Mackinac Center Current Comment :: 8 August 2008

<>< Josh Rule : : 2008 MCPP Intern

Trying Liberty’s Hannah Mead wrote today’s Current Comment.  Mead looks at the current situation of ethanol growth in Michigan.  She talks about a cellulosic ethanol plant in which GM and the state have put significant money, but which might end up harming the environment while doing little to affect the price of fuel. Also important to note is that because this plant creates cellulosic ethanol, it primarily uses wood as its raw material, not corn or another quickly replenishable crop. I am inclined to agree with Mead that this new plant is probably not what Michigan needs.  with global food supply, global ethanol supply, and global corn supply.  Something does not quite add up, she argues, and concludes that ethanol simply has to go.  It is not the green fuel some claimed it to be – a wonder that would usher in a new era of global prosperity. Go ahead and read the Current Comment to find out why.

(Edit:  I wrote this post quickly and sloppily.  Sorry about that.  Hopefully, the edits reflect a bit more carefully what Mead has actually written about.)

Independently Arriving at the Same Conclusion…

<>< Josh Rule : : 2008 MCPP Intern

Paul Graham, an author and influential programming guru, hints in his essay You Weren’t Meant to Have a Boss! that perhaps markets operating inside an organization would be a better strategy than traditional chain-of-command leadership.  The entire essay is worth the read, but this quote was particularly interesting:

…[S]ince human nature limits the size of group that can work together, the only way I can imagine for larger groups to avoid tree structure would be to have no structure: to have each group actually be independent, and to work together the way components of a market economy do.

Graham goes on to say that perhaps someone should take a deeper look at this idea.  One person who has thoroughly investigated the concept of incorporating markets into companies and other organizations is Charles G. Koch.  His company, Koch Industries, is one of the largest private companies in the United States.  His ideas have been encapsulated into a book called The Science of Success, and are central to the ongoing research of the Market-Based Management Institute.

The idea of operating an organization like a market is a potentially good one, granted that the rules and incentives are properly set up.  Has anyone else done serious work in this area?  What are your thoughts about organizing a company around an internal market?  Leave your ideas in the comments below.

He Has the Right

<>< Josh Rule : : 2008 MCPP Intern

Yeah, we like capitalism here.  And, we are not ashamed of that.  Markets are good things.  So, let’s hear a little applause for Armin Heinrich, a developer for the iPhone who released a new application at the App Store yesterday.  The program, called I Am Rich is designed to nothing other than illustrate to other that you are indeed rich.  The app costs $999.99 and does nothing other than display a small red, glowing gem on the screen.  Oh wait, there is also an information button that can be clicked to provide a mantra, the secret to staying ” rich, healthy, and successful.”

Folks across the blogosphere are up in arms against Apple and Heinrich for allowing such an application.  Yet, this program illustrates one of the great beauties of capitalism – supply and demand.  Not everyone wants to buy the $1000 application, and nobody is forced to do so.  But, the folks who would like to show off their wealth can do so (or could until Apple pulled the app).  People should, for the most part, be allowed to buy what they would like to buy.  If that is an iPhone application that self-admittedly does little to nothing, so be it.

Thanks to Marginal Revolution for this story.

Mackinac Center Current Comment :: 7 August 2008

<>< Josh Rule : : 2008 MCPP Intern

Bruce Walker has a terrific Current Comment at the Mackinac Center today, commemorating the life of Alexander Solzhenitsyn.  Solzhenitsyn was one of the greatest dissidents of the 20th century, working for years to write great works of fiction speaking out against the atrocities of the Soviet Regime.  Read Walker’s Current Comment, and then go read one of Solzhenitsyn’s works.

Be Ruthless!

<>< Josh Rule : : 2008 MCPP Intern

Recently, I have had a number of frustrating conversations about liberty and the role of government.  It can be difficult to communicate exactly how something will get done when nobody is being forced to do it.  How will the poor be taken care of when no one is forced to give to welfare?  How will aid make it to foreign nations if the U.S. government does not forcefully take money from its people?  In short, how can a system built on people’s self-interest provide for generosity?

The answers to these questions are difficult but not impossible.  I know that, and I know the answers to these questions.  So, why are the conversations frustrating?  Why don’t they end with glee every time as my friend and I realize, yet again, the beauty of liberty and limited government?  I was not thinking or speaking clearly.  I was just rushing through a torrent of classical liberal ideas, without connecting them, without stating their underlying principles, and without thinking through my words before speaking.  Therein lies the problem.  It becomes impossible to convince people that classical liberalism benefits people when you lay out your ideas sloppily. If I simply assume that my classical liberalism is so brilliantly simple that a half-baked attempt to communicate it will be overwhelmingly successful, I am grossly mistaken.

Yesterday, I was watching a clip online about public speaking, and the something the presenter said in that clip came back to me this morning as I was contemplating how to stop the frustration and help someone gain a new understanding of liberty.  Be Ruthless! Not in your conversations with other people, but in your deliberations with yourself to logically outline the case for liberty, one has to be ruthless.  The logic should be fatally clear, devestatingly easy to follow.  Complex ideas should be broken down into smaller ideas and tied closely with helpful analogies. The answer to a difficult question should begin with basic classical liberal premises, not halfway into the body of the argument.  Confusing or badgering people until they agree with You is no success.  It is the grandest of failures.

So, Be Ruthless!  Strip down your arguments to their most basic outlines and address additional issues as needed.  Then, strip that argument down again, even further, until just the core is present.  Do not cripple the argument, but do not overload it either.  Then, carefully present a tight, well-articulated argument, starting from agreed-upon premises and working, one step at a time, toward the conclusion.  Answer objections.  Do not brush them off as simple-minded.  Classical liberal ideals are powerful, but they are also difficult to understand, initially.  If we forget this fact, and expect people to pick them up without honest intellectual conversations, we are sorely mistaken.

Mackinac Center Current Comment :: 6 August 2008

<>< Josh Rule : : 2008 MCPP Intern

Today’s Current Comment is this week’s Michigan Education Digest from Michigan Education Report.  The most interesting story is about how a bill has recently been rushed through the legislature to allow Detroit Public Schools to maintain their ‘first-class’status.  The bill also opens up room for more charter schools, though, and teachers throughout Detroit are expected to protest this fact later this month.

Both the special ‘first-class’status and the possible expansion of charter schools are significant, although for different reasons.  The special status should be removed from Detroit Public Schools because, while it is the largest district in the state of Michigan, it is not different in kind from the others.  It is still a school district, teaching children basic tenets of math, science, literature, history, social science, and the arts.  True, many students are fairing very poorly there, but the extra funding and attention the ‘first-class’label brings will not solve the problem.  The possible expansion of charters school, on the other hand, should be applauded, because it might help the ailing district.  They are no magic bullet, but they are a step in the right direction.  Charter schools open up another avenue for competition that forces schools to put education before union contracts or teacher salaries.

I am certain that many skilled and committed teachers are part of the Detroit Public Schools, and charter schools leave them with nothing to fear.  In fact, these teachers will most likely be better off with the charter schools than without.  Those who do have a reason to protest this new opening for charter schools are teachers who are not actively engaged in the art of teaching. But, for students, losing teachers who are not passionate about education in order to gain teachers who are can only be a good thing.

Four other stories can be found in the Digest this week, so take a few moments and check it out.

Mackinac Center Current Comment :: 5 August 2008

<>< Josh Rule : : 2008 MCPP Intern

Trying Liberty’s own Lauren Ruhland wrote today’s Current Comment.  Originally, the story was published in Michigan Science, a print magazine from the Mackinac Center, but it has now been posted as a Current Comment as well.  The story is about the discovery of a megaladon tooth in the St. Clair River just a few months ago.  The megaladon was a shark that has been extinct for several millenia but was at one time a fierce predator, growing up to 60 feet in length.  Go ahead and read Lauren’s article to hear more about the discovery of the tooth and one of history’s largest predators.

Mackinac Center Current Comment :: 4 August 2008

<>< Josh Rule : : 2008 MCPP Intern

Today’s Current Comment was written by Central Michigan University faculty member Dr. Theodore Bolema.  He writes about proposed legislation currently under consideration by the Michigan legislature that would significantly curb the already crippled competition among energy providers in the state of Michigan.  Because of the design of the electrical grid, a natural monarchy does not really exist, although energy companies sometimes claim that there does.  Just like any other industry, though, competition is best for all.  Read Dr. Bolema’s article for more details.

Divest Michigan!

<>< Josh Rule : : 2008 MCPP Intern

Michigan papers today are carrying the news that Gov. Jennifer Granholm has announced a new program to spur the state’s business to growth.  The program takes $300 million from the state’s employee pension fund and is placing it in the hands of a high-caliber group of Michigan businessmen.  For more information, read here, here,  and here.

Now, while it is laudable that Gov. Granholm wants to aid Michigan businesses, perhaps she is going about it the wrong way. In looking at this program, I have two questions to which I simply cannot bring any sense.

1- Why use pension fund money? If I were a state employee banking on a government pension, I would not want the government to be tossing bits and pieces of that pension to a market in which it could be completely lost.  Yes, the government should try to use its money well and investing pension money is probably a good idea.  But loaning out money to startups seems to be an awfully risky move for money that needs to be quickly available for retiring state workers.  Startups are notoriously risky investments, and may not be the best choice here.

2- More importantly, haven’t we tried this type of investment before? what about programs like the Michigan Economic Growth Authority’s tax credit program?  That was supposed to bring large numbers of jobs to Michigan and jumpstart our economy.  What has happened to it?  Simply adding more programs will not solve the problem.  We need to do something fundamentally different.  Simply throwing money around, particularly taxpayer money, is a poor solution.  Instead, some of the officials in Lansing need to take a serious look over the tax program in Michigan and scrap it for something cleaner, simpler, and fairer.

Mackinac Center Current Comment :: 1 August 2008

<>< Josh Rule : : 2008 MCPP Intern

Today’s Current Comment is an article by Lorie Shane over at Michigan Education Report.  In it, Shane talks about the No Child Left Behind Act, how Michigan continues to perform, and how the act is changing.  While the article is very good, it does not mention what I think are some key points.

First, the NCLB Act, as well as the entire federal Department of Education, is unconstitutional.  The United States Constitution specifically states that those things which are not explicitly delegated to the federal government in the Constitution are to be left entirely to the states’decision.  Education is not specifically delegated in the U.S. Constitution, thus, it is the responsibility of the states to provide and regulate public education.  While the Michigan Department of Education is probably needed, the U.S. DOE certainly is not.

This constitutional provision illustrates an important concept in the U.S. theory of government that is often neglected: federalism.  The United States is just that – a group of states operating in cooperation.  Each state is to be largely independent in the development of laws, bureaus, and customs.  The federal government, in turn, is to provide for those specifically granted powers of the federal Constitution which the founding fathers did not believe easily accomplished by states acting disparately.  The federal government has grown much more powerful than is provided for in our theory of government, and the states, and their citizens, have suffered accordingly.  Federalism is a strong idea, reminiscent of the marketplace, and one to which we should draw attention more often.

Another point worth mentioning is that strong school choice is a much more effective regulator than the NCLB Act.  Leaving the ever-present possibility that students will leave if the education their school provides is not satisfactory, schools have a direct incentive to improve and educate well.  One of the most effective reforms for NCLB, then, would be to abolish it and move all the folks at the state level who have worked to ensure their schools are performing well to working full-time to initiate powerful school choice measures like a tuition tax-credit.

Teaching the youth of the United States is an incredible responsibility.  To do so poorly is an incredibly tragedy.  We must work to reform the educational systems not only of Michigan, but of state, providing a model for the world of how effective education policies can change the future of a nation.

Mackinac Center Current Comment :: 21 July 2008

<>< Josh Rule : : 2008 MCPP Intern

Isaac Morehouse and Bruce Walker put together today’s Currrent Comment, a celebration of the ideological ties between blues, jazz, and Milton Friedman’s  economics.  Sound a bit far-fetched?  It actually makes perfect sense.  Jazz and blues are all about personal mastery and personal determination.  They hinge on the freedom of the artist to determine what sort of work he will produce.  Similarly, Friedman’s theories required a great deal of personal mastery and personal determination if one wanted to succeed.  They too required freedom for each individual to choose, wisely or poorly, and to set and pursue their own goals and dreams, so long as they did not interfere with another person’s goals and dreams.  So, to celebrate the 96th anniversary of Milton Friedman’s birth, please go put on some Chicago jazz as you read an essay or book by this Chicago defender of human freedom.

Mackinac Center Current Comment :: 30 July 2008

<>< Josh Rule : : 2008 MCPP Intern

Clicking on today’s Current Comment link from the Mackinac Center homepage redirects readers to the new Michigan Education Digest.  This week’s digest contains five stories highlighting some of the more interesting developments in the world of Michigan public and private education.  Perhaps the most interesting, and disheartening, of this week’s stories highlights a recently released report concluding Michigan to have the lowest graduation rate for black males in the entire country.  In fact, Detroit Public School graduates 1 in 5 of its black males and only 17% of its white males.  Clearly, something is broken in the Detroit Public Schools, and widely embracing school choice is one of the only ways this situation will improve.  Go ahead, though, and read the rest of the stories.

Mackinac Center Current Comment :: 29 July 2008

<>< Josh Rule : : 2008 MCPP Intern

Today’s Current Comment was written by Jack McHugh.  He writes about the tax climate in Michigan and how increasing the tax burden for an already stumbling economy is a poor idea.  Fundamentally, McHugh reminds readers that economics is the study of people and their decision-making.  So, when the legislators in Michigan’s congress choose to enact higher taxes, businesses who were planning to move into Michigan decide not to come after all.  Families who were barely scraping by before the tax hike simply cannot make it anymore, so they move away.  People are not static objects, but thinking, feeling subjects.  Changing the rules of the game, by increasing taxes for example, changes the very way people play the game itself.  The same old game becomes an entirely new and different game.  But, new may not necessarily mean better.

Another way to communicate this truth is to realize that institutions are important.  Why?  Well, they are important because they can enforce rules and rules are important.  Why?  Well, rules are important because they create incentives, and incentives are important.  Why?  Well, incentives guide people’s behavior, and understanding how people act is the goal of economics.

For the most part, though, the problem is not in the institution itself.  Government, by most people’s account, is a valid institution with a legitimate place in society.  There are problems, though, with the rules.  The current rule set that governs Michigan residents, its current laws, are creating the wrong incentives.  They are, for instance, encouraging people to stay away from Michigan business and even to leave if they are already here.  Economic growth cannot happen this way, no matter how many tax credits are granted to filmmakers or other specialty enterprises.  Instead, these poor rules must be repealed, and different rules must be established to govern the game of Michigan’s economic health.  Remember though, that we might not need as many rules as we have currently.  We need just enough to create the right incentives, and no more.  In fact, creating extra incentives will only serve to make the game less fun for everyone involved.

Michigan needs serious revision to the rules governing the game, and until that happens, situations such as the one outlined by Jack McHugh in his Current Comment will only become more and more depressing.  The solution is simple, even if it may be hard to exercise the restraint to implement.  It is worth it though, for the millions of grateful people who will make Michigan prosper for decades to come.

Mackinac Center Current Comment :: 28 July 2008

<>< Josh Rule : : 2008 MCPP Intern

Jack McHugh writes today’s Current Comment about the proposed Reform Michigan Government Now amendment’s streamlining for Michigan’s budget.  He concludes that the amendment ends up saving the state approximately one-twentieth of one percent of its operating budget.  This amount is almost laughable compared to the hype the proposal has received for its reform and “downsizing” of state government.  McHugh includes further details, as well as his own recommendations, in the Current Comment, so check it out.

Mackinac Center Current Comment :: 25 July 2008

<>< Josh Rule : : 2008 MCPP Intern

Today’s Current Comment from the Mackinac Center actually comes from Michigan Education Report.  Vice president of public relations and government affairs for the Michigan Association of Public School Academies Gary Naeyaert writes on the need to remove the special ‘first-class district’status of Detroit Public Schools.  The distinction forcibly eliminates much of the competition by preventing many private and even charter schools from operating within the district.  Check it out.