Klassic: three libertarian priorities

In January of 2007, I wrote,

The goals of the free-market agenda should be:

1. Increase the proportion of children who are schooled outside of the public school system.
2. Increase the proportion of health care spending that is paid for directly by consumers.
3. Limit the fraction of people’s lives where they collect Social Security.

. . .If I wanted to create an industry with poor performance characteristics, I would set it up like the public school system. I would create a monopoly and set up an institutional structure that entrenches producers while marginalizing consumers. I would locate decision-making power at an ever-increasing distance from those affected by the decisions.

If I were writing this essay today, I would emphasize the ideological damage inflicted by government schools, not just the inherent inefficiency. But I think that the main point of the essay holds up, namely that the Republicans have ducked the big three elements of statist economic policy.

11 thoughts on “Klassic: three libertarian priorities

  1. The third point is probably a strategic mistake for libertarians.

    For one, Social Security isn’t breaking the bank or causing ideological damage like the other two. There are problems with it not being fully funded and actuarially sound, but those are technical matters and some countries do Social Security right in those respects.

    For another, there may be some benefits to “forced savings”, something that very successful governments do (Singapore has lots of forced savings). In marginal dollars are mostly going to bid up fixed supply position goods (say, real estate), it might not be the end of the world to dial down that arms race a bit and ensure a safety net when people are too old to work. At a minimum, forced savings are a rational response to the reasonable data driven conclusion that people without any money find a way to lobby government to provide the basics.

    Lastly, its an immensely popular program that has done no good politically for libertarians. I would suggest that if you really want to address #1 and #2, it’s time to ditch #3 if only on strategic grounds. They are far more impactful and far less sympathetic.

    • In terms of priorities #3, remember Trump won the Republican Primary and general election promising to protect Social Security and Medicare. (and Medicaid but I will assume Trump did not know what the last was in 2016.) Although we over-emphasize the WWC support for Trump being border security, we under-estimate the WWC support for Trump because of Social Security and Medicare.

      Also, according to exit polls in November 2016 Trump was consider more political center than Hillary. (Also check 2006 Midterms for Democrats.)

      • Indeed. I specifically want to call out Social Security though. Medicare is tied into #2 and its potential liabilities are almost infinite if trend is bad enough. Social Security by contrast is a much more predictable and less dangerous thing.

  2. For the support of private schools, I would recommend thinking of small solutions not big ones as:

    1) Show me data that the school systems are worse than they were in the 1980s and 1950s. There is a lot wrong but I don’t see a diminishing quality. (My kids high schools are better than my Reagan experience.)
    2) I would focus on High School first and foremost. Keep it simple and focus where different education will benefit students. I find small gains are easier to win and build a complete overhaul. The ease of a close local school is a huge benefit and Elementary schools system is easy transportation.
    3) Nobody has solved the price of College issue and that is a system voucherutopia of schools would probably go that direction.
    4) Private school enrollment is down 10%+ and public enrollment is up ~2%. Consumers are not moving away from public schools. (Yes this probably the drop in religious choices.)
    5) Show me a system that private schools would be effective in West Virginia. Private sector is great at finding customers and profits but where are the profits in WV?
    6) I would almost rather have large corporations take over school systems than small local companies. Not that I love oligopoly competition. Doesn’t any school choice state how grocery stores work effectively for consumers. And don’t large corporations dominate grocery stores?
    6) In terms of teacher unions, come up with a system that makes the great teachers want to reject the union. Make the members believe the union is hurting them. (which is how private sector controls union power.)
    6) I always assumed one way to improve school cost is housing deregulation. (And I see 20% drop in housing but even 10% would help here.)

    • 1) Show me data that the school systems are worse than they were in the 1980s and 1950s. There is a lot wrong but I don’t see a diminishing quality. (My kids high schools are better than my Reagan experience.)

      It’s not that school systems are worse, it’s just that they’re no better (and student performance no higher) even though we’ve tripled (yes tripled!) K12 spending (yes in inflation adjusted dollars!) since 1970:

      https://www.cato.org/blog/public-school-spending-theres-chart

    • I’m not sure that high school needs to be the focus. Probably different reforms / changes at different levels.

      A big issue (especially for many kids in the lower socio-economic strata) is that they barely learn to read well to to begin with–by 3d grade they are reading below grade level and never catch up. They fall progressively farther behind. By the time they reach high school they may be in 9th grade but still reading at the 3d or 4th grade level. They have 9th grader minds, and can talk and think like 9th graders, but they may have 4th grader reader proficiency. or worse.

      I’m not an expert, but perhaps they never really hit the “phonemic awareness” stage where they just grasp the way the letters give you sounds that combine into words that you should be able to understand if it’s your native language.

      The best book I know about this is by Diane McGuiness. But who cares what I think, just keep thinking about the problem and how to solve it. The problem doesn’t seem to be going away. High school is a little late to solve it.

      It would also be nice if we had good longitudinal data–did we ever teach reading better, and now we don’t? Did it just not matter so much 60 years ago?

  3. With regards to #1, I would say the rise in homeschooling is achieving this, though largely by circumventing the political process [1]. It’s interesting to note that many are pursuing the homeschooling route precisely because of the ideological harm caused by public schools.

    More cynically, we might say that Obamacare has achieved number #2 by (in effect) increasing everyone’s deductibles. Of course, premiums also went up too, and the bureaucracy of it all is a nightmare, but such is life.

    [1]https://www.city-journal.org/homeschooling-16265.html

    • In 2007 1.5 million children were homeschooled. In 2016 1.7 million children were homeschooled.

  4. The greatest trick the government ever pulled was convincing the people that what they are taught in government schools was what is needed to be successful in life.

    ” In all areas of mixed nationality, the school is a political prize of the highest importance. It cannot be deprived of its political character as long as it remains a public and compulsory institution. ”
    –Mises, Ludwig von (1927). Liberalism

  5. I like your three objectives, but, then, I am a libertarian. You can’t expect the Republican party to promote these objectives: they (the objectives) lack mass popularity.

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