What If Public Schools Were Abolished?

In American culture, public schools are praised in public and criticized in private, which is roughly the opposite of how we tend to treat large-scale enterprises like Wal-Mart. In public, everyone says that Wal-Mart is awful, filled with shoddy foreign products and exploiting workers. But in private, we buy the well-priced, quality goods, and long lines of people hope to be hired.Why is this? It has something to do with the fact that public schools are part of our civic religion, the primary evidence that people cite to show that local government serves us. And there is a psychological element. Most of us turn our kids over to them, so surely they must have our best interest at heart!But do they? Murray N. Rothbard's Education: Free and Compulsory explains that the true origin and purpose of public education is not so much education as we think of it, but indoctrination in the civic religion. This explains why the civic elite is so suspicious of homeschooling and private schooling: it's not fear of low test scores that is driving this, but the worry that these kids aren't learning the values that the state considers important.But to blast public schools is not the purpose of this article. There are decent public schools and terrible ones, so there is no use generalizing. Nor is there a need to trot out data on test scores. Let me just deal with economics. All studies have shown that average cost per pupil for public schools is twice that of private schools (here is a sample studyDownload PDF).This runs contrary to intuition, since people think of public schools as free and private schools as expensive. But once you consider the source of funding (tax dollars vs. market tuition or donation), the private alternative is much cheaper. In fact, the public schools cost as much as the most expensive and elite private schools in the country. The difference is that the cost of public schooling is spread out over the entire population, whereas the private school cost is borne only by the families with students who attend them.In short, if we could abolish public schools and compulsory schooling laws, and replace it all with market-provided education, we would have better schools at half the price, and be freer too. We would also be a more just society, with only the customers of education bearing the costs.What's not to like? Well, there is the problem of the transition. There are obvious and grave political difficulties. We might say that public education enjoys a political advantage here due to network effects. A significant number of "subscriptions," etc. have been piled up in the status quo, and it is very difficult to change those.But let's pretend. Let's say that a single town decided that the costs of public schooling are too vast relative to private schooling, and the city council decided to abolish public schools outright. The first thing to notice is that this would be illegal, since every state requires localities to provide education on a public basis. I don't know what would happen to the city council. Would they be jailed? Who knows? Certainly they would be sued.But let's say we somehow get past that problem, thanks to, say, a special amendment in the state constitution, that exempts certain localities if the city council approves. Then there is the problem of federal legislation and regulation. I am purely speculating since I don't know the relevant laws, but we can guess that the Department of Education would take notice, and a national hysteria of some sort would follow. But let's say we miraculously get past that problem too, and the federal government lets this locality go its own way.There will be two stages to the transition. In the first stage, many seemingly bad things will happen. How are the physical buildings handled in our example? They are sold to the highest bidder, whether that be to new school owners, businesses, or housing developers. And the teachers and administrators? All let go. You can imagine the outcry.With tax-paid schools abolished, people with kids in public schools might move away. Property taxes that previously paid for schools would vanish, so there will be no premium for houses in school districts that are considered good. There will be anger about this. The collapse in prices might seem like robbery for people who have long assumed that high and rising house prices are a human right. For the parents that remain, there is a major problem of what to do with the kids during the day.With property taxes gone, there is extra money to pay for schools, but their assets have just fallen in market value (even without the Fed), which is a serious problem when it comes to shelling out for school tuition. There will, of course, be widespread hysteria about the poor too, who will find themselves without any schooling choices other than homeschool.Now, all that sounds pretty catastrophic, doesn't it? Indeed. But it is only phase one. If we can somehow make it to phase two, something completely different will emerge. The existing private schools will be filled to capacity and there will be a crying need for new ones. Entrepreneurs will quickly flood into the area to provide schools on a competitive basis. Churches and other civic institutions will gather the money to provide education.At first, the new schools will be modeled on the public school idea. Kids will be there from 8 to 4 or 5, and all classes will be covered. But in short order, new alternatives will appear. There will be schools for half-day classes. There will be large, medium, and small schools. Some will have 40 kids per class, and others 4 or 1. Private tutoring will boom. Sectarian schools of all kinds will appear. Micro-schools will open to serve niche interests: science, classics, music, theater, computers, agriculture, etc. There will be single sex schools. Whether sports would be part of school or something completely independent is for the market to decide.And no longer will the "elementary, middle school, high school" model be the only one. Classes will not necessarily be grouped by age alone. Some will be based on ability and level of advancement too. Tuition would range from free to super expensive. The key thing is that the customer would be in charge.Transportation services would spring up to replace the old school-bus system. People would be able to make money by buying vans and providing transportation. In all areas related to education, profit opportunities would abound.$10 $6In short, the market for education would operate the same as any other market. Groceries, for example. Where there is a demand, and obviously people demand education for their kids, there is supply. There are large grocery stores, small ones, discount ones, premium ones, and stores for groceries on the run. It is the same for other goods, and it would be the same for education. Again, the customer would rule. In the end, what would emerge is not entirely predictable — the market never is — but whatever happened would be in accord with the wishes of the public.After this phase two, this town would emerge as one of the most desirable in the country. Educational alternatives would be unlimited. It would be the source of enormous progress, and a model for the nation. It could cause the entire country to rethink education. And then those who moved away would move back to enjoy the best schools in the country at half the price of the public schools, and those without children in the house wouldn't have to pay a dime for education. Talk about attractive!So which town will be the first to try it and show us all the way?if you like to look at the links here they are....http://www.mises.org/store/Education-Free-and-Compulsory-P94C18.aspxhttp://en.wikipedia.org/wiki/Network_effecthttp://mises.org/story/2937

Inflation and the Public Consciousness

When central bankers blast central banks for being reckless, you know the problem is serious. Indeed, it seems that everyone suddenly really cares about inflation. Everywhere you go, this is the talk, at the grocery, the gas station, among your neighbors. Price increases have been persistent in major sectors such as medicine and education for decades, but today the trend is conspicuously hitting the stuff that people buy everyday. So the reminders are ubiquitous, and public anger is growing.As the president of an institute that spends a vast amount of its resources on the issue of monetary policy and reform, I see this as both good and bad news. When no one else seems to care about these issues, we promote research and publish books that consider this topic from every angle. If you were going to reduce all these efforts to a single phrase, it would be, it's the government's doing. And the answer in a single phrase is, let the market, not government, manage the money.But just as in the 1970s, and before people began to accept 3–5% annual price increases as part of the natural law, people today are still enormously confused about the cause. There is no obvious foreign demon to blame for our economic troubles. People generally suspect that something is wrong in Washington, but such is always the case. The most immediate culprit in people's mind is actually the merchant, or perhaps a cartel of merchants.Already, enterprises are posting signs to explain the higher prices in terms of their higher costs. Panera Bread is taking the offensive by explaining that the higher price of wheat is to blame. That is true enough, but it's not the whole truth. Other retailers speak about the low dollar on international exchange — again true enough, but not the whole truth. Of course, the anger at oil executives is as predictable as it is unjustified.In economics, finding the relationship between cause and effect isn't as easy as tracing through a sequence of events. There is a time lag — of unpredictable length — between the monetary expansion of the Federal Reserve and the response in producer and consumer prices.There is also the major problem that when the experts speak about these issues, they talk about the price level as if it were like the sea level, or something else that rises and falls like the volume on an iPod. The truth is that the price increases following a monetary expansion affect different prices in different ways, and, again, in an unpredictable manner.Past bouts of expansion have created bubbles in the financial sector, plus other sectors such as housing, and state-dominated sectors like medicine and education. But a high dollar internationally, the growth of the international division of labor, as well as technological advance kept the prices of consumer goods down, even falling. All these effects have been absorbed already, and the falling dollar relative to other international currencies has meant a higher price on imports. Lower productivity contributes as well, as does the general recessionary environment. So the downward price pressure on consumer goods is at an end.Among the few who understand the role of money, there is the terrible problem that has grown up around the financial institutions created after deregulation. In short, hardly anyone knows what monetary instrument to measure to discover whether the Fed is creating a lot or a little new money. The only really reliable statistic is posted on Mises.org: the true money supply, which counts only immediately available money. It is here that we find the culprit: the great monetary expansion under Alan Greenspan that lasted from 2001 until 2005.Despite all the complications, the fundamental cause is the Fed itself, which purports to be the great savior of the money system but in fact is its destroyer. By flooding the economy with ever more paper money, it reduces the value of our money — an insidious tax that the governing elites levy in ways that keep the people in the dark.And here's the heck of it. When the Fed expands the money supply, it can funnel money to the elites long before the people are forced to pay the price. As Rothbard explains, those who get the money first are permitted to use it before prices rise for everyone else. By the time the new money circulates through the economic system and hits everyman's pocketbook, the elites who received the first round of injections have made off like bandits.At times like these, there is a role for good economists to explain the true source of inflation to the public. In the 20th century, we were blessed by scholars like Rothbard, and public intellectuals like Henry Hazlitt who wrote for every possible venue to explain that when the supply of money is increased, people have more money to offer for goods. If the supply of goods does not increase — or does not increase as much as the supply of money — then the prices of goods will go up. Each individual dollar becomes less valuable because there are more dollars. Therefore more of them will be offered against, say, a pair of shoes or a hundred bushels of wheat than before.The problems the Fed faces today are eerily similar to those of 1930 and following. The boom was caused by a loose money policy by the Fed, and the inevitable bust has come. But now everyone looks to the Fed to provide the answer. In the early 1930s, the Fed tried very hard to inflate the currency, but it could not manage to accomplish it through the credit markets alone. When bankers are reluctant to lend to shaky enterprises, and worried businessmen are reluctant to borrow, there is no other way to flood the markets. Today's Fed has been exceedingly reckless in trying to forestall this program. It has engaged in direct bailouts of investment banks, and it is offering super-subsidized loans to banks by the tens of billions. This is Ben Bernanke's little trick to use the banking sector more fully in his inflationary schemes.If Bernanke loses, we all lose. But if Bernanke wins, we lose even more. More inflationary finance can only make the present situation worse.Some people speculate that we are going to see not inflation but deflation due to the barriers faced by the Fed. My only comment is this: we should be so lucky. The Great Depression would have been worse without its only saving grace: all goods were cheaper than before. The major mistake of Hoover and FDR was in thinking that low prices were somehow the cause of the Depression rather than the effect.Will Bernanke make that mistake again? Anything is possible. Paul Volcker — who solved the last dollar crisis by shrinking the money supply — just gave a major speech in which he blasted the reckless manner in which Printing Press Ben is conducting policy.-by Llewellyn H. Rockwell, Jr.

are the dems really anti-war or just anti-republican?

I am saddened by the inability of the American people to exercise critical thinking and research the rhetoric from the democratic presidential candidates. When a politician says they plan to do something, it should take it with a grain of salt unless they have the record to back up their claims. In the case of Hillary it is evident that she was completely supportive of the war from the beginning and has been voting to fund it along with Obama. Nowadays most of her supporters will say that she has apologized and that she was given incorrect information. But before we blindly accept this we must look at the people who voted against the war and what reasons were given to justify their vote. A few said that we should not conduct a preemptive war. For these few people, the idea was not to focus on the current sources of intelligence but rather to revert back to their own philosophy of just war. These few believed that military force should only be used to DEFEND the country and not to perpetuate fights with POTENTIAL aggressors. It is these beliefs that seem to be missing from people like Clinton and Obama. Both candidates have said they will not take the option of a NUCLEAR first strike against Iran. Again we are seeing some of the same rhetoric from them that The Bush Administration put forth to invade Iraq. Obama has said that he will concentrate military efforts on Pakistan and Afganastan. Instead of bringing the troops HOME, he wants to MOVE them to another foreign country. Doesn't seem to be a change or a move for peace around the world since military occupation of foreign lands tends to bring about death and destruction.

What would you say if I told you that I knew how to spend your money better than you and I have decided to take 1/4 of your paycheck this month and spend it for you? You might not be so objectional if I told you that I would spend it on the roads that you drive on every day. But what if I said I was going to give it to a defense contractor to invade a foreign country because your land is running dry of a certain resource? Would you still agree? How about if I said I was going to use it to hire a few people to make rules for what you can and can't do with your life. What if those people ended up telling you that you were not allowed to drive your car because it is dangerous? Guns are dangerous and so are cars so shouldn't you be prevented from owning, creating, or using either? Think about it, how far will it have to go to see some real outrage from EVERYONE? Today we see the state is blocking voluntary transactions between concenting adults who are trying to fly on planes they know are unsafe. The people already know airlines are not good at maintenence, and they still demand the flight. BUT noooooo, your big brother cant let you make your own decisions...you might make the wrong one and end up with a consequence for your action. And even if something happens, don't you see it is in the best interest of the airline to maintain their flights, planes, and personnel to ensure that their business is profitable. Well if government was not there to make sure that airlines cannot fail this would be true. This all leads back to getting the state out of the market and letting the will of the people define standards and transaction regulations.

Sociology

My Sociology professor seems to advocate absolute socialism in every lecture I have attended...sadly. I sent her this email after our third test in which I found myself ansering incorrectly just to make the grade. Thats right, I have evidence to disprove many of the statements made in this class but the professor seems to ignore anything and all information I send to her. Here is the email:



Dr. ___,

I was searching on the net and found the following sources for the current long term capital gains tax rate of 15% for most income brackets since President Bush cut the rate in 2003. I am confused about where the 17.5 % quoted rate that you expressed in class and on the test came from? I also found out that short term capital gains, which most professional investors and successful traders are subject to, are taxed at the investor's ordinary income tax rate which can be upwards to 35%. Despite your political views, the federal government was not created to assume ownership of the lives of American citizens by taxing their income. I, a poor person, independent and living on my own supporting myself completely, have benefited by the decrease in the capital gains tax rate. I have worked since I was 14 years old and saved enough to invest.

I am hopeful that I will only be double-taxed (the corportation is taxed, then the owner of the corporation is taxed ie. the shareholder or me) for 15% rather than 30% (the previous capital gains rate) so I may be able to afford a better life for myself and my children. If this tax rate remains constant it will only further the chances that this might become true. I would hate to think that anyone would feel the need to discourage savings as it is one of the only ways a person without other means of upward mobility can work his or herself upwards. I also attached a link you may find interesting concerning the the recent increases in the cost of health care services in

The United States.15% Long term capital gains tax:

http://en.wikipedia.org/wiki/Capital_gains_tax_in_the_United_States

http://taxes.about.com/od/capitalgains/a/CapitalGainsTax_4.htm

http://www.irs.gov/taxtopics/tc409.html

Cost of health care services:

http://www.mises.org/story/2285Respectfully,Stephen Stokes