The Value of a Summer

The summer is drawing to a close, and I regret that I will shortly finish my internship at the Mackinac Center.  This internship has been a fantastic opportunity for me to sharpen my skills while working to promote free markets, and I consider it a great privilege to be considered a member of the Mackinac Center team.

At the end of any project, it is good to look back and consider the significance of the work that has been done.  At the end of the day, why is liberty important?  Why do we (both myself personally, and the Mackinac Center collectively) spend our time and resources promoting this idea?

The answer lies in the dignity of the human person.  The great “isms” and ideologies of our day, such as communism, fascism and utilitarianism, exalt an economic or political system to the detriment of each individual human being.  Under the reign of an ideology, people cease to be valuable in their own right, and are only respected insofar as they work towards or promote the state’s ruling “ism.”  Yearning for the progress of the state tramples over individual human lives.  Demagogues and dictators who strive to create a new social order out of whole cloth have never made it to Utopia, though they have made a lot of bodies while trying.

In order to achieve either stable economic prosperity or general personal happiness, any state must recognize the fundamental dignity of each of its citizens.  This does not mean giving the citizenry all of the hand-outs which they might request: after all, isn’t it a greater sign of respect when an individual is expected to provide for his own needs?  Even “soft” or democratic socialism, unaccompanied by iron-fisted police measures, denies to every man under its rule the basic dignity of providing for himself, to the extent that he can. 

And so, I am encouraged by the hope that my work at the Mackinac Center has contributed, in some small way, to the promotion of human dignity and liberty in my own time and place.  As Edmund Burke said, a nation is a “community of souls,” not robots, slaves or cogs in a machine, but men and women carefully formed in the image of God and valuable on that account alone.  Americans both inside and outside of government must cling to this principle if the nation is to remain both free and strong.

I will miss the Mackinac Center, but trust that I will find many more opportunities to advocate for liberty wherever my future paths take me.  As J. R. R. Tolkien said, “The Road goes ever on and on…”

On Equality

Why, exactly, did the Founding Fathers assert that “all men are created equal?”  The statement is clearly false from a material perspective. People are born into widely varying degrees of material comfort and prosperity. Later in life, individual economic choices and work, or lack thereof, will necessarily leave some citizens with more possessions than others. 

Government’s attempts to bring about material equality most commonly bring the entire population down to a “lowest common denominator” standard of living. With the government officials themselves excluded, this system may appear to bring about greater equality, but at a terrible price.  The leveling, centrally planned programs of the USSR produced a society with nearly everyone at a low standard of living.  The average Soviet family’s income was not only well below that of the U.S., but even below the poverty line in this country for much of the Cold War. Meanwhile, the system failed even to produce equality, because privileged Communist party officials abused their influence to maintain a standard of living far above that of the people whom they ostensibly served.

Mackinac Center President Emeritus Lawrence W. Reed had it right: “free people are not equal, and equal people are not free.”  Government cannot force equality in the face of each individual’s choices. Indeed, it would be a gross injustice to pronounce that two men — one frugal and industrious, the other lazy and spendthrift — deserve the same quality of life.  The fact that harder or smarter work can better one’s condition is the driving force behind American innovation. Remove that incentive through redistribution of wealth, and many more citizens will drift toward the lazy-and-spendthrift camp.  If working hard won’t better your lot, why bother?

The Founding Fathers had a much deeper meaning in mind for the phrase “all men are created equal.” They envisioned a republic with all men equal under the law, each accountable for his own actions. Legal equality, to them, included each man’s right to his own life, liberty and property.  Regardless of political power, no man’s rightful possessions could be taken away from him: the laborer had as strong a claim on his scanty savings as the rich had on their mansions. This equality of rights — not possession s— strengthens liberty rather than undermines it. Liberty cannot survive in chaos, but equality before the law prevents chaos and establishes certain principles by which both leaders and citizens are bound. The founders were correct in their defense of equality; modern America needs to remember the form of equality they valued.

Our Greatest Protection

            Americans have increasingly come to view government as a vital protector against economic hardship. U.S. politicians, especially from 1900 on, have touted various interventionist economic programs as essential for America’s prosperity and security. Free-market economist Milton Friedman, on the other hand, understood that the best protection for American workers and consumers springs not from government intervention, but from economic freedom. It is this freedom to choose that guards us from exploitation and opens innumerable doors of opportunity.

            Friedman describes in his book Free to Choose how economic freedom aids consumers. In a competitive market, businesses have strong incentives to produce goods that consumers need and demand. The freedom of new entrepreneurs to grab a share of the population’s demands ensures that the vast majority of consumer needs are met. Also, price spikes are mitigated by the competition: even if all existing stores agree to keep prices artificially high through collusion, new vendors can enter the marketplace and thwart their efforts. Consumers cannot be forced to buy particular products, and thus will voluntarily contribute to the expansion of high-quality vendors while abandoning companies that provide poor service. According to Friedman, it is free competition, not government regulation, that protects consumers from exploitation and shortages of essential goods. 

            In his works, Friedman also points out the benefit workers gain from economic freedom: the crucial ability to earn wages that reflect the value of their skills. In an open market, companies will compete strategically for the most productive workers, driving wages up and rewarding good work. The free market also allows workers to become entrepreneurs and manage their own time and resources. Free markets ultimately protect workers from poor conditions by providing them with the freedom to choose a job according to their own desires and abilities. By contrast, a legally enforced monopoly system hurts workers, as they can only seek work from an employer with little incentive to offer competitive wages or pleasant working environments. 

            Similarly, Friedman argued that the freedom to choose among schools can help protect American children against a poor education. The more options parents have regarding schooling, the more schools will be held accountable for the teaching they provide. The worst situation for any student is to have only one compulsory schooling option, as is true for many inner-city children. Without any alternative, they have nowhere to turn if their assigned school fails to provide a good service. Friedman and his wife Rose were tireless advocates for increased school choice, knowing that increased freedom for families could provide an escape route for children in poor schools.

            Dr. Friedman deeply understood the importance of freedom in our society. America’s key to prosperity and long-term economic security is the liberty that enables her citizens to apply their skills and talents without arbitrary government interference. Anytime a citizen is left with only one vendor to buy from, one employer to work for or one school to attend, that citizen becomes vulnerable. Our greatest protection against both corporate and government exploitation lies in our freedom to choose.

Inspired by Milton and Rose Friedman’s Free to Choose: A Personal Statement.

Snyder is Pro-Worker

A controversial poster has been put on display in the Marquette Arts and Culture Center.  This supposed piece of art portrays four Republican governors, including Gov. Snyder of Michigan, as iron-fisted fascists, and features the Nazi Eagle symbol with the swastika replaced by the GOP elephant.  While the poster is a blatant appeal to hatred rather than open discussion, this post is designed to critique its actual content, specifically the claim that Snyder and his policies are “anti-worker.”

It is true that Gov. Snyder is pursuing policies that would reduce the influence of labor unions in Michigan.  However, are such actions actually harmful to workers?  Michigan’s unions today are machines with massive bureaucracies.  Research by Paul Kersey, director of labor policy at the Mackinac Center, showed that the Michigan Education Association spent 58.7 percent of its budget on administration and overhead, while the figure was 30.8 percent for United Auto Workers (“Union Spending in Michigan: A Review of Union Financial Disclosure Reports”).   Such spending calls the value of unions to their workers into question.  True, the value of mass representation might be worth the dues which workers pay, but this is far from guaranteed.

A strong free-market solution is to allow each worker to decide for themselves whether to join a union or not.  By logical extension, if workers have the right to associate, they should also have the right not to associate.  Compulsory unionization, in which qualified workers are legally prohibited from holding a position unless they join a union, flies in the face of economic freedom, as well as smart business.  Any responsible manager should hire the best-qualified individual for a position, and when unions attempt to prevent this, they reward mediocrity.  This can be seen in teachers unions when teachers’ hours and pay scales are tightly defined with no regard to merit.  Teachers are left with little incentive to excel, and students suffer (along with the best teachers, who do merit more pay).

By fighting against compulsory unionization, especially in the public sector, Snyder and his fellow governors are far from being “anti-worker.”  Allowing workers the freedom to manage their own paychecks, rather than pay dues to potentially wasteful unions, is pro-worker.  In the long run, right-to-work policies make the unions more efficient and helpful to workers: unions have much more incentive to serve their members well when said members have the freedom to leave if they wish.

Government of the people, by the people, and incomprehensible to the people?

The Founders understood that the government of a Republic existed to serve its citizens, and not the other way around. In order for citizens to hold government responsible to this end, however, they must be able to actually understand what the government is doing.

Today, our government has strayed far from this path. Laws proliferate in such numbers that even lawmakers, let alone citizens, are left ignorant of legal intricacies. Bills can apparently even be passed without being read by their sponsors. Witness this exchange regarding the Patient Protection and Affordable Health Care Act (ObamaCare): http://www.youtube.com/watch?v=ITyy1-BUGu8

This week, President Obama and Speaker of the House Boehner are meeting to discuss potential action to be taken on the national debt, which currently exceeds $14 trillion, a number that few if any people can actually grasp. Looming large in their minds are questions concerning the U.S. Tax Code, arguably the most convoluted and confusing title of legislation in the country. The current code contains 11 subtitles and more than 9,800 sections. It has grown riddled with loopholes and provisos that favor special interests from every corner of society. While the much-touted exemptions from certain taxes granted to owners of corporate jets (section 4281) do provide a good example of this, they constitute only a tiny fraction of the problem.

The United States needs a tax code that its citizens can actually understand, as well as one that rewards productivity by allowing citizens of all levels of income to keep more of what they earn. A simplified tax code will benefit our country in multiple ways. It should set a principle of equality before the law by not favoring special interest groups as the current tax policy does. Businesses and individuals should not gain financial advantage based on catering to the political fads of the day, but should compete on an equal footing with consumer dollars as the reward for productivity. When interest groups spend money essentially lobbying for more money, productivity is lost. The resources invested in lobbying could both bring the company profit and increase America’s overall wealth if they were used to produce useful goods. A simplified tax code would send a clear message to special interests that money cannot buy them preferential treatment in Washington.

A popular understanding of the tax code would help to keep the government accountable, as people can quickly know how much tax they owe rather than sifting through pages of IRS regulations hoping that they didn’t miss a deduction. People deserve to know exactly how much of their money is used to finance their government, and in what ways. Businesses would also be able to make smarter decisions if they were confident of their tax burdens ahead of time. Of course, this demands a stable tax code as well as a simple one.

A flat-rate tax with fewer politics-based exemptions would empower both citizens and businesses in America while fighting the power of the IRS behemoth and special interests which seek gifts paid for by public funds. By closing loopholes and special credits, tax rates could be lowered across the system, encouraging both people and businesses to produce more. People produce more when they know that they will reap the benefits of their production, and such knowledge is only possible given a comprehensible tax code.

On Charity

How can we best confront the problem of human want and poverty?  Two competing schools of thought frequently clash in this arena, painting two opposite pictures of what can most benefit the poor.  The first school is dedicated to personal charity and philanthropy, while the second seeks governmental redistribution of wealth.  While both systems seek the benefit of the poor, they are based on radically different ideas of personal responsibility, and ultimately lead in opposite directions.

Private charity emphasizes personal responsibility and stewardship.  A poor man’s knowledge that another human being (perhaps even a personal friend) willingly sacrificed funds to help him serves as both an encouragement and a call to responsibility.  Looking another man in the eye knowing that he helped you voluntarily is the best antidote against any sense of entitlement.  It also reinforces to both parties the value of the human person, as the rich man counts the act of helping his neighbor as more valuable than the goods he might have purchased.  In essence, charity promotes community and respect.

By contrast, involuntary governmental programs (such as welfare) do not encourage responsibility from either party.  The givers in a welfare system (taxpayers) have little opportunity to meet or interact with the recipients of their money.  While charitable giving is voluntary by definition, taxpayers have no choice but to pay into the welfare system, which builds resentment in individuals who might otherwise have been happy to give money to their neighbors in obvious need.  For the recipients of welfare, the nameless, faceless governmental checks can quickly give rise to a sense of entitlement.  There is no philanthropist or neighbor to thank, no one to hold the recipient accountable and push him to use the money in a constructive way.  Also, government programs often absolve the well-to-do of any sense of duty toward the poor, as they trust in the government to do so.  However, you can care best for people whom you actually know, and who will actually respond to your gift.  Government does not “know” people, and as such can never care for them like a charitable giver can.

When prompted for a charitable contribution at Christmastime, Ebenezer Scrooge angrily replied “Are there no prisons?  Are there no workhouses?”  The miser brushed his duty towards his fellow men off on the government, which truthfully provided such conditions that many “would rather die” than enter a workhouse.  At the end of “A Christmas Carol,” it is Scrooge’s personal and voluntary charity which both raises the Cratchet family out of want and brings joy to Scrooge’s renewed heart.

The point of charitable giving to the poor is precisely that it is charitable, defined by a love and valuing of our neighbors.  Government welfare is inspired by neither of those things, but by a rejection of one’s own responsibility toward the poor.  The answer is not to throw more money at a wasteful system.  In truth, both the rich and the poor must embrace responsibility.

The Value of Competition

I am researching privatization in public schools for the Mackinac Center this summer, and so am making a good number of somewhat monotonous phone calls collecting data on competitive contracting within Michigan school districts.  Recently, a few districts have given me some interesting stats regarding their competitive contracting efforts that are enlightening.

I have spoken with several school districts which bid out their food, transportation or custodial services that are taking offers from various private firms to provide these functions rather than hiring school district employees.  In multiple districts, the school board did not decide to actually privatize, but the mere process of competitive contracting resulted in substantially decreased costs for the district.  Frequently, school employee unions gave concessions in order to keep the service in-house, demonstrating the impact of competition.  The introduction of competition among service providers works in the favor of our schools, enabling them to save precious dollars amidst tight economic times.  Schools must be allowed to explore multiple options, both public and private, in order to find the best possible options.  Any restrictions upon this competition handicap school boards in their attempt to make the best possible use of the resources available.

By the way, this competition does not demand that districts should privatize services haphazardly.  Sometimes, in-house services make the most financial and practical sense.  However, failing to explore all possible options is poor stewardship of taxpayers’ dollars.  A wise and frugal individual would explore as many options as possible before deciding on a major purchase, such as a new home or car.  Simply taking the first available option would be foolish and could likely lead to a waste of money.   We must hold Michigan school boards accountable as stewards of our tax dollars, entrusted to them with the faith that they will make good use of the money.  Competition is the best way to encourage high-quality services at fair prices, as the desire for healthy business will push private companies to provide better services for our schools at a lower cost.  The reminder that other companies are willing and able to provide comparable services is one of the best possible safeguards against workplace complacency and settling for second-rate work.  Competition promotes innovation and excellence.  It is a great strength of the free market.

On Liberty and Property

The Founders understood that a respect for personal property is closely linked to individual rights and liberties within society.  According to James Madison, the term property encompasses “every thing to which a man may attach a value and have a right; and which leaves to everyone else the like advantage.”  Property, therefore, encompasses far more than material possessions.  It includes such things as a man’s talents, intellect and personal security.  Under this definition, any government that seizes a man’s rightful property is violating that man’s liberty.

Liberty and property are ultimately inseparable.  This is most clearly seen in the arena of intellectual property: if men are not allowed to think, how can they ever be free?  A man’s ownership of his own skills and talents is also closely connected to liberty.  Any system which denies a worker the right to use their talents within the market hampers that worker the chance to improve his or her own life through innovation and hard work.  Governmental economic planning, which assigns citizens to specific labors without regard for personal desire or innovation, violates each citizen’s possession of his own talents, and thereby destroys both economic and personal liberty.

The accumulation of large amounts of property by a few individuals is generally frowned upon by society in general, leading to popular calls for increased taxes upon the rich.  However, just as each worker should have the right to labor for his own profit, every man, regardless of his wealth, should be able to enjoy the fruit of his own work and ability.  Extremely high taxes are no more appropriate for the rich than for the poor: every citizen’s property must be respected if this country is to remain free. 

At this point, it is important to note the final clause of the earlier quote from Madison: “property… leaves to everyone else the like advantage.”  The wealth of some citizens should never necessitate the poverty of others.  Free-market economies do indeed contain both rich and poor citizens, but every citizen should have at least the opportunity achieve prosperity.  In cases of oppression and abuse, outside intervention may be required to allow each citizen this opportunity for prosperity, but the government can never guarantee wealth to all.  Such a government would have no respect for either property rights or the purpose of government in general, which is not to provide people with property, but to bring an order based upon right, not upon brute force, into society, thereby creating the conditions under which property is secure.