implement laws that disenfranchised blacks. Literacy tests and polls taxes were among the methods used. By 1890 very few blacks were eligible to vote in the Southern states. The voting requirements also excluded many poor whites, but an exception was made for them. Anyone who had been eligible to vote or who was related to someone eligible to vote prior to the Civil War was not subject to the new voting rules (this is the source of the term "grandfather clause").

With blacks now excluded from voting, as well as holding most public offices, the Democratic legislatures began to enact the Jim Crow laws. While the specifics varied from state to state, they generally contained 4 key provisions:
  1. Labor contracts had to be negotiated and agreed to at the start of the year. This allowed the plantation owners to negotiate when labor demands were low and also provided them with greater certainty that their labor needs would be met. Breaking a labor contract was a criminal offense, rather than a civil matter.
  2. It was made illegal to entice laborers to seek employment in another state or county. Prior to Jim Crow employment agents had thrived--they advertised and recruited for plantation owners willing to pay higher wages. This resulted in laborers working for those who most valued their work, and created labor shortages in areas with lower wages.
  3. Vagrancy laws made it illegal to be out of work, even temporarily. This made it difficult for laborers to seek higher paying work, as they were subject to arrest.
  4. Those who were unable to pay their fines were sentenced to chain gangs, which were then leased to plantation owners. The mortality rate on the chain gangs was often as high as 45 percent, which meant that the penalty for vagrancy was often a death sentence.
Combined, these laws essentially put black laborers back into slavery. The laborers could no longer negotiate on equal terms or act on their own judgment. The penalties for vagrancy greatly discouraged blacks from seeking better employment. The plantation cartel had the steady source of labor that it needed. In short, it was government coercion that protected racists and made the cartel possible.

Prior to Jim Crow, plantation owners competed against one another for labor. Though there were informal agreements to refrain from such bidding wars, individual plantation owners ultimately acted in their own self-interest and competed for labor. This of course, increased wages to the benefit of laborers and the detriment of the plantation owners. The plantation owners responded by using government force in the form of Jim Crow to impose restrictions on everyone--neither plantation owners nor laborers could act as they judged best.

When the market was free plantation owners had a motivation--their desire to plant and harvest crops--to put aside their racism and negotiate with black laborers as equals. Those who valued their racist views more than their profit were free to act accordingly and they suffered the consequences. But they couldn't force blacks to accept their terms. It was only through Jim Crow and government's legal monopoly on force that they were able to form a "successful" cartel and impose their racism on others.

Monday, December 13, 2010

Altruism and the USPS Universal Service Obligation

For the past several months I have been researching various examples of the practical results of freedom. At the same time, I have examined the arguments that have been used to justify removing or preventing freedom in various realms of human activity. Invariably, this research has led me back to a fundamental philosophical issue--the mind-body dichotomy. (More specifically, I have been contemplating the moral-practical dichotomy.) For nearly a month my research has been interrupted as I have considered how this false dichotomy impacts the concrete examples I have been researching. What follows are some of my initial thoughts on this matter.

Most people understand that if they wish to achieve a certain goal they must engage in specific actions. If they want a good grade, they must study. If they want to lose weight they must watch their diet and exercise. Further, they understand that the nature of the goal determines what actions are required to reach it, that is, what is practical. For example, if one wants to lose weight, gorging on potato chips, candy, and soda is not practical.

Further still, most people understand that their goals must be realistic—they must be possible, consistent with their other goals, and attainable. For example, it would not be realistic for me to set the goal of becoming the quarterback for the Houston Texans. I don’t have the skills, have no desire to attain them, and my age and physique are inconsistent with that required. For me to pursue such a goal is to guarantee frustration and misery, for no action I take will allow me to achieve it.

These principles hold in the political realm as well. The goals of bureaucrats, politicians, and voters determine what is practical. But often these goals are unrealistic—they are impossible, inconsistent with other stated goals, and unattainable. As an example, consider the universal service obligation (USO) of the United States Postal Service (USPS).

The USO holds that the USPS must offer a certain level of service to all citizens. Further, those services must be “affordable” and uniform. To execute this mandate, the private express statutes (PES) limit the activities of private individuals and businesses, and protect the USPS monopoly on certain postal activities, such as mail box access.

While a number of arguments are used to justify the USO and the resulting limitations on individuals, they all boil down to one thing: Universal service is desirable and therefore the ends justify the means. But why is universal service considered desirable? While the idea of universal postal service dates from the beginning of the republic, a recent report from the USPS offers us a contemporary view of the topic.

In 2008 the USPS issued a report titled “Report on Universal Postal Service and the Postal Monopoly.” The report argued that changes to either the PES or mail box access would adversely impact the USPS’s ability to implement the USO. Therefore, the report concluded, such changes should not be made.

As justification of the USO, the report cited a long-held belief that the mail “binds” the nation together by providing for the exchange of ideas and information among citizens. Further, the report argues that the concept of universal service is embodied in the Constitution and therefore a proper goal of government (page 5).

First, the Constitution says nothing of universal service. It merely authorizes Congress to establish “post offices and post roads.” Second, the fact that the Constitution authorizes some power does not make it proper or just—the Constitution also legalized slavery.

What we are left with is the assertion that universal service is good and government must provide it. It is an assertion that is accepted without question, examination, or discussion. It is accepted with no consideration of context, means, or to whom such a mandate is desirable.

Consider the fact that, according to the report, alternatives to the USPS exist for every piece of mail that it delivers. These alternatives include private companies such as UPS and FedEx, as well as the Internet (page 2). Indeed, the report cites the Internet as a primary reason for declining USPS volume. In other words, the exchange of ideas and information can and does occur without the involvement of the USPS—the nation is “bound” together. So why the continued insistence on universal service? The answer to that question goes to the heart of the matter, and reveals why allowing freedom in postal services is considered impractical.

The report repeatedly argues that relaxing the PES or taking other measures to permit private businesses greater freedom in mail delivery would substantially weaken the financial position of the USPS—private companies would offer services that draw customers away from the USPS, particularly in more profitable, high volume areas. This would leave the USPS to service less profitable routes and areas if the universal service mandate remained in place. Repealing the mandate is dismissed as contrary to “social policy”—it is regarded as immutable as the law of gravity.

The report acknowledges that differential pricing—pricing based on distance and location—is common among private companies and makes economic sense. Such pricing recognizes the fact that low volume routes and remote locations incur more costs to deliver mail, and the users of the service should bear the costs. But the USPS rejects differential pricing precisely because of this:
This would put service in danger for areas of the country whose volumes do not justify the costs to serve, namely isolated rural areas and low income urban areas. This is precisely the portion of the America public who could least afford an increase in postal pricing or a decrease in service. Isolated regions of the country currently depend heavily on the Postal Service to transport prescription medicines, educational materials, and other supplies. Cutting off such areas from uniform, affordable service and access could be devastating for these Americans. (page 81)
In other words, because of where they choose to live, some Americans need the USO in order to afford regular mail delivery. This is the “justification” for the USO. The report goes on to acknowledge the existential results: The criminalization of certain economic activities (such as the private delivery of first-class mail), higher costs to other postal customers, and political pressure to keep financially unviable post offices open.

Not surprisingly, the report claims that this serves the “public interest.” But the fact is, some members of the public benefit through lower postal rates while other members of the public are forced to bear the costs. Some members of the public are protected from the economic consequences of their choices—such as where to live—while other members of the public are prohibited from acting according to their own rational judgment—such as starting a postal service. Some members of the public are forced to sacrifice their money and their dreams for the alleged benefit of other members of the public.

That the USO—like all policies founded on the “public interest”—causes demonstrable harm to some individuals is considered irrelevant. Indeed, it is widely considered proper, just, and moral.

According to the dominant morality in our culture—altruism—each individual has a moral duty to self-sacrificially serve others. Each individual has an obligation to put aside his own interests, desires, and judgment in deference to the “public interest.” The actual consequences do not matter, so long as the intention is to serve others.

Altruism demands the renunciation of personal values and interests. In practice, altruism obligates an individual to serve the needs of others. And there never has been, nor will there ever be, a shortage of individuals in “need” of food, or shelter, or health care, or flat screen televisions. A consistent altruist must sacrifice such values in service to those in need. That such a policy is clearly impractical—if one chooses to remain alive—does not dissuade the advocates of altruism. Service to others is the “right” thing to do.

Altruism requires its advocates to choose between the moral—service to others and the renunciation of personal values—and the practical—attaining and enjoying the values required for human life.

In contrast, egoism holds that the moral is the practical. Egoism holds that the purpose of morality is to provide a set of principles to guide man in the attainment of the values required to sustain and enjoy his life. Egoism holds that each individual should be free to act according to his own judgment in the pursuit of his own values, so long as he respects the mutual rights of others. To the altruist, this is impractical—if one wishes to practice service to others, then pursuing one’s own values is impractical.

Altruism is a primary reason why it is often declared that arguments for capitalism are good in theory, but won’t work in practice. Altruism puts forth a false dichotomy between the moral (theory) and the practical. While such a dichotomy necessarily exists when the theory is wrong (such a theory is contrary to reality), the nearly universal acceptance of altruism often leads to the conclusion that such a dichotomy exists with all theories. In other words, it is widely held that theory and morality are useless when it comes to dealing with the issues and choices each of us face in our life. (The epistemological issue involved in this conclusion—skepticism—is beyond the scope of this article.)

It is within this framework that the typical non-egoist considers an argument for capitalism. He may regard the argument as good in theory, that is, logical, but regards theory and logic as unrelated to living one’s life. After all, the altruist regards his own moral creed as “good in theory” but clearly not a practical guide for sustaining and enjoying his life.

An individual will not regard capitalism as practical as long as he accepts altruism. Capitalism provides a sanction for individuals to pursue their personal values, a practice that is inimical to altruism. Only by embracing egoism—the moral right of individuals to live for their own sake—will a social system that sanctions and protects that right be regarded as practical. In other words, what one wishes to practice—service to others or the pursuit of one’s own values—will determine what one regards as practical.

This does not mean that demonstrations of the practical benefits of capitalism are pointless. To the contrary, the practical results are the purpose of a proper theory. However, such demonstrations must also identify the moral context. For example, consider the history of mail delivery in the United States.

As I previously wrote, prior to the Civil War much of the nation’s mail was delivered by private express companies. These companies offered their services at a substantially lower price than the postal service and consumers voluntarily used the private companies. The owners of the private expresses were acting in their own self-interest—their desire to make a profit. The customers of these companies were similarly acting in their own self-interest—their desire to save money. Neither was taken advantage of or forced to engage in the transaction. Neither acted for the benefit of the other as his motivation, yet each party did in fact benefit because each was left free to act according to his own judgment.

Those who chose to live in remote areas were free to do so. One of the consequences of such a choice was irregular mail service, or perhaps none at all. Those who regarded mail service as sufficiently important were free to move to a city or town, pay higher postal rates, or make other arrangements. Each individual could act according to his own judgment and hierarchy of values, so long as he respected the mutual rights of others.

This system was both moral—it recognized each individual’s right to act according to his own judgment—and practical—a multitude of options existed and individuals could choose those that fit their needs and desires. However, the fact that some individuals had a “need” that was unfulfilled did not sit well with some politicians and public officials. To them, the system in place was not practical, and the unsatisfied “need” was their proof. The fact that individuals in remote areas were cut off from metropolitan areas was deemed contrary to the “public interest,” despite the fact that such individuals voluntarily chose to live in isolated areas.

The result was the private express statutes—laws specifically designed to criminalize economic activities that many Americans judged beneficial and voluntarily used. Motivated by altruism, politicians forced some individuals—the owners of the private express companies and their customers—to sacrifice their personal interests and values for the alleged benefit of others. The higher costs paid by some consumers, the destruction of some businesses, and the loss of individual freedom were simply the price to be paid in service to others. That some individuals must sacrifice for others is precisely what altruism demands.

The idea that men could live together with each pursuing his own interests is completely foreign to the altruist. He can’t imagine life without sacrifice, and regards any argument to the contrary as “good in theory.” What he doesn’t, and can’t, understand is that it is also good in practice.

Thursday, December 9, 2010

My Life

If you want to see something positive, upbeat, and moral, watch this video.

Wednesday, November 24, 2010

The Freedom To Choose

It is often argued that government regulations are necessary to protect consumers from unscrupulous businesses. Without such regulations businesses could take advantage of consumers by misrepresenting their products or services, withholding information, or otherwise preventing consumers from making informed buying decisions. Regulations insure that consumers get safe and effective products.

This argument implies that offering safe and effective products is of no self-interest to businesses, that a company would sell anything in order to make money. It implies that a business would invest years of research and development and enormous sums of money only to market a product that posed a risk to consumers.

Certainly, there are companies that take a short-term perspective and focus on immediate results at the expense of long-term success (for one example see Enron). But such companies are rare. A product that is dangerous or ineffective will be discovered. And if the company knowingly and intentionally misrepresents its products, it is engaging in fraud and should be prosecuted. Defining and protecting individual rights is the only proper role of government in regard to "consumer protection." Indeed, protecting individual rights is the only means by which the legitimate rights of consumers and producers can be protected.

Rights sanction an individual's moral right to act according to his own judgment within a social context. The mutual rights of others prohibit him from interfering with their actions. If an individual chooses to market a product or service, he has a moral right to do so. And consumers have a moral right to purchase or boycott his offering. Nobody--including government--has a rational justification for interfering with either producers or consumers.

Yet, this is precisely what government regulations do. The threat of physical force--fines or prison--prohibits producers from offering the products or services they deem fit. That same threat prohibits consumers from purchasing products or services that they judge best serve their needs, desires, and values.

Government regulations prohibit individuals from exercising their own rational judgment and acting accordingly. For the mentally lazy this breeds a false sense of security--if a product or service is sanctioned by government it must be safe and effective. For the independent individual this limits opportunities and choices, and often results in actions the individual would otherwise not choose. As an example, see Social Security, which is forced upon all workers regardless of their own judgment regarding the merits of the program.

Abolishing government regulations does not mean that consumers would be left to the mercy of businesses. Indeed, there are myriad examples of private organizations that provide consumer education, certify the safety and effectiveness of products, and otherwise provide information that assists consumers in making choices that best fit their own needs and desires.

nderwriters Laboratories (UL) is one example. UL is a private product safety testing and certifying organization. Founded in 1894, their web site states:U
UL has developed more than 1,000 Standards for Safety. Our Standards for Safety are essential to helping ensure public safety and confidence, reduce costs, improve quality and market products and services. Millions of products and their components are tested to UL's rigorous safety standards with the result that consumers live in a safer environment than they would have otherwise.1
Products that meet UL standards are allowed to display the UL logo as long as it remains compliant. Though UL certifications carry no legal weight, the company’s reputation is such that failure to meet UL standards can mean the death of a product:
[I]t may be extremely difficult to sell certain types of products without a UL Mark. Large distributors may be unwilling to carry a product without UL certification, and the use of noncertified equipment may invalidate insurance coverage. It is common practice in many fields to specify UL Listed equipment or UL Recognized materials.2
Unlike government regulations, which are imposed on producers and consumers regardless of their individual choices, UL certifications are entirely voluntary. A manufacturer can choose to market a product that does not meet UL standards, and consumers are free to purchase such products if they choose. While both assume certain risks on the basis of their choices, each remains free to act according to his own judgment. UL is only one example of private companies offering testing and consumer information.

MET Laboratories offers a service similar to UL, offering further choices to consumers and manufacturers. MET’s web site describes the difference between its service and that of UL: “The main difference between these two marks is with the level of involvement and partnership between the manufacturer and the test lab.”3 Whether this difference matters is a choice that each manufacturer and consumer is free to decide.

Unlike government regulations, which impose one set of standards upon an entire industry regardless of the judgment of those subjected to the regulations, the free market provides producers with choices. A manufacturer can decide to have his product tested by UL, or by MET, or forgo testing entirely. Consumers are free to purchase products that are certified or not certified (and likely less expensive). While UL and MET focus their efforts on electrical products, other organizations test other consumer products.

Good Housekeeping has been testing and approving products since 1902. The magazine first began testing products “to study the problems facing the homemaker and to develop up-to-date, firsthand information on solving them.”4 In 1910 the magazine built the Good Housekeeping Institute in Springfield, Massachusetts to test products, which included a model kitchen, a domestic science laboratory, and test stations for testing products under household conditions. As with the UL mark, the Good Housekeeping Seal of Approval has become an important aspect of marketing and brand recognition for many products.

Interestingly, both UL and the Good Housekeeping Seal of Approval were started during the Progressive Era—a time when businesses were unjustly under attack for the safety of their products. Recognizing the need for independent evaluation of products, these two private companies moved to satisfy the legitimate concerns of consumers. And they are not alone in helping consumers make informed decisions.

Consumers Union (CU) tests products and publishes the Consumer Reports magazine. Its mission
is to work for a fair, just, and safe marketplace for all consumers and to empower consumers to protect themselves. The organization was founded in 1936 when advertising first flooded the mass media. Consumers lacked a reliable source of information they could depend on to help them distinguish hype from fact and good products from bad ones. Since then CU has filled that vacuum with a broad range of consumer information.5

In addition to its laboratory testing, CU also conducts reader surveys, which results in product reliability reports from the actual users of those products.

Other organizations also provide information to consumers. For example, provides “independent test results and information to help consumers and health care professionals evaluate health, wellness, and nutrition products.”6 Angie’s List allows consumers in more than 120 cities to share their experiences with service providers in more than 450 different categories. The Better Business Bureau “ensures that high standards for trust are set and maintained… so consumers and businesses alike have an unbiased source to guide them on matters of trust.”7 Many trade associations and product manufacturers offer certification programs that insure that professionals meet certain standards, properly install products, and operate ethical businesses.

Each of these is an example of the private sector providing alternatives for consumers to obtain the information that they require to make an informed decision. Unlike government regulations, which are inflexible and coercive, these organizations can respond quickly to changing market conditions and are entirely voluntary. As such, they respect the moral right of producers and consumers to act according to their own judgment. Protecting that right is the only proper function of government, and the only form of "consumer protection" required.

1 "Standards for Safety,"
4 "The History of the Good Housekeeping Seal,"
5 "Our Mission,"
7 "Vision, Mission, Values,"

Thursday, November 18, 2010

Television, Phones, and Freedom

On Sunday the Chronicle ran an article that illustrates, at least in part, a practical benefit of freedom. The development of Internet television is creating concern among broadcasters and cable companies, who fear that they will lose viewers. Prior to this innovation, cable television created similar concerns for broadcast television.

In a free market, an individual can offer any product or service that he chooses. The voluntary choices of consumers will determine whether he succeeds or fails.

In a regulated market, an individual must meet the arbitrary mandates of government officials. His success depends partially on his ability to satisfy consumers and partially on his ability to satisfy government bureaucrats. And often the latter is more important than the former.

When I was a child we had 3 choices when it came to television. Because the airwaves are "public property", the government regulated (and still does) their use to promote the "common good." The result was a lack of choice for consumers and the stifling of innovation.

Cable provided (and still does) a way to escape the regulatory burden of the FCC. Because they are not using "public property" cable companies do not need to comply with many FCC regulations. This freedom allows cable companies to offer a wide variety of programming, and the success or failure of these companies depends upon the voluntary choices of viewers.

Today, Internet television is expanding the choices available to consumers. Companies such as Google and Apple have identified an opportunity and are acting according to their judgment.

Government regulations are often defended because alternatives to the status quo cannot be imagined. For example, few can imagine how electricity or water might be provided on a competitive basis. Such industries, it is argued, are "natural monopolies" and should be regulated to protect consumers from gouging.

For decades this argument was made to "justify" regulation of phone companies. Cellular technology--which could not be imagined just a few years ago--has made that argument moot. Even with regulations restricting their actions, entrepreneurs developed alternatives that others could not envision. The same is occurring with television.

It wasn't that long ago that cable television and cell phones were considered luxuries. Today, their availability and affordability make them almost necessities. This development did not occur because of government regulations, but in spite of them. When men are free to act according to their own judgment, they will find innovative methods for providing the products and services that others desire and value.

It is impossible to predict what innovations men would develop if they were free do so. We cannot imagine how water, electricity, roads, and a myriad other services would be provided if men were free to innovate and act according to their judgment. But our lack of vision does not justify stifling the creativity and ingenuity of Thomas Edison, Henry Ford, or Bill Gates. Instead, we should stay out of their way. Not only will we enjoy the practical benefits, it is the moral thing to do.

Tuesday, November 9, 2010

Public Education and the Poor

It is commonly argued that without public education the poor would have few, if any educational opportunities. Without public education, those born into poverty would have little opportunity to escape, and the poor would remain poor generation after generation. To break this cycle, the argument goes, government must intervene and provide the educational opportunities that would otherwise be absent.

Undoubtedly, poverty can pose an obstacle to attaining a quality education, just as poverty can pose an obstacle in the attainment of many other values. But obstacles are simply that, and they can be overcome without government intervention.

Today, education is a virtual monopoly of the government. While home schooling and private schools have grown in popularity in recent decades, public schools remain the dominant source of education for most Americans. Indeed, approximately 85 percent of America’s schoolchildren attend public schools, primarily because these schools are “free” to attend.[1] Of course, these schools are not free—their costs are borne by taxpayers, which includes parents and non-parents alike. Because they are forced to financially support public schools, most parents cannot afford the expenses associated with private schools or home schooling, despite the fact that, according to a survey conducted by the National Association of Independent Schools, only 39 percent of those polled would send their children to public schools if cost and proximity were not factors.[2]

In other words, while the vast majority of parents send their children to public schools, those schools are not their preference. Taxation to support public schools effectively eliminates a meaningful choice for many parents, and prevents them from acting as they would choose if they had complete control over their money.

Prior to the Civil War, public schools were virtually non-existent. As educator Robert Peterson writes, most young children were taught at home: “Home education was so common in America that most children knew how to read before they entered school.”[3] It wasn’t necessary for public officials to dictate the curriculum, compel school attendance, or force citizens to pay for public schools. Parents recognized their responsibility for educating their children and acted accordingly. Combined with vocational training received at home, for many colonial Americans a formal education was simply unnecessary. For those who did desire additional education, churches and private schoolmasters offered an abundance of choices. Peterson writes:
Historical records, which are by no means complete, reveal that over one hundred and twenty-five private schoolmasters advertised their services in Philadelphia newspapers between 1740 and 1776. Instruction was offered in Latin, Greek, mathematics, surveying, navigation, accounting, bookkeeping, science, English, and contemporary foreign languages. Incompetent and inefficient teachers were soon eliminated, since they were not subsidized by the State or protected by a guild or union. Teachers who satisfied their customers by providing good services prospered. One schoolmaster, Andrew Porter, a mathematics teacher, had over one hundred students enrolled in 1776. The fees the students paid enabled him to provide for a family of seven.[4]
These schools allowed colonial Americans to attain the education they desired without government intervention. The desire to profit motivated educators to provide the types of classes that individuals wanted, not those demanded by public officials. Both educators and students were free to pursue their own self-interest.

Despite the success of the market in providing educational services, in the mid-nineteenth century many Americans began to demand public schools. Much of the justification for establishing public schools was to meet the needs of the poor and to help immigrants assimilate. The market was considered a failure because some individuals were not receiving the education that others deemed desirable. The fact is however, that the market was providing educational opportunities to these groups. According to Peterson: “In 1767, there were at least sixteen evening schools, catering mostly to the needs of Philadelphia’s hard-working German population…. There were also schools for women, blacks, and the poor. Anthony Benezet, a leader in colonial educational thought, pioneered in the education for women and Negroes.”[5]

In colonial America for example, education was a favorite form of philanthropy for Quakers, and “the poor, both Quaker and non-Quaker, were allowed to attend without paying fees.”[6] Such educational philanthropy is not limited to colonial times: Oprah Winfrey has donated nearly $2 million to the Ron Clark Academy in Atlanta[7] and Providence St. Mel in Chicago.[8] Both schools serve poor, inner-city children. Such examples demonstrate that those who are concerned about education for the poor have the opportunity to provide voluntary financial support to schools for the poor.

However, the poor do not need to rely on alms and philanthropy. If individuals are free of government coercion, entrepreneurs find innovative ways to provide the values desired by consumers, education included.  A study by James Tooley, a professor of education policy at the University of Newcastle in England provides a compelling example.

Tooley conducted a two-year study of education among the poor in five cities in Nigeria, Kenya, China, Ghana, and India. His study focused on differences between public and private schools in the poorest areas of his selected cities—areas that lacked indoor plumbing, running water, electricity, and paved roads. What he found was remarkable.

For example, in Hyderabad, India, 76 percent of all schoolchildren attended private schools. Despite the fact that public education was available, many of the city’s poorest parents chose to send their children to private schools, even when then had to pay tuition. Tooley reported similar findings in the other cities: “the poor have found remarkably innovative ways of helping themselves, educationally, and in some of the most destitute places on Earth have managed to nurture a large and growing industry of private schools for themselves.”[9] The students in private schools in Hyderabad had an income of less than $30 per working household member, compared to an average of $46 per month for the city. Tooley’s findings dispel the myth that the poor need government assistance in order to educate their children.

The competitive nature of private education directs schools to provide the curriculum and quality desired by consumers. If the schools fail to do so, parents are free to move their children to a better school. As previously noted, taxation virtually eliminates this option for most Americans.

As we have seen, both historically and currently, the private sector can and does provide ample educational opportunities, even for the poorest of the poor. More importantly, private institutions cannot rely on coercion to obtain funding or customers, but must meet the freely chosen desires of parents and students. In recognizing the right of individuals to act according to their own judgment in the pursuit of their own values, a free market in education is moral. The examples in this article demonstrate that it is also practical.

[2]“Public Knows Features That Make a Quality School”, Council for American Private Education, January 2000,
[3] Robert A. Peterson, “Education in Colonial America”, The Freeman, September 1983, Vol. 33, Issue 9,
[5] Ibid
[9] James Tooley, “Private Schools for the Poor”, Catholic Education Resource Center,

Saturday, November 6, 2010

A Good Article on the Preservation Ordinance

A good article on the impact of the new preservation ordinance, complete with informative pictures, can be found at Cynthia Mullins' Real Estate Market Blog. (HT: Barry Klein) The pictures show many alterations to homes that will not be allowed under the new ordinance. The ordinance is wrong in theory, and the pictures show how absurd it will be in practice.

Thursday, October 28, 2010

Private Letter Carriers

We are often told that government must provide certain vital services, such as education, roads, and mail delivery. If such services were left in the hands of private companies, service would be poor or nonexistent. But history provides a very different lesson.

Prior to the Civil War private letter carriers flourished throughout the United States. In sparsely settled areas of the country about 300 “western expresses” provided mail delivery.[1] The best known of these companies was the Pony Express. In the more densely populated northeast, two types of delivery companies emerged—“locals” and “eastern expresses”.

The locals were based in the major eastern cities and primarily served local businesses. One of the largest of the locals was Boyd’s City Post in Philadelphia, which employed 45 carriers and delivered up to 15,000 letters a day.[2] The eastern expresses mostly operated between the larger eastern cities, such as Boston, New York, and Philadelphia. Both the locals and the expresses offered their service for considerably lower rates than the postal service.

As one example, in 1844 Lysander Spooner founded the American Letter Mail Company. Spooner believed that he could deliver mail anywhere in the country for five cents per letter, versus the 12 cents charged by the postal service. Not surprisingly, the public loved Spooner’s company and the revenues of the postal service plummeted. Congressmen, who often rewarded political supporters with an appointment as the local postmaster, were incensed and responded by lowering postal rates. Spooner was not to be outdone, and lowered his rates further. Finally, in 1851 Congress strengthened the postal service’s monopoly and forced Spooner out of business.[3]

It wasn’t poor service or outrageous prices that closed Spooner’s business, but literally an act of Congress.

The popularity of the private services was so great that one United States Senator estimated that at least half of the letters mailed in the country were being delivered by private carriers.[4] The success of the private mail companies prompted one economist to write in the New York Review in 1841 that, even though postal services in all western nations were a branch of the government, "we might easily imagine it to be carried on by a private association, without its changing in any degree its essential character."[5]

However, this would have meant the end of an important tool for political patronage. When confronted with the possibility that the postal service might be abolished, Selah Hobbie, the first assistant postmaster general at the time, allegedly cried, “Zounds, sir, it would throw 16,000 postmasters out of office.”[6] This would not have been politically popular, and we are paying the consequences today.

It wasn't market forces--the free and voluntary choices of consumers--that led to the demise of the private letter carriers. It was government coercion that literally made it illegal for them to offer a service that consumers willingly paid for.

The lesson from the private letter carriers goes far beyond mail delivery. The same arguments used to justify the postal monopoly--universal service, affordable rates, etc.--are used to justify government monopolies in roads, education, water and sanitation, and now health care. In each instance the private sector is either prohibited from offering such services, or severely restricted by government regulations, i.e., coercion. And in each instance the results are the same as with the postal service--poor service, fewer choices, and higher costs.

While the primary argument in favor of abolishing the postal service is moral--the moral right of each individual to act according to his own rational judgment--there is abundant evidence that private mail delivery is also practical. When individuals are free to pursue their own values without interference from others, they will find ways to attain those values. It was true of private mail delivery, and it is true of every other value as well.

[1] Richard R. John, Jr., “Private Mail Delivery in the United States during the Nineteenth Century: A Sketch”, p. 138,

[2] Ibid.

[3] Lucille J. Goodyear, “Spooner vs. U.S. Postal System”, American Legion Magazine, January 1981,

[4] John, p. 141.

[5] John., p. 143.

[6] John, p. 144.

Wednesday, October 27, 2010

The Moral is the Practical

A reader--who often does not agree with me--has suggested that I consider the practicality of the ideas I advocate. This is, in essence, a very good suggestion, and it is what I intend to write about more frequently in the future. In the meantime, the suggestion raises an issue worth comment.

Though the reader did not explicitly say so, he implied a dichotomy between theory and practice. This false dichotomy can be traced back to Plato (and perhaps before). It takes form in numerous ways, but each asserts an inherent conflict between the intellectual and the physical, that is, between the mind and the body. And, no matter its form, the physical is always regarded as crass and inferior.Whether it is art versus business, or love versus sex, or reason versus emotions, the physical is regarded as tainted.

This view holds that man's mind is at constant war with his body, that his mind can contemplate the ideal while his body must deal with the practical necessities of life of earth. While the mind can identify what is right, the body must do what is practical. Man can pursue eternal bliss by renouncing this world, or he can seek happiness here on earth. He can save his soul, or he can enjoy life.

As Ayn Rand put it, man is neither a ghost nor a zombie. He is neither a disembodied spirit nor a mindless corpse. He is a being of mind and body, and the purpose of his mind is to identify those actions his body should take. The purpose of the mind is to identify what is practical.

(Of course, what one regards as practical depends upon what one wishes to practice. If one wishes to rule over others then permitting individuals to act on their own judgment is not practical. But this is a different issue.)

To claim that an idea is good in theory but will not work in practice is a gross contradiction. By what standard does one conclude that an idea is good in theory? If a theory does not work in practice, it is not a very good theory.

Each individual has a moral right to live and act according to his own rational judgment, so long as he respects the mutual rights of others. In practice, this means that he may not use force or fraud against others--he may not compel them to act contrary to their own judgment--just as they may not use force or fraud against him.

Many claim that, while this sounds good in theory, it won't work in practice. They argue that many necessities, such as roads and education, would not exist if left entirely to the discretion of individuals. Consequently, government coercion must be used to force individuals to do their "fair share," to place the good of the "community" above their own interests. And they then proceed to ignore the abundance of evidence--such as crowded roads and an educational system that does not educate--that demonstrates that such coercive measures are a failure, i.e., are not practical.

Coercion is impractical because it is immoral. Coercion does not "work" in practice because it is wrong in theory. There is no dichotomy between the moral and the practical.

Monday, October 25, 2010

A New Approach

Two weeks ago I announced a holiday from blogging to give me a chance to re-assess my goals and interests. I had several reasons for this.

Most of my posts address irrational ideas or policies. While this is valuable, and I have learned a lot in writing on such topics, it does get a bit depressing at times. It is important to attack and expose evil, irrational ideas. But fighting against something isn't the same as fighting for something. (Implicitly, in doing the former I have done the latter.) That however, isn't enough for me.

Given the state of our culture, writing about the negative provides an endless stream of potential topics. For some time it has been easy to get motivated to expose the hypocrisy and evasion so prevalent among government officials and advocates of statism. Over the past few months I have found myself less and less motivated to write about the sewer.

For years I have been very interested in finding examples of the practical benefits of freedom. In every industry that I have examined, when individuals are free to act according to their own judgment without interference from others, remarkable things happen. When individuals are free to pursue their own values without arbitrary government controls and regulations, they make their lives immensely better.

While such examples are not nearly are prevalent as I would like, they do abound. They are often more difficult to locate, study, and document than the topics I have been writing on. But they are real, they are inspiring, and they represent the best in man. And these are the things that I want to write about.

Life can be and should be better than preservation ordinances, light rail, and land-use regulations. It is important to fight the parasites and the thugs, but it is more important to recognize the producers. It is important to defend my values, but it is more important to celebrate them.

I have yet to work out the logistics of how I will do this. I will need to spend more time researching. I likely will not post as frequently as in the past.

I will continue to address examples of irrational policies and ideas, though that too will likely be less frequent.

Tuesday, October 19, 2010

A Temporary Obstacle

The new preservation ordinance contains a provision that "allows" property owners in a designated historic district to rescind that designation. The Chronicle's print article last week explained the process:
If 51 percent of property owners oppose the designation, the planning director must either recommend to City Council reducing the size of the district or eliminating it. Council is not bound to follow the recommendation.
I previously noted that the principle underlying the preservation ordinance cedes complete control of property use in historic districts to city council. This provision confirms that fact.

The ordinance goes further than ignoring the desires and judgment of individual property owners. According to the Chronicle, even if every property owner in a district wants to rescind the historic designation, council has no obligation to honor that desire. In short, council can do as it damn well pleases. Council can substitute its judgment for that of the property owners and impose that judgment by coercion.

This is the logical and inevitable result of the principle accepted by council when it passed the first preservation ordinance. At that time council declared that it had the authority to control some uses of some properties. But "some" was only a temporary limitation made necessary by pragmatic political considerations.

Even the current ordinance is a compromise, as acknowledged by Ma Parker. But such compromises are a complete victory for the preservationists. The principle animating preservationists--that the community has the right to regulate private property--is a matter of law. The details, which the preservationists are not entirely happy with, are only another temporary obstacle to their goals. But those obstacles are minor with preservation advocate Ma Parker running the show. After the ordinance was passed, she said:
It is possible under this ordinance to have historic districts have a reconsideration and break off and some parts of those historic districts go away. I'm going to do my best to make sure that doesn't happen.
Considering that she has a gun at her disposal, while those wishing to leave the historic district can do little more than beg for her cooperation, the prognosis isn't good for property owners in historic districts.

Monday, October 18, 2010

The Power of Principles

Last week city council "proved" that I have psychic powers. About 17 years ago I predicted the action that council took last week in regard to the preservation ordinance.

In the early 1990s city council was considering Houston's first preservation ordinance. I spoke before council in opposition to the ordinance. A council member asked me if I had a problem with the 90-day moratorium--which allowed the city to halt demolition of "historic" buildings for 90 days. I replied that I was because in principle there was nothing to stop that council or a future council from extending the moratorium to 120 days, or 200 days, or banning demolition completely. Last week city council banned demolition of "historic" buildings.

Granted, my prediction was not predicated upon psychic powers. It was founded on the power of principles. Having recognized the principle underlying the preservation ordinance, it was easy to predict the future. It was easy to predict how that principle would be applied in the future.

In principle, the preservation ordinance held (as do all land-use regulations) that the use of property is rightfully determined by the community, not the owner. The owner's desires and judgment are to be sacrificed to that of the community. Seventeen years ago the community judged it proper to have a 90 day moratorium. Today it judges it proper to prohibit the demolition of "historic" buildings. The difference is merely a matter of details.

Interestingly, the council member who questioned me about the moratorium scoffed at my answer. I can't predict what future councils might do, he said. He was right, for without principles it is impossible to predict the consequences of any action. Without principles, the future is a realm into which we must blindly venture armed with nothing but a hope and a prayer. Without principles a politician can claim ignorance of what future councils might do--a claim that is not without merit.

Or, he can can make make dire predictions about the failure to address some immediate need--such as Houston's crumbling infrastructure--without reference to other issues, past events, or implications for the future. As a case in point, consider Ma Parker's plea that Houstonians vote in favor of the "rain tax." In Sunday's Chronicle she told us that unless we vote for Proposition 1 we won't be able to pick up our kids from school, will be stranded at work, and will spend sleepless nights watching the bayous.

What she doesn't tell us is precisely how the money will be spent. She doesn't tell us that similar promises by past politicians have almost always fallen far short of the intended panacea (for example, the sports stadiums and the Bayport Cruise Terminal). What she doesn't tell us is that rebuilding Houston's infrastructure will turn into a huge political battle as politicians and voters insist that their pet project receive the highest priority. While she insists that the proposition imposes restrictions on how the new tax money can be spent, she doesn't tell us that politicians make a living finding ways to skirt the law and bring home the bacon to their political supporters. She doesn't tell us because she lacks the means to do so--rational principles.

Just as the eventual result of the original preservation ordinance were easy to predict if one holds rational principles, so the outcome of Proposition 1 (if passed) is easy to predict. It will take longer than promised, cost more than projected, and divide the city into warring factions. I only hope that this time I don't have the opportunity to see my prediction come true.

Monday, October 11, 2010

A Holiday

My posting is going to be sporadic for a while. I have too many business activities demanding my attention (which is good). I am finding it more and more difficult to find time for blogging.

I am also tiring of commenting on negative policies and ideas all of the time, and want to consider a different approach to the blog.

The Real Tragedy of Bullying

An OpEd in Sunday's Chronicle tells us that we must protect kids from bullying. Citing a growing number of suicides by bullied teenagers, Kathleen Sebelius, Secretary of Health and Human Services, and Arne Duncan, Secretary of Education, write:
The events of the last few weeks have filled many of us with sadness and anger. They should also fill us with determination to do everything we can to stand up for Seth, Tyler, Asher, Billy, Justin and millions of other young people who can't do it for themselves.
That a teenager would conclude that his life isn't worth living is certainly sad and tragic. But the cause of these suicides goes beyond the taunts of ignorant peers.

Sebelius and Duncan claim that the victims of bullying cannot stand up for themselves. They argue that society must do so. But they fail to tell us why. Instead, all they offer are assertions, which is itself a symptom of the problem.

A proper educational system would teach children to think logically and to judge critically. A proper educational system would provide children with the intellectual tools required to judge the claims and assertions of others. A proper educational system would prepare children for life as rational, independent individuals.

But this is not what public education does. The public educational system is more concerned with protecting a child's self-esteem than teaching thinking skills. The public educational system is more concerned with students passing standardized tests than learning how to solve problems. The public educational system is more concerned with teaching children to get along with others than to think independently.

John Dewey, the father of Progressive education, captured the essence of public education in his book, Democracy and Education:
Setting up conditions which stimulate certain visible and tangible ways of acting is the first step. Making the individual a sharer or partner in the associated activity so that he feels its success as his success, its failure as his failure, is the completing step. As soon as he is possessed by the emotional attitude of the group, he will be alert to recognize the special ends at which it aims and the means employed to secure success. His beliefs and ideas, in other words, will take a form similar to those of others in the group. (pages 16- 17)
Dewey's purpose, and the end result of Progressive education, is to destroy the ability of individuals to think and judge independently. Faced with the taunts and jeers of one's peers, an independent thinking child would reject such bullying for what it is: The mindless ignorance of Neanderthals. However, a child who cannot think for himself can easily allow such harassment to shape his own self-image. He can easily conclude that he is somehow deficient and his life is worthless.

Bullying is a pathetic activity, but there are far worse actions that an individual can take. And destroying the minds of innocent children is one of them.

Friday, October 8, 2010

The Voluntary and the Coercive

On Thursday the Chronicle reported that a vote on the new preservation ordinance has been delayed for a week. That was an expected development, as the various parties are trying to reach a compromise. What is more noteworthy is a comment left by a reader:
I don't understand why it's okay for suburban neighborhoods (and some inside the Loop) to have deed restrictions, but the older neighborhoods can't have essentially the same thing, which is what these preservation ordinances basically are. 
This argument was used by zoning advocates in the 1990s. It ignores a crucial distinction between deed restrictions and zoning/ preservation ordinances. The former are voluntary and consensual, while the latter are mandatory and coercive.

Those who equate deed restrictions and government land-use regulations see a similarity--restrictions on the use of property--and conclude that they are essentially the same. In the process, they ignore the nature and source of those restrictions.

Deed restrictions are a contractual agreement between property owners in a given area. An individual is free to accept the restrictions imposed by that contract, or simply not purchase the restricted property. The choice is his and he can act according to his own judgment. Land-use regulations however, are imposed by government force. The desires and judgment of a property owner are irrelevant--he must abide by the dictates of government.

As evidence, consider the preservation ordinance. Preservationists want to permanently prohibit the demolition of certain buildings, regardless of the property owner's judgment.

Those who see no difference between voluntary choice and coercive mandates are guilty of the worst kind of package-deal. To them, a restriction is a restriction, when it is accepted voluntarily or imposed coercively. To them, it does not matter if an individual agrees to the restriction or is forced to act against his own judgment. Sadly, if they ever do discover the difference it may be too late.

Thursday, October 7, 2010

The Squeaky Wheel

The ongoing saga that is the new preservation ordinance is nearing its climax, and preservationists appear to be getting their way. The Chronicle reports:
The key change [in the new ordinance], which would permanently forbid demolition or certain alterations of historic buildings in 16 designated districts and three pending ones, was expected to remain intact, according to city officials and activists on both sides of the issue.
Conveniently ignored in this farce is the fact that city officials and activists are deciding the use of property that none of them own. (Granted, some of those on both sides of the issue do own property in the historic districts, but the ordinance applies to all property in those districts.)

Preservationists have been griping since the passage of the first ordinance in the 1990s. Because that ordinance did not prohibit the demolition of "historic" buildings, they have complained that the ordinance has no teeth. It wasn't enough that they had some voice in how owners of historic buildings used their property. They wanted, and have continued to demand, complete control over the property owned by others. Those demands have found a receptive audience in Ma Parker and she is eager to grease their wheels.

The drafting of the new ordinance has been an orgy of compromise. Even the Greater Houston Builders Association, which has historically shown some level of respect for property rights, has caved and is supporting the ordinance in principle. The association is just bickering over details while conceding the moral high ground to the preservationists.

No matter what is in the final ordinance, this isn't over. The preservationists will continue whining and they will be back for more.

Wednesday, October 6, 2010

The Alternative to Government Regulations

A truly free market is characterized by a separation of government and economics. Individuals are free to engage in the economic activities of their choice, so long as they do not use force or fraud in dealing with others. Many believe that this is impracticable. Without government regulations, they argue, consumers will have no "protection" and will be left to the mercy of businesses.

It is important to realize that government regulations do not protect consumers from fraud or dangerous products. Despite an abundance of regulations, Bernie Madoff, Enron, and numerous other businesses have engaged in wholesale fraud. Rather than protect consumers, regulations create a false sense of security. Believing that regulators are preventing fraud, consumers often fail to engage in due diligence.

What is the alternative? Certainly, nobody wants to discover that his doctor is an incompetent hack. Nobody wants to buy tainted food or medicines. Nobody wants to be defrauded.

Even in our heavily regulated society today, there are many alternatives to government regulations. Organizations such as the Better Business Bureau and Angie's List allow consumers to voice complaints about businesses and make recommendations. Organizations such as Good Housekeeping and Consumers Union test products and provide consumers with information to make intelligent buying decisions. Product manufacturers and trade organizations provide certification programs. And in a truly free market it is likely that other alternatives will be developed.

Advocates of regulation posit an irrational, and impossible, standard--preventing fraud and deceit. This is a Platonic ideal that does not and cannot exist. So long as men possess volition, they are capable of engaging in fraud. Rather than regulate and control all businesses, government's proper role is to prosecute those who actually do engage in fraud or knowingly market dangerous products.

The alternative to government regulation is freedom--the absence of coercion in the relationships between men.

Tuesday, October 5, 2010

Random Thoughts on Gardening

For years I have been a rather avid gardener. Between clippings from various plants and the leaves from 11 live oaks, I create an abundance of debris. I generally try to compost these materials, as the compost is very beneficial for my beds and lawn. I have seen significant improvements where I use the compost.

Just to be clear, I don't compost in order to save the planet. I compost in order to save my yard. Or more specifically, in order to produce healthy plants so that I can enjoy pretty flowers, a lush lawn, and tasty vegetables.

Last winter's freeze took a real toll on my landscaping. My tropicals died back to the ground, and many just plain died. I lost several hibiscus, and those that survived have not bloomed all year. My rubber tree--which once stood about 30 foot tall--not comes in at a paltry 3 feet. But the vines, such as Rangoon Creeper and Star Jasmine--have come storming back with a vengeance.

We had our best tomato and cucumber crops ever, which I attribute to the compost I added to the garden in the spring. And our antique roses produced more flowers than in the past. To some extent, these successes help make up for the lack of hibiscus, which bloom almost year round.

Gardening can be a time consuming hobby. Pruning, fertilizing, planting, watering, and other tasks must be performed regularly. But it is also rewarding. We almost always have multiple plants in bloom, including azaleas, sages, jasmine, roses, hibiscus, and more. These plants attract butterflies, which flitter around the yard most of the year, as well as hummingbirds, cardinals, blue jays, and on several occasions, wild parakeets.

Our pond is also a source of ongoing effort and pleasure. Home to a number of koi and goldfish, it regularly attracts toads who enjoy mating on its fringes. I could live with the toads, given the fact that they eat mosquitoes and other nasty insects, but their nocturnal mating ritual involves an ear piercing noise that makes it almost impossible to sleep. I have on many occasions been forced to disrupt their mating in order to sleep. (That alone makes for an interesting story.)

I am sometimes amazed at what we have created in our back yard. It is a miniature wildlife sanctuary. But its purpose is to provide pleasure to human life.

Monday, October 4, 2010

"Necessary" Regulations

From what I can tell, Glenn Beck considers himself a libertarian. On Friday he was explaining libertarianism to a caller. At one point, Beck said that libertarians don't believe in government regulation. He then "corrected" himself and said that some regulations are necessary, such as those licensing doctors. Beck and his side kick, former Houston talk show host Pat Gray, then explained some of the horrors that would result without such licensing.

Unfortunately, Beck's position is typical of conservatives. Despite his constant talk about principles, he demonstrates over and over than he doesn't have any. For example, he does not complain that regulations are wrong in principle, but that too many go too far. How, and by what standard, does he determine what is "too far"? Without principles he can only decide each issue on a case-by-case basis.

Beck explained why doctors should be licensed: We don't want to discover that our surgeon is a butcher. Certainly this is true, but Beck wants us to believe that the same government he regularly chastises should be in the business of deciding who is competent and who isn't. Where Beck routinely calls for individuals to be more responsible for their lives, when it comes to doctors he argues that that responsibility should be ceded to government.

Not surprisingly, Beck shows no concern for the doctors who are subjected to arbitrary government decrees. His concern is with the patients, who he fears might be subjected to sub-prime health care without government involvement. Patients have a need--to be protected--and the rights of doctors are irrelevant.

The fact is, there are no necessary government regulations. Individuals have a moral right to offer any product or service they choose, so long as they do not use force or fraud. And they also have a right to purchase any product or service they choose.

In the context of health care, this means that anyone has a moral right to offer medical services, including my lawn boy. If he offers to remove my appendix, and I consent, he has not violated anyone's rights. Each of us acted according to our own judgment, even though mine would be extremely poor. But I, and every other individual, should be free to make poor decisions.

Friday, October 1, 2010

An Absence of Principles

Once again the Chronicle editorial board demonstrates its complete lack of principles in an editorial titled "Profit over principle." The editorial chastises insurance companies for refusing to offer child-only policies. With the first phases of ObamaCare kicking in, insurance companies are prohibited from denying coverage to those with pre-existing conditions.

While paying lip service to this concern, the paper argues that it has no merit:
Insurers complain that the new provisions would trigger an influx of consumers with high-cost pre-existing conditions but few healthy ones to offset these costs. That is certainly a possibility, but one that could have been foreseen and guarded against. 
Exactly how is a business to guard against the coercive power of government? How are insurers expected to be profitable--so that they can remain in business and pay future claims--if they are forced to abide by the arbitrary dictates of petty bureaucrats and pandering politicians?  And how are they supposed to foresee what mandates and prohibitions will be placed upon them in the future?

The editorial oozes of altruism--children have a need and insurance companies have a moral duty to fulfill that need. The fact that the insurance companies are being forced to act against their own judgment, and sensible business practices, is of no concern to the Chronicle. According to the Chronicle, insurance companies should not be seeking a profit, but instead should offer coverage to anyone who wants it.

While the paper is eager to sell doctors into slavery and drive insurance companies out of business, it continues to seek a profit. It continues to charge for ad space, despite the needs of businesses who are hurting from the slow economy. It continues to charge subscribers, despite any hardships they might be experiencing. If others have a moral duty to serve the needs of others, why is the Chronicle immune?

Of course, to see the inconsistency of its position, the paper would have to hold rational principles. As it has demonstrated too many times to count, it doesn't.

Thursday, September 30, 2010

Harris County Wants a Raise

Like many other government entities, Harris County is feeling the impact of the recession. Property tax collections have declined and the county has had to dip into its reserve fund. Where the county has historically maintained reserves amounting to about 15 percent of its budget, it will enter the next fiscal year with a cushion of about 1 percent. County officials are warning that a tax increase must be considered, though they made the usual promises to look into cutting spending.

The Chronicle reports that Precinct 4 Commissioner Jerry Eversole believes that a tax increase cannot be avoided:
"You're absolutely wasting time if you think we can maintain this budget without a tax increase," he [Eversole] said. "If we can get through 2011, we damn sure aren't going to get through 2012. So somewhere along the line either this (budget) has to be cut or we've got to talk about a tax increase."

After the meeting, Eversole said he does not favor a tax increase, but that it has to be on the table along with options for spending cuts.
Unlike private citizens, the county government has an ATM--tax payers--that never runs dry. It can spend beyond its means and then simply demand, at the point of a gun, that tax payers replenish the bank.

Commissioners, eager to show that they are on the side of tax payers, tossed out a few suggestions for meager cuts: ending car allowances and take-home cars for county employee and conducting a study to privatize the county jail. Nobody suggested cutting any of the improper county services that comprise a large part of the budget.

For example, the 2009-2010 budget includes $990 million for toll roads and $437 million for flood control. Even if we concede that privatizing infrastructure services isn't going to happen soon, the county's bloated budget contains plenty of other targets for spending cuts. More than $28.5 million was budgeted for public health and environmental services, $27.3 million for libraries, and $130.9 million for youth and family services. Of course, cutting spending in these areas would require Commissioners to not only grow a spine, but to also reject the morality of altruism.

So long as they believe that individuals have a moral obligation to sacrifice for others, they will continue to fund things like public health, libraries, and youth services. Until they recognize the moral right of each individual to his own life, the pursuit of his own happiness, and the wealth that he creates, they will continue to rob tax payers to pay for the needs of others. And that won't occur until voters refuse to be self-sacrificial milch cows.

Wednesday, September 29, 2010

Why is the Chronicle Surprised?

Absent rational principles, virtually any issue can be confusing. Absent rational principles, it can be almost impossible to identify a connection between events. Absent rational principles, we get editorials like that in Tuesday's Chronicle. Subtitled "The State Board of Education is still politicizing our children's textbooks," the editorial seems surprised that political considerations are a part of a government agency.

The paper's dismay results from refusing to recognize the essential nature of the board. Government is an agency of force, and the State Board of Education is no exception. Its edicts are imposed upon public schools, teachers, and parents by force. That competing interests want to control the use of that force for their own ends should not be surprising. Indeed, it should be expected.

As with other issues, such as Metro, the Chronicle wants us to believe that the problem is not an improper government agency, but rather those in charge. If only board members put aside their personal views and did what is best for the state's public school students, such issues would not even be raised. That simply isn't going to happen when so much political power is at stake.

If the Chronicle wants to see politics taken out of education, then it should advocate for government to get out of education. Politics and government are inseparable, a fact that continues to escape the paper's editorial writers. And that is precisely what we should expect from those who reject rational principles.

Tuesday, September 28, 2010

Non-fundamental Change at HISD

On Sunday the Chronicle ran an OpEd optimistically titled "Reinventing education in Houston." From the title, one would expect the article to reveal some kind of revolutionary idea. Instead, we simply got more of the status quo.

The article states:
HISD has not been waiting passively for someone to provide an answer; it has the will, the leadership and the support to transform the district into a model for the rest of the nation. The board of education, Superintendent Terry Grier and the HISD team have the courage and expertise to step outside the comfort zone and take the necessary but often controversial actions to bring about fundamental change, like linking teacher pay with their performance based on reliable data and making continued employment contingent on ongoing improvement. That level of accountability also applies to the quality of the leadership of principals and central office staff. 
Consider what is regarded as "fundamental change": Holding teachers, principals, and staff accountable. Granted, this might be new in the realm of public education, but it can hardly be considered fundamental change. HISD will remain a political institution, subject to the vagaries of educational bureaucrats in Austin and political pressure in Houston. Taxpayers will continue to be forced to support public schools, whether they are happy with the results or not. Parents--particularly those in lower income brackets--will continue to have limited educational choices for their children. How is this "fundamental change"? It brief, it isn't. HISD is simply tinkering with details while throwing out another promise.

Consider what is regarded as holding teachers, principals, and staff accountable: Basing their pay on student performance. And who will determine student performance? The same bureaucrats and administrators that have been promising change and improved performance for decades. The "customers" of public education will have little, if any, input other than putting political pressure on those same bureaucrats and administrators. This is precisely what has been occurring for decades, and can hardly be considered "fundamental change."

If HISD truly wants to do something revolutionary and do something that would truly serve as a model to the rest of the nation, it would begin putting itself out of business. It would begin taking measures to get government out of education.

Doing so would benefit taxpayers who would no longer be forced to support a failing public educational system. Those who want to voluntarily support education would be free to do so, and they could choose to support those schools who produce results with which they approve. They could hold schools accountable by withdrawing their financial support if they are unhappy with those results.

Parents would benefit by having the freedom--and the resources--to choose how their children are educated. If they are unhappy with the content of that education, or the results, they would be free to hold the school accountable by moving their children to a different school.

Competent and talented teachers and administrators would benefit because they would have the freedom to command higher salaries. Those who value their services would be willing to pay higher prices for results, but nobody would be forced to do so.

Fundamental change does not mean tinkering with the details of public education. It means abolishing public education.

Monday, September 27, 2010

Metro Unveils New Transit Plan

In the face of increased public scrutiny and declining tax revenues, over the weekend Metro unveiled a new transit plan that it claims will slash expenses by 83.4% and simultaneously create nearly 175,000 jobs. The new plan will scrap the proposed light rail lines, as well as most bus routes, and replace them with hand-pulled rickshaws.

At a press conference announcing the new plan, Metro CEO George Greanias said:
When I took this position I told Ma Parker that I had no preconceived notions about how we should solve the city's transportation problems. I promised to start from scratch and consider anything, no matter how antiquated and labor intensive. Sometimes the best way to move forward is to move backward and this plan accomplishes that in spades.
While federal regulations do not mandate "buy American" for purchases of rickshaws, Greanias was quick to explain that Metro had located a manufacturer in Neodesha, Kansas. A company spokesman acknowledged that the company's capacity of 250 rickshaws a year was grossly inadequate to meet Metro's requirements, but vowed that the company would ramp up production "somehow." The new plan calls for Metro to purchase 50,000 rickshaws by 2012.

Greanias admitted that transit times would increase substantially, noting that a commute that now takes 30 minutes would increase to approximately 6 hours by rickshaw. "Certainly some people won't like the idea of spending half of their life in a rickshaw," he said, "but they need to put aside their own interests and consider the good of the community."

Metro will spend $10 million to promote its new plan, including about $1 million for Google AdWords and another $500,000 for ads in The Greensheet. Its slogan for the campaign will be, "Please ride our rickshaws." Metro will also paint squiggly lines down the middle of the street along selected routes. Greanias didn't explain the purpose of the squiggly lines, but did say that they would look "pretty cool."

The Chronicle quickly endorsed the idea in a Sunday editorial:
In our fast-paced modern world, Greanias has demonstrated remarkable vision in proposing a plan that will slow commutes to a snail's pace. Instead of fighting traffic, isolated in their vehicles with only blowhards like Glenn Beck for company, commuters will be able to engage in leisurely conversations with other commuters. And they will have more time to enjoy Houston's only daily newspaper, which will be offering 20% off new subscriptions.
To serve the needs of passengers during their long, arduous journeys, Metro will build about 10,000 rest stops along its routes. Each rest stop will include a Starbucks, free WiFi, and shower facilities. Select facilities will also have recreational areas with beach volleyball and a bowling alley.

Houstonians had mixed reactions to the announcement. "That's a great idea," said one bus rider. "Two rickshaws crashing into one another isn't going to be nearly as spectacular as a train-bus collision," said another passenger. Greanias dismissed the critics as uninformed naysayers, adding, "If I cared about their opinion, I would have spent $5 million on a study. I don't, so I didn't."

Local labor officials expressed concern that Metro would try to keep costs low by hiring only illegal aliens to pull the rickshaws. "Illegals don't have the necessary training," said one labor official, "and they will take jobs from Americans who want an easy paycheck and extravagant benefits."

Metro expects ridership to decline between 6% and 97%, a fact that doesn't concern Greanias. "To be honest," he said, "Metro has never been about transportation. It has been about providing jobs. And this is going to create goo-gobs of jobs."

The first rickshaws were scheduled to be delivered in mid-October. However, production has been delayed because Metro officials can't decide what color to paint them.

Friday, September 24, 2010

Bill White's Legacy

While serving as Houston's mayor, Bill White was championed as a visionary who would lead our city to greatness. He advocated for light rail, rammed numerous "green" initiatives down our throats, and promoted Houston Hope. His business skills were touted as a new model for politicians.

In the wake of his exit from the local political scene, we are finding that White's leadership wasn't all that it appeared. He left the city with a massive budget deficit. He appointed leaders to Metro who apparently wasted millions of tax dollars, ignored federal law, and left Houstonians with a bunch of empty promises regarding light rail. And now we find that Houston Hope may leave tax payers holding the bag for millions more.

According to the Chronicle:
The city may have to return tens of millions of dollars to the Department of Housing and Urban Development for errors it made in the use of federal funds dating back to 2001....

City officials characterized HUD's challenges to its use of federal money as old news, but sources with knowledge of the matter say the city could be on the hook to pay back between $35 million and $45 million due to previous issues and newly identified problems. Those include questions about "Houston Hope" homes, a signature initiative of then-Mayor Bill White that sought to help low and middle-income individuals buy their own homes.
While in office, politicians love to tout programs like Houston Hope. It is an "easy" way to win political support with tax payer money. They love to make grand promises about how a program or initiative will provide untold benefits to everyone. By the time the program or initiative is exposed as a failure, the politician has moved on to greener pastures and his successors must clean up the mess. Such is the case with Bill White.

The more cynical among us would attribute this to politics as usual. And in a sense they would be right. 

While many complain about corrupt politicians and inane government policies, few question the basic premise underlying those policies. Few question the legitimacy of government's involvement in housing, education, transportation, or a myriad other aspects of our lives. Few question the legitimacy of using government coercion to regulate and control the actions of individuals. "Politics as usual" means a continual battle by competing groups to gain political influence and force their pet cause on the citizenry.

Bill White is certainly not unique in this respect. He capitalized on a booming economy, his political connections, and his likable personality to create support for expanding city government. He led a drunken orgy of regulations and programs that made voters feel good in the short term. Now, the hangover has set in and the bill must be paid.

Thursday, September 23, 2010

Rush and Rand

Like many, I was introduced to the work of Ayn Rand by the Canadian rock band Rush. An early album was dedicated to "the genius of Ayn Rand." While I was a Rush fan in high school, it was several years before I read anything by Rand. Even then, while I found her work compelling, neither Anthem nor The Fountainhead motivated me to read further. That motivation came when I was about 23 and served on a jury for an attempted murder trial.

The defendant in the case pleaded guilty by reason of insanity (or whatever the plea is). He definitely seemed to have mental problems, but we convicted him in about an hour. That part of the trial was easy. The sentencing phase was much more difficult.

We were presented with a range of options, from probation to 20 years. We finally settled on 7 years, a decision which I remain comfortable with given the context of my knowledge at the time. But after the trial I was bothered by the difficulty of the decision. I began to wonder how we are to make decisions regarding moral issues.

To solve my dilemma I decided to study religion, since religion was the only source of morality known to me at the time. I went to the book store to stock up on writings on the great religions. Fortunately, the philosophy section was next to the religion section. Spotting several of Rand's works, I thought that she was likely to have better answers than religion. (I considered myself an agnostic at the time.)

I tried to read The Virtue of Selfishness, but was overwhelmed within a few pages. She addressed issues and ideas that were completely foreign to me. But I persevered, and with a dictionary as a constant companion, I dove into "The Objectivist Ethics." Before I was finished I concluded that I had found the source for the answers I was seeking. I then began to devour everything I could find that Ayn Rand had written, and the rest, as they say, is history.

I tell this story because Rush is playing in Houston this weekend. I will miss their concert because I am presenting a paper to the Houston Objectivism Society, but I will be there in spirit. While they are playing songs that have moved and inspired me for years, I will be talking about the ideas that have changed my life. I will have fun, even if I can't play the air guitar.

Wednesday, September 22, 2010

Don't Sweat the Small Stuff 47

The Vampire Cops
The Houston DWI blog reports "that Harris County DWI "No Refusal" weekends are going to be every weekend for the next 3 years." (HT: blogHouston) Thanks to a federal grant, anyone suspected of DWI can have their blood forcibly removed from their body for testing.

I want to make it clear that I think driving while drunk is grossly irresponsible and an objective threat to others. However, I find the standard for DWI to be non-objective. Certainly, the level of alcohol in one's bloodstream can be measured, but that alone does not tell us whether an individual is impaired to the point that he should not be driving. Two individuals can have the exact same alcohol in their blood and exhibit vastly different levels of impairment.

The Devil Calling Satan Evil
On Friday the Texas Board of Education will consider a resolution "asserting the need to fend off a pro-Islamic, anti-Christian bias in textbooks." According to the Chronicle:
The resolution says pro-Islamic and anti-Christian bias has tainted past social studies textbooks, and problems "still roil" in some books nationwide. It asserts that "more such discriminatory treatment of religion may occur as Middle Easterners buy into the U.S. public school textbook oligopoly." It says past books devoted more text lines to Islamic than to Christian beliefs and asserted that there have been "politically correct white-washes" of Islamic culture and "stigmas on Christian civilization." 
The conservative Christians on the Board are concerned that their particular form of mysticism is not getting enough attention in the public schools. Instead of removing all religion from the educational system, they want to argue over which particular irrationality will be forced upon students.

More Economic Illiteracy
The Chronicle reports:
American taxpayers have thrown $4.6 billion into emergency projects across Texas over the past 19 months to salvage the Lone Star State economy — creating or saving 47,704 jobs as of July, a review of federal records shows.
First, American taxpayers didn't "throw" money into Texas. It was taken from them by force.

Second, the paper doesn't tell us how much money was taken from Texans to "save" jobs in other states.

Third, the paper doesn't tell us is how many jobs were destroyed when that $4.6 billion was seized from individuals and businesses who would have otherwise saved, invested, or spent that money.  Nor does it tell us how many jobs were destroyed by the taxes Texans have paid and will pay to allegedly benefit the residents of other states.

In short, while bragging about the "jobs" saved, the paper conveniently ignores the cost.