Au Revoir, Ayn Rand
Jan. 17th, 2008 09:52 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
le_bebna_kamniIn high school I was a huge Ayn Rand fan. While her books were about stereotypes, with her plots a bit formulaic at times, I reveled in the ideology: the idea that we could create a utopia simply by allowing people to be free, to be awarded solely on their merit to society, with free trade and free will for everyone. Amen.
Of course, ironically, this was also during my fundamentalist days, so while I thought economic libertarianism was the only way to go, I believed very strongly that everyone should have to follow Christian (as I defined Christian) values and norms and that this should be enforced through legal measures. This meant regulating people's sex lives, the substances they ingest, the materials they read, etc.
While the change toward believing in social freedoms was not over-night, it did come very rapidly (i.e., within the span of a year), and directly coincided with my loss of faith in Christianity in conjunction with anthropology classes that taught me that my perspective isn't the only one that exists (or is even possible).
Now I consider myself to be more-or-less socially libertarian: if it doesn't harm other people or infringe on others' rights (except by mutually informed consent), it should be allowed under law for an individual to do within their own homes/property. [Note that this rules out smoking in public places -- like sidewalks, where people have to walk through it! -- but does not rule out businesses who want to designate themselves as venues for smoking]
And so far I haven't found any exceptions to my thoughts on social libertarianism -- but I challenge people to come up with exceptions, because I might change my mind. ;P
But moving away from the ideology of economic libertarianism has been a slow one. First, let me take a moment to define "economic libertarianism", at least in the way that most libertarinists I have read mean it. It means free trade. It means no restrictions on business, and more specifically, no industry is government-controlled (including schools, utilities, health care, whatever). It is in complete opposition to socialized programs (unless instituted by a private organization) -- one historical term might be "laizez-faire capitalism" which, while it currently has negative connotations, was once considered a positive thing by pro-business advocates.
Not all capitalism is laizez-faire, mind you. But libertarian-style capitalism, because it advocates a lack of government, must by nature be laizez-faire.
One of the problems I've had, though, is that libertarian economics haven't always matched with my other ideals. For example, when I learned that not all people are poor because they're lazy (on the contrary, in my opinion most working-class people work harder than your average white collar), it made me question whether socialized programs should be eliminated entirely. But libertarians made the argument that charities would still exist and, if not burdened with taxes, people would give more money to these private charities and orphans/mentally-disabled/physically-disabled people or people "just down on their luck" would be taken care of.
[Note: I have read other studies that incline me to believe this last statement would not hold true. However, please temporarily accept it at face value for the sake of discussion, as it would take a completely separate entry to discuss it.]
When I became aware of environmental issues, I found libertarians who very effectively argued that harming the environment infringes on the rights of others (for example, higher cancer rates in towns around industrial plants that do dumping rather than proper waste disposal). Some libertarians even advocate expanding the definition of "harm" to include other [mostly mammalian] life forms, to allow for certain animal rights issues.
And most of these explanations have kept me fairly satisfied -- at least until recently.
The more I research into contemporary and historical instances of public venues being privatized, the more I become convinced that at least certain services must always remain within the public/governmental sphere. Take for example fire-fighting. Last night I was watching "Gangs of New York" for the first time, and while the historical debacle of privatized firefighting was something that I had known about, I never really considered the consequences of it. The movie finally made me grasp what the average person had to deal with.
"Gangs of New York" takes place in New York City around the time of the Civil War, and has a scene where three rival fire-fighting brigades show up and fight over who gets to put out a house while the house burns down and people loot it. While certain things were over-dramatized, there is significant truth to the scene and it brought to mind other issues that were not in the plot.
For example, if you couldn't pay for fire-fighting services, they let your house burn. If your house was next to the one burning, you had to pay the fire-fighters to protect your house, or they would let it burn too. And the scene where a man puts a barrel over a hydrant to keep it hidden until his fire brigade shows up is absolutely accurate. The reason why fire-fighting was taken out of privatized hands was because there were too many instances of fires getting out of control because they started in a poor neighborhood -- and ended up burning down an eighth or more of the city because people couldn't pay.
There are certain things like roads and sidewalks that also need to remain in the public domain. The reason for this is that they are necessary to the functioning of society, and there is not enough availability to allow competition -- a requirement for capitalism to be effective. What I mean by this statement is this: there is a limited amount of space available for putting in sidewalks and roads. It is not possible, for example, to have five or ten or one hundred competing sidewalk companies that each have their own sidewalks that go to every business/house/public building. You can't simply pay to use the sidewalk that you prefer, thus giving incentive for other sidewalk companies to increase their quality to compete.
Instead, there is a limited amount of space -- perhaps 5 or fewer feet wide -- that is available to accommodate a sidewalk. A sidewalk is an example of a situation where there is only one opening for a resource, so the government steps in to ensure that no one monopolizes it and side-steps normal free-market processes. They generate capitalistic competition by [theoretically] contracting sidewalk construction or maintenance to the company who provides the best service for the lowest price. But the government -- not the contractor -- owns the sidewalks, which is key.
Without this intervention, you might get the equivalent of medieval footbridges where the first bandit to stake out the path in front of your house names his price -- hardly the "free-market competition" envisioned by libertarians. [As an aside, similar land-availability issues with plumbing, railroads, electrical lines, and land-line phone service make an interesting case for public domain as well -- but that's a whole journal entry by itself.]
But what actually started this journal entry was a chapter in a book titled Inequality Matters: The Growing Economic Divide in America and Its Poisonous Consequences. It's an interesting book, and one that provides a lot of facts and figures to contemplate.
Each chapter is written by a different author, and they cover a fairly broad range of subjects ranging from the decline of organized "for the people" groups to elementary education and modern retirement plans. But the underlying message is essentially this: it's not simply a matter of some people make it and some people don't. Our government is actively embracing policies that intentionally widen the gap between people at upper income levels and those below them, often [falsely] in the name of "free trade".
While some authors in the book are socialistic, I actually think that the majority fall under the category of "responsible capitalists" -- i.e., a capitalistic system thrives on competition, and sometimes regulation is necessary to ensure that competition is fair and continues to exist.
While I'm not going to address the premise of "responsible capitalism" itself, nor the whole book, the book definitely makes apparent the need for certain things to be public, such as education. One of the biggest equalizers in the US is education: your parents might have been minimum-wage workers, but if you work hard and get a degree, you can become whatever you want to be. This point is very important, because it is the foundation on which the premise of "equal opportunity", "all men are born equal", and the American Dream is based.
While there are some positions that theoretically don't require degrees, I would argue that the majority do. If you want to be a doctor, or a public accountant, or even a teacher, you have to have a certain piece of paper that says you've gone through the requisite training. Even most businesses are now requiring MBAs for managerial positions.
In other words, education is one of the primary ways in this society to move up in life. If anyone in our country can become wealthy, then we remain free of the "divine right of kings" and the class-based society of "noble" vs. "serf" that our country was founded against. Therefore, equal access to education is of the utmost importance.
But education is one of the "public domain" issues that I see most attacked by libertarians. The argument goes: our schools are so crappy because they are public. Private schools repeatedly demonstrate better performance. It's true that private schools are expensive, but if all schools were privatized, there would be competition and prices would go down. Competition would also be incentive for schools to improve.
However, the chapter "Corporations Unbound", by Joel Bakan gives some very astute observations about school systems that have attempted to privatize using a corporate model (as opposed to religiously-funded schools) -- specifically the Edison Schools. The Edison School system is the largest education management organization, or EMO. Essentially, EMOs are like contractors who get paid by local government to run the school district in lieu of a directly-controlled government education system.
The problem, Bakan points out, is that when you turn schools into a for-profit business, you encounter the same problems as other for-profit businesses.
For example, mis-management of businesses by CEOs who leave with a "golden parachute" as the business goes under is common-place in today's world. When stock prices for the Edison Schools dropped from $21.68 per share to only $1.00, they sold off text-books, lab supplies, computers, and musical instruments. They tried to move the corporate offices into the school itself to save on costs, and even contemplating forcing students to do some of the work for free so they could cut down on adult staff. Meanwhile, the Edison's top executives were getting salary increases and bleeding off other company perks, and when the company became so worthless it was bought out, they kept the current CEO and even doubled his salary.
At least in today's public schools the worst that can happen is the students have the same textbook for 30 years. :O
And while expensive private schools may provide better performance, independent researchers at Western Michigan University actually concluded that Edison was mis-representing the performance in its schools. When Edison has a guaranteed contract and its students aren't coming from the wealthy, they tend to skimp and eliminate the less profitable elements.
And why should it be any different from any other corporate endeavor? You get what you pay for: don't expect the same maintenance service at low-rent housing as you would at a penthouse. You don't get as good of care in an Ypsilanti hospital as you do in Novi (I know from personal experience). And you won't get better education at the low-cost privatized schools.
And what about closing down schools entirely when they no longer become "profitable"? After all, we've seen this time and time again when it comes to health care in Detroit.
In the past several years, we have seen virtually all of the hospitals close down in inner-city Detroit, including the one that admitted the most gun-shot victims in the state. Now the same gun-shot victim must drive another 30-45 minutes to find the nearest hospital, assuming the highways aren't under their normal state of heavy traffic, which is more than enough time to bleed to death. This is solely due to loss of profits by private health care systems.
Don't think that the same pattern won't occur if we privatize Detroit schools -- on the contrary, there is not a business in the Detroit area that has given us reason to believe otherwise. Schools in most areas tend to lose money -- including religious schools -- but when the government (or church) owns them this is both expected and tolerated because it assumes that education is a "greater good". This is why you see primarily church-sponsored hospitals lasting longest in poorer areas.
When profits supercede "greater good" this all changes. Significant losses are no longer acceptable; short-cuts must be taken not just to break even, but so that stock holders and the CEOs will be paid well.
The only reason why public schools currently have such a disparity in education is because they are mostly funded by property taxes -- i.e., the quality of the education is dependent on the wealth of the people that pay for it. Since capitalistic models of education also depend on this criteria (money spent equates with quality of purchase), I hardly see that privatization would help. On the contrary, it would eliminate the few remaining "socialistic" avenues (e.g. federal funding) that keep many such low-income schools afloat. Why, then, if unequal funding is such a problem, do we want to get rid the equalizing "socialistic" measures, rather than adding more?
And what happens to the student of parents who can't pay at all? At present, very few low-income people go on to college simply because they can't afford tuition -- even at a public low-cost community college. Should they also be denied K-12 education under the privatization model? Yes, some scholarships might be available, but will the businesses provide scholarships to every kid in inner-city Detroit? (And keep in mind that tax breaks would no longer be an incentive for businesses to give scholarships, since under libertarian models you wouldn't pay taxes.)
In essence, then, a privatized model of schooling threatens to eliminate the one thing that previously made us equal: free access to education. A merit-based system where wealth is awarded in direct proportion a person's contribution to society...well, let's just say that can only be possible if all people are born with equal access to the tools to succeed. In a society where you need wealth to gain wealth, you can no longer tout a concept of "equal opportunity" or the American Dream.
Therefore, while I do not reject all forms of capitalism, I can finally say that libertarian economics is not the way to go -- at least not if you're an idealist like me who strongly believes that all capable people who work hard should have the ability to succeed. ;P
Of course, ironically, this was also during my fundamentalist days, so while I thought economic libertarianism was the only way to go, I believed very strongly that everyone should have to follow Christian (as I defined Christian) values and norms and that this should be enforced through legal measures. This meant regulating people's sex lives, the substances they ingest, the materials they read, etc.
While the change toward believing in social freedoms was not over-night, it did come very rapidly (i.e., within the span of a year), and directly coincided with my loss of faith in Christianity in conjunction with anthropology classes that taught me that my perspective isn't the only one that exists (or is even possible).
Now I consider myself to be more-or-less socially libertarian: if it doesn't harm other people or infringe on others' rights (except by mutually informed consent), it should be allowed under law for an individual to do within their own homes/property. [Note that this rules out smoking in public places -- like sidewalks, where people have to walk through it! -- but does not rule out businesses who want to designate themselves as venues for smoking]
And so far I haven't found any exceptions to my thoughts on social libertarianism -- but I challenge people to come up with exceptions, because I might change my mind. ;P
But moving away from the ideology of economic libertarianism has been a slow one. First, let me take a moment to define "economic libertarianism", at least in the way that most libertarinists I have read mean it. It means free trade. It means no restrictions on business, and more specifically, no industry is government-controlled (including schools, utilities, health care, whatever). It is in complete opposition to socialized programs (unless instituted by a private organization) -- one historical term might be "laizez-faire capitalism" which, while it currently has negative connotations, was once considered a positive thing by pro-business advocates.
Not all capitalism is laizez-faire, mind you. But libertarian-style capitalism, because it advocates a lack of government, must by nature be laizez-faire.
One of the problems I've had, though, is that libertarian economics haven't always matched with my other ideals. For example, when I learned that not all people are poor because they're lazy (on the contrary, in my opinion most working-class people work harder than your average white collar), it made me question whether socialized programs should be eliminated entirely. But libertarians made the argument that charities would still exist and, if not burdened with taxes, people would give more money to these private charities and orphans/mentally-disabled/physically-disabled people or people "just down on their luck" would be taken care of.
[Note: I have read other studies that incline me to believe this last statement would not hold true. However, please temporarily accept it at face value for the sake of discussion, as it would take a completely separate entry to discuss it.]
When I became aware of environmental issues, I found libertarians who very effectively argued that harming the environment infringes on the rights of others (for example, higher cancer rates in towns around industrial plants that do dumping rather than proper waste disposal). Some libertarians even advocate expanding the definition of "harm" to include other [mostly mammalian] life forms, to allow for certain animal rights issues.
And most of these explanations have kept me fairly satisfied -- at least until recently.
The more I research into contemporary and historical instances of public venues being privatized, the more I become convinced that at least certain services must always remain within the public/governmental sphere. Take for example fire-fighting. Last night I was watching "Gangs of New York" for the first time, and while the historical debacle of privatized firefighting was something that I had known about, I never really considered the consequences of it. The movie finally made me grasp what the average person had to deal with.
"Gangs of New York" takes place in New York City around the time of the Civil War, and has a scene where three rival fire-fighting brigades show up and fight over who gets to put out a house while the house burns down and people loot it. While certain things were over-dramatized, there is significant truth to the scene and it brought to mind other issues that were not in the plot.
For example, if you couldn't pay for fire-fighting services, they let your house burn. If your house was next to the one burning, you had to pay the fire-fighters to protect your house, or they would let it burn too. And the scene where a man puts a barrel over a hydrant to keep it hidden until his fire brigade shows up is absolutely accurate. The reason why fire-fighting was taken out of privatized hands was because there were too many instances of fires getting out of control because they started in a poor neighborhood -- and ended up burning down an eighth or more of the city because people couldn't pay.
There are certain things like roads and sidewalks that also need to remain in the public domain. The reason for this is that they are necessary to the functioning of society, and there is not enough availability to allow competition -- a requirement for capitalism to be effective. What I mean by this statement is this: there is a limited amount of space available for putting in sidewalks and roads. It is not possible, for example, to have five or ten or one hundred competing sidewalk companies that each have their own sidewalks that go to every business/house/public building. You can't simply pay to use the sidewalk that you prefer, thus giving incentive for other sidewalk companies to increase their quality to compete.
Instead, there is a limited amount of space -- perhaps 5 or fewer feet wide -- that is available to accommodate a sidewalk. A sidewalk is an example of a situation where there is only one opening for a resource, so the government steps in to ensure that no one monopolizes it and side-steps normal free-market processes. They generate capitalistic competition by [theoretically] contracting sidewalk construction or maintenance to the company who provides the best service for the lowest price. But the government -- not the contractor -- owns the sidewalks, which is key.
Without this intervention, you might get the equivalent of medieval footbridges where the first bandit to stake out the path in front of your house names his price -- hardly the "free-market competition" envisioned by libertarians. [As an aside, similar land-availability issues with plumbing, railroads, electrical lines, and land-line phone service make an interesting case for public domain as well -- but that's a whole journal entry by itself.]
But what actually started this journal entry was a chapter in a book titled Inequality Matters: The Growing Economic Divide in America and Its Poisonous Consequences. It's an interesting book, and one that provides a lot of facts and figures to contemplate.
Each chapter is written by a different author, and they cover a fairly broad range of subjects ranging from the decline of organized "for the people" groups to elementary education and modern retirement plans. But the underlying message is essentially this: it's not simply a matter of some people make it and some people don't. Our government is actively embracing policies that intentionally widen the gap between people at upper income levels and those below them, often [falsely] in the name of "free trade".
While some authors in the book are socialistic, I actually think that the majority fall under the category of "responsible capitalists" -- i.e., a capitalistic system thrives on competition, and sometimes regulation is necessary to ensure that competition is fair and continues to exist.
While I'm not going to address the premise of "responsible capitalism" itself, nor the whole book, the book definitely makes apparent the need for certain things to be public, such as education. One of the biggest equalizers in the US is education: your parents might have been minimum-wage workers, but if you work hard and get a degree, you can become whatever you want to be. This point is very important, because it is the foundation on which the premise of "equal opportunity", "all men are born equal", and the American Dream is based.
While there are some positions that theoretically don't require degrees, I would argue that the majority do. If you want to be a doctor, or a public accountant, or even a teacher, you have to have a certain piece of paper that says you've gone through the requisite training. Even most businesses are now requiring MBAs for managerial positions.
In other words, education is one of the primary ways in this society to move up in life. If anyone in our country can become wealthy, then we remain free of the "divine right of kings" and the class-based society of "noble" vs. "serf" that our country was founded against. Therefore, equal access to education is of the utmost importance.
But education is one of the "public domain" issues that I see most attacked by libertarians. The argument goes: our schools are so crappy because they are public. Private schools repeatedly demonstrate better performance. It's true that private schools are expensive, but if all schools were privatized, there would be competition and prices would go down. Competition would also be incentive for schools to improve.
However, the chapter "Corporations Unbound", by Joel Bakan gives some very astute observations about school systems that have attempted to privatize using a corporate model (as opposed to religiously-funded schools) -- specifically the Edison Schools. The Edison School system is the largest education management organization, or EMO. Essentially, EMOs are like contractors who get paid by local government to run the school district in lieu of a directly-controlled government education system.
The problem, Bakan points out, is that when you turn schools into a for-profit business, you encounter the same problems as other for-profit businesses.
For example, mis-management of businesses by CEOs who leave with a "golden parachute" as the business goes under is common-place in today's world. When stock prices for the Edison Schools dropped from $21.68 per share to only $1.00, they sold off text-books, lab supplies, computers, and musical instruments. They tried to move the corporate offices into the school itself to save on costs, and even contemplating forcing students to do some of the work for free so they could cut down on adult staff. Meanwhile, the Edison's top executives were getting salary increases and bleeding off other company perks, and when the company became so worthless it was bought out, they kept the current CEO and even doubled his salary.
At least in today's public schools the worst that can happen is the students have the same textbook for 30 years. :O
And while expensive private schools may provide better performance, independent researchers at Western Michigan University actually concluded that Edison was mis-representing the performance in its schools. When Edison has a guaranteed contract and its students aren't coming from the wealthy, they tend to skimp and eliminate the less profitable elements.
And why should it be any different from any other corporate endeavor? You get what you pay for: don't expect the same maintenance service at low-rent housing as you would at a penthouse. You don't get as good of care in an Ypsilanti hospital as you do in Novi (I know from personal experience). And you won't get better education at the low-cost privatized schools.
And what about closing down schools entirely when they no longer become "profitable"? After all, we've seen this time and time again when it comes to health care in Detroit.
In the past several years, we have seen virtually all of the hospitals close down in inner-city Detroit, including the one that admitted the most gun-shot victims in the state. Now the same gun-shot victim must drive another 30-45 minutes to find the nearest hospital, assuming the highways aren't under their normal state of heavy traffic, which is more than enough time to bleed to death. This is solely due to loss of profits by private health care systems.
Don't think that the same pattern won't occur if we privatize Detroit schools -- on the contrary, there is not a business in the Detroit area that has given us reason to believe otherwise. Schools in most areas tend to lose money -- including religious schools -- but when the government (or church) owns them this is both expected and tolerated because it assumes that education is a "greater good". This is why you see primarily church-sponsored hospitals lasting longest in poorer areas.
When profits supercede "greater good" this all changes. Significant losses are no longer acceptable; short-cuts must be taken not just to break even, but so that stock holders and the CEOs will be paid well.
The only reason why public schools currently have such a disparity in education is because they are mostly funded by property taxes -- i.e., the quality of the education is dependent on the wealth of the people that pay for it. Since capitalistic models of education also depend on this criteria (money spent equates with quality of purchase), I hardly see that privatization would help. On the contrary, it would eliminate the few remaining "socialistic" avenues (e.g. federal funding) that keep many such low-income schools afloat. Why, then, if unequal funding is such a problem, do we want to get rid the equalizing "socialistic" measures, rather than adding more?
And what happens to the student of parents who can't pay at all? At present, very few low-income people go on to college simply because they can't afford tuition -- even at a public low-cost community college. Should they also be denied K-12 education under the privatization model? Yes, some scholarships might be available, but will the businesses provide scholarships to every kid in inner-city Detroit? (And keep in mind that tax breaks would no longer be an incentive for businesses to give scholarships, since under libertarian models you wouldn't pay taxes.)
In essence, then, a privatized model of schooling threatens to eliminate the one thing that previously made us equal: free access to education. A merit-based system where wealth is awarded in direct proportion a person's contribution to society...well, let's just say that can only be possible if all people are born with equal access to the tools to succeed. In a society where you need wealth to gain wealth, you can no longer tout a concept of "equal opportunity" or the American Dream.
Therefore, while I do not reject all forms of capitalism, I can finally say that libertarian economics is not the way to go -- at least not if you're an idealist like me who strongly believes that all capable people who work hard should have the ability to succeed. ;P