New Way to Care: Social Protections That Put Families First, by John C. Goodman, Independent Institute, 384 pages, $29.95
In the Depression summer of 1934, President Franklin D. Roosevelt gradually concluded that the country needed a broad-based, government-led program to assure Americans' economic security. He thus created the Committee on Economic Security, led by such long-forgotten policy mechanics as Frances Perkins, Arthur Altmayer, Edwin Witte, and Wilbur J. Cohen.
The Committee begat the Social Security Act of 1935. The legislation's central feature was billed as "social insurance": Workers would make contributions throughout their working lifetimes, the government would invest the funds in special Treasury notes, the earnings would accumulate, and at age 65 or upon disability the workers would begin to draw retirement benefits. What could go wrong?
Thirty years later, big government had advanced far enough in public esteem for presidents John F. Kennedy and Lyndon B. Johnson to expand social insurance to include government-managed health insurance for retired workers (Medicare) and government-paid health care for the poor (Medicaid). The chief policy mechanic for this great leap forward was Cohen, who ended up serving as secretary of health, education, and welfare for the last seven months of Johnson's presidency.
Let's engage in a counterfactual. Suppose those social insurance plans had been designed by libertarian-leaning policy mechanics. What would they have produced?
In New Way to Care, economist John C. Goodman supplies a plausible answer to that question. Goodman reveals the disincentives, inefficiencies, hypocrisies, astronomical unfunded liabilities, and general absurdities in the programs that currently exist. Then he goes beyond that to lay out the policy alternatives that, he argues, would make the American social security, disability, and health care universe effective, consumer-centered, and, above all, pro-liberty.
Goodman has authored at least 26 books on health and welfare policies since 1980. His most influential work was probably Patient Power: Solving America's Health Care Crisis, written with Gerald Musgrave and published in 1992. That 657-page magnum opus reviewed the evolution of health care policies in the U.S. and abroad. It lucidly explained why competitive markets and informed and empowered patients lead to efficient and beneficial outcomes, while turning over patient care to government bureaucracies inevitably leads to inefficient and sometimes calamitous mistreatment.
At that date, this notion was considered borderline preposterous by orthodox health policy wonks, whose differences arose mainly over how and to what extent the government should control health care, who should be made to pay, and what sort of provider organizations and business plans were most desirable. No one has done more than Goodman to force the principles of patient choice and provider competition upon a health policy community that has been uncomfortably resistant at best and relentlessly opposed at worst. Goodman is widely credited as the father of health savings accounts, an idea that Congress enacted in 2003 and now benefits more than 25 million American families.
In his new book, Goodman asks the pointed question: Why is government involved in retirement security, medical care, disability support, and unemployment payments? "For elderly entitlement programs," he writes, "we have made promises to future retirees that far exceed the revenue that will be there to fund them. In fact, the unfunded liability in [federal] elderly entitlement programs alone is about six times the size of the entire economy." What's more, "Even when a social insurance program is reasonably funded, individuals invariably face perverse incentives to behave in ways that undermine the purpose of the program and increase the costs for others."
Goodman goes to considerable lengths to identify those federal programs' defects, few of which were imagined by Wilbur J. Cohen and his colleagues. A six-page appendix concisely explains what socialized medicine actually looks like in practice. One would hope that this recitation would give reasonable people pause. For example, under the much-touted Canadian single-payer system, the care is rationed mainly by waiting. "In 2016," Goodman writes, "Canadians waited an average of 21.2 weeks between referral from a general practitioner to receipt of treatment by a specialist—the longest wait time in over a quarter of a century of such measurements."
Goodman focuses on how to deal with real risks that people face: outliving one's assets, dying and leaving your family without resources, becoming disabled and facing financial ruin, becoming unemployed and finding no market for your skills, or surviving a pandemic. A two-word summary of his solutions would read: "opt out." Goodman wants people to be able to exit dysfunctional systems, both to improve their own circumstances and to give those systems an incentive to improve. More expansively, Goodman wants all of those programs if not totally scrapped then redesigned to maximize choice and responsibility in light of sound economic principles.
There are some complications. One can imagine the better students of a yearlong college course taught by Goodman using this book as a financial planning handbook. But most people are likely to have a hard time working their way through some of Goodman's solutions. And it's hard to imagine some of them, however defensible they may be in an economics seminar, becoming viable policy alternatives in Congress.
Take opting out from the Social Security program. Goodman suggests that the government give a young worker the opportunity to make a one-time lump sum payment in lieu of ever paying payroll taxes or accepting any benefits. Then he could use 4 percent of his untaxed wage income to make investments that would produce larger benefits than what he forswore over his expected lifetime.
Or: A worker who has vested Social Security benefits could take an early buyout, in an amount determined by life expectancy and a government discount rate. He could then take the cash and put it to work at what he expects to be a more advantageous rate.
A young Milton Friedman might have jumped at those offers, but one may fairly suspect that many young people today will not, unless they have an appreciable amount of assets to begin with.
Another economically but not politically defensible idea is for the government to allow health insurers "to sell insurance that substantially restricts largely futile end-of-life care." This would offload to insurers the practice of the U.K.'s National Institute for Clinical Effectiveness (NICE)—that is, expertly establishing a cost-benefit tipping point beyond which the National Health Service won't pay for any more care. Just imagine an insurance salesman trying to make a pitch for such a policy.
These may not be plausible as political proposals, but they are worthwhile as thought experiments. And Goodman produces dozens of less sweeping reforms that would expand personal responsibility and allow more choices. Many of these are, or should be, within the realm of practicality.
Goodman defends several program changes made under the last administration. Chances are that President Donald Trump had little awareness of what his appointees were actually doing, but Goodman rightly credits the Department of Health and Human Services (HHS) and its Centers for Medicare & Medicaid Services director, Seema Verma. She found ways, without legislation, to expand virtual health care technology in a pandemic, pay doctors for "virtual check-ins," create "right to try" treatment options, protect emergency use of health savings accounts, expand opportunities to buy lower-cost short-term insurance coverage, and increase medical price transparency.
Unsurprisingly, The Washington Post reported in February that President Joe Biden's HHS appointees "are preparing dozens of regulatory actions to roll back much of the previous administration's legacy. That legacy, largely loathed by liberals, emphasized personal responsibility over government assistance and individual freedom over consumer protections.
As in Patient Power, Goodman looks for creative market-oriented practices abroad, even when they occur within an otherwise unappealing political context. Chilean dictator Augusto Pinochet, for example, replaced his country's collapsed social security system with one based on worker-owned accounts. These became popular precisely because employees, not the corrupt government, owned them. (Chile also created a private disability insurance program, in which "Workers make additional contributions to their retirement accounts to cover the contingency of disability, and they pay fees for group disability coverage for any portion of their wages that can't be replaced from their own accounts.")
Similarly, while Singapore is an illiberal society in several notable ways, it has adopted what Goodman calls "the most successful social security system in the world." There, he explains, "people are required to save a substantial part of their income to meet basic needs." Unfortunately, Goodman devotes only three paragraphs to the Central Provident Fund's successes.
New Way to Care is enormously valuable for anyone engaged in the debates over the future of retirement, disability, unemployment, and health care policies. Life would be better for all Americans if John Goodman and other market-oriented health policy practitioners could achieve majority support.
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]]>Great Society: A New History, by Amity Shlaes, HarperCollins, 429 pages, $32.50
With John F. Kennedy's election to the presidency in 1960, Amity Shlaes recounts, Americans developed a growing urge for a "big change that blasted like a space rocket." By 1972, when the smoke from that rocket had somewhat cleared, they had acquainted themselves with the New Frontier, the Vietnam War, the moon landing, two landmark civil rights acts, Medicare, Medicaid, the New Federalism, the "urban disorders" of Watts and Detroit, and the severing of the last feeble tie between the dollar and gold. But it was President Lyndon Johnson's War on Poverty that gave the era the appellation of "the Great Society."
In Great Society: A New History, Shlaes describes the actors, events, and outcomes of those years. The book is a fast-moving and entertaining read, rich in interesting details and extraordinary in the author's marshalling of the history. Shlaes, an experienced journalist, has a gift for leading the reader through subjects that initially seem only marginally related, tying them together in the service of her narrative.
As one who lived through that era, most of it in Washington, I appreciate how Shlaes has shone her reportorial light into many fascinating corners and upon a marvelous and frequently flawed cast of characters. Besides Presidents Kennedy, Johnson, and Nixon, this cast includes poverty czar Sargent Shriver, his brother-in-law Bobby Kennedy, presidential wordsmith Richard Goodwin, United Auto Workers leader Walter Reuther, Fed Chairman Arthur Burns, radical activists Tom Hayden and Michael Harrington, California Gov. Ronald Reagan, Michigan Gov. George Romney, black power leader Nathan Wright Jr., and future senator Daniel Patrick Moynihan. (I had encounters with all of them except Shriver.)
The overarching theme of the Great Society was a massive social project announced by Johnson in a 20-minute address at the University of Michigan on May 22, 1964. He told the graduates that "far from crushing the individual, government at its best liberates him from the enslaving forces of his environment." His administration, Johnson said, had assembled "the best thought and the broadest knowledge to find answers to society's problems." Those answers would be implemented by a "fighting and aggressive" federal government dedicated to winning a war against poverty and against the "loneliness, estrangement, and isolation" that were its consequences.
"The men around Johnson," Shlaes observes, "felt the weight of this faith in them, and strove hard. Viet Nam would be sorted out. There would be a Great Society. Poverty would be cured. Blacks of the South would win full citizenship. The Great Society would succeed." There would be plans! Many plans! Measurements! Results! The federal government, led by a powerful and determined president advised by the best social scientists, would become the driving force for social change, as opposed to merely backfilling the shortcomings of capitalism.
And how did all this work out? Poorly, says Shlaes.
Shlaes' most compelling example contrasts a monumental public housing project in St. Louis called Pruitt-Igoe with an adjacent neighborhood development project called the Bicentennial Civic Improvement Corporation.
Pruitt-Igoe was a stark and stupendous complex of 33 high-rise apartment buildings for the poor, designed by rising architectural star Minoru Yamasaki. Begun in 1955, it was the delight of the urban planners of the '50s. But by the mid-'60s, it had become a decaying, dangerous, increasingly abandoned, and crime-ridden concrete wreck. Interpretations of Pruitt-Igoe's descent vary, but all agree that high-rise rental housing for the poor (or at least the nonelderly poor) turned out to be a very bad idea. Feeble attempts at rehabilitating parts of the project foundered. After resisting the embarrassment for years, the feds threw in the towel in 1972. The demolition was finished in 1976. Half of the site now hosts industrial warehouses; the other half became an unplanned urban forest, later bulldozed for commercial redevelopment.
By contrast, there was the Bicentennial project, literally in the shadow of a Pruitt-Igoe high-rise, inspired by Father Joseph Shocklee of St. Bridget's parish. Working with people of the Jeff-Vander-Lou neighborhood organization, Shocklee put together a team involving the gas company, the Pulaski Savings Bank, a few private donors, and a small-scale minority contractor. Starting in the mid-1960s, Bicentennial bought up vacant brick town houses for $600, found and counseled prospective homeowners, contracted for the rehab, and financed the sale with unsubsidized market-rate mortgages from Pulaski. Existing homeowners cooperated to help the new homeowners improve their education and job skills, find employment, and improve their new properties.
As Bicentennial scored successes with 80 new homeowning families, the appeal of home ownership for the working poor blossomed. Under the Federal Housing Administration (FHA) Section 235 mortgage insurance program, passed in 1968, mortgage brokers rushed to enroll low-income homebuyers. They offered nominal down payments, 40-year terms, and 1 percent financing. But the program relied on new construction, not the more troublesome rehab, and it favored large contractors to achieve the government's grandiose production goals (6 million housing units for low- and moderate-income families over 10 years).
The contractors had to pay FHA-mandated above-market Davis-Bacon wages to their unionized (and largely white) workforces. There was little time or inclination to prepare inexperienced homebuyers for ownership or to bring them into a supportive neighborhood organization. The result: brand new suburban-style split-level houses, purchase price $23,000—unaffordable even with the extreme subsidy terms. When a confused and fitfully employed buyer couldn't pay, the lender foreclosed, the FHA took the hit, and the buyer often departed with all the copper plumbing for resale. (This aftermath is not in the book.)
Shlaes is particularly insightful in describing the tribulations and failures of the Community Action Program (CAP), managed by the free-standing Office of Economic Opportunity (OEO). CAP, a radical departure in the history of federal programs, squeaked through the Democratic Senate on a 46–44 vote. The proposition was this: Uncle Sam would directly fund local organizations in poverty-impacted areas to plan, develop, and coordinate the many facets of Johnson's War on Poverty.
America's mayors did not like this one bit. Accustomed to managing federal funds for urban programs, the mayors regarded the activist groups—composed more often than not of minority citizens resentful of City Hall for its neglect, disrespect, and even oppression—as budding revolutionaries. This, they believed, was not just an affront to the mayors but also a federally funded recipe for revolution.
CAP also required "maximum feasible participation of the residents of the areas and the members of the groups." But participation in what? Making plans? Assenting to the plans of others? Hiring and firing? Dealing with City Hall? Coordinating multifarious other programs and organizations? As Moynihan pithily summarized: "The government did not know what it was doing."
The dream of mass participation wound up dissolving. Fifty years later, it would be a challenging task indeed to find a local CAP agency imbued with anything resembling the revolutionary themes of the 1960s.
Shlaes offers a fascinating, detail-rich re-enactment of President Richard Nixon's Camp David economic summit of August 15, 1971, which she describes as "one of the most impressive [collections of minds] in the history of economic policy." The impetus was a deteriorating international economic situation brought on by the excesses and misfortunes of the Great Society era: the costly and unwinnable Vietnam War, the interminable and conflict-ridden War on Poverty, the unrepaired wreckage from urban riots, a housing finance fiasco that eerily foreshadowed that of 2007, and the forced abandonment of any tangible link of the dollar to gold.
Nixon's Camp David summit produced at least a grudging acceptance of breaking the gold link, imposing wage and price controls, and enacting the first general tariff (10 percent) since Herbert Hoover's day. That all turned out badly. Shlaes, quoting Arnold Weber, notes that "almost everyone associated with the sweeping interventions…has recanted or admitted error."
And that brings Shlaes to her trenchant conclusion. Quoting the economist Friedrich Hayek, she concludes that grand governmental schemes to broadly reorder society are doomed to fail. Public planners do not have adequate information from the grassroots, and they cannot collect information from a nonexistent price system. The Great Society program deserves to go down in U.S. history as a baneful example of a far-ranging, high-sounding, politically motivated experiment that turned out to be largely futile in achieving its hopes, proposed and carried out by theoreticians and planners who (to borrow from Moynihan) simply did not know what they were doing. With the notable exceptions of the civil rights bills, this was a sorry legislative era that festers in the memory of many people still living.
And what of Bicentennial? The former Pruitt-Igoe tenants had discovered a superior alternative to government housing aid, Shlaes writes. "With his small [private sector] housing program, Father Shocklee had shown that 'the poor' were more like the middle class than people supposed. They gained from something only when they had a chance to own it."
The post How We Lost the War on Poverty appeared first on Reason.com.
]]>During the 1980 presidential campaign I served as one of Ronald Reagan's three principal speechwriters. I came to this task having drafted some 46 radio scripts for Reagan over the previous three years and having read hundreds of other speeches that the man had written himself.
In late October 1980, I was assigned to draft Reagan's election eve national television speech. The idea—initially—was to summarize the main points of his campaign for the presidency, and to illustrate how his thinking on public issues would serve the American people.
The result was a 16-page, 4,520-word double-spaced draft. The first version was circulated to various campaign personnel, and their suggestions were incorporated in a second draft dated October 27.
Before I could produce a third draft, there was a new development. According to our three-day running polls, Reagan was leading President Jimmy Carter by 10 points nationally and his support was trending upwards. Apparently, our strategists told us, Reagan's performance had dispelled earlier doubts about his ability to serve, and the voters were increasingly finding him preferable to Carter and independent candidate John Anderson.
So the campaign high command decided—rightly—to not have Reagan give an election eve address. Instead (as I recall) the press office issued a brief statement reiterating his main themes, thanking all those who worked for his cause, and urging the American people to cast their votes for him the following day.
What I have since called "Reagan's Lost Speech" was thus never cleared for delivery, or even (so far as I know) shown to Reagan. But, with one exception, every proposal in it had been offered by Reagan, wither in the campaign or in his years as governor and radio commentator.
The speech contained many of his standbys: a personal story, a Thomas Jefferson quote, a celebration of human-scale institutions, a denunciation of too much taxation and regulation, an appeal for entrepreneurial opportunity, and a defense of private property. It reiterated plans for "moving more power to the people, more liberty for the people, and more resources in the pockets of the people to use as they, not someone else, think best."
Then came the one original idea, which I have always referred to as Tribune of the People. The speech promised a White House office that would "identify the laws and activities of the federal government which have the effect of stripping power away from the people of this country, or stifling independent initiative, or defeating self-help and enterprise at the local level, and of undermining the human scale institutions of our society." The speech pledged that as president he would give his personal attention to act on the recommendations from this office to roll back too much government.
The idea, which was my invention, stemmed from the Roman tribunes, and more recently from the Vermont Council of Censors, created to alert citizens to departures from the sound principles of the state's 1777 Constitution. (Unfortunately, the Council was repealed in 1871 when it got too far out in front for women's right to vote.)
Finally, Reagan would offer his dream that as president he would "capture a vision of America—strong, vital, productive—where the affliction of giantism began to give way before a resurgence of individual liberty, of strong families, of the human-scale institutions that give meaning to our existence, of a new faith in American's future."
Brave, inspiring words (or so I thought, and still think), but they were doomed to oblivion. My disappointment was alleviated somewhat by the repeated requests from campaign manager Bill Casey for more copies to distribute—to whom I never knew. Casey was a firm believer in the expanded ownership part in particular, on which he had once (unsuccessfully) campaigned for Congress.
So what impact did the "lost speech" have? So far as I know, none. Once in the Oval Office, Reagan's style was to make decisions on matters brought to his attention by his top staff, none of whom had any visible interest in any of the ideas contained in this speech.
I managed meetings of the Cabinet Council on Food and Agriculture for 14 months, at which point I decided I was wasting my time, gave up, and returned to my log house on Kirby Mountain, Vermont. There I put on my office wall a fine photo of Ronald Reagan splitting wood on the ranch, alongside portraits of Thomas Jefferson, Bob Taft, Robert La Follette, and my favorite, John Taylor of Caroline, elected three times to the U.S. Senate, who three times resigned and went home to Virginia in disgust.
Below, the draft of that never-delivered speech:
Reagan Final TV Address 11/80
McClaughry Draft 2 10/27/80
Two years ago I did a radio commentary about a man I have never met. His story was so interesting, and it told so much about what life has become in this country, that it has stuck in my mind. And tonight I'd like to share it with you.
The man's name is Karl Magnuson. In the early '70s he held a comfortable position on the faculty of a well-known state university. He was secure and well paid. His students and colleagues respected him. But he was bored and unsatisfied with college life. And after thinking about it a long while, he decided to begin a new life.
He left the university and bought a plot of land in Topaz, Michigan, a town so small it's not on many maps. Karl became a farmer. He learned to live independently, close to the land. He took part in the life of his local community. But scarcely had he arrived in the great pine forests of northern Michigan when he learned that the people of his little community were under almost constant assault from higher levels of government.
The first problem came from a regional planning commission. Its members were appointed, not elected. They had the idea that all future growth and development in Karl's region should be confined to two favored "growth center" areas, leaving Topaz in a permanent "no growth" zone.
Karl and his neighbors fought back, and for daring to challenge the sacred cow of regional planning they were branded as right wing nuts.
But while this battle was going on, the US Forest Service appeared on the scene. It wanted to use helicopters to spray the forests with chemical defoliants. That meant spraying people's homes and livestock, even their children. So Karl and his neighbors went to court and got an injunction to keep from being sprayed by the US government. This won them recognition as concerned environmentalists.
Soon after this, along came the US Navy with a plan to build a massive communications array in Karl's township. Karl and his neighbors fought back again. This time a prominent state official branded them Communists.
Then back came the Forest Service, considering the idea of designating hundreds of thousands of acres of forest as permanent wilderness. The same people defended their community one more time. For this they were labeled greedy exploiters of the forests. These were the same people who had just been applauded as environmentalists for opposing the toxic spraying of those same forests!
All this made Karl Magnuson begin to wonder. On one day, he and his friends were attacked for being left wingers; the next, for being right wingers. How could this be?
"The Left-Right opposition," Karl concluded, "functions as a smokescreen that obscures and diverts people's attention from a real and terrifying process that has developed with frightening rapidity in capitalist and socialist countries alike. The real threat is the enormous enlargement and the decisive centralization of all the means of power and decision."
And I think he is absolutely right. The overriding question is not one of Left or Right. It is one of reversing the flow of power and control to ever more remote institutions, and of restoring that power to the individual, the family, and the local community.
Richard Goodwin—not one of my advisors, but one who came to Washington twenty years ago for the New Frontier—has said much the same thing. "The most troubling political fact of our age," he wrote, "is that the growth in central power has been accompanied by a swift and continual diminution of the significance of the individual citizen, transforming him from a wielder into an object of authority."
This stripping of power and decision making from the individual, the family and the community has had unhappy effects on our people. It has stifled their creative energies. It has tended to make them seekers after permits, rather than doers of fine and generous deeds. It has left them resisting the dictates of a distant authority, instead of working together in a more constructive cause. It has left them disgusted with the institutions of this nation. They are losing faith in a system over which they have come to believe they can have little influence. They are, all too often, simply powerless, and they are angry about it.
As the power of large, centralized institutions grows, the power and vitality of locality, of community, of neighborhood, of parish—all shrink away, until the citizen is left face to face with an all-powerful and little-caring state.
Thirty years ago a young Congressman recognized this truth. "Only by doing the work ourselves," he said, "by giving generously out of our own pockets, can we hope in the long run to maintain the authority of the people over the state, to ensure that the people remain the master, the state, the servant. Every time that we try to lift a problem from our own shoulders and shift that problem to government, to the same extent we are sacrificing the liberties of our people."
The name of that young Congressman was John F. Kennedy.
And the danger he foresaw thirty years ago has largely come to pass.
Our national government has grown to the point where it taxes away a record 21% of the gross national product of our people.
That same government has found thousands of ways to spend your money, all too frequently in ineffective programs which seem to fold, spindle and mutilate read human beings instead of helping them.
The same government has become an intrusive policeman in the lives of millions of Americans.
Its firearms agents devise elaborate schemes to entrap law-abiding merchants into violations of the law.
Its Interior Department harasses innocent landowners and tries to drive them off their own land.
Its tax collectors seem determined to drive thousands of independent contractors out of business.
Its Labor Department sends out inspectors to find mothers who are earning money at home while caring for their children and puts them out of work.
Its Energy Department tries to impose costly and unnecessary conservation requirements on homebuilders.
Its Justice Department goes to court to urge the busing of children far away from their own neighborhoods and their parents, merely to satisfy some arbitrary ideal of racial balance.
Its Department of Transportation spends years and millions of dollars prescribing the perfect city bus, which, it turns out, builders can't build and cities don't want.
Its Department of Education unwittingly tries to destroy some of the nation's oldest and most respected black colleges and universities.
Its Postal Service prosecutes a lady in Rochester who opens a courier service among downtown offices which provides better, faster and cheaper service without taxpayer subsidy.
In short, our Federal government has become a growing threat to the liberties of our people. At the same time it is consuming their substance through record-breaking taxation. And even that isn't enough to pay for its excesses. So a Democratic Congress and a Democratic President run an annual deficit, print new money to cover that deficit, cheapen the value of the dollar by twelve cents every year, rob the paycheck of every working man and woman and the savings account for every senior citizen, and unleash a runaway inflation that threatens the integrity of our whole economic system.
And it does another thing. By its ever-present influence, by its web of regulation, by its confiscation of private capital, the federal government is slowly stifling the creative energies of a free people.
Throughout our history, Americans have been remarkable for their creativity, their ability to devise ingenious new solutions to problems. But that creativity is in mortal danger under a government which seems to be heading in the direction of "everything not forbidden is required."
What is at stake is our liberty. Thomas Jefferson recognized long ago that the mortal enemy of liberty and community is the concentration of power. He asked "What has destroyed liberty and the rights of man in every government that has ever existed under the sun?" And he answered "The generalizing and concentrating all cares and powers into one body."
The task for us is clear. We must reverse the trend toward the concentration of power into ever more remote and unreachable institutions, and instead make sure that that power is widely distributed among the people—among families, among individuals, among independent businesses and worker organizations, among our local communities and their social institutions.
We must let the genius of our people flower once again, as it did through the years when this brave new country grew into the freest, most prosperous nation on the face of the earth.
To do that will require strong, dedicated national leadership—in the Presidency and in the Congress. And that leadership will have to have the strong support of the American people.
Our first task is to begin to celebrate, once again, the virtue of human scale in our institutions.
Human scale is the scale that human beings can understand and cope with. It is the scale of the local fraternal lodge, the church and synagogue and congregation, the women's group and the luncheon club.
It is the locally owned factory, where the owners are also employees, who live nearby and care about the well-being of their fellow workers and their community.
It's the small businessmen and women, who personally deal with customers, who put their reputation on the line, who stand behind the firm's products or services.
It is the farm or consumer cooperative, the town or neighborhood bank that reinvests savings in its community, the democratically governed union local.
The human scale is the town council, the board of selectmen, the precinct captain, the ward leader, the committeeman and woman.
It is this activity on a human scale that creates the fabric of community, and provides the framework for the exercise of responsible liberty.
The human scale defines an arena for civic action, for mutual aid, cooperation, and self help, where people can join together to deal with common problems using their own energies, resources, and leadership.
Indeed, many believe—and I have long been among them—that the strength of our institutions depends critically upon the strength of the human community upon which they rest. When decision making power and resources are stripped away from that human scale community, when a dominating government in city hall or the state capital or, worst of all, in Washington usurps the authority of the people and reduces them to objects to be manipulated –then we are in danger of losing the one thing that has over three centuries made us the great nation we are.
When one looks at the extent to which government giantism—and the inseparable political, social, and economic giantism—now pervades American life, one may well fear for the future of our liberties. But despite this troubling trend, there is much left of the American spirit.
In my campaign, and in my years of public office, I have seen many examples of the rich activity on the human scale which has been the glory of our past and is yet the hope of our future.
I have seen block clubs and neighborhood federations, chambers of commerce, and youth centers. There are community gardens, even in the midst of some of our largest cities. There are land trusts, and co-ops, and neighborhood newspapers. There are appropriate technology projects and community recycling centers. There are projects to help small farmers remain on the land, and to help small business acquire the capital it needs to expand. There are women's groups and church groups, business groups and labor groups, service clubs and local development corporations.
These are the associations at a human scale that must be nourished if America is to remain strong and free. The great French commentator Alexis DeTocqueville noted this long ago when he observed that "the morals and intelligence of a democratic people would be in as much danger as its commerce and industry if ever a government wholly usurped the place of private associations."
There is no shortage of ideas for nourishing self-help, association, and voluntary action—only a shortage of will in Washington, where the idea of returning power to the people of this country is viewed with alarm, suspicion, and contempt.
But it is time to begin. And the first thing we can do is to put an end to foolish and dangerous government meddling into things that free people can better deal with in their local communities. This is not to say that the wealthier citizens or areas of this country are to be relieved of the responsibility of assisting the less fortunate. But it does mean that we must begin to devolve responsibilities from the national government to lower levels, levels as close as possible to the people themselves.
A second step, inseparably linked to the first, is to restore to the people the resources their national government has taken from them to pay for things they don't need and don't want. We need a substantial across the board income tax cut for individuals 10% in 1982, another 10% in 1983, and another 10% in 1984. This will put money back in the pockets of the people, as well as stimulating a new wave of job-creating investment in our economy. It will give them and their local governments a new opportunity to deal with problems their own way, instead of having solutions dictated to them by a distant bureaucracy which knows or cares little about their needs.
Then we must begin to roll back the wave of over-regulation that plagues this country. People simply cannot act in their own self interest when they are hemmed in on all sides by an imperious government determined to direct their every move.
I say that if a young mother wants to knit at home, her children playing at her feet, to support her family or augment its income, then a humane government will not send an inspector to close her down for violating a half-century old sweatshop law.
I say if people want to come together and organize their own school for their own children, they should not have to do battle with their own government which assaults them for noncompliance with a bunch of bureaucratic guidelines no one ever voted for.
We need to reexamine our tax, securities, and patent laws to encourage investment capital to flow to bright new entrepreneurs. We need to give them a real chance to build their enterprises without having to give up control to large corporations in return for badly needed expansion capital. That should be a high ranking item on the nation's agenda for the 1980s.
Capital mobility, I might add, is vitally important in the field of new energy and electronic technology. Since the 1973 oil embargo there has been an amazing flowering of invention in these fields. Much of it has been by basement inventors and backyard experimenters and bright young scientists and engineers who left comfortable employment to strike out on their own. These are the people our laws should encourage. History shows us that they, more than the large well-established corporations, provide the real spark of innovation in our economy.
If we stop fixing prices for energy, stop subsidizing favored energy producers, and change our tax laws to increase capital mobility, I am convinced that there will be an astonishing burst of invention in the energy area—new solar devices, batteries, motors, home building ideas, vehicles, windmills, flywheels, gasohol plants—thousands of new ways to produce and use energy efficiently. With these new products and new techniques we can continue to enjoy the benefits of today's high energy society, but at the same time actually use less energy to achieve it—and thus move away from today's dangerous dependence on Middle Eastern oil.
We need, too, to restore respect and protection for the basic human right to own, use and exchange privately owned property. Our founding fathers knew, two centuries ago, that, as John Adams put it, "property must be secured, or liberty cannot exist".
A society of landless serfs, toiling on the estate of a feudal baron, could not aspire to either prosperity or freedom. But with the human right of property ownership secured, and with a real opportunity for all Americans to become property owners, we built a great economic system of free enterprise, and at the same time created a self-governing republic that has been the envy of the world.
Our task today is twofold. We must protect the human right of property ownership from a grasping government which, left unchecked, would gladly swallow up that right in the name of burdensome taxation, national planning, and centralized control. And at the same time, we must work diligently to make sure that as many as possible of our people may share in the American dream.
This means helping people –even tenants of public housing—to achieve home ownership and to keep their home even when threatened by unemployment.
It means helping people—especially women and minorities—to start and expand independent businesses.
It means changing our inheritance laws to make sure no family farm or small business ever has to be broken up and sold to pay estate taxes.
It means encouraging employee stock ownership plans and other worker ownership techniques for helping as many people as possible to earn a share in the wealth of this country.
The matter of ownership should be of greatest importance to minority groups, for historically they have had the least opportunity to join in owning the wealth of America. Dr Nathan Wright Jr., who chaired the National Conference on Black Power amid the urban disorders of the 1960s, has pointed out how ironic—and tragic—it is that just at the moment in our history when minorities are beginning to get a real chance to acquire real equity in their country, government seems intent on making ownership meaningless for everyone.
Another policy that must be implemented is one of taking resources presently spent by government bureaucracies and letting the people themselves make the decisions about how the money should be spent. I am thinking particularly of community development in our urban neighborhoods.
Under the present block grant program, called CDBG, Washington takes the money from citizens in taxes, rakes off its customary handling charge, adds in a lot of regulations and requirements, and distributes what's left to city governments for the supposed benefit of the people.
Now when you spend $3.8 billion a year, chances are you will accomplish some good with it. And many cities have, in fact, used CDBG funds in creative ways that really do respond to local needs. But in all too many cases the funds have been spent in ways that please city hall and comply with federal regulations, without improving anything that neighborhood people really care about.
Now I believe that problems should be solved by the people most directly concerned—not by bureaucracies miles away. And who knows best about the problems of our urban neighborhoods? Washington? Your state capitol? City Hall? I doubt it.
I think neighborhood people know best. I think they can put their own money to work effectively to build a better life for themselves and their families.
When I'm President, I'm going to try an experiment. I'm going to tell my Secretary of Housing and Urban Development to take some of the discretionary funds under the CDBG plan and distribute them not to city hall, or to organizations that have the political favor of city hall, but directly to all the citizens of a neighborhood.
Under this experiment, every citizen would get a voucher or coupon. It might say, for example, "ten dollars of your money plus this voucher will produce $50 for the neighborhood improvement project of your choice." The citizen could choose from among dozens of neighborhood projects—some run by city governments, others by church groups, fraternal societies, block clubs, a wide variety of improvement groups.
Now that is really returning power to the people!
It's giving them, not public officials, the money and letting them, not bureaucrats or politicians, decide how that money should be spent. For after all—whose money is it? It's their money, and they should get what they want, not what somebody else thinks is good for them.
There will be some who will say that giving power back to the people is a wrong idea. They may say that neighborhood people lack the big picture, and will squander the money on projects of little value. They may say that only through the federal government can your tax dollars be wisely spent.
Well, I think they're wrong. And when you look at the ridiculous things that the government spends your tax dollars on, when you look at all the times that our urban neighborhoods have been overrun by federally funded urban renewal or freeways or other projects that destroy homes and businesses and places of worship and the rich and varied culture of our communities—you will realize, I think, that the people themselves could scarcely have done any worse.
And I am convinced that the people could do a lot better. Because you'll use the money the way you want it spent for your own benefit, for the benefit of your families and your neighborhood. You know what works and what doesn't. You know who you can trust, and who you can't, because they owe their allegiance to downtown politicians or Washington bureaucrats who pay their salaries.
That's the kind of creative new approach I'm going to try when I become your President. I don't want to be President so I can boss an army of bureaucrats who want to run your life. I want to be President so I can reverse the progress of power to Washington, and unleash the power of progress in every neighborhood and every town and every workplace across this great land of ours.
There's another thing I plan to do when I'm President, and that's to help the parents of our private school children to meet the costs of private education.
Private education has played an honored role in our history. And I don't mean just the expensive prep schools. I mean the private and parochial schools in city after city in this country, and the newer alternative schools, and the academies that offer real educational opportunities to minority children.
Our private schools have fought a continuing financial battle to stay open. They have also had to fight a legal battle against an Internal Revenue Service which has threatened their independence and their very existence.
I think it's time that the parents of private school children were entitled to a tax credit against the tuition they pay. After all, most of them do pay taxes for the support of public schools, but they do not ask public schools to pay the teachers and finance the facilities to educate their children.
A tax credit for private education will do much to strengthen these vital institutions, and keep them alive and vigorous for the benefit of millions of American children who find them preferable to local public education.
This is not an exhaustive list of the things we must do, but it is a list that includes some of the most important tasks ahead. My administration will provide real leadership—leadership from me, as President—to restore power and authority and tax resources to the people and their local communities. We'll work together to bring back to prominence the human scale institutions so vital to a free and healthy human society.
We'll constantly look for new ways, try new experiments, seek out new ideas -all with the goal of moving toward more power to the people, more liberty for the people, and more resources in the pockets of the people to use as they, not someone else, think best.
This is a big undertaking. It will demand high level effort and a great deal of skill, wisdom, patience, and persistence from the Reagan Administration.
I propose to create a new kind of office in the Reagan White House. I haven't thought of a suitable name for it, but I do have an idea of what I'll ask it to do. I'll charge it first of all with carefully identifying the laws and activities of the federal government which have the effect of stripping power away from the people of this country, or stifling independent initiative, or defeating self-help and enterprise at the local level, and of undermining the human scale institutions of our society.
As these activities are fully identified, I will ask for a plan for rolling back or reshaping or devising alternatives to those activities. I will expect the head of this office to convene agency heads and work with them, under my direction, to carry out the agreed plan.
In some cases changes can be made by a Cabinet officer alone. In other cases it may require cooperation between two or more agencies. In other cases it may require changes in legislation. I know it can't all be done in only four short years. There will be many problems, for Washington will not be eager to give up the power it has accumulated at the expense of our people.
But we can make a bold beginning. We can start on a trend which, with the support of the people of this country, can bring back to them and to their local communities much of the power that has been taken from them over the past half century.
I pledge my personal attention to this effort. I can't promise miracles, for the task is enormous. But on the basis of my eight years as chief executive of the nation's second largest government in California, I think I can get some solid results over the next few years.
There are many things I hope to achieve in my Presidency. Above all else, I want historians to say of me, later on, that I reduced the terrible threat of war and kept my country at peace. That I brought back prosperity, and with it decent paychecks that Americans could once again cash for honest money. That I was a President of civility, of honor, of moral strength, of compassion for the needy, the helpless, and the elderly.
But I also want it said of me, that I was able to capture a vision of America—strong, vital, productive—where the affliction of giantism began to give way before a resurgence of individual liberty, of strong families, of the human scale institutions that give meaning to our existence, of a new faith in America's future.
That is my dream, and with God's help, and yours, I look forward with optimism and enthusiasm to building anew the city on the hill.
# # # #
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]]>The Square and the Tower: Networks and Power, from the Freemasons to Facebook, by Niall Ferguson, Penguin Press, 563 pages, $30
The imposing Torre del Mangia is a 289-foot tower rising over Siena's city hall. Below, the Piazza del Campo serves as the Tuscan town's market square, civic meeting place, and entertainment venue. Together they form the metaphor in the title of The Square and the Tower, the British historian Niall Ferguson's new book about networks, hierarchies, and how they have interacted throughout history.
How hierarchies operate is not a conceptual mystery. The emperors of Rome, the caliphs of Islam, the autocrats of the Kremlin, the armies of Napoleon and Eisenhower, the corporate managers of General Motors, the bosses of the Teamsters Union: In each case we see a Mr. Big at the top of the tower directing lieutenants, satraps, prefects, and legates, all the way down to the grunts at the bottom. Hierarchies arose at the beginning of human civilization, but the "zenith of hierarchically organized power," Ferguson writes, "was in fact the mid–20th century—the era of totalitarian regimes and total war."
Yet hierarchies do not rule perpetually without challenge. Ferguson argues that since 1446, three disruptive changes have made it increasingly easy for large numbers of people to interact and collaborate over time and space—that is, to network. The first was the printing press, whose output swept across 15th century Europe and then beyond. The next was the 19th century telegraph cable, which allowed messages to flow from London to Bombay in four minutes. (The telephone, the fiber optic cable, and the satellite download dramatically accelerated this revolution.) The third change is the instantaneous communication of the internet.
Networks are obscure, ephemeral, clandestine, acephalous, and potentially subversive, built around nodes connected by "edges" to other nodes in a manner that produces activity without centralized control. As in Ferguson's "square" metaphor, they are flat, dispersed, and operate beneath or apart from a tower-like superstructure. Moreover, networks can be part of other networks—and they can be created, manipulated, captured, and annihilated by hierarchies. The Russiagate scandal, for example, hinges on the idea that the leaders of the Russian hierarchy have supported and manipulated a network of largely autonomous cyber-trolls.
Ferguson produces several examples of hierarchies defeating challenges from networks. Take Lenin and Stalin's relentless crackdowns after the Bolshevik Revolution. Their regime shrilly denounced any dissenting network—the peasant-led Social Revolutionaries, the kulaks, the Cossacks, the Kronstadt anarchists—as counterrevolutionaries, traitors, bloodsuckers, vampires, and "unreliable elements" of the Communist Party itself. Under Lenin, the Bolsheviks carried out as many as 300,000 political executions in just their first two years of power. Stalin's reign was even bloodier, and three of his own secret police chiefs were eventually taken out and shot. Once the all-powerful Communist Party became established, few Soviet citizens dared to belong to any unauthorized network.
In discussing these events, Ferguson exhibits an enormous range of historical knowledge. The people parading across his pages include Spanish conquistadors, Malayan guerrillas, the Swiss mathematical prodigy Leonhard Euler, Admiral Wang Hong, the Bavarian Illuminati, Hitler and his gang, Nelson Mandela, George Soros, Paul Revere, Henry Kissinger, Mohammed Atta, the Tuscan painter Ambrogio Lorenzetti, and hundreds more.
These vignettes can be fascinating but sometimes run aground. Many of the book's 60 chapters appear to be instances of an author taking the opportunity to mention something of interest from his research, whether or not it readily illustrates his theme. He devotes one chapter, for instance, to the origin and social habits of an elitist Oxford/Cambridge in-group called the Conversaziones. The historian spends a remarkable amount of writing describing the sexual peccadilloes of the Apostles, as they called themselves. The fact that they included a Soviet spy ring is notable, but their contribution to understanding the workings of networks does not seem very significant.
But some of the networks he discusses are clearly relevant. One is Alcoholics Anonymous. This group offered "a twelve-step path back to sobriety," Ferguson writes, "but its real strength lay in the therapeutic network effects of regular meetings at which experiences of addiction were confessed and shared." Ferguson attributes its success to its "quasi-religious and wholly unpolitical character" and wonders whether, had it somehow been linked to communism, J. Edgar Hoover would have placed it under surveillance.
Ferguson is enthusiastic about criticizing hierarchical rule, or at least its authoritarian excesses, but he is also quick to finger the dark side of networks bent on hatred, plunder, violence, and, in our day, cyber-terrorism (think of ISIS or the WannaCry virus). At one point he writes: "The lesson of history is that trusting in networks to run the world is a recipe for anarchy: at best, power ends up in the hands of the Illuminati, but more likely it ends up in the hands of the Jacobins." Ferguson, a disciple of Edmund Burke, is no admirer of Jacobins.
While it's not difficult to heuristically appreciate the archetypes of hierarchy and network, the "square" and the "tower" are inherently blunt tools for the analysis of social and political movements and organizations. There are hierarchies within networks, networks within hierarchies, and a vast range of commingled life forms that defy simple taxonomy. Henry Kissinger, Ferguson's favorite networker, was of course the foreign policy director of the United States government hierarchy.
But there is a conflict in Ferguson's own thinking about hierarchies and networks as well. "The near-autarkic, commanding and controlling states that emerged from the Depression, the Second World War, and the early Cold War exist today, if at all, only as pale shadows of their former selves. The bureaucracies and party machines that ran them are defunct or in decay. The administrative state is their final incarnation," he writes. "Will the new networks liberate us from the shackles of the administrative state, as the revolutionary networks of the 16th, 17th, and 18th centuries freed our ancestors from the shackles of spiritual and temporal hierarchy? Or will the established hierarchies of our time succeed more quickly than their imperial predecessors in co-opting the networks, and enlist them in their ancient vice of waging war?"
The fact that today's most celebrated cyber-networks (Facebook, Google, Twitter, Baidu, Alibaba, Tencent) are centrally controlled by hierarchies suggests that networkers' power to control, influence, or undermine those hierarchies may be limited.
Ferguson concludes that "unless one wishes to reap one revolutionary whirlwind after another," the alternative to a world run by networks, some of them villainous, is a "pentarchy of the great powers"—like the 19th century alliance among Germany, France, Italy, Spain, and Great Britain—in which the members "recognize their common interest in resisting the spread of jihadism, criminality, and cyber-vandalism." But where is the assurance that these Platonic guardians, these hierarchs, will act in society's best interest rather than their own? The multitude of available networks today plays an important role in checking and even bringing down culpable hierarchies, he thinks. If the hierarchies start banding together, what then?
Ferguson recognizes this dilemma, but he doesn't have a reassuringly workable answer. Nonetheless, his book raising the question is well worth the reading.
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]]>Human Scale Revisited: A New Look at the Classic Case for the Decentralist Future, by Kirkpatrick Sale, Chelsea Green, 359 pages, $24.95
Thirty-seven years ago, Kirkpatrick Sale set out to write a comprehensive compendium of the evils of things pushed far beyond their natural "scale," coupled with pungent arguments for why these baneful developments are destructively anti-human. The result, Human Scale, weighed in at a hefty-scaled 523 pages. The present work, Human Scale Revisited, is a slimmed down and updated reissue, adding a plethora of examples of things that Sale believes have run far beyond our ability to comprehend, cope, and pay for.
Sale is an independent journalist whose ideological proclivities are difficult to characterize. Depending on the passage, he can appear as a Bill McKibben environmentalist, a Peter Kropotkin anarchist, a Wendell Berry communitarian, an Albert Jay Nock libertarian, and, now and then, a crypto-authoritarian. His other volumes range from SDS, the definitive history of Students for a Democratic Society, to Rebels Against the Future, a defense of the Luddite anti-industrial movement in England. His most recent cause has been to put forth the case for secession ("harmony through division") as a way to protect human communities whose values are threatened by rampaging bigness.
The heart of Human Scale, then and now, is Sale's judgment that "to save our planet and its civilizations…we must work toward a decentralization of institutions, the devolution of power, and the dismantling of all large scale systems that have created or perpetuated the current crisis. In their place, smaller more controllable, more efficient, more sensitive, people-sized units, rooted in local environments and guided by local citizens. That is the human-scale alternative."
Sale builds his case on what he calls the Beanstalk Principle: "For every animal, object, institution, or system, there is an optimal limit beyond which it ought not to grow." He ransacks history and human experience for supportive examples, many of them compelling. Among the thinkers he favorably cites are Aristotle, Lewis Mumford, Arnold Toynbee, Alexis de Tocqueville, Robert Putnam, Thomas Jefferson, and Sale's mentor, the late Austrian economist Leopold Kohr.
Of particular interest is Sale's no-holds-barred attack on governments grown too big, too costly, too corrupt, too invasive, and too prytanogenic—a Sale-coined Greek neologism meaning "damage caused by the state."
"Guided by a liberal mania that government is able to solve all problems," he writes, "Washington's reach extends into virtually every nook of the society; where it does not control, it influences, where it does not dictate by virtue of law, it persuades by reason of power.…Beyond a modest size a government cannot be expected to perform optimally, and the larger it gets the more likely it is that it will be increasingly inefficient, autocratic, wasteful, corrupt and harmful."
What is remarkable about this broadside is that Sale has been since college a man of the left. He has published in Mother Jones and The Nation (and also The American Conservative). But unlike the followers of, say, Bernie Sanders, to whom government in control is ever the solution, Sale is clear-eyed about what that would mean and wants no part of it.
Indeed, he is even moved to observe that "the ascendancy and triumph of Donald Trump in the 2016 election was only the most recent demonstration of the antipathy to government that runs deep in America beyond the reach of all the do-gooding boosters and the high-pressure media to alter or cure."
Big Socialism sucks, but Sale is equally scornful of Big Capitalism. As it has developed in practice, he argues, capitalism has put the advanced industrial societies into mortal peril through its roughshod exploitation and waste of resources, its "ecocide," its social burdens, its social irresponsibility, its instability, and its overgrowth. His alternative to global capitalism consists of human-scale economic units, self-definition of jobs, self-scheduling of time, small group work based on consensus and cooperation, and autarkic self-sufficiency. He praises family farms, communal agriculture, worker-run cooperatives, kibbutzim, and, in a final Luddite supernova, "abandoning as unnecessary and undesirable almost everything manufactured at the factory level anywhere and anyhow."
Not surprisingly for a lifelong partisan of the left, Sale has little to say about the evils produced by Big Labor. He does, however, keep faith with his thesis by quoting the economist Mancur Olson caustically criticizing union coercion. When describing a workplace self-management experiment at the Rushton coal mine in Pennsylvania, he seems saddened that the United Mine Workers killed it off for its own petty reasons.
Although he notes approvingly the merits of "telework" and "telemedicine" for the decentralist life, Sale provides little discussion of the role of the internet, social media, and other digital technologies (including currencies) that permit the interaction of people beyond normal face-to-face settings. Here the author's Luddite tendencies do not serve him well.
Possibly most troubling is Sale's unfamiliarity with science. He is relentlessly scornful of nuclear energy, which he associates with huge, dangerous, capital-consuming edifices kept afloat by subsidies. There is something to be said for that point of view, but there are already on the horizon new, modular-built, economical, proliferation-proof, waste-consuming, and walkaway-safe Generation IV nuclear plants—notably the liquid fluoride thorium reactor—which would have displaced the light-water dinosaurs 30 years ago had the dinosaur lobby not persuaded the federal government to stop them in their tracks.
Sale is also dead set against petroleum fracking, despite what most would see as its obvious economic benefits to society. His ultimate cure-all for the energy needs of a human-scale society is the sun. In 1980 he gave much space to solar thermal applications, since solar photoelectric was then far from cost-effective for most uses. Today his enthusiasm for solar has reached greater heights. Solar, he argues, is small-scale, decentralized, flexible, economical, safe, and communitarian, and the fuel is free. Sale naturally favors communal solar heating and microgrids with electricity storage. That obliquely recognizes that solar only works when the sun shines, but it leaves open the question of locally created electricity storage technology.
You have to wonder how a committed decentralist dedicated to small-unit self-sufficiency can view as the energy solution photovoltaic panels made of rare earth metals mined and processed in China, shipped across the Pacific, trucked to the local solar outlet, and controlled by electronic systems, a concept far beyond the imagination of even our mid-20th century forebears.
Finally, Sale's paean to the small, harmonious, face-to-face democratic community of friendship and shared values needs a hard look in light of too many small communities' discrimination, intolerance, and cruelty against the "different."
Sale acknowledges witch burning and lynch mobbery as regrettable aberrations, but he argues that communal responsibility, a convergence of values, the pain of ostracism, and ultimately the "secession, migration and relocation" of the minority to start over somewhere else are useful correctives to repressive tendencies in the small communities of the future. Well, yes, this worked, more or less, for the Umayyads, Mormons, Puritans, Tuscarora, and Zionists, to name a few, but it does require finding an accessible destination more congenial than the place departed from.
What will deter these small communities from oppressing others? That's the central question in G.K. Chesterton's wonderful little novel The Napoleon of Notting Hill. His sad conclusion was: probably nothing. Perhaps the best answer was Kohr's: Conflicts between small principalities will always recur, but they won't do a lot of damage—certainly far less than conflicts between megastates and their war machines.
Sale's historical showcase is the little town of Lucca. For 800 years, "surviving ups and downs and feasts and famines, it was one of the most prosperous places on the entire Italian peninsula, not to mention the entire European continent." That came to an end with Napoleonic imperialism, but its experience produced "Lucca's Law": "Territories will be richer when small and self-sufficient than when large and dependent." The other historical models he invokes include New England and Swiss canton town meetings, Jefferson's proposed (but never activated) ward republics, tiny nations like Liechtenstein and San Marino, and the more exotic (but less convincing) examples provided by the Dinka, Basarwa, Tiv, and Lugbara.
Back in 1980 I hoped Human Scale might attract a segment of the left, drawing them away from socialism and sociopathy. I was disappointed. Although I continue to believe millions of Americans favor a human-scale future at least in principle, I see no evidence of a coherent movement.
But let's give Sale his credit. He has defined an organizing principle for a world he believes would be more conducive to human happiness, prosperity, and freedom, and he has marshaled every conceivable argument for why this posited world is better than a globalized empire of bigness. Sale says this book is not a blueprint. It may, however, inspire some people, somewhere, under some conditions, to seize upon its insights and use them to improve their lives.
The post The Decentralist appeared first on Reason.com.
]]>Hidden in Plain Sight: What Really Caused the World's Worst Financial Crisis and Why It Could Happen Again, by Peter J. Wallison, Encounter Books, 356 pages, $27.99
Eight years after the nation's financial system began its rapid slide into calamity, we all know why. Greedy Wall Street operators, aided by the repeal of the 1933 Glass-Steagall Act and only feebly regulated by the Bush administration, ran wild in the pursuit of greater profits for the rich. Eventually many big banks failed and were bailed out by taxpayers. But in 2010, President Barack Obama and the Democratic Congress took bold action to create powerful new government regulatory machinery. Still, much more regulation is needed to forestall future damage.
This narrative of the economic debacle is heavily promoted in the mainstream media and by regulators. But in Hidden in Plain Sight, financial scholar Peter Wallison argues that the story is laughably false. Worse yet, he says, the true causes of the debacle have not been dealt with, and there is every reason to believe that the same thing can happen all over again.
Wallison, a co-director of financial policy studies at the American Enterprise Institute, is one of the nation's top historians and analysts of financial structure and regulation. During the early Reagan years he was general counsel of the Treasury Department, where he learned a lot about markets and regulation. Happily he was not a participant in any part of the 1997-2009 financial disaster that is the subject of this book. He was, however, a member of the largely misguided Financial Crisis Inquiry Commission of 2009-2010, and he dissented from that body's final report.
Wallison's story of the run-up to the 2007 collapse begins with the Democratic Congress of 1992 and the 1993 arrival of the Clinton administration. The same years saw the rise of onetime Clinton roommate and political operator James A. Johnson to the chairmanship of the Federal National Mortgage Association (Fannie Mae). Wallison pays little attention to Johnson's career, but Johnson worked energetically and successfully to prevent Congress from privatizing Fannie Mae after the Republicans took control in 1995. He mobilized support on the left by buying millions of mortgages that increasingly departed downward from Fannie's historic underwriting standards. This subprime mortgage purchase binge is central to Wallison's story.
Here's the quick version. In 1992 Congress set "affordable housing" goals for Fannie Mae and its savings-and-loan counterpart, Freddie Mac (together known as the Government-Sponsored Enterprises, or GSEs). That year a manageable 30 percent of Fannie's portfolio qualified as "affordable housing." In 1997 the Department of Housing and Urban Development (HUD), as authorized by Congress, increased the required fraction to 42 percent. In 2001, under President George W. Bush, HUD increased the goal to 50 percent. In 2008 it upped the goal to 56 percent.
To find enough "nontraditional mortgages" to meet these increasing requirements, Fannie and Freddie bought increasingly lower-quality mortgage paper. Mortgages with three percent down payments sufficed for a while, but by 2000 the two GSEs were buying mortgages with zero down payments, credit rating scores below 660, and debt-to-income ratios as high as 38 percent. By 2008, half of the nation's home mortgages-32 million of them-were subprime, and 76 percent of those were owned by the GSEs.
As the two GSEs defined substandard lending ever downward and marketed pools of such mortgage paper to Wall Street investors, financial firms came to adopt the same lax standards for their Private Mortgage Backed Securities (PMBS). Investors bought billions of dollars' worth of those privately issued securities, believing they were backed by quality collateral. Market players also believed that GSE issues were backed by implicit federal government guarantees.
"With all these new buyers entering the market because of the affordable housing goals, together with the loosened underwriting standards the goals produced, housing prices began to rise," Wallison writes. "By 2000, the developing bubble was already larger than any bubble in U.S. history, and it kept rising until 2007…when it finally topped out, and housing prices began to fall."
With housing prices falling, financial regulation came into play. Regulators required "mark to market" valuation of housing assets-that is, institutions had to value them at their current market price. But suddenly there was no rational market to take a price from. Frightened investors dumped housing paper. Financial credit regulators, who had previously considered GSE paper almost risk-free, started requiring banks to have more capital. But the financial firms that held or stood behind $2 trillion in PMBS could hardly float new stock issues when much of their assets were rapidly shrinking in value.
Wallison notes some other factors in the crash, but this is the heart of his story. Between 1995 and 2008, Wallison writes, the government and investors following federal incentives "spread Non-Traditional Mortgages throughout the financial system, degraded underwriting standards, built an enormous and unprecedented housing bubble, and ultimately precipitated a massive mortgage meltdown. The result was a financial crisis."
How Washington and the mainstream media responded to that financial crisis occupies a large portion of the book. Wallison shows that the response was founded on two large ideas. The first was the belief that without large capital inflows from the Treasury and the Fed, the whole "interconnected" financial system would have fallen apart and the world as we know it would have come to an end. The second was that lax financial regulation allowed this crisis to happen, and therefore the financial sector should be subject to more muscular controls.
Wallison's views on three issues are worth exploring in detail. A major argument on the left, recently advanced on behalf of Sen. Elizabeth Warren's proposed 2014 financial legislation, is that the 1999 "repeal" of the 1933 Glass-Steagall Act removed the restrictions that kept investment banks from using commercial bank deposits to speculate in an unregulated marketplace. Wallison authoritatively refutes this contention. He points out that while the 1999 act allowed affiliates of commercial banks to engage in investment banking (and other financial activities), the 1933 Glass-Steagall firewall protecting insured deposits against speculative investing is still in full effect.
The second issue is the March 2008 forced merger of the investment firm Bear Stearns with JPMorganChase, greased by $29 billion in Fed-supplied capital. Wallison shows that there was never any need to bail out Bear Stearns in the first place. But he also argues that the Treasury and the Fed's refusal to bail out Lehman Brothers in September 2008, after giving the financial world the impression that the government would bail out "interconnected" firms of that size, "changed the perceptions and ultimately the actions of all major financial players," leaving them "weaker and less prepared to deal with the enormous financial panic that occurred when Lehman was allowed to fail." Wallison accuses Bush-era Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke of, essentially, bungling the management of events in that crucial year.
Finally, Wallison sharply attacks the "false narrative" of the financial crisis offered by activists, politicians, and regulators with a direct interest in sweeping new regulation. We would have done much better, he writes, "if the narrative about the financial crisis had properly located the problems in the reduction of mortgage underwriting standards brought on by the government's housing policies and implemented largely through the affordable housing goals." Continuing belief in this false narrative, evidenced by the Dodd-Frank Act, the Financial Crisis Inquiry Commission's myopic 2010 report, and proposed legislation in the most recent Congress, makes it likely that there will be another financial crisis in the future.
Wallison's book is well-informed, detailed, clear, and sharply focused -though readers unfamiliar with finance will find it thick going in some places. The author's independent point of view makes the book far more reliable than the self-protective accounts published by such actors as Paulson and his Obama-appointed successor, Timothy Geithner. Wallison makes it a point to consider alternative explanations for the crisis, and he convincingly presents the contrary evidence.
Perhaps most useful, Hidden in Plain Sight makes it clear that the next crisis will likely be caused by people peddling-or at least believing-a false narrative about the last one. This book would make a very good text for a business school course titled "Financial Crises: How They're Caused, How They're Made Worse, and How They Can Be Prevented."
Contributing Editor John McClaughry (john@ethanallen.org) is the now-retired founder of Vermont's free market Ethan Allen Institute.
The post Is Another Financial Crisis On the Way? appeared first on Reason.com.
]]>The metropolis of Detroit has received considerable attention lately, little of it sanguine. A sampling of recent titles includes Escape from Detroit, Lost Detroit, What Doomed Detroit, Detroit Disassembled, and Detroit Breakdown. The once mighty Motor City has seen its population tumble from 1.86 million in 1950 to an estimated 700,000 today. Lewis Solomon—author of another recent book, Detroit: Three Pathways to Revitalization—estimates that 500,000 Detroiters inhabit the lower socioeconomic strata.
Solomon, a research professor at George Washington University Law School, aims to recognize and catalog "Detroit's challenges." The three pathways he endorses are a rightsized municipal government, a resurgent private sector fueling economic growth, and a grassroots alternative economy built on "community-oriented entities" such as cooperatives and small-scale entrepreneurship.
But before he gets to his solutions, he outlines the city's problems. His first chapter's candid recital of the challenges facing Detroit is enough to terminally discourage the most sanguine reader.
Precipitous population losses. A shrinking tax base. Too few jobs. Impoverished families. An uneducated, unskilled workforce—47 percent of the city's adults lack basic reading and writing skills, even though about half of those 47 percent have high school diplomas. White and then middle-class black flight to the suburbs, beginning with the 1967 race riots. Unsalable homes in fractured neighborhoods, with 79,725 vacant buildings and over 100,000 parcels of vacant land. Deserted office buildings and destroyed factories. Crumbling infrastructure. Shrinking and unreliable public services. Wretched ghetto schools. Periodically looted public pension funds that have become an "enormous and crushing" cost burden. A municipal debt of 32 times the city's total net assets. Despair, drugs, crime, trash, and graffiti.
At this point, the reader might well decide to move on to another book. But Solomon follows quickly with a second chapter highlighting the city's assets. These include good air service, fine downtown hotel accommodations and restaurants, modern football and baseball stadia, and a riverwalk that "serves as a magnet for those who want to stroll, jog, or bike in a park setting." Or, possibly, to run for their lives.
There are also reputable colleges, medical centers, the Detroit Institute for the Arts, and yes, the Detroit Symphony Orchestra. As Reason's Nick Gillespie once observed, "If the top three answers to the question "What's great about the place?" include 'a world class symphony orchestra,' you're smack dab in the middle of a current or future ghost town."
But Solomon soldiers on, and it's worth staying with him as he seeks evidence for the maxim "in disintegration lies opportunity." He presents a detailed account of the various plans presented by a procession of public and civic entities to address the city's financial stability, launch a "Detroit Works Project," begin a "New Economic Initiative," and so on. While each of these has done some good work, none has been able to enlist the degenerate mechanism of municipal government in service of a promising agenda.
Mayor Dave Bing, a Hall of Fame basketball legend elected in 2009 to succeed 24 years of thoroughly irresponsible, incompetent, and corrupt municipal leadership, tackled the task with courage and enthusiasm. His guiding strategy was to "rightsize" the city—not the city government, as Solomon recommends, but the actual city itself. Bing set out to concentrate its shrunken population in a smaller number of viable neighborhoods, while demolishing enough of the remaining area to create an "urban prairie" of grasslands, reforestation, and rainwater retention ponds. Those in the disfavored areas would face reduced city services (no street lights, etc.) until they gave in and moved.
The mayor's hope was that the surviving viable neighborhoods would attract middle-class urban pioneers. He acknowledged that public safety (police and fire) was the top priority, followed by a productive school system. Despite his good intentions, Bing's approval rating sank as low as 14 percent; he fled the office in 2013. By that time the city was in the hands of emergency manager Kevyn Orr, who in February 2014 (after this book had gone to press) filed the nation's largest-ever municipal bankruptcy petition.
Solomon devotes a revealing chapter to Detroit's wretchedly unproductive public school system. The statewide Education Achievement System, launched in 2012, targets six city high schools and nine elementary schools, together having 10,000 students. The plan also created nine "quasi-charter schools" with 2,800 students in which the principal, not the school board bureaucracy, in charge. There is no mention, however, of creating real charter schools or, better yet, paying pupils' tuition for the public or private school or program of their choice.
One bright spot in this recitation comes when Solomon discusses the private sector's civic leadership. A host of corporations seem committed to making central Detroit a tech services enterprise zone. The leader and visionary of this strategy has been Daniel Gilbert, CEO of the nation's leading online mortgage lender, Quicken Loans. Aided by $47 million in state tax credits and the availability of bargain-basement office space, Gilbert and his affiliated firms have brought 6,000 jobs to central Detroit.
The trouble is that almost all of those jobs have gone to non-residents of the city. That's because the jobs require skills and work habits in short supply among the 174,000 Detroiters aged 17 to 64.
And therein lies the most wrenching dilemma of revitalizing Detroit. Those low-skill working-age people, most of them failed by the government school system, somehow have to make themselves employable in a new economy or else choose between perpetually gaming the welfare system or migrating from the city they have known.
Solomon is not unaware of this dilemma. He considers the potential of the "creative class" of artsy types to pump new life into sinking neighborhoods, but he realistically stops well short of seeing it as a major contributor to revitalization. Similarly, he sees community gardens on vacant land, "small worker owned enterprises," other "decentralized, smaller scale institutions," and even a local currency system as means for rebuilding a lost sense of community. He offers "low odds" for the success of any kind of metropolitan planning but he concludes that urban agriculture, leading to a "more self-sufficient, parallel political economy, could serve as a major engine for Detroit's revitalization." Seems unlikely.
Not that Solomon's third pathway isn't an attractive vision. It is. Anything that tends to recreate a functioning civil society of shared values, mutual concern, and self-help is a worthy goal. The hard part is creating the substrate of earned life support of the citizens, without which their citizenship is often reduced to continually voting for subsidies.
What is disappointing about Solomon's prescriptions for reversing Detroit's plight is his apparent unfamiliarity with the scholarship and practice of undoing the malign results of Too Much Bad Government. For instance, the Reason Foundation, which publishes this magazine, has a Local Government Center that has advocated urban revival strategies for four decades, all based on the idea of reducing suffocating government regulation, scrapping crony deal-making, letting markets begin to work, and giving empowered residents realistic opportunities to improve their city and their prospects.
A real revitalization plan might entail turning Detroit into a contract city that outsources its activities to private enterprise—or, alternately, decentralizing city governance to semi-autonomous neighborhood assemblies. It could mean giving every kid a voucher for any of a wide range of educational programs, public or private. Selling off municipal assets such as the city-owned art collection and Detroit Power and Light. Deregulating enterprises large and small, from manufacturing and department stores to street vendors and jitneys. Replacing the byzantine zoning bylaws with a Houston-style set of covenants and performance standards. Converting city worker pension plans to defined contribution plans, thus preventing the city's crushing burden of pension debt from becoming still worse. Establishing a strong policy in support of almost any kind of civil society activity, even those that threaten the livelihoods of politicians and municipal unions. Solomon does discuss privatization of DP&L and the municipal airport, but his book lacks enthusiasm for the more aggressive libertarian agenda.
The foregoing is just a quick sampler. If you reject such ideas, your two alternatives are to be a perpetual subsidy-supported metropolis constantly succumbing to decay or a gated urban gentry zone surrounded by desolation and a sullen, unproductive, excluded population.
Solomon's slim volume is a concise and well-documented assessment of Detroit's recent history and its problems and assets. There's nothing wrong with its three "pathways to revitalization." What it lacks is a grander vision of freedom and opportunity.
Contributing Editor John McClaughry, former president of the Ethan Allen Institute, is the author of "Recycling Declining Neighborhoods: Give the People a Chance" (Urban Lawyer, Spring 1978). As a Detroit native, he is concerned about being recalled.
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]]>Politics on a Human Scale: The American Tradition of Decentralism, by Jeff Taylor, Lexington Books, 581 pages, $54.99
Is America's Jeffersonian decentralist tradition alive, comatose, or irretrievably dead? With Politics on a Human Scale, the Dordt College political scientist Jeff Taylor offers a well-informed, near-encyclopedic examination of when and how America's once-dominant political tradition receded.
Taylor begins by laying out the decentralist's core beliefs: "Power distribution should be as wide as possible. Government functions should be as close to the people as practicable. In this way, individual human beings are not swallowed by a monstrous Leviathan. Persons are not at the mercy of an impersonal bureaucracy led by the faraway few. Decentralism gives us politics on a human scale." The underlying philosophy, he writes, has four key components: democracy, liberty, community, and the affirmation of an underlying morality.
This quadratic package clearly includes more than the libertarian passion for individual freedom. Reconciling democracy and liberty has always been a problem, as Clint Bolick of the Institute for Justice ably showed in his 1993 book Grassroots Tyranny. There is a similar tension between communitarianism, which focuses on mutual obligations within a group, and the individual's liberty to follow his or her own path even if that means disrupting community equilibrium. Traditional morality often parts company with liberty on such issues as gay marriage and abortion.
Taylor's great exemplar of this decentralist tradition is Thomas Jefferson, in whom most of these tensions can be found. The first modern political leaders he focuses on are two late-19th- and early-20th-century figures, one from each major party, who without being libertarians nonetheless defined a "path ultimately not taken by the Progressive Era and the New Deal."
One is William Jennings Bryan, a man widely remembered today as a quaint prairie populist whose most famous moment was his 1896 peroration that "you shall not crucify mankind upon a Cross of Gold." After losing three presidential elections as the Democratic standard bearer, Bryan served two profoundly unsatisfying years as secretary of state while President Woodrow Wilson lured America into World War I. He concluded his career as the tragicomic champion of creationism who was made a laughingstock among sophisticates by his arguments at the 1925 Scopes evolution trial.
Libertarians find little to approve in Bryan, viewing him as a consistent statist who embraced both social and economic interventions. They note his support for the Prohibition and income tax amendments, his demand for "free silver" to inflate the currency, and his lifelong battle to use the government to control corporate and financial influence. That's certainly true—especially the latter part.
But Taylor, who has studied Bryan carefully, notes another side to the Nebraska Democrat. At a time when Jeffersonianism was already starting to lose its grip on the public mind, Taylor writes, "Bryan's concern for the common people—many of whom were relatively poor—did not include using the federal government to solve their poverty problems. He believed in a laissez-faire economy through which industry, thrift, cordiality, and honesty would be naturally rewarded. He objected to governmental favors that artificially interfered with this natural order. That is why he opposed members of 'the privilege-hunting and favor-seeking class' who acquired wealth through exploitation and political favoritism."
Taylor's description of Bryan as a friend of "laissez faire" may perplex readers, but in his basic philosophy Bryan was no socialist. Unlike Teddy Roosevelt, Woodrow Wilson, and Franklin Roosevelt, Bryan really did believe that removing privilege bestowed by wealth-corrupted government would fairly leave the common people free to produce their own economic results according to their character, talents, and initiative.
Bryan's Republican counterpart was Sen. Robert M. "Fighting Bob" La Follette. Elected governor of Wisconsin on his third try in 1900 over the frantic opposition of the state's rail, timber, and banking interests, La Follette fought for party primary elections, for the "scientific" taxation of railroads (based on independently determined economic value rather than political influence), for initiative and referendum, and for worker safety measures, all under the flag of Progressivism. During his Senate years, from 1906 to 1925, he fought for the eight-hour day for workers in interstate commerce, for the Pure Food and Drug Act, for the prohibition of child labor, for women's suffrage, and above all for control of corporate power.
At the same time, he was a harsh critic of much of Wilson's big-government agenda. He opposed the Wall Street–led creation of the Federal Reserve system and was persistently suspicious of regulatory bodies such as the Interstate Commerce Commission and Federal Trade Commission, feeling that they had been captured by the industries they regulated. John Chamberlain, a onetime leftist turned classical liberal intellectual, "counted La Follette as an exception to the progressives who helped to move the nation toward regimented socialism," Taylor writes. The leftist historian Gabriel Kolko, Taylor adds, similarly sees La Follette as "standing apart from many Progressives in favoring competition, not monopoly (private or public)."
Just as important, La Follette was a strong opponent of Wilson's illiberal record on civil liberties and peace. Like Bryan, La Follette opposed Wilson's march toward World War I, so much so that he came close to being expelled by the Senate for his "disloyal" criticism of the war effort. He defended the "plain principle of international law announced by Jefferson" to secure neutrality outside of the Old World's wars. He staunchly opposed conscription, espionage and sedition laws, and Wilson's League of Nations, which he saw as forever embroiling America in transatlantic conflicts, and he endorsed amnesty for conscientious objectors.
In 1924 La Follette ran for president as an independent. The core idea of his platform was the statement that "the equality of opportunity proclaimed by the Declaration of Independence and asserted and defended by Jefferson and Lincoln as the heritage of every American citizen has been displaced by special privilege for the few, wrested from the government of the many." His ticket garnered 4.8 million votes (17 percent) but carried only one state (Wisconsin). La Follette, exhausted, died the following year, as did the equally exhausted Bryan.
The coming of the New Deal was the death knell of the Bryan/La Follette tradition. Franklin Roosevelt came to office wearing the shredded cloak of Democratic veneration for Jefferson, but soon he was wearing something more like the tunic of Mussolini. Joseph Ellis, a left-of-center Jefferson biographer, once wrote that "Roosevelt's appropriation of Jefferson as a New Deal Democrat was one of the most inspired acts of political thievery in American history, since the growth of federal power during the New Deal represented the triumph, in Jeffersonian terms, of 'consolidation' over 'diffusion'"—i.e., decentralism.
The surviving La Follette/Bryan Progressives were not impressed. In An Encore for Reform: The Old Progressives and the New Deal (1967), the historian Otis Graham found that a majority of the figures he examined were at least skeptical of FDR's early corporatist phase, and that many were strongly opposed, sometimes acerbically so. Roosevelt's National Industrial Recovery Administration and its government-enforced cartels were not the sort of reform that either Bryan or La Follette ever had in mind.
By and large, Taylor finds nothing to applaud among the later Democrats, with the possible ambiguous exception of Gov. George Wallace. Taylor rightly castigates the "real and vile bigotry" Wallace fostered in the early 1960s, but leaves the reader with the wistful thought that, with the memory of that bigotry erased—perhaps through a Men In Black–style neuralyzer?—a later post-racial Wallace might have become a towering pro-decentralist figure in national politics.
It isn't a convincing scenario. Wallace criticized much of Washington's big-government meddling, especially when it had a racial component, but he was enthusiastic for big government with respect to the government he was in charge of, spreading around the pork like any southern governor of the time.
A more credible standard-bearer for Jeffersonianism among the post-FDR Democrats would be Fred Harris, an Oklahoma senator from 1965 to 1976, who Taylor mentions only fleetingly. Harris' 1973 book The New Populism condemns not just big business but big government, taking on farm subsidies, wage and price controls, the Interstate Commerce Commission, and the Civil Aeronautics Board. Like La Follette before him, Harris favored antitrust enforcement but had a genuine populist hostility to Washington-centered bureaucratic programs. His book also includes a powerful chapter titled "If a Little Capitalism is Good What's Wrong with a Lot?" that makes a Jeffersonian case for employee ownership and profit-sharing. Harris' national ambitions failed, partly due to some personal problems and partly because the onetime party of Bryan, and especially its financiers, had no interest in nominating an anti-establishment agrarian who had taken up the La Follette flag.
On the Republican side, Taylor approves of Sen. Robert Taft and Sen. Barry Goldwater's limited-government and federalist messages, and he acknowledges that Goldwater opposed the 1964 Civil Rights bill on pure constitutional principle, not racism. After Goldwater's 1964 electoral cataclysm, though, Taylor can find precious little to applaud among Republicans.
One hundred and fourteen pages and 356 footnotes are devoted to cataloging the inconstancy and perfidy of scores of Republicans who at least once, somewhere, sometime, committed an anti-Jeffersonian transgression. The only living Republicans for which Taylor has kind words are the paleoconservative Pat Buchanan, the libertarian Ron Paul, and the Tea Party conservative Jim DeMint.
George H.W. Bush? George W. Bush (who Taylor annoyingly refers to as "Jr." and characterizes as the head of "the Hubert Humphrey Administration that never was")? Rudy Giuliani? Newt Gingrich? Mitt Romney? As Sen. Everett Dirksen once responded to an unlikely legislative proposition, "Ha, ha, ha, and, I might add, ho, ho, ho."
Some of the disqualifying transgressions unearthed by Taylor seem excessively circumstantial. Jack Kemp would seem to be a likely candidate for Taylor's approbation, given his enthusiasm for stimulating economic activity through low-tax enterprise zones, converting public housing to tenant association management, reforming welfare reform through citizen empowerment, and reducing income tax rates to stimulate economic growth. (On the other hand, Kemp's supply-side pitch for tax reduction was aimed at increasing revenue to pay for existing government programs.)
But Taylor argues that Kemp fell away from his early promise, ultimately becoming a Bush bureaucrat and uninspiring running mate to the even less inspiring Bob Dole, famously branded by Newt Gingrich as "tax collector for the welfare state." In fairness, Taylor might have recognized that by 1996 Kemp's star had largely set, and Dole's handlers were vigilant to keep Kemp from upstaging the doomed candidate at the head of the ticket.
Taylor is also dismissive of Wisconsin Rep. Paul Ryan, who he describes as "a consistent supporter of big government and crony capitalism," citing Ryan's support for TARP, No Child Left Behind, the auto bailout, Medicare Part D, raising the debt ceiling, and international interventionism. This is true on all points, but I confess considerable sympathy for Ryan's courageous efforts to steer the country away from the looming fiscal abyss, and his thoughtful support for strengthening civil society.
Taylor is particularly hard on columnist George Will, today perhaps the most respected voice of conservatism among the nation's media. Taylor accuses Will of being "an adherent of conservatism only in the sense of being indebted to an elitist and statist type of conservatism with roots going back to Hamilton and Aristotle." That may be a fair characterization of Will's earlier views, but it ignores the more libertarian positions the pundit has been taking recently.
Taylor's verdict on Will marks a strange contrast with his treatment of the former congressman and OMB director David Stockman, whose recent libertarian-leaning views are stressed and whose earlier wanderings-his support, for example, for former Texas Gov. John Connally's campaign for the Republican presidential nomination in 1980-do not attract Taylor's attention. Connally was the protege and chief vote stealer for Lyndon Johnson, the architect of wage and price controls and repeal of the gold standard for Richard Nixon, and an advocate for universal conscription. If Taylor is going to criticize Will because he backed "Scoop" Jackson for president in 1976, surely Stockman's support for Connally is a more egregious sin. Or perhaps neither man should be tarred forever for their early misjudgments.
Ah, but what about Ronald Reagan? In a 44-page chapter with 119 notes, subtitled "Conservatism Co-Opted," Taylor argues that "contrary to conventional wisdom, the Reagan revolution never occurred…because Reagan did not surround himself with revolutionaries." Taylor then goes through chapter and verse of the transgressions against Jeffersonianism of practically all of Reagan's top appointees. (Chief of Staff James Baker, for example, had spent most of the previous decade as a Bush family operative explaining to Republicans that Reagan was wholly unqualified to hold high office.) Taylor offers a long list of the anti-Jeffersonian missteps of the Reagan years: increasing Social Security taxes, exploding the national debt, failing to abolish the Department of Education, failing to repeal draft registration, underwriting guerrilla wars in Central America, and so on.
Taylor concedes that "Reagan was able to keep the party together—social conservatives and economic conservatives, paleoconservatives and neoconservatives, libertarians and moralists, populists and elitists." That was no small achievement, especially when coupled with fatally undermining the Soviet Union and pulling America out of a serious recession. Nonetheless, "Republicans who were promised Reagan's policies and personnel received Bush's instead." The 1980s, Taylor argues, "were closer to Eisenhower and Rockefeller than Taft and Goldwater. For those who desired politics on a more human scale, regardless of their stated ideology, this was a tragic missed opportunity." Amen to that.
Well, then: After eight years of missed opportunity with Reagan, four years of failure under Bush the Elder, eight more under Clinton, another eight under Bush the Younger, and now eight truly execrable years under Obama, is there any scintilla of hope for a revival of Jeffersonian democracy, liberty, community, and morality?
Taylor surveys today's broad political landscape for hopeful signs. His findings are not impressive. Perhaps there is a hidden, fragmented, inarticulate majority out there yearning for another Bryan, La Follette, or Reagan to lead America back on the path of Jeffersonian decentralism. If there is, it hasn't yet found a credible leader.
The post Forgetting Jefferson appeared first on Reason.com.
]]>Proctor School, Hebron Academy, and Riverside School are all private institutions. There's nothing unusual about that. What is unusual about the education of these three children is that their families live in Vermont school districts that in effect offer tuition vouchers to some or all of their pupils. The Dorset School District pays about a third of the private-school costs for the Torregrossas, and the town school district of Kirby pays the entire $1,750 annual tuition for Anna McClaughry's schooling.
This is extremely unusual in the United States, and it's more than a little ironic. Washington bureaucrats, Chicago free market economists, Harvard sociologists, and teachers-union officials from New York to California have argued for years over the idea of education vouchers, even seeing a much-ballyhooed but ill-fated "voucher experiment" come and go in the 1970s. Meanwhile, students in almost 100 Vermont towns have quietly received education vouchers from their local school districts, just as their parents and grandparents did before them.
Now Vermonters have never used the word voucher to describe what happens there, and some state officials were kind of skittish about a reporter coming around and asking questions. Nevertheless, long before the rest of the country had ever heard of the idea, many Vermonters were benefiting from a system whereby the local government uses tax monies to pay for education rather than to provide it.
Early Vermonters, like all New Englanders, placed great value on the education of their children. Vermont's 1777 constitution—the oldest state constitution still in force—provided that "a competent number of schools ought to be maintained in each town unless the General Assembly permits other provisions for the convenient instruction of youth." Citizens then undertook to found private academies to educate their sons and daughters. People's Academy in Morrisville, Bellows Free Academy in Fairfax, and Burr and Burton Seminary in Manchester are typical survivors from this early era.
As the idea of universal taxpayer-supported education took hold in the first part of the 19th century, the future of these local academies was questioned. Should the local school district finance a new public high school, thus dooming the local private academy? Or should the district simply pay tuition to the private academy, which would serve the purposes of a local public high school?
Since the prominent civic leaders of most Vermont communities had themselves graduated from local private academies, they usually exerted their influence against putting the school out of business by creating a new public high school. Taxpayers also were generally averse to the idea, since it was obviously cheaper for the school district to pay tuition for their children than to assume the capital costs of creating a whole new school. And so it became a tradition in many Vermont towns simply to have the taxpayers pay for the town's children to attend the local private academy. Where there was no private academy, the local school district created and supported a public high school or joined with nearby towns to create union districts. In a few cases, like Townshend's old Leland and Gray Academy, the private school was converted into a public high school.
Vermont's experience was not unique. Headmaster James Steenstra of the Gilbert School in Connecticut says that, beginning in the early 1800s, local governments throughout New England financed the education of school children at private academies. Today, vestiges of the system remain in three towns in rural Connecticut (Norwich, Winsted, and Woodstock) and at least three towns in Maine (Lee, Blue Hill, and Dover-Foxcroft).
Today 95 of Vermont's 246 towns have no public high school and do not belong to any of the state's 27 union high school districts. State law authorizes the school boards of these towns to designate a high school and to pay the full tuition for any local student to attend it. If a school district does not designate a high school, it must pay on behalf of any town pupil, to any approved high school in or out of the state, a tuition amount equal to the average Vermont union high school tuition ($2,675.67 in the 1983–84 school year). If tuition at the chosen high school exceeds that amount, the school district may choose to pay the full amount, but because of taxpayer pressure this is rarely done. The parents must chip in the difference.
Even if the local school district designates the local private academy as the town's high school, it may still be possible for parents to enroll their children elsewhere with voucher support. The town of, Lyndon has a strict policy. It has designated Lyndon Institute as its high school and stoutly resists parents' request to send their children elsewhere. The reason cannot be economic, for the Lyndon Institute tuition is slightly above the state union average. The school board seems to believe that all local students simply should attend the local high school. On occasion, presented with a very strong argument, it has relented, but more commonly it will deny appeals. The state Board of Education has upheld the denials.
St. Johnsbury, nine miles from Lyndon, has the opposite policy. Rather than designating St. Johnsbury Academy as the official high school, the authorities allow parents to choose any approved school. But of the 419 high-school-age students in the district last year, 401 did attend St. Johnsbury Academy. Seventeen chose other nearby schools; only one student attended private school away from the area (in Connecticut). Since St. Johnsbury Academy's tuition is $465 above the state union average and the district chooses to pay the entire tuition, one would think that taxpayer pressure would encourage parents to select alternative schools—but this does not seem to be the case. St. Johnsbury Academy, with an excellent scholastic and athletic reputation, has long been the preferred choice of local parents. It also has a boarding department for approximately 40 additional students from elsewhere.
The Manchester-Dorset area, where the Torregrossas live, has a relatively high-income, well-educated population, famous for expensive summer homes and country clubs. According to state records, the two towns together had 344 high school pupils last year. Of these, 299 attended Burr and Burton Seminary, a nonsectarian private academy located in Manchester. Three attended public high schools in Vermont or nearby New York. Seventeen chose private schools elsewhere in Vermont. The remaining 15 attended out-of-state private schools from Phillips Exeter to Lawrenceville to Miss Porter's School. One of them ranged as far afield as Ketchum School in Idaho. To each school the Manchester or Dorset school district supplied a check for $2,480.20, the state-designated average for 1982–83. This covered 25–35 percent of the tuition, room, and board costs for such high-class private academies. Parents, of course, made up the difference.
Barre Town, a blue-collar rural area surrounding industrial Barre City and Vermont's famous granite quarries, presents an entirely different picture. Of the 594 high school pupils in Barre Town last year, 521 attended public high school in Barre City. Another 72 went to public high schools in nearby towns, presumably for geographical reasons. Only one went to a private secondary school in a nearby town.
There is an important limitation on the voucher system. Payments can be made only to nonsectarian private schools approved by Vermont's Department of Education. This at once leaves out the state's three Catholic high schools and one fundamentalist Christian school. The department maintains a list of approved schools, which includes most of the established private academies in New York and New England. When parents propose to send a child to a school not on the list, the department will investigate. For well-established schools, a call to the department of education in the other state may suffice. In some cases the Vermont department will dispatch a field investigator. According to department officials, in one recent case the school was not approved, and the parents, informed of the reasons, chose another private school. Ordinarily, there is some presumption that parents who can ante up $5,000 above the value of a voucher should have some idea of what they are buying.
My own town of Kirby, population 285, is one of about 25 Vermont towns that has a voucher system for all grades, not just for high school. Kirby, which reached its peak population of about 500 in the late 19th century, once had six separate school districts. In living memory there have been five operating one-room schools in the town. In 1978 the townspeople voted to close its last school, which had only 11 pupils in grades one through six. (Although there are enough children in the town to support a one-room school, their geographical distribution means that there is no convenient place to locate such a school.)
So, since 1978, taxpayers have paid the full tuition for Kirby's grade-school children to attend school in adjacent towns (and at least the state union average for high-school pupils). The town continues to pay for two school buses to transport most of its pupils to the schools of their choice, although some must arrange their own transportation.
Among the available schools is Anna McClaughry's. Three years ago a private grade school in Newark, 18 miles from Kirby, closed its doors when the proprietor decided to take a sabbatical. Some of the suddenly unemployed teachers and the parents of the pupils founded Riverside School, located on the Kirby side of nearby Lyndon. The school offers instruction in grades 5–8, emphasizing literacy, the mastery of traditional subject matter ("social studies" has been banned), French and Latin, environmental appreciation, and computer knowledge. In contrast with most public middle schools, three of its six teachers hold degrees from Yale, Harvard, and the Sorbonne.
Five of the "orphan" Kirby pupils are attending Riverside, their full tuition of $1,750 paid by the taxpayers via the Kirby school board. (Parents of the remaining 21 pupils, who come from towns that maintain public grade schools, must pay the tuition themselves.) Headmaster Richard Koehne told REASON that he is very pleased to have the Kirby pupils, noting that the town's voucher system creates more potential customers for his school. "We especially like having kids come from Kirby on the voucher plan because it broadens our student body mix," he says. "Otherwise, we would have only children of parents who could afford the tuition on top of the property taxes they pay to support the public schools."
While Vermonters, unbeknownst to the rest of America, have been carrying on their voucher-like tradition, a debate about vouchers has been part of a growing movement in the country to change public policy so that more parents will have a meaningful choice about their children's education. The reason for this movement, as Harvard law professor Charles Fried aptly summarized recently in the New Republic, is that "many individuals are deeply dissatisfied with the public education system and the network of union and political alliances that make it particularly hard to change."
Parents have traditionally had the option, of course, of sending their children to private schools. This option was threatened in Oregon early in this century when the state legislature passed a law requiring attendance at government-operated schools. Fortunately, that law was struck down by the US Supreme Court in 1925. Justice James McReynolds, speaking for a unanimous Court in Pierce v. Society of Sisters, declared that "the fundamental theory of liberty upon which all governments in this Union repose excludes any general power of the state to standardize its children by forcing them to accept instruction from public teachers only. The child is not the mere creature of the state; those who nurture him and direct his destiny have the right, coupled with the high duty, to recognize and prepare him for additional obligations."
The Pierce case ended the legal threat to the existence of private schools, but parents who desired private education for their children have still faced the problem of cost. There is no exemption or rebate from the various taxes used to support public education. And thus nonpublic education has been the province either of the affluent, who can afford to pay both bills, or of parents whose church—notably the Roman Catholic and Lutheran—has managed to offer parochial schooling at less than its true cost.
The double burden is not insignificant. The Census Bureau figures that total expenditures for elementary and secondary schools in the 1980–81 school year had to be funded by $444 in taxes per man, woman, and child in the United States. So a couple with two children was paying $1,776 in taxes to support the public school system that year, regardless of whether their children were actually attending government schools. If a family chose to send their children to private schools, they would pay, in addition, around $400 a year for church-affiliated elementary schools and $1,500 for other private elementary schools; private high schools cost even more.
In the late 1940s, the hierarchy of the Catholic Church made a serious push in Congress for government aid to parochial schools, triggering a spirited church-state controversy that ended in the proposal's defeat. Over the next 20 years, however, a new proposal emerged from three quite different quarters. Called the "tuition voucher," it provided for government grants directly to parents, who could then use the proceeds to purchase education for their children from the school of their choice, whether public or private.
An early and eloquent advocate of tuition vouchers was free-market economist Milton Friedman. In 1962, in his influential Capitalism and Freedom, Friedman stood the time-honored argument for public education on its head. Do public schools produce a healthy mix of rich and poor, black and white, etc.? Perhaps in the days of the small town with only one school, but not with the rise of populous urban and suburban areas that are economically and racially stratified. A poor black urban family, Friedman pointed out, could possibly save its money and buy the same fancy car owned by a well-to-do white suburbanite, without also buying a fancy house in the suburb. But it was highly unlikely that the black family could afford to send its children to first-class schools located far away from the lower-income black neighborhood. (And a recent study by the National Institute of Education suggests that, after two decades of efforts at integration, minority parents are in the same position today.)
How could a system widely regarded as incompetent, over-costly, and perhaps unjust be most improved? Some people favor an end to all state involvement in education, but that is "outside the range of political feasibility today," Friedman wrote in a 1973 New York Times Magazine article. In an essay published in 1955, however, Friedman first wrote of vouchers, saying that they would "give competition and free enterprise greater scope" and "pave the way for the gradual replacement of public schools by private schools."
For most of America this was a startling new idea, but Friedman's proposal was close to the system already in place in some Vermont districts. He would have local school boards provide parents of every school-age child a voucher for an amount equal to the average cost of educating a child in the local government schools. The parents would "be free to spend the voucher and any additional sum they themselves provided on purchasing educational services from an 'approved' institution of their choice," Friedman explained a few years later in Capitalism and Freedom. "The role of government would then be limited to insuring that the schools met certain minimum standards, such as the inclusion of a minimum common content in their programs."
Friedman emphasizes that parents should be able to use their vouchers in both private and government schools, whether in the school district or not, if the schools are willing to accept the children. This, he argues, would give parents real freedom of choice, encourage healthy competition among schools, and inject a market standard for teachers' salaries.
Nothing came of Friedman's proposal at the time, but others began to think along the same lines. Christopher Jencks, a liberal professor of education at Harvard University (now at Northwestern University), advocated a voucher system as early as 1966. In 1970 he argued that vouchers could meliorate the plight of black children in underfunded and ineffective ghetto schools. Since despite a decade of civil rights agitation and progress, it did not appear that black schools in white-dominated cities would ever be brought up to the level of the better white schools, Jencks favored vouchers to allow blacks to attend the white schools instead of the schools nearest their homes.
Meanwhile, a few Catholic educators were warming up to the voucher idea. Unlike the earlier proposal to divert tax monies directly to parochial schools, the voucher plan ostensibly subsidized parents, just as the post–World War II GI Bill had subsidized students. It would then be immaterial whether the parents cashed their vouchers with parochial schools or nonsectarian private schools or public schools. Inasmuch as the earlier GI Bill had stimulated a wave of trade schools created expressly to relieve veterans of their GI Bill dollars, this contention was somewhat transparent; but the movement still grew.
During this period, however, the opposition was far from asleep. Advocates of public schools saw that a movement toward vouchers would threaten their effective government monopoly over education. Local school boards and superintendents didn't like the proposal. Teachers unions particularly opposed the idea, it being easier to organize a relatively small number of large public-school systems than a large number of small private schools. In addition, as Friedman had argued, the teachers recognized that a real marketplace for education would mean competitive pressure to hold down their salaries. So the National Education Association and the American Federation of Teachers began to allocate substantial resources to heading off the voucher scheme.
Indeed, vouchers probably have no more passionate enemy than Albert Shanker, president of the American Federation of Teachers. For years, Shanker has written a column published as a paid advertisement in the New York Times, and several have been devoted to lambasting vouchers.
In 1971, Shanker wrote, "The greater the free choice granted by a voucher plan, the more will the educational interests of poor, black and difficult children suffer." (Never mind that "poor, black and difficult children" under the current system are ordinarily the ones with the least possibility of affording private alternatives to inferior government schools.)
"Our public schools…are designed to keep our society together," he opined in 1979. "Vouchers are designed to use tax money to pull our society apart." (Never mind that the all-important purpose of schools is educational, not social, and that in this purpose they have by wide agreement failed miserably.)
And in a 1980 column: "There would be competition among schools in much the same way as there is now competition among toothpaste companies, auto manufacturers and department stores. Some enterprising schools might offer gifts to newly enrolling students in much the same way that savings banks offer such gifts to new depositors. Or…students might be offered rewards for enrolling their friends!" (Never mind that precisely such competition has resulted in largely satisfied toothpaste, auto, and department store customers.)
Shanker and his teachers union colleagues were first mobilized by a voucher study conducted in the late '60s under Christopher Jencks's direction at the Center for the Study of Public Policy in Cambridge, Massachusetts. The authors of the study endorsed education vouchers; but unlike the simple Friedman plan, theirs included a number of special restrictions on the vouchers. For example, they recommended that local government agencies be given a mandate to:
—establish higher voucher payments for poor and mentally handicapped students;
—regulate schools' admissions and expulsions policies ("one critical notion in our report was that a voucher school should admit nearly everyone who wanted to attend, space permitting," Jencks recently told REASON); and,
—forbid parents to pay any tuition out of their own pockets to supplement their children's vouchers.
The Nixon administration's Office of Economic Opportunity (OEO), still populated with a number of Great Society bureaucrats, had supported this study. Bolstered by rhetorical support from Friedmanite libertarians, OEO began in 1970 to look for a test site for a voucher experiment. But when they broached the idea in Seattle, San Francisco, and Rochester, they ran into a buzzsaw of opposition.
Those who favored racial integration opposed vouchers because they saw in them a way out for white students, not a way in for blacks. The more OEO tried to contend with their objections, the more the anti-integration forces shied away from the idea. Church-state separationists were put off when Catholics supported the plan. Local superintendents and board members began to view the whole scheme as causing far more trouble than it could possibly be worth, especially in view of the continuing necessity for taking in enough revenues to meet long-term fixed costs for school plants. Teachers unions, as usual, were strongly and actively opposed.
Vouchers' best chance came in New Hampshire, which had no racial-integration problem and a governor and state board of education chairman who were ardent free-marketeers. They prevailed on the Nixon administration to offer New Hampshire a "free market voucher," considerably less restrictive than the "regulated compensatory voucher" urged by Jencks and the OEO liberals. Fortified with ever-increasing federal funding, OEO and the state finally got five school districts to plan for a test—until the teachers' unions let loose their adamant opposition, and all five districts backed down.
Finally OEO found a test site, Alum Rock School District, a largely lower-middle-class and lower-class area in San Jose, California, with one of the lowest assessed property valuations per student in the state. After lengthy negotiations between the agency and school district officials, a three-year demonstration project was established in 1972.
It was set up to include 6 of the district's 24 public schools. Under the plan, 22 "minischools" were formed at the six participating schools. Eleven of the minischools emphasized general basic academic skills, while various others emphasized reading, math and science, fine arts, cross-cultural learning, and learning basic academic skills through practical everyday activities.
In the spring, each school would plan its minischool programs for the next year, and descriptions of all the district's minischools were compiled and sent to parents along with voucher forms. For each child, parents indicated on the voucher form their first three choices of programs and of schools where the programs were being offered. Each student had a spot guaranteed at his or her neighborhood school ("squatter's rights"). When there were not enough spaces in a minischool to accommodate all the applicants from outside the neighborhood, the available spaces were rationed out by lottery.
A "compensatory voucher" allotment addressed a worry of Jencks and his colleagues that in a voucher system, teachers and schools would want to teach middle-class and wealthy children while ignoring poorer children. To create a greater incentive for minischools to teach poor children, the voucher amount for Alum Rock students who were eligible for the federal school-lunch program was 30 percent higher.
"Alum Rock can show the way," the Los Angeles Times announced in 1973. They spoke a bit too soon. On the whole, the Alum Rock experiment proved to be a fiasco. A Rand Corporation study in 1974 found that in every voucher school, in all grades but one, students fell behind in achievement while students at Alum Rock's nonvoucher schools essentially held their own. Robert Klitgaard of Rand called it "one of the starkest downward effects I've ever seen."
But the Alum Rock project was hardly a test of the voucher idea. From the start, the experiment's design was far removed from an authentic voucher plan. For one thing, private schools were effectively excluded. They were technically eligible for vouchers but had to comply with a host of district regulations concerning teacher certification, curriculum standards, student discipline, and more. For that reason, no private school ever actually received a voucher.
Also, the minischools' admissions and expulsion procedures were heavily regulated, so they had none of the freedom that private schools have to enforce strict educational and conduct requirements. Moreover, schools were given enrollment ceilings. Thus, the schools that offered the best programs, by parents' lights, could not expand to accommodate more students, and the schools in lesser demand inevitably enrolled the overflow from the more sought-after schools. Moreover, in stark contrast to a competitive market situation, teachers who garnered few students were guaranteed a salary on the OEO payroll, while good teachers whose reputation or teaching competence attracted more students would not be rewarded with higher salaries.
Mercifully, the entire Alum Rock experiment ended in 1975. Not a single school district in the country followed its example.
As dismayed voucher advocates examined the results of Alum Rock, many were worried that this bad imitation of vouchers would be taken to reflect on vouchers generally. Certainly, confirmed voucher opponents seized on Alum Rock to try to discredit vouchers. Voucher arch-enemy Albert Shanker crowed in the aftermath, "The washout serves to remind us that panaceas sold to the public rarely work in practice."
But Shanker and company were not entirely successful. An infrastructure of intellectual and academic support for vouchers continued through the 1970s and into the '80s. The idea today is kept alive partly by the efforts of the Education Voucher Institute (EVI), a think tank in Ann Arbor, Michigan, whose executive director is University of Michigan professor William Coats.
As in the beginning with free-marketeer Milton Friedman and liberal Christopher Jencks, support for vouchers over the years has come from across the political spectrum. On the right, William F. Buckley argued for vouchers in his book Four Reforms; sociologist Edward Banfield endorsed them; and in the past, the Young Americans for Freedom has made vouchers a high priority.
On the left, liberal and radical advocates of education reform such as John Holt, Nat Hentoff, and Jonathan Kozol—and, less enthusiastically, politicians like Sen. Daniel Patrick Moynihan (D–N.Y.)—have come out in favor of vouchers.
Nat Hentoff, columnist for the Village Voice and the Progressive, is typical. In a 1972 magazine article, he wrote about choosing schools for his own children. "I did visit our local public school," he recalled. "The children there were being treated like automobile parts on an assembly line. So my four children are in four different private schools, because each learns in a different way."
He continued, "If I were not able to afford those four tuitions, my children would be compressed into the single mold the public school chooses for all children, and at least two of them might well have dropped out by now.…Why not allow for some real democratic pluralism in public education by ending that monopoly through making public independent education also possible? Consider the range of choice that would then be available to parents now restricted to the monopoly system."
Hentoff recently told REASON that he still supports vouchers if they are given to schools that do not discriminate on grounds of race, sex, etc., and if they are not given to church-related schools.
Politicians have generally been skittish about the issue of vouchers. Few doubt that it has a lot to do with the political pull of the two big teachers' unions, the National Education Association and the American Federation of Teachers.
Vouchers found a desultory champion in Ronald Reagan. While governor of California, Reagan called for vouchers in his 1972 "state of the state" message. Voucher legislation was introduced, but disappointed supporters in the legislature complained to the Los Angeles Times that Reagan "gave the measure little support," and it died in committee.
Last spring, the Reagan administration proposed giving local school districts the option of converting their federally funded Title I program (billed as supplemental education services for educationally disadvantaged children) to a voucher system. A bill was drafted by the administration and sponsored by Rep. John Erlenborn (R–Ill.), but history may be repeating itself. After a single day of House subcommittee hearings, the legislation faded away, and the administration has reportedly done little to promote it.
There is one state government where vouchers may be getting a fair hearing. Rep. John Brandi (D) has introduced a bill in the Minnesota legislature to provide vouchers worth $1,475 per pupil for low-income families. The vouchers would be good at any school. Minnesota's Democratic governor, Rudy Perpich, is reportedly "committed to the market-based system" in education but has not yet endorsed the legislation (see Trends, Aug. 1983). Minnesota has already instituted a tax deduction for education expenses, and the measure survived a legal challenge on church-state grounds when the Supreme Court recently upheld its constitutionality.
Elsewhere, voucher advocates who have not met with success in state legislatures have turned in some instances to the ballot referendum. The first major campaign of this sort was in 1978 in Michigan, which lost by 59–41 percent.
Perhaps the most ambitious campaign came in California two years later. John Coons and Stephen Sugarman, two liberal Berkeley law professors, drafted a ballot initiative that would have set up a two-part voucher—a base amount allocated for all students no matter what their family income and a supplementary amount proportional to their family income.
Coons and Sugarman's "Family Choice Initiative," as it was called, was hotly debated in late 1979 and early 1980. As could have been predicted, the state's educational establishment was bitterly opposed. Wilson Riles, then the state superintendent of public instruction, stormed, "The idea is crazy.…I see chaos [if it passes]." In the face of this opposition, the initiative was unable to gather sufficient signatures for ballot status.
An interesting coalition of liberal and conservative Californians believe the time may now be ripe for another attempt at the ballot box. Roger Magyar, a Republican Party activist and state official during Reagan's administration in Sacramento, and Leroy Chatfield, a former United Farm Workers organizer and the manager of Jerry Brown's 1976 presidential campaign, have put together an organization called Parents Choose Quality Education. Their voucher plan has won the endorsement of Milton Friedman, and they hope to win sufficient signatures for placement on the June '84 primary ballot.
There has been a dramatic increase in popular support for vouchers in the last few years. Indeed, 1983 was the first year in which a majority of Americans in a national survey expressed support for education vouchers. A Gallup Poll conducted last June indicated that 51 percent of Americans would like to see a voucher system adopted in this country; 38 percent would not, and 11 percent had no opinion. The favorable responses were up from 43 percent in 1981 and 38 percent in 1971.
The youngest group surveyed—people 18–29 years old—were most in favor of vouchers (60 percent for, 29 percent against, 11 percent no opinion). And blacks at the grassroots level are even stronger in their support (64 percent for, 23 percent against, 13 percent no opinion). Yet many veteran civil rights leaders are adamantly hostile, because a variant of vouchers was briefly used in the South by local school boards and state governments during the 1950s to try to stave off school integration.
Likewise, despite the strong support among Catholics for vouchers (63 percent for, 29 percent against, 8 percent no opinion)—not to mention the fact that some 3 million youngsters are attending Catholic schools in 1983–84—the US Catholic Conference has never taken a public stand for vouchers. Individual priests and bishops have supported the idea, but they have no solid institutional backing.
Roger Magyar told REASON that in California, church officials are apprehensive that a voucher system might exclude parochial schools, either from the beginning or later at the behest of a court ruling. Meanwhile, the American Civil Liberties Union is against vouchers for the opposite reason: it's worried that a voucher system would include parochial schools. Burt Neuborne, legal director of the ACLU, told REASON that the organization is opposed to vouchers on Establishment Clause grounds (the constitutional provision that "Congress shall make no law respecting an establishment of religion").
The irony here is that civil libertarians should be a natural constituency for vouchers. After all, government-run schools routinely trample on the civil liberties of families who disagree with the way their children are educated.
Clearly, the popular support for vouchers in this country has survived and prospered without nurturing by the political establishment. One can only conclude that parents' alienation from the current state monopoly in education is very strong indeed. So while economists propose and teachers unions dispose, the mass of parents out there may well come to consider education vouchers as natural as generations of smalltown Vermonters have found them.
John McClaughry, formerly a senior policy advisor in the Reagan White House, went home to Vermont in 1982, where he runs the Institute for Liberty and Community "way back in the woods." This article is a project of the Reason Foundation Investigative Journalism Fund.
The principle behind vouchers—privatizing decisions on where and how children are educated—is firmly established to varying degrees in several countries. Estelle James, chair of the economics department at the State University of New York at Stony Brook, told REASON that in a number of countries, including France, Great Britain, Norway, and India, governments finance part or all of children's education in nongovernmental schools. However, no other systems are as close to the voucher idea as in the Netherlands and in British Columbia.
James did a study of the Dutch system for the Institution for Social and Policy Studies at Yale. She observed that the Dutch arrangement, in existence since the late 19th century and codified in the nation's 1917 constitution, is "much like a voucher system, with strings attached."
Each family gets a voucher that is equivalent in value to the per capita cost in the local public school. It must be spent on education. The school that receives the voucher is then entitled to funding to cover specified amounts of teachers' salaries and other expenses.
It is not exactly a free market. The private schools' right to raise and spend funds as they see fit is limited. According to James, schools have some discretion to charge parents ancillary fees in addition to the voucher, usually between $100 and $200 a year. A new law took effect last year saying that parents' failure to pay ancillary fees cannot be grounds for excluding a child from a private school—but this is expected to have little effect, since most schools traditionally waived ancillary fees for low-income families.
There are other state regulations. For example, the central government pays all teachers' salaries directly, and these salaries are determined by fixed schedules based on education and experience. Schools may not supplement these salaries.
Such intrusions may be substantial, but James observed that private schools in the Netherlands still have wide latitude to operate very differently from government-run schools. And some 70 percent of Dutch parents send their children to private schools, indicating that private schools are preferred by consumers.
In discussions with parents and educators, James discovered a widely held belief that private schools:
—"are more personal [than public schools] and responsive to parental wishes,"
—"spend funds more effectively and use their fees to secure better facilities," and,
—"label their ideology ahead of time, so parents know what they will be getting, in contrast to public schools which ostensibly have no ideology except that which the individual teacher adopts."
Secular private schools certainly exist in Holland, but about 95 percent of voucher-eligible schools are church-related, most commonly with the Dutch Reformed, Calvinist, or Catholic churches. It is relatively easy to start a voucher-eligible private school in Holland. The 1920 Law on Education requires only that parents of a specified number of students join together in a formal organization and request a school with a specific religious or pedagogical philosophy. Currently, the minimum number of participating families varies from 50 in the smallest municipalities to 125 in the largest.
In British Columbia, a voucher-like system has been in place since the 1977–78 school year. Only six years old, it is less extensive than the Dutch system but is considerably closer to free-market principles.
As in the Netherlands, there is no voucher form per se. At the end of each school year, British Columbia's independent (private) schools that qualify receive aid directly proportional to the number of students they have enrolled. But unlike the Netherlands, there is no government regulation of teachers' salaries nor of participating schools' right to charge parents additional tuition and to solicit contributions.
There are two groups of independent schools eligible for support. A school in the first group needs to meet relatively lenient standards: adequate facilities, three years in operation as a nonprofit society (equivalent to a nonprofit corporation in the United States), and no programs that "promote or foster doctrines of racial or ethnic superiority, religious intolerance or persecution, or social change through violent actions."
A school in this group receives, for each of its pupils, an amount equal to 9 percent of the average operating costs per pupil in the public schools. The independent school can then use these funds for "peripheral services" such as student transportation and textbooks.
The second group of schools must comply with more stringent regulations governing curriculum, pupil testing, program assessment, and teacher certification, in addition to the first group's qualifications. However, it receives, for each pupil, 30 percent of the average operating costs per public-school pupil (that 30 percent was $954 in 1982–83).
The provincial government is very straightforward about the rationale for the aid program. Education Minister Jack Heinrich wrote in an open letter last September that it "relieves taxpayers of costs far in excess of the subsidy [the schools] receive."
The current student population in British Columbia is 487,000, according to a ministry official. Of these, 23,500 are attending the province's 140 independent schools that receive aid (another 6,000–7,000 are in independent schools that don't qualify for aid—mainly fundamentalist Christian schools).
The aid plan's enabling legislation in 1977 sparked considerable controversy. The relatively conservative ruling party, the Social Credit Party, was supportive, while the socialist New Democratic Party was generally opposed. Now, however, a ministry official notes that "people are treating it as permanent." Even the New Democrats, who are out of power, have pledged to retain the program if they win office.
Statistics indicate that the aid program is working quite well. As might be expected, learning assessments comparing the independent schools to the public schools consistently indicate the independent schools' superiority. But it's also interesting that the average family income of independent-school students is slightly lower than the provincial average, probably because of the heavy representation of urban working-class Catholics. This has been somewhat embarrassing for early critics of the aid program who claimed that it smacked of elitism.
Another interesting phenomenon: Stephen Easton of Simon Fraser University, an expert on aid to private education, told REASON that although hard figures aren't available, he has observed a migration of teachers from the public school system since the voucher law was passed. Apparently they're turning entrepreneur and setting up independent schools despite the lower level of government funding there.
"When people in the United States talk about vouchers," Easton told REASON, "they're thinking of Alum Rock. If they want to see a real experiment with vouchers, all they have to do is to look right across the border."
—Paul Gordon
One of the strongest advocates of education vouchers, Milton Friedman, argues that they will "pave the way for the gradual replacement of public schools by private schools." But many other supporters of free-market education disagree. Worrying that a voucher system might foster even greater intrusion on individual liberty than the present system does, they argue instead for education tax credits as a better way to move in the direction of privatizing education.
While some advocates of the voucher say it would reduce government control over education and foster diversity in schools, tax-credit advocates suggest that a voucher system could in fact have the opposite effect. They reason that to be eligible for voucher reimbursement from the government, private schools that are now virtually free of regulation would probably have to submit to a number of new governmental strictures.
Even some of the most modest regulatory schemes in proposed voucher systems would exclude parochial schools and racially discriminatory schools. But other, more ambitious voucher plans contemplate government regulation of private schools' admission and expulsion policies (some would deny private schools much latitude to reject or expel students), tuition schedules, curriculum, teacher qualifications, and faculty salaries.
Tax-credit advocates argue that under any voucher plan, there would be immense political pressure from school boards and teachers' unions to make schools satisfy a long list of requirements to be eligible for vouchers. To the extent that those would-be regulators were successful, a reform aimed at reducing state power in education would ironically extend it to private schools where it has been minimal or nonexistent.
Supporters of tax credits also note that with a voucher system, some taxpayers would still be forced to subsidize the education of other people's children, even more so than now. Indeed, the tax burden would probably be increased, since costs would be incurred for families of private-school students who are now paying their own way. And, as with the present system, small families and single people would bear a relatively large share of the tax burden compared to benefits received.
Thus, short of complete government withdrawal from the education industry, tax credits are often seen as a reform with greater potential than vouchers. There have been several versions of such credits, but the one that would offer the most freedom from government would be patterned on two recent initiative proposals in Washington, D.C., and California. These versions have three features that make them distinct from a proposal currently favored by the Reagan administration.
First, government authorities would be explicitly prohibited from imposing rules and regulations on schools in the name of tax credits.
Second, a credit would be allowed for paying the educational expenses of any student, whether related to the taxpayer or not. The credit would thus be available both to individuals and to corporations. Any taxpayer could easily help finance the education of a friend or some needy youngster who would otherwise have no opportunity to elect to attend a private school. This plan also opens up new opportunities for corporate giving as well as for employee benefits.
Finally, to avoid snags arising from First Amendment issues of church-state separation, credits would be allowed for payment of students' educational expenses at either private or government-run schools. With this feature, a carefully drafted tax-credit measure would be likely to survive challenges in court, under the authority of a 1983 Supreme Court decision upholding a Minnesota statute providing for state income-tax deductions for educational expenses at any school.
A credit could have other significant advantages over vouchers. It would implicitly recognize that taxpayers' money is their own, to be spent when and where they see fit. It would not require a coerced governmental transfer payment, as a voucher does. And practically, there would be far less rationale for government's policing schools that receive private contributions as opposed to government reimbursement.
Free-market defenders of tax credits usually agree that a voucher system would be an improvement over the status quo. They do contend, however, that an educational tax credit would be less vulnerable to statist depredations. In a free society, education should ultimately be provided on a fully privatized basis. A well-designed tax credit seems to them best calculated to move us in that direction.
—Manuel S. Klausner
The post Who Says Vouchers Wouldn't Work? appeared first on Reason.com.
]]>Writing in Reason's January 1984 issue, John McClaughry reported on a little-known revolution that had occurred in public education in the state of Vermont:
Tracy and Jesse Torregrossa are the children of a pharmacist in Dorset, Vermont, located in the southeastern part of the state. This fall, Tracy started her senior year at Proctor School in New Hampshire, and Jesse began his third year of high school at Hebron Academy in Maine. Meanwhile, in the northeast corner of Vermont, Anna McClaughry is reading Shakespeare in the fifth grade at Riverside School, located in an old farmhouse near Lyndonville. Proctor School, Hebron Academy, and Riverside School are all private institutions. There's nothing unusual about that. What is unusual about the education of these three children is that their families live in Vermont school districts that in effect offer tuition vouchers to some or all of their pupils. The Dorset School District pays about a third of the private-school costs for the Torregrossas, and the town school district of Kirby pays the entire $1,750 annual tuition for Anna McClaughry's schooling.
This is extremely unusual in the United States, and it's more than a little ironic. Washington bureaucrats, Chicago free market economists, Harvard sociologists, and teachers-union officials from New York to California have argued for years over the idea of education vouchers, even seeing a much-ballyhooed but ill-fated "voucher experiment" come and go in the 1970s. Meanwhile, students in almost 100 Vermont towns have quietly received education vouchers from their local school districts, just as their parents and grandparents did before them. Now Vermonters have never used the word voucher to describe what happens there, and some state officials were kind of skittish about a reporter coming around and asking questions. Nevertheless, long before the rest of the country had ever heard of the idea, many Vermonters were benefiting from a system whereby the local government uses tax monies to pay for education rather than to provide it.
The post 45 Years, 45 Days: The Case for School Vouchers appeared first on Reason.com.
]]>Suppose—just suppose—that there were a tested energy technology out there that
• produces electricity cheaper than coal, because of lower capital and fuel costs,
• uses a fuel that is in almost inexhaustible supply, both in the U.S. and elsewhere,
• operates continuously, in baseload or peaking mode, for up to 30 years,
• operates at an efficient high temperature but at atmospheric pressure,
• can be factory-built and deployed in compact 100-megawatt modules close to the end use of the power,
• contributes nothing to air or water pollution and needs no water for operation,
• safely consumes long-lived transuranic waste products from current nuclear fission reactors,
• produces high-temperature process heat that can make hydrogen fuel for vehicles, and
• is walkaway safe.
Science journalist Richard Martin's book SuperFuel makes the case that such a technology exists. It's thorium, and particularly the LFTR—the liquid fluoride thorium reactor.
All 104 units of the U.S. reactor fleet, plus all of its naval nuclear fleet, are comprised of light water reactors using low-enriched uranium. (Around 4 percent of the uranium fuel is the fissionable U235.) These reactors transfer the fission heat of nuclear fuel into water and then high-pressure steam, which eventually turns turbines that turn generators that produce electricity.
These conventional reactors have gotten larger over the years—up to 1,700 megawatts—to attain capital cost efficiency. They generate power inside large steel and concrete containment vessels to contain any accidents. There are several other varieties of nuclear reactors: high temperature gas cooled (China's HTR-10, Germany's THTR), heavy water and natural uranium (Canada's CANDU), graphite moderated bomb factories (Chernobyl), and the fast breeder (Russia's BR600, France's Superphenix).
In the 1960s, Oak Ridge National Laboratory pioneered the idea of the thorium reactor. If you bombard the plentiful and slightly radioactive heavy metal thorium 232 with neutrons, you convert it to fissionable uranium 233. Instead of water, the LFTR circulates the thorium tetrafluoride fuel through the reactor core dissolved in molten lithium and beryllium fluoride salts. A small amount of U235—or later, U233—supplies the neutrons that cause fission. Excess neutrons fly off into a surrounding blanket of molten thorium salt to convert more thorium into new U233 fuel, which can then be used to keep the reaction going. Because the molten salt expands when heated, it is inherently safe: The lower density fuel won't support a continuing nuclear reaction.
Every stage of this process—fuel loading, neutron management, fuel separation, heat exchange, refueling, and waste separation—has been successfully tested in actual reactors, although not in an optimum commercial-scale configuration.
So why aren't we doing it? To answer that, Martin details the long battle between the demanding and acerbic Admiral Hyman Rickover, who wanted nuclear engines based on known technology right now to propel his fleet of submarines, and the gentle visionary Alvin Weinberg, longtime director of Oak Ridge National Laboratory, who envisioned a fleet of safe and affordable thorium-powered electric plants. Rickover, a savage bureaucratic infighter, got what he wanted, and Weinberg got fired. The industry put its muscle behind the hugely expensive liquid metal fast breeder reactor. It in turn was shelved in 1984 after Congress spent $8 billion on the Clinch River Breeder without turning a shovelful of dirt.
As Martin puts it, "Light water reactors and their younger cousin, the liquid metal breeder, won out because of technological intransigence rooted in the military origins of the U.S. nuclear program."
From 1965 to 1969, Weinberg's molten salt reactor experiment had operated successfully, in the later months with thorium-derived U233 fuel. By 1973, Weinberg was gone, molten salt was rejected, and thorium was dead. Rickover's uranium-based industrial empire was preserved, as Westinghouse and other companies built the admiral's naval reactors; the cheaper, safer alternative was shelved.
A man with all the capital in the world couldn't crack into the U.S. nuclear power market: Since it involves uranium, the government stands adamantly in the way, arm in arm with the interests committed to defeating any challenge from disruptive technology. (Nuclear Regulatory Commission approval of a new reactor type typically takes up to 10 years.) That's why Martin believes the LFTR or a variant is more likely to be developed and eventually marketed by China, Russia, India, France, Canada, or even the Czech Republic, all of which are actively pursuing the idea.
Is the LFTR just another fantasy? Weinberg's R&D program solved the major technical problems over 40 years ago. There are several unsolved but not insuperable issues: getting the neutron-eating lithium 6 out of the lithium salt, separating certain fission product salts from the molten salt carrier, and managing small amounts of gaseous tritium. And of course, it will take a lot of engineering to put all the pieces together into one efficient, factory-built 100 Mw modular plant sized to supply, say, Terre Haute, Indiana. It remains to be seen how hard it will be to get such a plant insured, but LFTRs are inherently far safer than light water reactors. If one obtains a Nuclear Regulatory Commission license as a certification of safety, insurers ought to accept it—but there will terrific pressure from the established industry to drag out that certification for as long as possible.
Martin's book is a good read, but when he proposes the steps he thinks are needed to bring his "superfuel" into widespread use, he just comes up with more industrial policy. He wants the government that snuffed out thorium and molten salt reactors four decades ago to subsidize them back into existence, perhaps (one might conjecture) making use of the now vacant Solyndra factory. Maybe the government ought to just get out of the way? If thorium is the Next Big Energy Thing, let its advocates prove it—as soon as Washington stops protecting anachronistic technologies and the companies that sell them, and lets new ideas and talent bring us into a brighter energy future.
The post A Cheaper, Safer Sort of Nuclear Power appeared first on Reason.com.
]]>There will probably never be an Oxford Companion to the 2008 American Financial Disaster. Those interested in this baneful topic, however, would do well to read Reckless Endangerment. Veteran New York Times business reporter Gretchen Morgenson and financial analyst Joshua Rosner (who, Morgenson says, "has seen every trick there is") acknowledge that their book about the events that led up to the financial crisis is not the last word on this sorry episode. But it is, they promise, a work that names names and smokes out 20 years of key incidents that produced the crash and its trillion-dollar aftermath. In this they deliver.
The thesis of Reckless Endangerment is simple: In a rush to orchestrate affordable home ownership—and generate enormous profits—politicians, government-sponsored enterprises, pusillanimous regulators, greedy mortgage brokers, and profit-chasing Wall Street investment bankers combined to drive the American economy into its worst crisis in 70 years, saddling taxpayers with trillions of dollars of debt and leaving the financial landscape littered with the wreckage of ruined lenders, borrowers, and taxpayers.
Morgenson and Rosner begin this ugly tale in 1991, following the savings and loan crisis and subsequent taxpayer bailout. "In just a few short years," they write, "all of the venerable rules governing the relationship between borrower and lender went out the window, starting with the elimination of the requirements that a borrower put down a substantial amount of cash on a property, verify his income, and demonstrate an ability to service his debts."
The poster boy for this narrative is Federal National Mortgage Association ("Fannie Mae") CEO James A. Johnson, an ambitious Minnesota lad who worked his way up in Washington via connections with Walter Mondale, Bill Clinton (his roommate at a 1969 anti–Vietnam war conference), and other Democratic luminaries.
The Roosevelt administration created and capitalized Fannie Mae in 1938 when no private group came forward to charter a national mortgage association. Its purpose was to provide a secondary market for mortgages issued by bank lenders, thus replenishing their loan capital.
In the 1950s Congress pressed Fannie Mae into becoming the purchaser of otherwise unmarketable government-insured mortgages with below-market interest rates. In 1968 Congress created a federal corporation, the Government National Mortgage Association (Ginnie Mae), to purchase government-insured mortgages, and spun Fannie Mae off as a pseudo-private corporation to buy private mortgage paper from banks and other loan originators. Although it was now owned by private stockholders, Fannie Mae retained an exemption from securities laws, an exemption from D.C. real estate taxes, and the right to draw ultimately $2.5 billion from the U.S. Treasury. It was not explicitly backed by the full faith and credit of the government, but investors quickly leaped to the conclusion that it was. That perception allowed Fannie Mae (and its smaller savings-and-loan counterpart Freddie Mac) to borrow money at a significantly lower rate than most financial institutions.
In 1991 retiring Fannie Mae Chairman David Maxwell recruited James Johnson as his successor, mainly for his connections and political skills. Johnson, Morgenson and Rosner write, soon became "the financial industry's leader in buying off Congress, manipulating regulators, and neutralizing critics.…Johnson's manipulation of regulators provided a blueprint for the financial industry, showing them how to control their controllers and produce the outcome they desired: lax regulation and freedom from any restraints that might hamper their risk taking and curb their personal wealth creation."
Throughout the 1990s, Fannie Mae recurrently faced the threat of congressionally spurred privatization. To protect the lender from the horrors of losing its competitive advantage, Johnson set out to make Fannie Mae so popular with Congress that its privileges would remain intact, keeping its money machine running at full throttle. His strategy was to produce millions of happy new homeowners, people whose credit history, income, or down payments were inadequate by traditional home loan standards. Community organizations, subsidized by the Fannie Mae Foundation, would generate applicants from groups believing themselves to be victims of a heartless capitalist system. Banks and other lenders would originate these loans with an agreement that Fannie Mae would buy the loan paper, leaving them with attractive servicing fees and political approval. Activist organizations such as the left-wing Association of Community Organizations for Reform Now (ACORN) and home buyers would become a political claque pressing their members of Congress to defeat any threat to their benefactor.
Johnson's playbook for blocking privatization and troublesome regulations became a blueprint for any large institution seeking freedom or favor. When one courageous Congressional Budget Office analyst, Marvin Phaup, produced a report in 1995 measuring the value of Fannie Mae's implied government guarantee and the equally startling amounts that found their way into Fannie Mae's executive pay packets, Johnson's lobbyists spread the rumor that Phaup suffered from mental illness. Fannie Mae's political contributions became enormous.
Fannie Mae not only played defense in Congress; it also seized on the practice of securitizing mortgage loans for sale to the country's leading financial institutions. Wall Street—notably Goldman Sachs—in turn made huge profits selling these securities to investors.
This superstructure all came crashing down in 2007, and in late 2008 former Goldman Sachs CEO Henry Paulson, serving as George W. Bush's treasury secretary, presided over the Troubled Asset Relief Program bailout and the disappearance of firms such as Bear Stearns and Lehman Brothers. A year later Fannie Mae and its smaller counterpart, Freddie Mac, went into government "conservatorship." (Amusingly, the conservators are now suing the larger banks for selling Fannie Mae and Freddie Mac the toxic mortgages that the buyers eagerly solicited.) James Johnson made it out the door unscathed in 1999, going on to chair the compensation committee of Goldman Sachs, Fannie Mae's go-to collaborator, then headed by Henry Paulson.
Morgenson and Rosner turn over a lot of rocks, doing a good job of explaining the incentives and motivations of various actors, including those few who sounded the alarm, usually in vain. The most infamous of the bad boys are, in addition to Johnson, Rep. Barney Frank (D-Mass.), Sen. Chris Dodd (D-Conn.), Clinton administration Treasury Secretary Robert Rubin and his deputy Larry Summers, and Fannie Mae officials Franklin Raines and Robert Zoellick.
President Bill Clinton was an enthusiastic enabler. In 1994 he launched the Johnson-conceived National Partners in Homeownership program, a public-private partnership booster club aimed at encouraging greater home ownership financing. President George W. Bush foolishly took a plunge into affordable home ownership in 2002 by announcing expanded support for home buyers from the Department of Housing and Urban Development, but made at least two efforts to get Congress to put the brakes on Fannie Mae's runaway express. His most serious effort, in 2005, died when Bush capitulated to a united front of Democratic senators, including the Fannie Mae–financed Sen. Barack Obama (D-Ill.), who vowed to filibuster a Republican-authored regulatory reform bill. To the end of his presidency Bush seemed not to grasp the awful consequences of his passion for irresponsibly expanding home ownership.
Also notable among the villains were the three securities rating agencies: Standard & Poor's, Fitch's, and Moody's. A 1975 Securities and Exchange Commission (SEC) ruling conferred a shared monopoly on the three, and each learned that asking for too much information about a pool of loans was bad for its business. Since the rating agencies only offered opinions, they were not subject to civil action by investors who discovered that they had paid too much for junk.
On the mortgage origination side, the most prominent villain was the flamboyant Angelo Mozilo of Countrywide Financial. But there were plenty of others, including many in the higher suites of Wall Street's most prestigious investment banks.
There were also some white knights, men and women who saw where all this was headed and tried to get it under control. They include Bush's first treasury secretary, John Snow; regulators Bill Taylor (Federal Reserve), Armando Falcon (Housing and Urban Development), and Don Nicolaisen (SEC); Congressional Budget Office Director June O' Neill; and several less visible lawyers and analysts whose warnings were beaten down by Fannie Mae's powerhouse lobbying.
Reckless Endangerment is not, at least directly, about the role of the Federal Reserve Board. The Fed, however, was an enormous enabler, with its shockingly promiscuous money creation and shockingly low interest rate policy from 2001 to 2003. Year-over-year growth of the money aggregate M2 ranged from 8 percent to 10 percent, while the Fed lowered its target for the federal funds rate, the rate at which banks borrow from the Fed to maintain their reserve requirements, from 6.25 percent in 2001 to 1 percent in 2003. This policy produced a negative real rate of interest and an enormous incentive for investors to seek out riskier, more lucrative debt—such as Fannie Mae's mortgage-backed securities. Morgenson and Rosner do not fault Federal Reserve Chairman Alan Greenspan and Ben Bernanke, then a member of the Fed's board, for their wrong-headed monetary performance and ambivalent pronouncements. But it is hard to see how anything like the housing bubble could have happened had there been a stable 2 percent monetary growth rate and a 6 percent federal funds rate.
For students of financial regulatory policy, Reckless Endangerment is valuable in identifying key decisions that led to unhappy results. For instance, a little-noticed provision in the Federal Deposit Insurance Corporation Improvement Act of 1991 authorized the Fed to bail out not just commercial banks but also investment banks and insurance companies. In November 2001 all four federal bank regulators agreed that AAA- and AA-rated mortgage-backed securities needed to carry only a 20 percent risk weight, down from the conventional 50 percent—drastically reducing the amount of reserves banks were required to hold against loan defaults. This change fueled investor confidence in the securities, which all too often contained a large component of subprime and Alt-A mortgages ("liar loans").
The authors do not give enough attention to the Community Reinvestment Act (CRA), first enacted in 1977 to require banks to report the distribution of their mortgage loans. By 1995 the CRA had become a powerful tool in the hands of ACORN and allied activist organizations. Unless a bank could silence their protests by making (and passing on to Fannie Mae) the demanded amount of subprime loans, it faced serious difficulties in obtaining regulatory approval for branching, merging, and other corporate decisions.
The book is also marred by superficial criticism of the "repeal" of the 1933 Glass-Steagall Act, which prohibited deposit-taking commercial banks from underwriting or dealing in securities. As former Treasury Department General Counsel Peter Wallison has shown, the reformist 1999 Gramm-Leach-Bliley Act actually left this prohibition intact. Gramm-Leach-Bliley merely allowed a bank holding company that owned a deposit-taking commercial bank to also own other affiliated financial firms, such as insurance companies or stock brokerages. This change, Wallison persuasively argues, enhanced competition, preserved the protection against banks draining their depositors' accounts to speculate, and in fact buffered the financial crash in 2008.
One other shortcoming of the book—perhaps understandable—is its decision to begin the story in 1991, when Johnson took the reins at Fannie Mae. The Housing Act of 1968, the law that created the modern Fannie Mae, contained an ominous provision replacing the "economic soundness" underwriting standard of the Federal Housing Administration (FHA) with a weaker "acceptable risk" standard. This practice inevitably spread throughout the industry.
The Housing Act also spawned the Section 235 program, under which the FHA insured 40-year home mortgages at 1 percent interest with a $250 down payment, in order to finance President Lyndon Johnson's projected 6 million new units of subsidized housing over 10 years. That program produced every feature of the subprime loan scandals of the last 20 years: enormous default rates, liar loans, exploited purchasers, quick-buck profits, foreclosures, vandalism, fraud, and taxpayer losses. Reviewing the wreckage, Housing and Urban Development Secretary George Romney later reported to Congress in harrowing detail the failure of an idealistic proposal gone very, very wrong. How the architects of the most recent 20 years of disaster could have so rapidly forgotten that searing experience remains a mystery.
Those interested in this shameful topic would do well to read additional accounts by Jeffrey Friedman, Peter Ferrara, Richard Rahn, and Peter Wallison, among others. But all in all, Reckless Endangerment is an informative, understandable, and balanced account of the great homeownership madness. It is especially good in illuminating the scheming of actors in and out of government who made it worse, and a useful epilogue tells us what became of the key figures.
The authors stop short of offering an explicit reform agenda, but it's not hard to infer their preferred model: more and better regulation by dedicated and courageous public servants. A market-disciplined system—with full and honest disclosure, no government risk taking, and no hope of bailouts—might have been a far better path.
Contributing Editor John McClaughry recently retired as president of the Ethan Allen Institute in Vermont.
The post The Affordable Housing Scam appeared first on Reason.com.
]]>At the turn of the 20th century, one of the most popular writers in America dwelled in a small village in upstate New York. After two decades of wandering about Europe and America, Elbert Hubbard (1856–1915) had settled in East Aurora, 18 miles southeast of Buffalo. Along the way he had built and sold a soap company, making a tidy profit he used to finance his literary ventures.
Hubbard wanted to be a well-known writer. The editors at the leading publishing houses of the day did not encourage that ambition. So Hubbard followed the advice of an ancient local rustic, Uncle Billy Bushnell: "Stay at home and do your work well enough, and the world will come to you."
Hubbard launched a printing plant, manned by youngsters from the village, to turn out his magazine The Philistine, devoted to expressing his political, philosophical, and religious views. He went on to print, bind, and sell his essays. Many of them, written to introduce readers to notables such as Washington, Voltaire, Marcus Aurelius, and Jane Austen, appeared in a 14-volume set titled Little Journeys to the Homes of the Great. His most celebrated essay—still read today, though not often enough—was "A Message to Garcia," the inspiring tale of a resourceful and courageous U.S. Army courier who made his way to the camp of a Cuban rebel leader just before the outbreak of the Spanish-American War. Hubbard became known far and wide as "The Sage of Aurora."
In many respects—not including the creation of a 300-employee publishing house—Bill Kauffman of tiny Elba, New York, has become today's Elbert Hubbard. But unlike Hubbard, whose essays glorified the lives and works of famous people, Kauffman's literary journey seeks out "the America of holy fools and backyard radicals, the America whose eccentric voice is seldom heard anymore…the [voice of] third parties, of Greenbackers and Libertarians and village atheists and the 'conservative Christian anarchist' party whose founder and only member was Henry Adams."
Kauffman's earlier books mined interesting veins of localism and hostility to modernity. America First! celebrated America's forgotten isolationist activists, from Hamlin Garland to Alice Roosevelt, plus other assorted individualists, including Edward Abbey, Gore Vidal, Sinclair Lewis, and this writer, included because he considered me, not altogether inaccurately, the last lonely true-believing Jeffersonian. His Dispatches From the Muckdog Gazette celebrated the lives of the common people of Kauffman's Genesee County, home of the minor league Batavia Muckdogs baseball team.
His newest book, Look Homeward, America, will interest anyone who suspects there might be more to America than is found in the average installment of the network news. It's a series of often sparkling profiles of Americans, both near-famous and obscure—similar to Hubbard's Little Journeys, but selected and viewed through Kauffman's unique prism of localism, authenticity, tradition, and human scale.
Like Hubbard, Kauffman has had a long and interesting journey back to his self-imposed exile in Elba. He began a career of itinerant wordsmithing with two and a half unsatisfying years as a staff member for Sen. Daniel Patrick Moynihan (D-N.Y.) in the 1980s. (Kauffman relates his disappointment with his old boss in a profile in this book, lamenting the senator's failure to live up to his own best instincts and possibilities.) Kauffman then worked from 1985 to 1988 at Reason, serving part of that time as the magazine's first Washington editor. At Reason he interviewed such eccentric Americans as the Black Panther turned Reaganite Eldridge Cleaver, a pre–Supreme Court Clarence Thomas, and Charlton Heston; he contributed reports on topics ranging from cowpunk to Kerouac, from anti-war capitalists to Delaware's former Republican governor Pete du Pont, who sought his party's presidential nomination in 1988.
In the 1990s Kauffman, who is now 47, returned to his native Genesee County after writing Every Man a King (1989), a novel clearly inspired by his own wanderings. He bought an old house in Elba (32 miles northeast of Hubbard's East Aurora) and began his own one-man literary enterprise. Besides writing books, he contributes articles to a range of publications, from the left-leaning British newspaper The Independent to the libertarian monthly Liberty. For several years he did editorial work for the conservative magazine The American Enterprise.
It's difficult to find a place for Kauffman in today's political taxonomy. He started out as a populist liberal. As that youthful infatuation waned, he became a libertarian, attracted by that creed's unrelenting hostility to the curse of statism. In his own telling, he became increasingly uncomfortable with the Randian side of libertarianism and what he saw as the movement's infatuation with economic calculus to the near-exclusion of humanistic values such as community, charity, faith, and honor. He then slid into the "peace-and-love left wing of paleoconservatism," of which he may well be the only identifiable member.
The more Kauffman read and experienced, the more he developed an affinity for various schools of thought, not all of them mutually consistent: Jeffersonian agrarian distributist, Catholic Worker pacifist, traditional Old Right conservative, transcendentalist, decentralist, anarchist. His anarchism, he stresses, is not that of "a sallow garret-rat translating Proudhon by pirated kilowatt, nor a militiaman catechized by the Classic Comics version of The Turner Diaries." Rather, he writes, "I am the love child of Henry Thoreau and Dorothy Day, conceived among the asters and goldenrod of an Upstate New York autumn." Thoreau doesn't play a major role in Look Homeward, America, but Day, a largely forgotten social activist who died in 1980, is one of its stars.
From this intellectual odyssey Kauffman has accumulated a long list of dislikes, some of them intense. A sampler: wars, empires, television, consolidated schools, homeland security, the metric system, interstate highways, collectivism, day care centers, Wal-Mart, wage labor, gun control, urban renewal, trade agreements, the PATRIOT Act, National Review, Ayn Rand, Henry Kissinger, Nelson Rockefeller, and Hillary Clinton. Among his least-favorite initials are FDR, JFK, LBJ, NYC, IRS, and CNN. What this seemingly diverse list has in common, to Kauffman, is that each entry is destructive of the values he holds dear: the richness, faith, and compassion of a small community, built upon a network of self-reliant but mutually supportive families, rooted in a sense of place, cherishing the memories and traditions of generations past.
The figures who march across the pages of Look Homeward, America include the Iowa regionalist painter Grant Wood (American Gothic), the Ohio copperhead congressman Clement Vallandigham, the socialists Eugene V. Debs and Mother Jones, the contemporary rural Maine novelist and militia maven Carolyn Chute, the former New York congressmen Augustus Frank Jr. and Barber Conable, the late Rep. H.R. Gross (R-Iowa) and current Rep. Ron Paul (R-Texas), and the Goldwater speechwriter turned Black Panther and anti-war enthusiast Karl Hess. Kauffman reveres this cast of characters because each, in his own way, said no to war, to empire, to global commerce, to giant enterprise, and to centralized governments gobbling up taxes, distributing benefits, and propagating dependency, all contrary to the spirit of the Old Republic.
That semi-mythic era of the happy, contented rural village—its land-owning swains and lasses farming and blacksmithing and barn raising, quilting and square dancing and parenting, worshiping and burying and remembering, oblivious to the greed, passions, and nation-state criminality washing over the rest of the planet—has, on the whole, receded far beyond recovery. But in thousands of Elbas and Auroras, Kauffman believes, principled localists can still create a facsimile. Or could, if somehow the intrusive forces of bigness, modernity, homogenization, and imperialism could be kept at bay beyond the village limits.
Kauffman leads off his parade of exemplars with Dorothy Day, the guiding spirit of the Catholic Worker movement. An ultra-sincere follower of the Christian gospels, Day ardently believed in a widespread distribution of "true" private property ownership, in which the property is under the personal control of its moral and responsible owner, as the essential ingredient of a just society. To this distributism Day added pacifism and anarchism. Her slogan was "To Christ—To the Land," representing a vision in which community-oriented independent landowners would honor the teachings of the church and build little societies free of exploitation, wage slavery, tenement housing, plutocracy, pride, communism, and for that matter "progress."
If Dorothy Day is Kauffman's heroine, Wendell Berry is his hero. One of America's most distinguished men of letters, Berry lives on his ancestral farm in Port Royal, Kentucky, immersed in its traditions and continuity of generations. As a patriot of his native land—that would be greater Port Royal and probably all or most of Kentucky—Berry brilliantly inveighs against the evils of war and empire.
Berry ascribes those ills to our loss of firm roots in the villages and neighborhoods of America. As Kauffman puts it, "As romantic as prairie schooners and the Hesperian exodus to the fruited plain may be, the real honor resides with those who stayed put. [They were] the real heroes of the settling of America." Of course, if millions of early immigrants had stayed put in Yorkshire, Galway, Ulster, Silesia, Saxony, Tuscany, Lebanon, Wallachia, Oaxaca, Luzon, Shantung, and other such places, today's America would be only a thinly populated Native American battleground, unmarred by Caucasians and casinos.
The book's other chapters celebrate the lives and idiosyncrasies of a wide range of people not often celebrated. The least obscure of this bunch is President Millard Fillmore, of whom very little has ever been approvingly said other than Queen Victoria's observation that he was the handsomest man she had ever met. Kauffman tries hard to make his fellow upstate New Yorker (Fillmore originated in East Aurora, long before Hubbard's time) look good. He was, Kauffman reports, a "fine if not outstanding president," mainly because as a "Peace Whig" he opposed the Mexican War, the proposed annexation of Cuba, and the fire-eaters on both sides who eventually produced the bloody convulsion of the Civil War.
This tribute is persuasive only to those who, like Kauffman, view nay-saying and pacifism as controlling virtues. Fillmore's signing of the Fugitive Slave Act, his preference for deporting slaves to Africa over abolition, and his 1856 presidential candidacy on the secretive anti-immigrant and anti-Catholic Know-Nothing ticket hardly make a glittering legacy. So long as Fillmore pretty much said no to everything, he qualified as a Kauffman notable if not a hero. Once he found something to say yes to—intolerant nativism—he pretty much fell out of the pantheon.
Kauffman's localist-traditionalist ethos would have received the hearty assent of Elbert Hubbard's East Aurora villagers, and their Elba neighbors, in 1900. Well, perhaps in 1825, before railroads, the telegraph, and the electric grid worked their insidious effects.
Two salient facts intrude upon this blissful picture. First, very few of America's 300 million inhabitants have any intention of living like their or anybody's forebears in an upstate New York village with all the blessings of 1900 (let alone 1825) technology. Not even Bill Kauffman, with his fondness for home-squeezed apple cider, sandlot baseball, Christmas caroling, and dandelion wine, is willing to give up his word processor and Internet access, his publisher in far-off Delaware, and (presumably) his access to modern medical and dental care.
Attractive as such a life may seem to many—and I write this in a log house on a northeastern Vermont mountainside—none of us can flee from the second and more menacing fact that in a cave in Pakistan, a coffeehouse in Cairo, a mosque in Riyadh, and a bunker beneath Tehran, well-armed and inventive villains really, really want to kill the peaceful people of Elba, New York, and wherever else we Americans dwell. They want to do so because their reading of their holy book commands them to purify their faith by extirpating the infidels, and in so doing reaffirm their divine right to rule the world. This is not a problem that Kauffman chooses to address.
As one who has long fought against the temptation, I can despondently concede that we Americans of 2006 cannot afford to retreat into a nostalgic tranquility. We are in a global struggle we would rather not have to contest but which now makes American withdrawal from the world a matter of possibly mortal consequence.
Still, facing that challenge need not command all our waking hours. Some of them thus can be enjoyably spent reading Bill Kauffman's lively, literate, and thought-provoking ramble through the woodland paths and flower-strewn dales of the Old Republic, honoring its heroes and heroines, celebrating their commitment to place and community, and inspiring us to think bravely about recovering its best features in a time of soul-crushing bigness, cultural degradation, and mortal challenge from implacable enemies.
Contributing Editor John McClaughry (john@ethanallen.org) has for the last 40 years served as moderator of the town meeting of Kirby, Vermont (pop. 500).
The post Paradise Lost appeared first on Reason.com.
]]>As Campaign 2004 entered its home stretch, we asked a variety of policy wonks, journalists, thinkers, and other public figures in the reason universe to reveal for whom they are voting this fall, for whom they pulled the lever last time around, their most embarrassing presidential vote, and their favorite president of all time. Their answers, as of late August, follow.
—The Editors
Contributing Editor Bagge is best known as author of the alternative comic book Hate.
2004 vote: If it looks like my home state could go either way by Election Day, I'll vote for John Kerry. Otherwise I'll vote for the Libertarian Party's candidate, Michael Badnarik. That's been my M.O. every election year, since the Democratic candidate usually strikes me as the lesser of two evils (if not by much).
2000 vote: Harry Browne.
Most embarrassing vote: Every time I've voted for a major-party candidate I've felt embarrassed. I vaguely recall voting in '88 for Michael Dukakis, whose only positive attribute was that his last name wasn't Bush (as is the case with John F. Kerry).
Favorite president: George Washington, for actually refusing to assume as much power as he could have gotten away with. I can't think offhand of another president that could be said about.
Bailey is Reason's science correspondent.
2004 vote: I'm undecided between Republican George W. Bush and Libertarian Michael Badnarik. Bush has been a great disappointment. But Kerry will be even worse—raising taxes, overregulating, and socializing more of medicine. What to do?
2000 vote: George W. Bush. I couldn't possibly have voted for Gore since he dislikes me personally. Besides, I was presciently worried (you can ask my wife) about a popular vote/electoral vote mismatch.
Most embarrassing vote: George McGovern, 1972. I was 18 and thought I was a socialist.
Favorite president: George Washington. The man spurned being made king and stepped peacefully down from office.
Barlow is a songwriter for the Grateful Dead and other bands, the co-founder and vice chair of the Electronic Frontier Foundation, and a Berkman Fellow at Harvard Law School.
2004 vote: I'm voting for John Kerry, though with little enthusiasm. This is only because I would prefer almost anything to another four years of George W. Bush. I don't believe the Constitution, the economy, or the environment can endure another Bush administration without sustaining almost irreparable damage.
2000 vote: John Hagelin of the Natural Law Party. I discovered, in the voting booth, that a friend of mine was his vice presidential candidate. I couldn't bring myself to vote for Bush, Gore, or Nader and had intended to cast no presidential vote.
Most embarrassing vote: I'm embarrassed for my country that in my entire voting life, there has never been a major-party candidate whom I felt I could vote for. All of my presidential votes, whether for George Wallace, Dick Gregory, or John Hagelin, have been protest votes.
Favorite president: Jefferson, who defined, in his works and in his person, just about everything I love about America.
Bovard is author of The Bush Betrayal (Palgrave Macmillan) and seven other books.
2004 vote: I will probably vote for Badnarik, the Libertarian Party candidate. Both of the major-party candidates brazenly flaunt their contempt for the U.S. Constitution. Regardless of who wins in November, the U.S. likely will have a lousy president for the next four years.
2000 vote: I abstained.
Most embarrassing vote: I voted for Gerald Ford in 1976. He was not that embarrassing, compared to Jimmy Carter. And compared to George W. Bush, Ford was verbally graceful.
Favorite president: It might be a coin toss between Washington and Jefferson.
Washington set a magnificent example of self-restraint, protecting the new nation from both his own power lust and unnecessary wars (despite foolish popular demands). Jefferson masterfully reined in the federal government from the tyrannical Alien and Sedition Act persecutions that John Adams launched.
Brand is the founder of the Whole Earth Catalog and the Long Now Foundation. He is the author of, among other books, The Media Lab (Viking) and How Buildings Learn (Penguin).
2004 vote: Kerry. He's knowledgeable enough and appears to do well in crunches. He has the skills and connections to begin to undo the damage of the Bush years. He's highly ambitious, which is fine with me. And he personally killed a man who was trying to kill him and his crew. You could also say he personally attacked a government that was trying to kill his generation. Those actions take sand. Too bad they won't come up in the debates.
2000 vote: Al Gore.
Most embarrassing vote: Lyndon Johnson.
Favorite president: Theodore Roosevelt for a fine blend of intellect and zzzzzest, tied with Bill Clinton for the same reasons.
Carey stars in Drew Carey's Green Screen Show, beginning October 7 on the WB.
2004 vote: Quit pretending that it matters, would you? Can you vote for all the nefarious cabals that really run the world? No. So fuck it.
2000 vote: I voted Libertarian, for all the good it did me.
Most embarrassing vote: Is it considered embarrassing to cast a vote out of principle for someone you know doesn't have a snowball's chance of winning? Oh, OK. Then they're all embarrassing.
Favorite president: Andrew Jackson, because he's what a lap dance costs (and because, ironically, he opposed having a National Bank).
Cavanaugh is Reason's Web editor.
2004 vote: Michael Badnarik, because he's Not Bush either.
2000 vote: Ralph Nader.
Most embarrassing vote: Dukakis in 1988. I thought he looked cool in that tank!
Favorite president: If we can't count John Hanson, then Warren G. Harding; would that they could all achieve so little.
Chapman is a columnist and editorial writer for the Chicago Tribune.
2004 vote: I haven't decided between John Kerry and Michael Badnarik. I have only the dimmest hopes for a Kerry presidency, but I think Bush has to be held accountable for Iraq, the worst foreign policy blunder since Vietnam, and the accelerated growth of the federal government.
2000 vote: Harry Browne, in keeping with my usual (though not automatic) practice of voting for the Libertarian presidential nominee.
Most embarrassing vote: Richard Nixon, in my first election, 1972, an experience that helped estrange me permanently from the Republican Party.
Favorite president: Thomas Jefferson, who took great and justified pride that as president, he eliminated internal taxes and avoided war, and who peacefully doubled the size of the young nation.
Senior Editor Doherty is author of This Is Burning Man (Little, Brown).
2004 vote: I am a principled nonvoter. If I were forced to vote at gunpoint, I'd pick the Libertarian Party's Michael Badnarik, whose views on the proper role of government most closely resemble mine.
2000 vote: I did not vote. Those who vote have no right to complain.
Most embarrassing vote: I've been saved the embarrassment of ever having to feel any sense of responsibility, of even the smallest size, for the actions of any politician.
Favorite president: In their roles as president, I can't be an enthusiastic fan of any of them, but for his role in crafting the Constitution, a document that held some (unrealized) promise to limit government powers, James Madison.
Richard Epstein
Epstein is a professor of law at the University of Chicago and author, most recently, of Skepticism and Freedom: A Modern Case for Classical Liberalism (University of Chicago).
2004 vote: I don't know who the Libertarian candidate is this time, but you can put me down as voting for him; anyone but the Big Two. As far as I can tell, the debate thus far has borne no relation to the important issues facing the nation…except Vietnam. It's just two members of the same statist party fighting over whose friends will get favors.
2000 vote: I can't remember.
Most embarrassing vote: Since I don't remember who I vote for from one election to the next, it's hard to say. I suppose Richard Nixon in '72, though that doesn't mean I'd want to have voted for George McGovern either.
Favorite president: I'm certainly a Calvin Coolidge fan; he made some mistakes, but he was a small-government guy.
Freund is a senior editor at Reason.
2004 vote: I'm still thinking about it.
2000 vote: Harry Browne.
Most embarrassing vote: Andre Marrou.
Favorite president: I have no favorite president.
Contributing Editor Garvin, author of Everybody Had His Own Gringo: The CIA and the Contras (Brassey's), writes about television for The Miami Herald.
2004 vote: I live in Florida. My votes are randomly assigned based on the interaction of our voting machines, the Miami-Dade Election Commission, and passing UFOs.
2000 vote: See above.
Most embarrassing vote: My presidential record is solid. However, I once cast a write-in ballot for Dynasty's Joan Collins for Congress. It was an immature act, insulting to America's democratic institutions, and I regret it. Upon reflection,China Beach's Dana Delany would have been a more deserving choice.
Favorite president: William Henry Harrison caught pneumonia while delivering his inaugural address, lay in bed barely conscious for six weeks, and then died, his presidency having done hardly any damage to the country.
George is a New York Post columnist, West Indian Catholic stand-up comic, and recovering Republican flunky.
2004 vote: Living in a maximum blue state allows me to vote my conscience. Rather than vote for an entitlement-expanding, tariff-imposing, deficit-increasing, big-government Johnson Republican or an entitlement-expanding, tariff-imposing, tax-increasing, big-government Nixon Democrat, I will vote for Libertarian Party candidate Michael Badnarik.
2000 vote: Harry Browne. Bush's last-second evasiveness on his DUI arrest was too reminiscent of the slippery tongue of the guy about to leave office. Bob Jones University didn't help either.
Most embarrassing vote: Never actually did it, but had I been a citizen the year I turned 18 (1980), I would have (gulp!) voted for Jimmy Carter. It's the secret shame I have carried around for decades.
Favorite president: Abraham Lincoln, for proving that it's best to keep the band together despite many years of creative differences. (Had the Beatles followed his example, the world would have been a much better place.)
Gillespie is editor of Reason and of the new anthology Choice: The Best of Reason (BenBella Books).
2004 vote: Probably no one but maybe Badnarik, if only to register dissent from the Crest and Colgate parties.
2000 vote: Harry Browne, I think, but possibly no one.
Most embarrassing vote: In 1984, the first time I could vote for president and the only time I've voted for a major-party candidate, I cast a ballot for Walter Mondale. I empathize with complete losers, and a guy whose only memorable campaign line—"Where's the beef?"—came from a Wendy's commercial (not even a McDonald's spot!) was a loser of historic proportions.
Favorite president: Richard Nixon, who has done more in my lifetime than any other U.S. pol to discredit the idea that government should wield massive and unexamined power over citizens.
Contributing Editor Godwin is legal director of Public Knowledge.
2004 vote: Kerry. Let's put it this way: After four years of Bush, the Republican Party has become an example of a political machine out of control. Everything they used to decry—reckless foreign intervention, fiscal irresponsibility, deficit spending—they now represent. You don't have to love Kerry or the Democrats to think it's time for a change. Worst case, at least we'd get divided government for four years.
2000 vote: Gore, only because as a Texan I already had strong reservations about George W. Bush.
Most embarrassing vote: Not a one.
Favorite president: I have a lot of fondness for Theodore Roosevelt: In him you had a strong, articulate president who never thought he lost manhood points by being pro-environment. I also like Eisenhower; he presided over a strong American response to a very polarized East-West world.
Hentoff, a nationally syndicated columnist, writes regularly for both the Village Voice and The Washington Times. An expanded paperback edition of his book The War on the Bill of Rights and the Gathering Resistance (Seven Stories Press) will be released this fall.
2004 vote: I'm not voting for anyone at the top of the ticket. I can't vote for Bush, who supports Ashcroft's various "revisions" to the Bill of Rights, since our liberties are what we're supposed to be fighting for. As for Kerry, I think he's an empty suit: How much time did he give his years in the Senate in his convention speech, about 40 seconds?
2000 vote: I voted for Nader last time. But he wants to pull the troops out of Iraq, which would lead to a state of nature like Thomas Hobbes had; it would be disastrous. He's also become part of the bash-Israel crowd, and to get on ballots he's been cooperating with Lenora Fulani, who has been accused of harboring anti-Semitic biases.
Most embarrassing vote: Well, I didn't mind voting for Nader in 2000, because Gore had a whole series of empty suits during that campaign, and I didn't think much of Bush either. I can't think of any votes I'm particularly embarrassed about.
Favorite president: FDR. He could have done much more to help the victims of the Holocaust, but he did act decisively (if trickily) to take us into the war, which was essential. Otherwise we'd all be speaking German. And as Cass Sunstein has pointed out, FDR was the one who laid out a "second bill of rights," with economic freedoms like a right to decent housing.
Higgs is a senior fellow in political economy at the Independent Institute and author, most recently, of Against Leviathan (Independent Institute).
2004 vote: I never vote. I don't wish to soil my hands.
2000 vote: Had I been forced to cast a ballot for president in the 2000 election, I might have died of septicemic disgust.
Most embarrassing vote: I voted only once in a presidential election, in 1976, and I did so on that occasion only so that I could irritate my left-liberal colleagues at the University of Washington by telling them that I had voted for "that idiot" Gerald Ford.
Favorite president: Grover Cleveland, because he, more so than any of the others, acted in accordance with his oath to preserve and protect the Constitution, despite great pressures to act otherwise.
Jillette is the larger, louder half of the comedy/magic team Penn & Teller and star of Showtime's Penn & Teller: Bullshit!
2004 vote: I'm undecided (always the stupidest position). I might do the moral thing and not vote at all, or do the sensible thing and vote Libertarian (Badnarik, right?), or I might make 100 bucks from my buddy Tony and vote for Bush. (I told Tony that Bush and Kerry were exactly the same, and he bet me 100 bucks that I didn't believe that enough to really truly vote for Bush.) But if you want to be pragmatic, I'm in Nevada, so who cares?
2000 vote: Harry Browne!
Most embarrassing vote: I must have voted Republicrat at least once, but voting is secret—the Founding Fathers didn't want us to be embarrassed by our evil pasts.
Favorite president: Teller (he's president of Buggs and Rudy Discount Productions [Penn & Teller's company]), because he can lie without saying a word.
Kopel is research director of the Independence Institute in Golden, Colorado.
2004 vote: George Bush. This will be the first election in which I have ever voted for a Republican for president. We're in a war in which the survival of civilization is at stake, and Bush is the only candidate who realizes the gravity of the danger we face and who is determined to win World War IV.
2000 vote: Ralph Nader.
Most embarrassing vote: Harry Browne, 1996.
Favorite president: George Washington, for leading the nation through extremely perilous times, and for setting the highest standard of personal conduct and patriotic leadership.
Contributing Editor McClaughry, a senior policy adviser in the early Reagan White House, is president of the Ethan Allen Institute in Vermont.
2004 vote: George W. Bush. Unlike his opponents, he at least understands that only America can defeat militant Islam by a combination of military force and the ideology of freedom. At home, his recent advocacy for "a new era of ownership" promises the only way out of statist stagnation.
2000 vote: Bush.
Most embarrassing vote: Nixon, 1972.
Favorite president: Jefferson. He respected the Constitution, shrank government, slashed taxes, paid cash for Louisiana, hammered the Algerine pirates, reined in the judiciary, and began to extinguish the national debt.
Contributing Editor McCloskey teaches economics, history, English, communications, and anything else they tell her to teach at the University of Illinois at Chicago.
2004 vote: Can you believe this? The last time I voted for anyone but a Libertarian was for George McGovern in 1972, against the war. This time, another Democrat gets it—though as an economist I know it's irrational to vote at all.
2000 vote: For whomever the Libertarian Party candidate was. You expect me to remember?
Most embarrassing vote: Lyndon Johnson in 1964, my very first vote. Because Goldwater was scary. Did I know scary?
Favorite president: Speaking of scary, the office is. So the least effective: Warren Harding.
McElroy is a Fox News columnist, the editor of ifeminists.net, and a fellow at the Independent Institute.
2004 vote: I'm voting for No One for at least three reasons: 1) As a Canadian, I am spared the insulting process of punching a ballot to express which power glutton should prevail; 2) as an anarchist, I refuse to legitimize the process that puts anyone in a position of unjust power over people's lives; and 3) as a practical matter of value returned for effort, the time is better spent enjoying family or working.
2000 vote: No One. I admit to being so anti-Clinton and so appalled by the prospect of political correctness continuing that I uttered out loud "anyone but Gore"—which, in practical terms, meant Bush. Those famous last words are right up there with Socrates saying, "I drank what?"
Most embarrassing vote: I have never voted in a political proceeding. But when I first became a libertarian while living in California, I did support the Libertarian Party candidate. This would be more embarrassing if I had not learned from my mistake. The lesson: It is not the particular man in power that I oppose but the power itself, which is unjust. As a matter of logic, if nothing else, I cannot oppose the office as illegitimate while waving a straw hat and yelling, "Elect my man to it!"
Favorite president: Thomas Jefferson in his first term because he did less harm than any other president.
Murray is W.H. Brady Scholar at the American Enterprise Institute and author, most recently, of Human Accomplishment (HarperCollins).
2004 vote: Reluctantly—very reluctantly—George Bush. I find the Democrats so extremely obnoxious that I have to vote against them, and I can't do that voting Libertarian.
2000 vote: Harry Browne.
Most embarrassing vote: For Bob Dole in 1996, because I found Bill Clinton so extremely obnoxious that I had to vote against him. Probably my 2004 vote will be my second most embarrassing ballot.
Favorite president: Gotta be George Washington. He was acutely conscious that everything he did would be a precedent, and just about every choice he made was right.
O'Rourke is H.L. Mencken Research Fellow at the Cato Institute and author, most recently, of Peace Kills (Atlantic Monthly Press).
2004 vote: George W. Bush, because I don't want Johnnie Cochran on the Supreme Court.
2000 vote: George W. Bush. (I always vote Republican because Republicans have fewer ideas. Although, in the case of George W., not fewer enough.)
Most embarrassing vote: A 1968 write-in for "Chairman Meow," my girlfriend's cat. It seemed very funny at the time. As I mentioned, this was 1968.
Favorite president: Calvin Coolidge—why say more?
Paglia is a professor of humanities and media studies at the University of the Arts in Philadelphia.
2004 vote: John Kerry. In the hope that he will restore our alliances and reduce rabid anti-Americanism in this era of terrorism when international good will and cooperation are crucial.
2000 vote: Ralph Nader. Because I detest the arrogant, corrupt superstructure of the Democratic Party, with which I remain stubbornly registered.
Most embarrassing vote: Bill Clinton the second time around. Because he did not honorably resign when the Lewinsky scandal broke and instead tied up the country and paralyzed the government for two years, leading directly to our blindsiding by 9/11.
Favorite president: John F. Kennedy. Not that he accomplished much. But he was the first candidate I campaigned for as an adolescent, and I still admire his articulateness and vigor. The Kennedys gave the White House sophistication and style.
Pinker is Johnstone Professor of Psychology at Harvard and author of The Blank Slate (Penguin), How the Mind Works (W.W. Norton), and The Language Instinct (HarperCollins).
2004 vote: Kerry. The reason is reason: Bush uses too little of it. In the war on terror, his administration stints on loose-nuke surveillance while confiscating nail clippers and issuing color-coded duct tape advisories. His restrictions on stem cell research are incoherent, his dismissal of possible climate change inexcusable.
2000 vote: Gore, with misgivings.
Most embarrassing vote: I left Canada shortly after turning 18 and became a U.S. citizen only recently, so I haven't voted enough to be too embarrassed yet.
Favorite president: James Madison, for articulating the basis for democracy in terms of the nature of human nature.
Contributing Editor Pitney is a professor of government at Claremont McKenna College and author of The Art of Political Warfare (University of Oklahoma Press).
2004 vote: I'm voting for Bush. He cut taxes. Kerry would raise them.
2000 vote: Bush. Former reason Editor Virginia Postrel put it well: "Bush is a mixed bag. But I think Al Gore is the devil."
Most embarrassing vote: I'm comfortable with my presidential votes in general elections. In 1980, though, I hesitated to back Reagan in the primaries because I didn't think he would win in November. Oops.
Favorite president: Abraham Lincoln preserved the Union and wrote some of the most beautiful prose that ever came from an American pen.
Poole is the founder, former president, and current director of transportation studies at the Reason Foundation. He served on the Bush-Cheney transportation policy task force during the 2000 campaign and on the administration's transition team.
2004 vote: Bush, reluctantly, despite his troubling expansions of the federal government and threats to civil liberties. The alternative is simply worse. We elect not an individual but a consulting team, and we'll have a far better team in place with Bush than with Kerry.
2000 vote: Bush.
Most embarrassing vote: Richard Nixon in 1968. What a disaster! But at least he kept his promise to eliminate the draft.
Favorite president: Thomas Jefferson, despite his flaws, for his intellect, limited government philosophy, and strong support for separation of church and state.
Rauch is a correspondent for The Atlantic and a columnist for National Journal.
2004 vote: I'll recuse myself from this…I never tell my vote. A journalist thing.
2000 vote: See above.
Most embarrassing vote: See above.
Favorite president: Lincoln. All the usual reasons. Favorite prez of past 40 years: Bush 41. Beats Reagan and everybody else hands down.
Rennie is editor-in-chief of Scientific American.
2004 vote: John Kerry. Anybody who has seen Scientific American's editorials during the last few years knows we're deeply unhappy with the de facto anti-scientism of the current administration. Science shouldn't trump all else in setting policy, but it would be a nice change of pace for a White House to put science ahead of ideology again. Of course, I'm keeping my expectations low.
2000 vote: Remember that guy? The one that everybody said claimed to have invented the Internet, except he hadn't said that at all? He seemed good.
Most embarrassing vote: Back in college in 1980, flushed with youthful sanctimony, I voted for John Anderson. The voting booth is a bad place to be an idealist. But at least when I threw my vote away on a third-party candidate, it was irrelevant.
Favorite president: John Quincy Adams showed that it was possible for the son of a president to rise to that same office in a highly disputed election without being remembered as a dangerous embarrassment.
Reynolds, a professor of law at the University of Tennessee, publishes InstaPundit.com.
2004 vote: Most likely George Bush, and for one reason: the war. I'm having trouble trusting Kerry on that.
2000 vote: Harry Browne.
Most embarrassing vote: Dukakis, '88.
Favorite president: Calvin Coolidge, who knew his limitations.
Along with his partner Jane Metcalfe, Rossetto started Wired.
2004 vote: Bush may be wrong about everything else, but he is right about the issue that matters most for my children's future: stopping Islamic fascism. And Manchurian candidate Kerry and the Copperheads, er, Democrats, are just a joke, preferring to act as though this probably generation-spanning war is about politics, not the survival of the West.
2000 vote: I am proud to say that I have never voted for president in my life, despite having eight opportunities to do so, and really resent being forced to do so now.
Most embarrassing vote: This one—but the alternative of not voting and allowing a billionaire currency speculator like George Soros to pick the next U.S. president is too dire to contemplate.
Favorite president: Chauncey Gardner, from Being There. He was even less verbose than my next favorite president, Calvin Coolidge.
Sanchez is Reason's assistant editor.
2004 vote: Kerry would get my vote if I didn't live in the District of Columbia, but the prospect of raising his total from 94.0001 percent to 94.0002 percent isn't quite enough to lure me to the polls. Badnarik is embarrassing, and Bush is so egregiously dishonest and destructive that even electing a mannequin like Kerry is an acceptable price of ousting him.
2000 vote: I didn't vote, though (to my shame, in retrospect) I was optimistic about G.W. Bush after the convention speeches, where all that focus on Social Security reform, educational choice, and "humble" foreign policy led me to think he might do some net good.
Most embarrassing vote: I've managed to spare myself that particular breed of embarrassment by not voting. Blessed are the apathetic, for they get the better even of their political blunders.
Favorite president: Grover Cleveland, who vetoed a popular agricultural assistance bill with the phrase, "Though the people support the government, the government should not support the people."
Shafer writes the Press Box column for Slate.
2004 vote: Who is the Libertarian candidate this year? That's who. Because I'm a yellow dog Libertarian.
2000 vote: Who was the Libertarian candidate that year? That's who.
Most embarrassing vote: I've never been embarrassed in the slightest by my presidential ballot.
Favorite president: Richard Nixon, because he's the gift that keeps giving.
Shermer is publisher of Skeptic magazine, a monthly columnist for Scientific American, author of The Science of Good and Evil (Henry Holt), and a bicycling enthusiast.
2004 vote: John Kerry. I'm a libertarian, but in 2000 I voted my conscience under the assumption that it probably didn't matter who won between Bush and Gore (Tweedledee and Tweedledum when compared to Browne), and I was wrong. It did matter. The world situation is too precarious and too dangerous to flip a coin, the Libertarian candidate cannot win, Bush's foreign policy is making the world more dangerous and more precarious rather than less, and Kerry has a good chance to win and an even better chance to improve our situation. Most important, he's a serious cyclist who wears the yellow "LiveStrong" bracelet in support of Lance Armstrong's cancer foundation and Tour de France win.
2000 vote: Harry Browne, because like the Naderites on the other end of the spectrum I voted my conscience.
Most embarrassing vote: Richard Nixon, 1972, my first presidential vote cast, just out of high school. My poli-sci profs the next several years of college regaled us with daily updates about Watergate. Ooops…
Favorite president: Thomas Jefferson, because 1) he was a champion of liberty, 2) he applied scientific thinking to the political, economic, and social spheres, and 3) when he dined alone at the White House there was more intelligence in that room than when John F. Kennedy hosted a dinner there for a roomful of Nobel laureates.
Sirius, former editor-in-chief of Mondo 2000, edits NeoFiles at life-enhancement.com/NeoFiles and is author of, most recently, Counterculture Through the Ages: From Abraham to Acid House (Random House).
2004 vote: I can't bring myself to say it. I'm voting for the only guys who stand a chance of replacing the complete insanity of the Bush administration and return us to the ordinary consensus madness we had come to know so well. You know, John and John.
2000 vote: Even though I ran as a write-in candidate myself, I wound up voting for Nader because I thought he gave such rousing and impressive speeches. I wouldn't actually want him to be president though. He's way too puritanical. Did anybody notice that he joined in on the Janet Jackson nipple crisis? Instead of objecting from a religious point of view, he objects from the view that corporate media are "spewing filth" into our environment. The health fascists are everywhere.
Most embarrassing vote: Ralph Nader in 2000. First of all, some other people actually voted for me. My insincerity is justifiable only in a dadaist context, which I therefore proclaim. And secondly, it encouraged Nader, who is now clearly addicted to the run.
Favorite president: It's difficult to rate the quality of an 18th-century president's decisions at this distance, but I choose Thomas Jefferson for eloquently elucidating many of the ideas and attitudes of the Age of Reason.
Smith is chairman of the Federal Election Commission.
2004 vote: That's one an election commissioner better not answer; we're not supposed to engage in partisan activities
2000 vote: I don't want to answer that one either.
Most embarrassing vote: I'm too smart to cast embarrassing ballots.
Favorite president: Warren G. Harding; he's a vastly underrated president and a man of great ordinary decency.
Smith, the 2002 Nobel Prize winner in economics, was born and raised in Kansas and inspired to learn by a farmer-teacher in a one-room country schoolhouse.
2004 vote: I am not voting for Kerry. Yet to be decided is whether I will vote for Bush or for neither.
2000 vote: Bush.
Most embarrassing vote: Many of the presidents were embarrassments, but not for me as a voter, because I always think of myself as voting against the other one. This policy led me to vote "for" Humphrey, Nixon, and others, but I saw myself as choosing negatively.
Favorite president: Eisenhower, for whom the affairs of state could always await another round of golf—for his not wanting to "get bogged down in a land war in Asia," and his concern about the military-industrial complex, which generalizes to other complexes like the Treasury-investment-banking complex.
Sullivan, a senior editor at The New Republic, blogs at andrewsullivan.com.
2004 vote: I can't vote because I'm not a citizen. So I can only "support" candidates, and I'm not supporting anyone in this election.
2000 choice: Bush.
Most embarrassing choice: I'm unembarrassed by all my choices.
Favorite president: Lincoln, of course. He saved the Union.
Senior Editor Sullum is a syndicated columnist and author of Saying Yes: In Defense of Drug Use (Tarcher Penguin).
2004 vote: The thought of choosing between Bush and Kerry, or casting another pathetic protest vote for the Libertarian candidate, is so depressing that I probably won't be motivated to visit my local polling place this year. I'd like to see Bush lose, but without Kerry winning. Much as I disliked him when he was in office, Clinton is looking better and better to me in retrospect.
2000 vote: Harry Browne.
Most embarrassing vote: It's a tossup between Mondale in 1984 and Dukakis in 1988. Dukakis is more embarrassing because it was more recent (and because he's Dukakis), but Mondale is more embarrassing because I voted for him twice—in New York's open primary (when I almost went for Gary Hart) as well as the general election.
Favorite president: Thomas Jefferson for his writings rather than his performance in office, Grover Cleveland or Calvin Coolidge for taking seriously their oaths to uphold the Constitution and its limits on federal power.
Taylor writes Reason Express, a weekly news commentary for Reason Online.
2004 vote: George W. Bush, pathetic bastard that he is—and has made me. The only thing that I am certain that John Kerry would do is raise taxes. Plus I figure the potential confusion surrounding a new national security team may well get people killed. See? Pathetic.
2000 choice: Bush, in Maryland. A gimme.
Most embarrassing vote: Bob Dole in 1996. Knew that was going nowhere.
Favorite president: Ronald Reagan, because he beat back the flawed economic theory that was destroying America and the world.
Volokh teaches and writes, mostly about constitutional law and cyberspace law, at UCLA School of Law. He blogs at volokh.com.
2004 vote: George W. Bush. I almost always vote for the party, not the man, because the administration, its legislative agenda, and its judicial appointments generally reflect the overall shape of the party. I tend to think that Republicans' views on the war against terrorists, economic policy, taxes, and many though not all civil liberties questions—such as self-defense rights, school choice, color blindness, and the freedom of speech (at least as to political and religious speech)—are more sound than the Democrats' views. I certainly find plenty to disagree with the Republicans even on those topics, but if I waited for a party with which I agreed on everything or even almost everything, I'd be waiting a long time.
2000 choice: George W. Bush.
Most embarrassing choice: Can't think of any.
Favorite president: George Washington. As best I can tell, he did a crucial job better than anyone else could have done, and I don't know him well enough to have learned about all his warts.
Managing Editor Walker is author of Rebels on the Air: An Alternative History of Radio in America (NYU Press).
2004 vote: I'm not sure yet, but I'm increasingly inclined to write in Elmer Fudd.
2000 vote: Harry Browne.
Most embarrassing vote: Dukakis. Bush Sr.'s ACLU-baiting campaign was appalling, and I wasn't yet ready to start throwing my vote away on third-party candidates and frivolous write-ins. So I threw it away on a Democrat instead.
Favorite president: It would have to be one of those practically powerless presidents who served under the Articles of Confederation—maybe the anti-federalist Richard Henry Lee, chief of the Continental Congress from 1784 to 1785, who helped launch the American Revolution, tried to ban the importation of slaves, fought to include a Bill of Rights in the Constitution, and sang the goofiest song in 1776.
Wanniski midwifed supply-side economics, was the first Marxist to work as an editor of the Wall Street Journal editorial page, and is author of The Way the World Works (Gateway).
2004 vote: Bush does not deserve to be re-elected, and Kerry does not deserve to be elected—Bush because of Iraq and Kerry because his economics are dreadful. I'm leaning toward Kerry because I prefer recession to imperialist war, but Bush might tempt me back by firing Cheney, Rumsfeld, and company.
2000 vote: George W. Bush.
Most embarrassing vote: I only voted for Dole in '96 because Jack Kemp was on the ticket. I should have voted Perot in protest.
Favorite president: Abraham Lincoln, because he saved the Union. Otherwise, there would today be no USA.
Contributing Editor Welch is a columnist for Canada's National Post. He blogs at mattwelch.com.
2004 vote: John Kerry, because I think the foreign policy approach of Bush and his administration would make the world, on balance, less safe and less free, while expanding the target on Uncle Sam's back, compared to a presidency run by a flip-floppy Democrat with a Republican Congress. I think Bush needs to be fired.
2000 vote: Ralph Nader, despite covering his campaign.
Most embarrassing vote: Dukakis. I'm hoping not to feel the same way this November.
Favorite president: Lincoln, for freeing slaves, preserving the Union, and serving as a ghostly conscience to haunt the Republicans' "Southern Strategy."
Wilson helped found the Guns and Dope Party (gunsanddope.com), which urges everybody to vote for himself. His best-known book is Illuminatus! (Dell), co-written with Robert Shea.
2004 vote: I'm voting for myself because I don't believe anybody else can represent me as well as I can represent myself.
2000 vote: Nobody. I sat in my tent and sulked, like Achilles.
Most embarrassing vote: In 1964 I voted for LBJ because I thought Goldwater would escalate the war in Vietnam.
Favorite president: John Adams, because he didn't trust anybody in politics, including himself.
Contributing Editor Young is a columnist for the Boston Globe.
2004 vote: That's a little private, don't you think? Whichever way I answer, half my friends won't talk to me anymore. (Such are the perils of having a bipartisan social life.) Of course, I could cast a write-in vote for Xena, Warrior Princess…but that would probably piss off my friends who are Buffy fans.
2000 vote: See above.
Most embarrassing vote: Well, talk about private!
Favorite president: George Washington—can't offend anyone with that.
The post Who's Getting Your Vote? appeared first on Reason.com.
]]>Prior to 1965, "urban policy" meant a redevelopment czar, a master plan, eminent domain, "people clearance," downtown megaliths, and high-rise public housing ghettos for the displaced poor. In that year it became clear this was a recipe for social disaster.
The flames over Watts, the uprising on Chicago's West Side, the marches in Boston's Roxbury, and the turbulence all over America put the "plight of the cities" high on the nation's policy agenda. Thus began a 30-year experiment in urban policy, centering on federally funded "community action," liberalized welfare entitlements, and "model cities." All of this proved to be at least as ineffectual, disruptive, and ill-conceived as the previous urban renewal regime.
By 1977 neighborhood activists across the country had mustered enough political strength to get Congress to force an unwilling Carter administration to accept the creation of a National Commission on Neighborhoods. In their site visits around the country, commission members heard an appalling litany of grievances, most of them concerning injuries inflicted by governments.
Even avowedly liberal neighborhood witnesses blasted governments for their stupid rules, venal politics, lust for tax dollars, pilfering and wasting of funds, suppression of grassroots initiative and, with respect to neighborhood organizations, complete disinterest at best and inveterate hostility at worst. As Sen. William Proxmire (D-Wis.) ruefully remarked to a witness at a 1977 Senate hearing, "You would probably have better neighborhoods today if there had been no federal programs at all!"
The Carter White House clearly had no use for the commission's 1979 report and deep-sixed it on arrival. Ronald Reagan, before he became president, had derided "foolish government policies over the past several decades [that] have often worked to undermine, even destroy established neighborhoods," but his White House staff and Housing and Urban Development appointees had little knowledge of or interest in anything below the level of city government. Eventually, the movement for a neighborhood-oriented national urban policy subsided.
What had perished in the swamps of Washington, however, emerged alive in Indiana. In 1992 Stephen Goldsmith was sworn in as the Republican mayor of Indianapolis. (With its combined city-county government, Indianapolis is one of the few large cities that has a chance of regularly electing a Republican mayor.) He became one of a small handful of mayors, including Democrats John Norquist in Milwaukee and Kurt Schmoke in Baltimore, who, in Goldsmith's words, "tackled problems like crime, high taxes, and poverty by reversing the ways in which local government was actually perpetuating the problems rather than helping to solve them."
Putting Faith in Neighborhoods is Goldsmith's front-line memoir of how he and his administration changed the traditional rules of urban government by bringing neighborhoods, their people, and their little civil societies to the forefront of urban policy. It is a sequel to his well-received 1997 volume The Twenty-First Century City, published when he was in the sixth of his eight years as mayor.
The earlier book earned considerable attention for its account of Goldsmith's results-oriented management and path-breaking municipal service privatization. While it contained chapters on crime, neighborhoods, and civil society, they tended to be anecdotal and to recount ruefully some of Goldsmith's early mistakes. The new volume, which includes a 45-page case study of Goldsmith's Neighborhood Empowerment Initiative by Ryan Streeter of the Hudson Institute, is a focused, systematic, and remarkably perceptive primer for a neighborhood-oriented urban policy that works.
From his years as city prosecutor, Goldsmith had concluded that Indianapolis' overriding problem was a crisis of citizenship and a disintegration of local civil society. Over the previous 30 years, Goldsmith writes, "big government systems such as welfare created an attitude of entitlement among those in need and marginalized the local faith-based and other community groups that are often highly effective in transforming individuals' lives. Indeed, America's value-generating civic institutions were often derided as oppressive, parochial backwaters of bigotry and ignorance."
Though highly critical of traditional urban government, Goldsmith was no libertarian. He writes that "if government tries to do too much, it often strips away the motivation people have to be engaged in their communities. If it does too little, citizens often do not have the resources or access to information to tackle their problems." He recognized that the great challenge is, as liberal thinker Michael Sandel put it, "reversing a pervasive sense that our most important civic institutions are unraveling and a feeling that we are not in control of the forces that have the greatest effects on our lives." In short, Goldsmith staked his mayorship on reawakening power in his city's neighborhoods.
To do that, Goldsmith operated from two fundamental principles. A healthy civil society depends on habits of self-governance and personal responsibility. Residents are wise enough to provide direction to their neighborhoods, and government must be responsive to this wisdom.
For those who came of age with the urban policy of the 1960s, '70s, and '80s, this was a form of radicalism rarely heard from a mayor's office. It was especially radical to a generation of urban leaders who viewed ordinary citizens as potential problems to be entitled, delivered to, managed, disciplined, and displaced as might be necessary to carry out the Master Plan but never empowered to act in their own petty little interests. Goldsmith obviously has learned much from the writings of Robert Nisbet, Jane Jacobs, Peter Drucker, and above all Alexis de Tocqueville.
Goldsmith is committed to market forces as the ultimate engine of economic progress. He rightly takes credit for making his city much more business-friendly by lowering tax rates, scrapping counterproductive regulations, and creating an overall environment conducive to enterprise. But Goldsmith believed that free market reforms occur within a matrix of cultural values and social capital. He focused his efforts on changing that matrix.
Neighborhood residents needed to know that their civic leaders heard and understood them. Goldsmith invited them into his office and sent city officials out to meetings all over the city just to listen—a simple, powerful, and surprisingly rare practice. Neighborhood leaders needed knowledge and leadership training. Goldsmith created a Neighborhood Resource Center to educate and train them. He brought in Robert Woodson's National Center for Neighborhood Enterprise to teach them how to run constructive grassroots organizations.
Neighborhood residents needed larger incomes. Goldsmith launched an innovative Independence Initiative, organizing business sector groups to line up job openings and employing the for-profit firm America Works to train welfare recipients and put them into jobs. Entrepreneurs needed opportunity. Goldsmith recognized that every struggling business and grassroots organization in his city faced a maddening array of government regulations, most of them of no value to the public. "Between 1994 and 1999," Goldsmith reports, "the [Regulatory Study] Commission saved Indianapolis taxpayers $3.3 million by getting rid of 157,000 processes and regulations….As far as I know, no one misses any of them."
Neighborhoods needed facelifts and repairs. Goldsmith spent $1.3 billion repairing and cleaning up streets, bridges, sidewalks, sewers, parks, and buildings, and did it without raising tax rates (thanks to management efficiency, privatization, business partnerships, and refinancing). He put volunteer county jail inmates to work beautifying common areas and parks (139,000 man-hours over eight years).
Neighborhood organizations needed funding. Goldsmith created a Community Enhancement Fund that made over 400 competitive awards totaling nearly $1 million to grassroots organizations. With these modest grants, Goldsmith reports, "an east side mentoring initiative arranged for twenty high school students to serve as mentors and tutors for nearly one hundred elementary school students. Groups turned vacant lots into parks, ugly areas into neighborhood gardens, graffiti into murals, and much more."
Neighborhood residents lacked self-governance. Goldsmith launched a Neighborhood Empowerment Initiative, hoping to move toward a true municipal federalism. It was, alas, thwarted by the City-County Council, whose elected members saw themselves as the only legitimate manifestation of government in their townships (the boundaries of which bore little relationship to actual human communities within the city).
The mayor realized that residents related to their society through faith-based institutions, which had traditionally been excluded from public policy. Goldsmith created a Front Porch Alliance, enlisting leaders of grassroots value-shaping organizations as intermediaries between people and city government.
So did Goldsmith's faith in "Tocquevillian empowerment" prove a success? Not entirely. Real-world urban problems are so deeply seated and intractable that it is rare that any leader can claim an unqualified success in dealing with any of them. In many cities the measure of success has come down to, "Hey—nobody rioted."
Still, Goldsmith can take credit for an effort that produced a lot of very positive results—not by showering neighborhoods with taxpayer largesse but by emphasizing character and responsibility, devolving power, and rebuilding the institutions of local civil society. His efforts won encomia from people such as Steve Forbes ("one of the most effective, innovative mayors in American history"), Mayor Ed Rendell of Philadelphia ("one of America's most innovative mayors"), and Jack Kemp ("demonstrated that expanding private enterprise, not government, is the key to efficient, high quality services and, more importantly, to the empowerment of the city's residents").
In 1996 Goldsmith—far from an ebullient campaigner—ran for governor of the Hoosier State. He lost by a five-point margin to the popular lieutenant governor, Democrat Frank O'Bannon. More surprisingly, Goldsmith lost Marion County (Indianapolis).
Three years after that defeat, Goldsmith abruptly and inexplicably announced that he wouldn't be running for a certain third term as mayor. (After leaving office, he became a major architect of President Bush's Faith-Based and Community Initiatives program.) He had no heir apparent. The Republican nominee to succeed him was the Indiana secretary of state, with little experience in urban management or policy. The neighborhoods that had appreciatively voted for Goldsmith in 1995 reverted to their normal voting habits.
With Goldsmith gone, the city's neighborhood organizations—only recently empowered—were not sufficiently strong and cohesive to force his unwilling successor to continue his program. The new mayor, business Democrat Bart Peterson, promptly dismantled Goldsmith's alliances and initiatives, vetoed budget items for their support, and reinstalled traditional top-down managerial government. File the Goldsmith years under "Bright Shining Moments."
Goldsmith's book reveals his impressive philosophical depth as well as his practical experience. Unlike most mayors, he saw that social problem solving goes beyond the province of experts, planners, and managers and that most baneful of concepts, "delivering services." The key to success is the transformation of ordinary people into active citizens.
The recipe is easy to state but daunting to achieve: Empower people, enlarge their capacities, strengthen their local civic institutions, lower government-created barriers, increase information flow, create networks for expanding opportunity, demand responsibility and performance, and, above all, recreate a sense of efficacy among those who had viewed themselves as alienated and powerless.
Every aspiring urban leader should read Goldsmith's illuminating little book. Not everything he tried worked in Indianapolis. Not everything that worked in Indianapolis will work elsewhere. But the book's principles and policy ideas are perceptive and powerful. For any leader seeking to revive a lost civil society, they are also indispensable.
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]]>Libertarian public interest lawyer Clint Bolick is rightly esteemed for aggressively defending the right of ordinary people to pursue their callings free from the clutch of the bureaucratic state. In doing so he has become one of the modern-day heroes of economic liberty, individual opportunity, and equality before the law. In Transformation he sets forth a clear-headed picture of what Americans can become if only government will change the rules to foster enterprise instead of dependency.
Texas' Teen Challenge is one of the many illuminating examples Bolick offers to illustrate how government stifles the creative energies of a free people. Founded in 1958, Teen Challenge is a faith-based drug rehabilitation program which accepts no public funds. In helping drug users get their act together and get clean, it achieved a remarkable long-term success rate: from 67 percent to 85 percent. The National Institute on Drug Abuse has remarked favorably on these striking results.
No matter. In 1995 the Texas Commission on Alcohol and Drug Abuse threatened the Teen Challenge officials with jail and $4,000-a-day fines, because the program did not employ licensed professionals or follow the state's official treatment regimen. Even such absurd charges as having "frayed carpeting" were tacked on to blacken the project's reputation.
Fortunately, Bolick and his Institute for Justice colleagues appeared on the scene, along with 325 angry church members, former addicts, and other Teen Challenge supporters. Texas officialdom backed down. Teen Challenge was left to do its good works without further harassment from government officials whose own bureaucratic programs succeeded mainly at making perpetual work and sending perpetual bills to the taxpayer. Teen Challenge has now expanded to 130 sites around the country.
This happy ending, alas, is not typical. During the last 40 years government has become the major obstacle to individual and community self-help and thus to social progress. In a sentence that ought to be repeated endlessly everywhere that social issues are debated, Bolick writes of the plight of the inner-city bootstrap entrepreneurs he has so often represented: The "crushing regulatory barriers" that defeat their enterprise are "kept in place by a powerful and reactionary coalition of labor unions, liberal politicians, government bureaucrats, and sheltered businesses determined to keep newcomers out."
Bolick is far from the first to catalog such cases. There is a substantial literature on this subject, including Richard Cornuelle's Reclaiming the American Dream (1965), Morgan Doughton's People Power (1976), the report of the Carter-era National Commission on Neighborhoods (1978), and Walter Williams' The State Against Blacks (1982). Indeed, one can go back further, to Alexis de Tocqueville, Wilhelm von Humboldt, Toulmin Smith, Albert J. Nock, and Felix Morley.
The now-common term empowerment stems from the theme of "empowering" that pervaded a little-noticed but prescient book by Nathan Wright Jr., Black Power and Urban Unrest (1966). Unlike Clinton-era liberals, who conceive of empowerment as an entitlement to more government benefits, Wright understood clearly, as does Bolick, that empowerment means allowing people the full and fair opportunity to do for themselves and enjoy the benefits of their labors.
Like many of his predecessors, Bolick writes that "eliminating barriers to self-determination is the object of empowerment." Recognizing that freedom is an indispensable precondition for progress, prosperity, community, and social harmony, he demands that ponderous, costly, malicious, interest-dominated, monopolizing government get the hell out of the way and let people have a fair chance to build better lives for themselves and their communities.
Bolick says creative public policy should be based on what he calls the "two Cs and three Ds": choice, competition, deregulation, decentralization, and depoliticization. He describes the application of that prescription to education, welfare, economic liberty, housing, crime, and community renewal.
At the end of each chapter Bolick sets forth a handful of specific proposals to advance the empowerment philosophy. A sampler includes parental choice in education, charter schools, deunionizing schools, occupational delicensing, ending government wage fixing, "empowerment zones" in which government relaxes restrictive economic regulation, community development corporations, welfare-to-work programs, child care credits, expanded home ownership, community policing, victims' rights, and the Talent-Watts American Community Renewal Act, which would offer neighborhoods a wide range of tax incentives, regulatory relief, homeownership incentives, scholarships, and devolution of government services.
Bolick recognizes and describes in frightening detail the social problems caused both by drug abuse and by the enforcement of harsh laws against drug abuse. He observes that full legalization of drugs remains beyond the range of popular acceptability, but his prescription is uncharacteristically feeble: "Statesmanship, not political demogoguery, is necessary to address the very real drug problem in this country."
If there is a weak point in Transformation, it lies in Bolick's imprecise use of the term community. Is it just shorthand for the multiplicity of voluntary organizations in an area? Or does it refer to a locally based entity to which governmental functions are assigned? The former interpretation leaves one wondering just who or what is supposed to take action, while the latter raises questions of legitimacy and governance which Bolick does not acknowledge. He has elsewhere inveighed against "grassroots tyrannies" that stifle enterprise and progress at the local level. How to keep a "community" from committing the same kind of sins is worth at least some discussion.
Citing Margaret Thatcher's successes in Britain, Bolick concludes that "the challenge is to create–through economic liberty, private sector education alternatives, private property ownership, and so on–a tangible stake in freedom for those who are dependent on the government….Our task is to illustrate, vividly and tangibly, the real-world human benefits of freedom to people who have been most denied it."
Doing so, he argues, will create powerful new coalitions between government-dependent people who yearn for independence and libertarians who want to free all people for growth and achievement. Bolick has demonstrated this repeatedly in his own work, with the voucher parents of Milwaukee, the jitney drivers of Denver, and the African-American hair-braiders of Washington.
The more people grasp the argument of this readable book, the more America will heed the admonition of young Congressman John F. Kennedy: "Every time that we try to lift a problem from our own shoulders, and shift that problem to the hands of the government, to the same extent we are sacrificing the liberties of our people."
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]]>Privatopia: Homeowner Associations and the Rise of Residential Private Government, by Evan McKenzie, New Haven: Yale University Press, 197 pages, $30.00
Neighborhood Politics: Residential Community Associations in American Governance, by Robert Jay Dilger, New York: New York University Press, 162 pages, $40.00
In the dark misty years after the collapse of Roman Britain, Germanic tribes migrated west to the island now known as England. They brought with them a mixed public-private system of land tenure and civic administration called voluntary feudalism. In this system, the proprietary landlord owned the land and organized the defense of the settlement. The freemen owned their farms and homes on a leasehold basis, paying the proprietor in produce, labor, and military service. In the ninth century, this system gave way to predatory political states, ending with the Norman Conquest and autocratic rule.
But the operative principle of voluntary feudalism survives and flourishes in various forms today, most commonly as residential community associations (RCAs). As of 1990, there were 130,000 RCAs operating in the United States, with over 30 million residents. The Community Associations Institute projects that more than 50 percent of all housing for sale in the nation's 50 largest urban areas—and nearly all new residential development in California, Florida, Texas, New York, and suburban Washington, D.C.—is organized in RCAs. By the year 2000, the number of associations is expected to climb to 225,000. If the new ones average the same number of residents as the old ones, over 50 million people, almost one-fifth of the U.S. population, will live in an RCA of one sort or another.
The rise of the RCA can be attributed to a large number of reasons, some of them springing from natural human preferences, and some of them the result of government action. The origin of the modern RCA can be dated to 1743, when the descendants of the Earl of Leicester tried to preserve a fenced-in private park in Leicester Square, London, by requiring those who bought or leased property around the park to pay a tax for its upkeep.
The prototype RCA in the United States appeared in 1831, at Gramercy Park in Manhattan. But a more fully developed example was Louisburg Square on Boston's elite Beacon Hill. In 1844, the landowners formed a Committee of Proprietors to preserve the common park area. Throughout the next 100 years, use and occupancy restrictions on residential deeds, an important feature of RCAs, steadily grew in popularity, often as a technique of preventing a feared reduction in property values from an influx of "Negroes, Irish, Mongolians," and other non-WASP racial and ethnic groups. The use of deed restrictions for such nefarious purposes was struck down by the Supreme Court in 1948.
In 1902, the Englishman Ebenezer Howard published Garden Cities of Tomorrow, which provided the model for the self-contained suburban community of gardens, fresh air, winding streets, and happy neighbors. The man who made it happen in the United States was J.C. Nichols, the first of the great "community builders." His Country Club District development in Kansas City, begun in 1905, became the template for the modern homeowners association. By 1964, when the Country Club District was essentially completed, the development contained 6,000 acres, 12,000 homes, 11 shopping centers, 50,000 people, and 29 homeowners associations organized into a giant RCA federation.
Unlike earlier small-scale builders, who wanted nothing to do with government, Nichols perceived that government could make a large-scale community development into a very profitable venture. This required planning—not only planning by the developer, but planning by the local government for streets, water, sewers, schools, parks, and police and fire protection. It is somewhat ironic that modern land-use planning and controls came not from assorted socialists and utopians, but from hard-nosed business people whose eyes were glued to the main chance and who probably voted gladly for McKinley.
From a legal standpoint, there are three types of RCA. The most common (61 percent) is the condominium association. These are most commonly multi-family, multi-story buildings where the residents own their individual apartments plus an undivided interest in the common areas (lobby, elevators, hallways, pool, garage, etc.). These common areas are managed, but not owned, by a condominium association made up of and controlled by the individual unit owners.
The homeowners association form of RCA (35 percent) is typically found in suburban developments of detached single family homes or townhouses. The homeowners own their own dwelling unit and its yard and garage and their association, unlike a condo association, owns the common property, including streets, parks, golf courses, and retail centers.
The third form of RCA, the cooperative (4 percent), has never really caught on in the United States. In the coop, usually but not always an apartment building, residents own no property individually. They own only a long-term, renewable leasehold in their apartment, plus a divisible interest in a tenant-managed corporation that owns all the common areas. The main drawback of the coop is that each cooperator is liable for all of the mortgage. If there are vacant units or if a cooperator defaults, the residents must pay their share of the corporation's liabilities.
Not included in these statistics are around 50 community land trusts (CLTs). A CLT is a democratically run RCA which owns and makes rules for dwelling on the land in conformity to a charter. Individuals can own and bequeath renewable 99-year leaseholds, and can sell the improvements made upon the land. Typically, the CLT retains a first option to buy the improvements at inflation-adjusted cost, less depreciation, so that upon sale the trust captures the increase in value due to community services or general appreciation.
The modern RCA performs four basic functions. Through a board of directors elected by the homeowners, it maintains the common areas. Like a government, it provides, either directly or through contracting, property-related services such as trash collection, snowplowing, and security patrols. It collects assessments from homeowners to pay its costs. And it enforces the covenants, conditions, and restrictions (CC&Rs) which protect the community and its property values against anti-social acts (any act which might diminish resale values). An unspoken fifth function is to organize political action efforts to get the municipal government to respond to the RCA's interests, making the RCA into a sometimes formidable special-interest group.
Government provided much of the impetus for the growth of RCAs. Although Nichols's Kansas City project antedated extensive government land-use controls, the rise of those controls created an important and costly barrier to land development. Developers found it easier and cheaper, per unit, to invest the time and money to secure approval for a large project than for a small one. The larger the project, of course, the more profit was expected, making possible larger contributions to supportive politicians.
In response to the building industry's pleas, the Federal Housing Administration in 1963 became an aggressive booster of RCAs. For FHA bureaucrats, planned and controlled RCAs made it easy to predict the economic viability, and thus the insurability, of a development 20 or 30 years down the road. It was also easier to impress Congress by "running up the numbers" when the developers built and sold 1,000 homes at a crack. The larger the project, the more interested members of Congress were in seeing that it got FHA approval.
From the standpoint of local government, at least initially, RCAs offered a terrific deal. A private developer would build needed new housing, which would add to the tax base. In return for receiving permission to exist, the RCA would provide many of its own municipal services at the homeowners' expense, thus protecting the municipality from additional costs. In some jurisdictions local governments even offer a property tax rebate to RCA members to offset their RCA assessments for services provided elsewhere by the municipality.
To prospective home buyers, RCAs promise certainty in a world of unforeseeable change, especially in protecting the homeowner's investment against depreciation. They promise a high quality of life, where sound planning and attractive amenities respond to the home buyer's desires. They offer resident control of many "public" services—a touchy point to critics—instead of leaving the homeowner at the mercy of the larger municipality, which may be controlled politically by people from the other side of town. They offer a social life in a relatively homogeneous community, an opportunity for town-meeting-style democracy, and a strong sense of personal efficacy.
Indeed, the success of RCA-type experiments as diverse as Arden, Delaware, Ft. Ellsworth Condominiums and Reston, Virginia, and the private city streets of St. Louis prove to public-choice economist Fred Foldvary that it is feasible, as well as infinitely desirable, to organize the proprietary delivery of "public" services on a territorial basis. Drawing on the work of Spencer Heath and his grandson, Spencer Heath MacCallum, Foldvary's Public Goods and Private Communities offers the proprietary community as the model for a happy future: All services performed in support of property by governments can be delivered far better through the use of contract, covenants, and user fees than by politicized government bureaucracies. He appears to endorse MacCallum's dream of a network of proprietary communities united into a polycentric federation that simply pushes aside traditional units of government, becoming, in effect, local government.
The critics of the RCA, however, are many and varied, and Evan McKenzie, a lawyer and associate professor of political science at Pennsylvania's Albright College, has earned a place in their vanguard with Privatopia: Homeowner Associations and the Rise of Residential Private Government. His case against these "privatopias" goes like this: RCAs are based on an "ideology of hostile privatism," where the supreme goal is the protection of property values, to which all of the nobler aspects of human life are subordinated. RCAs glorify a "culture that links ownership of private property with freedom, individuality, and autonomy, rather than with responsibility to the surrounding community." McKenzie even calls RCAs "socialism by contract"—although he concedes that it is a defective socialism since RCA bylaws don't require others to lift up the downtrodden who, due to economic reverses, can no longer cover their RCA assessments.
McKenzie attacks the RCA—which he calls a common interest development (CID)—for exhibiting a "communalistic, even cult-like isolationist nature." He is offended that in a poll of residents at the giant Leisure World RCA in Southern California, 92 percent of the respondents rated security "very important," and were happy to have the development patrolled by 300 private security officers.
He even sees the CID as a corporatization of the home. The individual in a CID, he says, is subservient to a corporation and its detached, expert managers who carry out their functions in a way that makes life easier for them, not the residents. The CID idea, he says, begins with a plan, then property, then rules to protect the property, then a physical city, and then people who live in the city and obey the rules, or else.
"In short," writes McKenzie, "a CID is a prefabricated framework for civil society in search of a population. The population may come and go, but the property and the rules will remain, and the population will remain in service to the rules." CIDs undermine the "real city," charges McKenzie. They are illiberal and anti-democratic, and they represent, to borrow Robert Reich's phrase, "the secession of the successful" from the disaster areas they left behind.
If CID living is as onerous as McKenzie claims, it's a wonder anybody actually lives in them. But McKenzie is at pains to demonstrate that CIDs are not the product of a voluntary Lockean contract among people who wish to escape the state of nature in return for common benefits. Instead, he says, the associations are a compulsory residential nightmare. His wrath is heightened by horror stories about tyrannical enforcement of CC&Rs: a woman taken to court because her dog weighed more than 30 pounds; a man who sued his senior-citizen community because it disallowed residence by his new 45-year-old wife; and a man sued by his RCA because he erected a fence to keep his young son from wandering over a 400-foot cliff. He describes how RCAs rely upon state government to bolster their enforcement and collection powers, while at the same time bidding government to remain outside the gates.
McKenzie builds much of his attack on the highly dubious proposition that the residents did not consent to this oppressive private government. According to him, they found themselves living in CIDs because they had no realistic options for living anywhere else. This will probably come as a surprise to CID residents, who thought they chose CID ownership of their own free will, and to non-residents who must wonder how they came to be spared.
At times, McKenzie grants that residents were not forced to join CIDs against their will. But that merely means they chose to join, in which case McKenzie views them as small-minded, selfish, illiberal, greedy dropouts from the great duty of life—namely, to make municipal government work and to struggle bravely toward economic justice for all instead of feathering their own nest.
Foldvary's shining RCA vision is a polycentric world of proprietary communities, wisely and efficiently operated with the consent of the residents by disinterested princes akin to Swiss hotel managers. McKenzie's horrible CID nightmare is an equally polycentric world of walled and guarded enclaves of the rich, petty, and socially irresponsible, where every generous impulse and mark of individuality is confined by a CC&R designed to advance the single-minded goal of property value protection and enhancement. Between these two poles lies Robert Jay Dilger's Neighborhood Politics.
Dilger, a political scientist at West Virginia University, is not seeking to grind an axe. His goal is to illuminate the origins, principles, development, and policy questions relating to the RCA movement. He blends exhaustive knowledge of his subject with an exemplary clarity of presentation. Without rhetorical flourishes or involved economic and legal analysis, he makes clear the various cases for and against RCAs. His conclusions are generally favorable to RCAs, and his recommendations include offering better information to prospective buyers to avoid ugly surprises later on, achieving better relations with local government, and providing representation for renters. He is supportive of the RCA as a channel for political activity, and as a forum for the practice of civic virtue.
RCAs obviously meet an important need for millions of people. In a society where government all too often proves unable to defend public order, assure personal security, prevent destruction of property values, spend tax dollars wisely, deliver high-quality services, and refrain from misguided social engineering, RCAs offer an attractive alternative. If one believes it is everyone's solemn duty to remain, suffer, and sometimes perish in the midst of over-governed but under-served urban disaster areas in the name of civic altruism and economic justice, then the RCA is a cowardly escape. On the other hand, if one believes in using one's resources to acquire the ownership of a decent home for one's family, or for one's retirement years, in safe and congenial surroundings, even at the price of some intrusive regulation of private choices, then the various forms of planned communities will remain an attractive option. Whether governments will allow themselves to be replaced by a RCA federation remains to be seen, but it's far from the worst idea to come down the pike.
Contributing Editor John McClaughry is president of the Ethan Allen Institute in Concord, Vermont.
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]]>In Lost Rights, journalist James Bovard chronicles the shockingly accelerating disappearance of the rights and freedoms of the ordinary American. Bovard has established himself through his two previous books (The Fair Trade Fraud and The Farm Fiasco) and countless columns as the preeminent exposer of government's responsibility for rigged deals, under-the-table handouts, special-interest ripoffs, and spectacular waste. Now he moves to a larger canvas: the whole range of government interference with the rights and liberties of the individual citizen.
"We face a choice not of anarchy or authoritarianism," writes Bovard, "but a choice of limited government or unlimited government." What have we chosen? After 335 bloodcurdling pages, it is crystal clear that, whatever the American people might have chosen, what they have gotten is virtually unlimited government. And when government has no limits, its subjects have no liberty.
Bovard's style is rapid fire. An indefatigable researcher, he inundates the reader with horror upon horror in a veritable tsunami of government atrocities. In the first page of the first chapter, he presents a vivid and wide-ranging summation of the different ways government can tyrannize today:
"The attack on individual rights has reached the point where a citizen has no right to use his own land if a government inspector discovers a wet area on it, no right to the money in his bank account if an IRS agent decides he might have dodged taxes, and no right to the cash in his wallet if a DEA dog sniffs at his pants. A man's home is his castle, except if a politician covets the land the house is built on, or if his house is more than fifty years old, or if he has too many relatives living with him, or if he has old cars parked in his driveway, or if he wants to add a porch or deck. Nowadays a citizen's use of his own property is presumed illegal until approved by multiple zoning and planning commissions. Government redevelopment officials confiscate large chunks of cities, evicting owners of homes and giving the land to other private citizens to allow them to reap a windfall profit. Since 1985, federal, state, and local governments have seized the property of over 200,000 Americans under asset forfeiture laws, often with no more evidence of wrongdoing than an unsubstantiated assertion made by an anonymous government informant.
"Government officials now exert vast arbitrary power over citizens' daily lives, from Equal Employment Opportunity Commission bureaucrats that can levy a $145,000 fine on a Chicago small businessman because he did not have 8.45 blacks on his payroll to federal agricultural bureaucrats that can prohibit Arizona farmers from selling 58 percent of their fresh lemons to other Americans. Customs Department inspectors can wantonly chainsaw import shipments without compensating the owner, Labor Department officials can nullify millions of employment contracts with a creative new interpretation of an old law, and federal bank regulators are officially empowered to seize the assets of any citizen for allegedly violating written or unwritten banking regulations."
The 10 chapters of Lost Rights contain the frightening details of these and many, many other invasions of liberty by governments beyond citizen and judicial control. The modern American police state has its way with its people through zoning, asset forfeiture, historic preservation, wetland controls, scenic rivers, urban renewal, marketing orders, antidumping laws, Superfund, banking regulations, licensing, labor regulations, gun control, union protection, transit monopolies, public school control, disability rules, and anti-pornography laws. Those who resist the dictates of the phalanx of repressive agencies at the local, state, and federal level are dealt with summarily, from fines and court orders on to outright murder and massacre, as at Ruby Ridge and Waco.
Bovard appears to be the most exhaustive researcher in the country. Lost Rights features over 2,000 footnotes, ranging from daily newspaper stories to court cases to congressional hearings. The evidence is overwhelming, and terrifying. We are losing our liberties, with no organized force or leadership working to reverse this terrifying trend.
Bovard concludes, "The time has come to face up to the pervasive failures and to radically reduce government officials' power to coerce, expropriate, and subjugate other Americans. The American people placed its faith in the State, and the State failed. We need a new faith in individual liberty."
More accurately, we need to revive the old faith. But if the last bit of American liberty glimmers and dies, consumed by the onrushing power of the uncontrolled and uncontrollable state, it will not be because no one sounded the warning. James Bovard has done so, powerfully and exhaustively. Our only hope to remain a nation of free people is for enough people to absorb this message, and resolve to reclaim their liberty and the genius of the Old Republic.
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]]>"Government's power to solve problems comes from its ability to reassign resources, whether by taxing, spending, regulation or simply passing laws. But that very ability energizes countless investors and entrepreneurs and ordinary Americans to go digging for gold by lobbying government. In time, a whole industry—large, sophisticated, professionalized, and to a considerable extent self serving—emerges and then assumes a life of its own. This industry is a drain on the productive economy, and there appears to be no natural limit to its growth. As it grows, the steady accumulation of subsidies and benefits, each defended in perpetuity by a professional interest group, calcifies government. Government loses its capacity to experiment and so becomes more and more prone to failure. That is demosclerosis: postwar government's progressive loss of the ability to adapt."
Thus does National Journal contributing editor Jonathan Rauch introduce the malady which sorely afflicts our national government. And to Rauch, who yearns for a reinvigorated, adaptive, active government, demosclerosis must be fought with every available medication. Unfortunately, as we shall see, the available medications are not very promising.
Making use of Mancur Olson's seminal analysis of the degenerative evolution of societies and governments, Rauch laments "the democratic public's tendency to form ever more groups clamoring for ever more goodies and perks and then defending them to the death. Free and stable societies, it seems, tend to drift toward economic cannibalism and governmental calcification, unless they make a positive effort to fight the current. Demosclerosis may now represent the most serious single challenge to the long term vitality of democratic government."
Rauch chronicles the onset of the disease with many compelling facts. We are in the midst of an accelerating hyperpluralism. More and more narrowly defined special-interest groups are springing up in Washington, complete with a full array of lobbyists, lawyers, influence peddlers, and PACs, to defend and improve upon their government subsidies, tax breaks, trade preferences, and rigged deals. Forty percent of the members of Congress who retired in 1992 promptly signed up to play this pernicious game.
This feeding frenzy has produced a parasite economy focusing not on wealth production for society as a whole but on transfer seeking—using the power of government to reroute wealth from elsewhere to their own constituencies' pockets. This parasite industry is qualitatively different from vendors in the private economy. You can refuse to buy from your auto dealer or stock broker and emerge intact, but the transfer seeker, like the criminal class generally, can manipulate the government to take your money if you don't hire him. And it is now common for a special-interest group to get a far better return on its investment in the parasite economy than in attempting to improve its productivity in the real economy. One of the iron laws of the parasite economy is: No matter who else loses, lawyers and lobbyists win. (See "Suckers!," May.)
Rauch offers numerous case histories of victories of the parasite economy over the disorganized forces of parsimony and limited government. Citrus marketing orders have forced the destruction of billions of pounds of oranges and lemons. Businesses were straitjacketed in their efforts to lay off unneeded workers. The notorious sugar program extracts some $1.4 billion from consumers to benefit a small but highly organized domestic sugar industry. The mere idea of treating non-veterans in V.A. hospitals, after the veterans, produces a fearsomely effective reaction among veterans' organizations. Federal programs, once created, are virtually impossible to eliminate.
One would think that the most calamitous result of this demosclerotic condition is the horrendous burden government places on the creative, wealth-producing energies of a free people. Not exactly. The biggest malign consequence, according to Rauch, is that government becomes calcified, unable to take advantage of new opportunities for activism. He is romantic about the innovative spirit of the days of Franklin Roosevelt and Lyndon Johnson, when government was bold, progressive, and visionary. Alas, "the same programs which made government a progressive force from the 1930s through the 1960s also spawned swarms of dependent interest groups, whose collective lobbying turned government rigid and brittle in the 1990s."
What would one have expected? The more government becomes the main provider of benefits for interest groups, the more fiercely the hired parasites of those groups must fight to protect those benefits. To avoid the current pathological condition, one should have prescribed that the federal government limit itself strictly to its constitutional duties, instead of throwing a giant buffet for every group which had become politically effective.
That seemingly self-evident conclusion is not, however, attractive to Rauch. Rauch wants to purge government of old, boring, and failed programs to make room for new, exciting, and progressive programs. He laments the power of the parasite industry that quite predictably sprang up to protect what Rauch thinks should be interred.
For example, Rauch weeps over the shrinkage suffered by Bill Clinton's bold "New Covenant" proposal for a national service corps, in which "young people could work for their country to pay back their student loans, learning citizenship and responsibility." A Congress burdened by inherited spending programs and a shortage of revenues was forced to lay out (i.e., borrow) only $1.5 billion for three years of this exciting new venture.
Well, I can remember when we had a somewhat similar program. Young people could borrow money, go to school, get a job, and work for themselves to pay back their student loans. That isn't enough for Rauch, who is excited only by a program where young people "work for their country." Nor does he inquire why it is now necessary to borrow so much money to pay hyperinflated college tuitions, or how the college aid programs have proven to be a massive transfer of wealth from taxpayers to overstaffed and overpaid college faculties, administrators, and assorted supernumeraries, using the student as a convenient political rationalization.
There are, however, some reform successes. Rauch identifies a recent Medicare "reform" as a good example of hemorrhage limitation: "Washington was able to tinker with the program to tame the worst excesses (albeit by shifting many of the costs to the private sector, and so displacing the health cost problem rather than solving it)." The truth is that Washington decided to pay less for services that medical providers were required to provide to the politically potent elderly, thus shifting the cost of service onto the premiums paid by private patients, thus producing a spiraling increase in health-insurance costs, thus creating the health-care crisis that justifies Hillary Clinton's socialization of one-seventh of the national economy. Lord, spare us any more such successes.
Rauch is sharply critical of the two kinds of political creatures he is aware of, liberals and conservatives. He asks liberals, who rely on governments to solve problems (how far our nomenclature has degenerated!), to understand that there are limits, and that when government becomes calcified, it will fail, and with it liberalism itself will fail. (This is one of the more sanguine observations in the book.) Conservatives, he says, are guilty of talking a government-limiting game while lacking the courage to carry through with it. Rauch ignores the awkward fact that most conservative failures occurred because the liberals had the votes.
Conservatives also come in for sharp criticism for their resistance to raising taxes. Rauch believes that to solve the deficit problem, "taxes must go up, probably a lot." He likes the idea of coupling higher taxes with spending cuts. Now if there is any more fatuous idea in Washington, I don't know what it is. Gerald Ford, Ronald Reagan, and George Bush all made deals with Congress to enact tax increases (now) balanced with spending cuts (later), a proposition that certainly merits Sen. Everett Dirksen's celebrated remark, "Ha ha ha, and I might add, ho ho ho."
So what is Rauch's remedy for this government-threatening affliction? He speaks with mild approbation of procedural change such as lobbying restrictions, campaign finance reforms, and term limits, and endorses the benefits of free trade and monopoly breaking. But Rauch's real remedy is "a disciplined regimen of self reform," led by a courageous president "with the backing of the nation as a whole."
Well, it has happened. Jackson killed the Bank of the United States. Van Buren put an end to some egregious bank bailouts. Pierce vetoed a bill for insane asylums, and Cleveland for agricultural subsidies. Calvin Coolidge, rest his soul, said no to practically everything asked of him. Jimmy Carter bagged the Civil Aeronautics Board, and even Ronald Reagan finally laid to rest the Synfuels Corporation and the Clinch River Breeder.
But after reading Rauch's forceful account of the strength of the parasite economy defending demosclerotic government today, one wonders where any modern president can find an effective majority to back his action, let alone "the backing of the nation as a whole." Identifying all the special-interest ripoffs and bagging them all at once sounds like a great idea. The question is whether any president could now browbeat any Congress into doing any of it.
There are some bold steps available to a president determined to lead—and to risk his presidency and the fate of his party. One would be to exercise an enhanced rescission power to perform surgery on spending bills, whether or not Congress agreed to give it to him. Another would be to send Congress a budget resolution that axed virtually every special-interest appropriation, subsidy, and tax preference—and to note that he would prepare a report to the American people providing chapter and verse on which members of Congress restored which schemes in the name of which special interests and would read the appropriate items from that report in a number of states and districts come next election season (a virtual declaration of war against Congress). Yet another would be to propose and campaign for a combined tax and debt limitation constitutional amendment, which would stop the issuance of gross federal debt at, say, $5 trillion and shackle Congress's power to replace debt issuance with higher taxes.
Rauch does not offer these radical remedies, or anything like them, because at heart Rauch thrills to the dream of an active, high-tax, innovative government solving the many problems of the people. As he sees it, the problem is not to cut back on bloated and intrusive government, but to cure demosclerosis, so that government is no longer thwarted in playing its intended progressive role. Unfortunately, it was government playing just that progressive role that got us into this sorry mess.
On the final page of his classic study of interest-group politics, The Governmental Process, published in 1960, David Truman wrote, "On examining the country's stormy past one may in bewilderment conclude that 'the Lord takes care of drunkards, little children, and the United States of America.' " After reading Rauch's book, even the most skeptical may feel the urgent need to pray.
Contributing Editor John McClaughry is president of the Ethan Allen Institute in Vermont.
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]]>The essence of federalism, argues Clint Bolick, is the protection of individual liberty, the paramount constitutional value. Counterbalancing power between the states and the national government helps ensure that both exercise their prescribed powers efficiently and that neither exercises unrestrained power.
In Grassroots Tyranny Bolick, a civil rights lawyer with the Institute for Justice in Washington, laments the destruction of this true federalist ideal by two mutually opposed groups of villains. In its place, in addition to federal tyranny, we have now acquiesced in a grass-roots tyranny of state governments and their creatures, some 82,000 (!) city, town, township, county, and special-district entities, each demanding a piece of its hapless citizens. What appear to be the two opposing poles in the contemporary federalism debate are actually united in one crucial belief: that individual liberty is but a minor consideration in the distribution and exercise of governmental powers.
Most of those who pass for "conservatives" are proponents of "states' rights federalism," a hoary legacy of the days of human slavery. To this camp, whose archetypes are former Judge Robert Bork and former Attorney General Edwin Meese III, the 10th Amendment, which reserves powers to the states, is all important, and the Ninth Amendment, with its admittedly nebulous declaration of rights retained by the people, is a nullity. Meese, at least opposes the idea that the Bill of Rights, written to restrain Congress, became with the 14th Amendment applicable to state and local governments as well.
These conservatives animadvert against federal mandates on the states and federal judges who interfere with state law making, so long as those laws do not clearly contravene the Constitution and are adopted democratically by a majority. (One may wonder where Counselor Meese was when President Reagan signed the bill to make federal highway grants contingent upon the recipient state's raising its drinking age to 21.) This view is neatly summarized in a quotation from political scientist Stephen Macedo: "When conservatives like Bork treat rights as islands surrounded by a sea of government powers, they precisely reverse the view of the Founders as enshrined in the Constitution, wherein government powers are…rendered as islands surrounded by a sea of individual rights."
The other group of federalism wreckers are social-action liberals, typified at one time by Louis D. Brandeis and in our time by William Brennan. They have a habit of shifting constitutional ground whenever a more attractive way of achieving their liberal ends can be devised. Sixty years ago, when a conservative Supreme Court struck down state invasions of liberty and contract on the grounds that "there are certain essentials of liberty with which the state is not entitled to dispense in the interest of experiments," liberals demanded that state governments be allowed maximum latitude to experiment (with government-organized cartels, "managed competition," price fixing, confiscation of property, etc.). In the expansive years of the Warren and Burger Courts, the same liberals demanded federal judicial action to eradicate local anti-liberal practices, notably by mandating racial quotas and balance, expanding entitlements for the poor, and creating new rights for criminal defendants and prisoners.
Bolick argues that both of these groups miss the real point: Federalism was consciously designed to limit governmental power and thus to protect liberty. State governments should respect the liberties of their citizens and protect them against federal intrusion. The national government should protect the liberties of the same citizens against state intrusion. Bolick rightly laments the infamous 5-4 Supreme Court decision in the Slaughter House cases (1873), which emasculated the 14th Amendment's Privileges and Immunities Clause, clearly intended to make the national government the protector of individual liberty of all citizens.
Bolick's catalog of current grass-roots tyranny is depressing, though far from encyclopedic. Examples: the federally aided obliteration of Detroit's Poletown to make way for a Cadillac assembly plant that was never built; New York City's refusal to let a homeowner occupy his own home; California's extortion of beachfront property owners; Cincinnati's attempted suppression of a Robert Mapplethorpe art exhibit; the decade-long battle of two black entrepreneurs to preserve their cornrow-braiding salon against the fierce opposition of the District of Columbia; the mandated insolvency of auto insurers under New Jersey's Joint Underwriting Act; the criminal conviction of a Georgia man for having the wrong thing in his mouth (a male friend) when the police broke in looking for drugs; the California parents whose children cannot be given IQ tests because of their race (black and Hispanic).
After this litany of truly egregious crimes by governments, the reader eagerly awaits the remedy. Surprisingly, it is the same remedy as for tuberculosis: "Sunshine is the only antidote to grassroots tyranny." Once revealed in all their ugliness, Bolick believes, these practices will be overthrown by citizen action, the electoral process, and determined litigation. As a state senator who incredulously watched his mostly normal-appearing colleagues serenely (in the face of his vigorous remonstrances, e.g., "Folks, this is WACKO") vote 25-4 to put the state public service department in charge of policing politically incorrect fluorescent bulbs, this reviewer can perhaps be excused for some cynicism about the curative powers of sunlight.
But sunlight is not the only remedy Bolick offers. He also has an idea he calls community rule adoption. He believes that when "communities," whatever they are (Baptists? Gays? Drug dealers? Tax resisters?), "adopt rules or values that are contrary to government regulation, a constitutional presumption in favor of liberty would force government to justify such restrictions, thereby protecting communities against government." This is a disconcerting concept. Are there self-defined "communities," as opposed to individuals, that have rights against the government?
Bolick also is occasionally silent on a crucial question that he himself considers important: the rights of property owners. Was the Cincinnati Contemporary Arts Center government owned? If so, can the owner not decide which works of art shall be displayed and which removed? Why should a columnist at a California State University student newspaper have the right to demand that his writings be published therein? Whose newspaper was it? His?
The key question in reviving Bolick's federalism and defeating grass-roots tyranny is the method by which the courts, state and federal, will act to protect liberty. Each court, he argues, should begin with the presumption of liberty imputed to those who authored the constitutions and amendments over the years. (How these authors tolerated governmental invasions of liberty that would appall us today, a necessary ingredient in the argument from original intent, is not addressed.) In litigation, the courts must require the challenged government to "demonstrate that the laws are necessary to achieve a legitimate government objective….If the government is unable to justify the regulations, the laws should be struck down. Government must accept the burden of demonstrating that its regulation of individuals is a reasonable exercise of a delegated power."
Unfortunately, courts have too often, for instance, found that government regulation of the human right to own property in land may proceed unhindered so long as some discernible sliver of value remains to the landowner. Hence, in Lucas v. South Carolina Coastal Council, Justice Harry Blackmun, dissenting, observed that the plaintiff could under the regulation continue to use his $975,000 beachfront lot for "picknicking," so no regulatory taking had occurred. Legitimate objective and reasonable exercise are weasel words that the courts at all levels, with only rare exceptions, have stretched beyond recognition in support of the insatiable meddlesome and confiscatory demands of Leviathan.
Sunshine will doubtless help, but in the last analysis there are only three nonviolent methods for the people to protect their dwindling liberties against governmental encroachment: 1) They can elect legislators who will vote for, not against, liberty and executives who will appoint judges who will interpret the laws with a presumption for liberty. 2) They can persuade the required majorities of Congress and state legislatures to make constitutionally explicit the privileges and immunities and Ninth Amendment rights retained by the people, along the lines set forth in Justice Bushrod Washington's dictum in Corfield v. Coryell (1823). 3) They can accept Bork's Prescription (move). To carry the discussion of remedies further requires reflection on the purpose of the Second Amendment, now under full assault by President Clinton, Attorney General Reno, and like-minded members of Congress.
Clint Bolick practices what he preaches. He has been at the forefront of numerous cases to protect and expand liberty, and his writings have given renewed vigor to the concept of economic rights as true civil rights—a concept that every freed slave of 1864 must have well understood. His book is well organized, well written, and supremely topical. His guiding principle—federalism as a means for protecting people's liberties from governments, while allowing the "legitimate" and "reasonable" objectives of government to be carried out—is sound and vital. Friends of liberty will profit by reading it and by advancing under its banner.
John McClaughry, a former state senator, heads the Ethan Allen Institute in Concord, Vermont.
The post Dangerously Unbalanced appeared first on Reason.com.
]]>Railroads, electric power, the telephone, and the interstate highway system have all had a powerful decentralizing impact on the American society and economy. In the coming years new telecommunications technology will drive another wave of economic devolution. Fiber-optic information highways will make it cheaper and easier for brain industries to disperse from large cities to small cities and, increasingly, to rural areas. More and more brain workers—people engaged in processing information rather than things—will relocate to what David Churbuck and Jeffrey S. Young, writing in Forbes, call the "virtual workplace."
This trend has for years been the stuff of Sunday-supplement articles: the software writer working from a hot tub on the deck of his Oregon mountain lodge; the meat broker selling shiploads of Australian lamb from a rural Vermont cabin; the catalog sales company whose order takers answer phones far out in the Nebraska prairie. But the telephone, the modem, and the fax machine are only the first-level instruments of this spatial devolution. Increasingly small and inexpensive satellite dishes will allow direct downlinking of data to individual homes. Fiber-optic computer networking will link company units together at the speed of light. Teams of architects and engineers will design products electronically while living many miles apart—and perhaps seeing each other only at the annual company picnic. Video conferencing will be cheap and simple, with large, flat wall screens bringing realistic, life-size images into each dispersed office. Holograph transmission may be a reality by 2018.
Fast, efficient parcel services like UPS and Federal Express allow overnight delivery of documents and products to co-workers or customers, at a cost often less than one employee's 20-mile round-trip commute to work. An example: Dell Computer is a retail firm with no store. It markets directly to customers through toll-free phone lines and next-day delivery via UPS from strategically placed warehouses.
The Lewis Galoob Toy Company of South San Francisco is a prototype of the global manufacturing business of the future. Galoob contracts with independent toy designers who think up new products. It contracts with manufacturing engineers who figure out how to make the products. It contracts with manufacturing brokers in Hong Kong who find workshops in China to put the products together. The brokers contract with ocean shippers to deliver the products to the United States. Manufacturer's representatives market the products on commission to wholesalers and retailers. A finance company collects payments on commission. The Lewis Galoob Company could be located anywhere in the world where modern telecommunication facilities are available.
The productive people who thrive in this kind of environment are not the sort of people who are content to live in, to use the worst example, New York City. They may enjoy the opera and the deli and MOMA, but they decidedly do not relish the crime, fear, stress, congestion, drug culture, pollution, rotten schools, filth, noise, graffiti, taxes, and endemic rudeness that infest the nation's largest (but shrinking) city. So why stay? Once their escape route led to the suburbs. Now, increasingly, it leads to the more distant reaches of the country.
Because the economy is rapidly becoming more global and more decentralized, and because it places ever greater emphasis on highly mobile brain power, competitive pressure will force governments to compete for the new entrepreneurial activity. High-tax, high-regulation Vermont and California will miss out on the economic decentralization wave. Low-tax, low-regulation New Hampshire and Idaho will win. And eventually the idea will percolate into the heads of even the most ardent statists that recreating the economic environment that has emptied out New York City is not conducive to anything desirable, unless their goal is simply to punish enterprise and impoverish their people.
The states led by economically smart political leaders will prosper, at the expense of their dull-witted competitors. And political leaders of regions within the loser states will demand more autonomy to shape their own policies and escape the curse of redistributionist legislatures enamored of more government spending and controls. This trend is already evident in Northern California and Southern Oregon, where sentiment is growing for secession into a new state of Jefferson.
Decentralization will also accelerate on the world stage. The explosion of nationalism that accompanied the disintegration of the Soviet Empire in 1989 has yet to run its course. But future fragmentations may increasingly emphasize not national but economic considerations. Pro-enterprise Slovenia wanted out of a stagnant Marxist Yugoslavia not only to get away from the quarreling Croats and Serbs but also to join Western Europe's market economy. Pro-enterprise Lombardy wants out of an Italy run by incompetent socialist bureaucrats in Rome. Pro-enterprise Guangdong is chafing at control from socialist Beijing.
We are heading toward the "World of a Thousand Flags" envisioned years ago by Austrian economist Leopold Kohr. Many of those flags will fly over strong, vigorous little economies, whose well-educated, hard-working, property-respecting citizens will earn their way in the world marketplace. Switzerland, Singapore, Taiwan, and South Korea are early examples.
In sum, the world of 2018 will feature a dynamic, flexible global economy, with economic rewards flowing to those with brain power, a work ethic, and a governmental regime built on sound respect for property rights, stable currency, and governmental restraint. Cities, states, and nations where government taxation and regulations stifle enterprise will see productive people relocate to more congenial environments. The pro-freedom areas and pro-freedom governments will be the winners. Countries and states run by dumb statists will be the losers.
The demands of a global brain-work economy will stimulate increased parental concern about the education of their children. Parents will no longer be satisfied with the mandatory offerings of the local government school, especially if it is devoid of moral and cultural values and lacking in educational or any other kind of discipline. They will demand education that will equip their children to take advantage of new opportunities and meet the emerging competition. This parental pressure will eventually spell the death of many government schools, with their central mandated curricula, militant teacher unions, low discipline, and "anything goes" ethos.
Ultimately, many states will allow what residents of 92 Vermont towns have had since 1869: a full-blown educational, choice system. And a Supreme Court test will establish that a general system of education vouchers does not constitute an impermissible establishment of religion, even if the vouchers are used to pay tuition at parochial schools. There will be a surge of home schooling and the ancient practice of mentoring, making use of interactive computerized instruction, compact-disk reference libraries and fiber-optic or satellite downlinking of a wide variety of instructional programs. The combination of telecommuting, home schooling, and electronic shopping and entertainment on demand will overcome the barrier of distance from urban centers.
Higher education will be radically transformed for most students. The children of the rich will still attend four years of on-campus instruction (and entertainment), but for most middle-class families the price tag will have become far too high. Instead of requiring students to spend four years on campus to earn a degree, colleges will assign them to learning mentors who will devise for them (often via teleconference) a suitable program of electronic instruction. Students will learn Shakespeare, cell biology, and calculus from the nation's very best teachers by laser disc and satellite dish. (An Arlington, Virginia, company already offers courses by some of the nation's most renowned professors on videotape and is arranging to offer college credit through several cooperating institutions.)
Remarkable new computer graphics will revolutionize mathematics and science instruction. Photos, film clips, and computer-graphic sequences will increasingly displace the traditional talking head. Students will take examinations at a nearby resource and proctoring center, which will serve many colleges on contract. Much higher education will be given in conjunction with the student's employer, and certifications of competence in specialized fields, like the Professional Engineer degree, will come to be more valuable than the traditional Bachelor and Master of Arts, Science, or Business Administration. Intercollegiate athletics will lose its connection to education, already something of a fiction in the major national programs. City and company teams, as in the old AAU and women's softball today, will fill the space just below the professional teams.
Labor unions in the non-governmental sector—now down to about one-eighth of the non-agricultural work force—will continue to dwindle in influence. Joint labor-management work teams, largely prohibited under long obsolete labor law, will increasingly determine workplace conditions independent of contract bargaining. The rise of profit sharing, employee stock ownership plans, and participatory management techniques—all abhorred by most old-line union leaders—will eventually end the labor-management-owner distinctions, with great benefits to the economy and to the participants. The last stronghold of unions, the public sector, will be steadily weakened as taxpayers demand the benefits of privatization of many government functions.
After a disastrous experiment with a bureaucratic, price-controlled national health system during the Clinton presidency, the nation will move to restore individual responsibility in lifestyle and health care. Employer-provided health benefits will cease to be tax free, but individuals and families will be allowed to put tax-deductible dollars into medical-care savings accounts, from which they will purchase catastrophic (high-deductible) coverage. Families that make healthful living choices will see their accounts accumulate over the years, creating a tax-free means to cover their health and retirement-home expenses. Low-income families will, as always, have to be subsidized, but they will take part in the same system as everyone else. Putting consumers back into the health marketplace in place of third-party payers, coupled with effective tort reform, will help curb health-care costs.
The discovery of the merits of the tax-deductible medical care savings account plus the need to generate investment capital formerly supplied by commercial bank reduced to uselessness by heavy-handed federal regulation, will lead to a revolutionary change in the national tax system. Instead of taxing income, the federal government will adopt a cash-flow-style consumption tax. The taxpayer will add up his income; deduct funds devoted to investments, savings, and medical-care account; claim an appropriate subsistence exemption based on family size; and pay tax on the consumed balance. This approach not only encourages investment and frugality, it also puts an end to the complexities and inequities of capital gains and depreciation treatment.
Another serious bout with inflation will give impetus to currency competition. Contracts will be written in terms of the index price of a market basket of internationally traded commodities instead of a fixed amount of Federal Reserve notes, and privately issued currencies will become preferable to unstable and politically manipulated government currencies. Localities will experiment with local currencies as payment for locally produced goods and services.
Throughout this period there will be a remarkable efflorescence of self-help activity in rural areas, suburbs, and inner cities alike. Once governments see that Americans can do remarkably well at solving their own problems if only left alone to do so, there will be a new willingness to dismantle the barriers to self-help. Neighborhood corporations, for instance, will demand the end of such government afflictions as mandated wage scales and nonsensical building and housing codes, zoning rules, and occupational licensing requirements. The opportunity to participate meaningfully in self-directed civic activity will restore real power to citizens seeking to take part in the "little platoons" of a society in which they can once again have confidence and whose progress they can help to shape.
John McClaughry was the Republican candidate for governor of Vermont in 1992.
The post Local Matters appeared first on Reason.com.
]]>The central thesis of political scientist Lawrence Mead's new volume on welfare, his second on the subject, is simple, straightforward, and profoundly disturbing: The era of redistributionist progressivism in welfare policy is finished, and it must and will be succeeded not by a new libertarianism, but by a new emphasis on citizen obligation and government authority. Mead finds the cause of this change in the politics of permanent dependency, of a demoralized underclass whose members have neither the skill nor the will to respond to progressive or libertarian opportunities.
"Up through the mid-1960s," writes Mead, "the leading question was how to help ordinary Americans obtain advancement.…The underlying dispute was over economic class—whether to accept the unequal rewards meted out by the marketplace or to try to equalize them by raising wages and giving public benefits to workers and their families. In the new era, which is characterized by what I call dependency politics, the leading issue is how to respond to the disorders of the inner city."
Prior to the mid-1960s, welfare reformers viewed the able-bodied non-elderly poor as economically competent but temporarily out of luck. The archetypes were the displaced worker and the sudden widow. The progressive policy inherited from the New Deal required government to provide a safety net for such people until they could return to work and to tamper with the labor market so that they could earn more money. Hence the make-work programs of the New Deal, minimum wage, unemployment insurance, job training, and collective-bargaining laws. All these measures presumed that today's poor could and would ascend by taking advantage of the government-supplied opportunities to become tomorrow's stable middle class.
But in the 1960s it became apparent that a rising percentage of those eligible for welfare were, for one reason or another, simply not equipped to pull themselves up the ladder extended to them by a caring government. By the 1970s, the leading progressive solution was to simply identify "the poor" and give them money. Curiously, this "solution" was popular both with liberals, who saw it as a way of indemnifying the victims of exploitative capitalism, and with softcore libertarians (notably Milton Friedman), who favored it because it would allow the abolition of the costly web of programs created to assist the poor to work their way out of poverty.
Progressive government, Mead argues, increasingly failed to spur social and economic advancement for those at the bottom of the pile. "That disappointment, like no other, hit progressive government at its heart." The chief dilemma in dependency politics today is that fostering competence in incompetent individuals is immensely more difficult than expanding opportunity for competent citizens. In short, a rising tide now seems to lift only some boats; many are permanently swamped.
Poverty among the able-bodied, non-elderly poor is a direct result of the poor not working. Mead examines four theories that attempt to explain why the poor do not work. The first is that it simply isn't worth it for them to work for entry-level wages. The obvious response is that most workers do not stay at entry level forever, but work their way up and, in any case, can make a go of it by working long hours.
A second theory, the most popular, is that the poor normally can't find work. If that were true, the boom years of 1983–89 ought to have pushed welfare dependency to rock-bottom levels. But the welfare rolls remained alarmingly high. Even in overheated local economies, the welfare population seemed scarcely to budge, and in some cases even increased. Meanwhile, immigrants, legal and illegal, filled many jobs.
A third argument, to which Mead gives only minimal weight, is that external barriers such as racial discrimination, welfare disincentives, and lack of child care and transportation keep the poor from working. This is a favorite argument of the left. It has, Mead notes, a terrible consequence: the inescapable notion that poor people have no responsibility for their plight. If nothing one does can possibly produce success, why do anything? This argument reduces the poor to "disassembled personalities," less than people, and feeds the social pathology of the victim class.
The fourth theory holds that the principal barriers to work are internal, rooted in the psychology of the nonworker. The nonworkers simply will not voluntarily accept work, at least not at wage rates prevailing in welfare communities, and do not believe work will get them anywhere.
"To a great extent," Mead observes, "nonwork occurs simply because work is not enforced. Overall I think conservatives have the better of the barriers debate—the chance to get ahead is widely available. But liberals have the more realistic view of the psychology of poverty—the poor do not believe they have opportunity, and this still keeps them from working." (Emphasis in original.)
The root of the new problem of chronic dependency, Mead concludes, is that the poor, particularly the minority poor, are psychologically defeated, "psychically inhibited," passive, resentful, and convinced that they are powerless to improve their own well-being. (That they should be so is not surprising; 25 years of unrelieved liberal demagoguery has had a telling effect.) Mead believes that the problem of the dependency culture cannot be solved by any known "welfare reform," even with "work incentives" and "work preparation." The competence assumption has broken down for millions of Americans, and creating economic opportunity is not likely to make much improvement in their condition.
The chronic poor are no longer psychologically equipped to work for self-advancement. Thus, if they are to work, they must be made to work, or be driven outside the pale of government largess. Mead finds this requirement of work not only productive of higher work levels and higher incomes but a desirable end in itself. It supplies desperately needed discipline and ends the evasion and defeatism that hold the poor in thrall. Indeed, he argues, with some evidence, that the poor will prove to be grateful for being made to work. If the problem of dependency politics is to be solved, governments will have to abandon opportunity strategies and entitlement strategies and adopt a strategy of authority and paternalism to deal with this intractable underclass.
This conclusion invites strong controversy. Authoritarian conservatives naturally like it, as do lots of working people furious at their freeloading welfare neighbors. But some libertarians see mandatory-work requirements as involuntary servitude. William Niskanen, chairman of the Cato Institute, has described Mead's policy as "abhorrent." The left, still wedded to ever-higher entitlements and large numbers of (preferably unionized) welfare bureaucrats ministering to the needs of the poor, view it as the final outrageous chapter in the oppression of the innocent downtrodden.
If one assumes, at least for purposes of argument, that "the government" ought to mandate work (responsibility) in return for welfare sustenance, it is relevant to inquire just how this is to be enforced. Mead thoroughly and brilliantly analyzes our descent into dependency politics and makes a strong case for the necessity of authority. Unfortunately, he does not describe the preferred mechanism for making welfare recipients work.
Is the present federal-state-local government welfare bureaucracy to be made into work police? At what will welfare recipients work? Public-sector jobs? Nonprofit-sector jobs? Private-sector jobs? Who pays the paychecks, the welfare bureaucracy or the employer? Who defines eligibility? When does it end?
A massive government work-enforcing welfare bureaucracy could well become a functional gulag for the poor, fully meriting Niskanen's term abhorrent. On the other hand, requiring people to work through programs managed by community-based organizations that provide social reinforcement and opportunity, and with which the poor feel some kinship and solidarity (as with the Mormon church's welfare system), is a much less disturbing prospect.
President Reagan's White House Interagency Low Income Opportunity Advisory Board advocated this devolution strategy with great ability. Instead of promoting systemic welfare reform, the board conceived a different strategy. If states and local communities could devise grassroots, community-based programs to overcome the self-defeating perceptions of the poor as well as offer them education, training, support services, and motivation, the board proposed using federal welfare funds to support those programs with few strings attached.
In 1987 and 1988 the board became an advocate for program waivers for states and cities willing to move in this direction. Under pressure from the board, federal agency officials grudgingly allowed some very interesting local experimentation. Unfortunately, the sharply expanded devolution approach built into the White House welfare-reform proposal of 1987 shrank almost to nothing in the Family Support Act of 1988. Instead, the act placed a strong emphasis on work requirements enforced through the existing welfare system.
It is regrettable that Mead stopped short of exploring alternative methods for putting a mandatory-work requirement into practice. As he leaves the issue, the idea of mandatory work is likely to be debated only in terms of a giant work-enforcing government bureaucracy. Facing that specter, many politicians are going to shy away from the unavoidable question: how to resurrect a chronically demoralized welfare-victim class.
But it is perhaps unfair to ask too much of Mead. He has brilliantly illuminated the undisputed collapse of the "progressive" model for repairing poverty and the emergence of the new politics of dependency. And he has argued with clarity and force for a resurrection for public authority, not to punish the poor for their poverty but to lift them up from it. Even those who view mandatory work in return for benefits as a form of involuntary servitude cannot evade Mead's powerful arguments against the alternatives.
John McClaughry, a Vermont state senator, is at work on a book about welfare reform.
The post Working for a Living appeared first on Reason.com.
]]>Worker Participation and Ownership: Cooperative Strategies for Strengthening Local Economies, by William Foote-Whyte et al., Ithaca, N.Y.: Institute for Labor Relations Press, 142 pp., $10.00 paper
"The man of virtuous soul commands not, nor obeys," wrote the 18th-century poet Percy Shelley. "Power like a desolating pestilence pollutes whate'er it touches, and obedience, bane of all genius, virtue, freedom, truth, makes slaves of men, and, of the human frame, a mechanized automaton."
Such might well appear as the introductory motto of Workplace Democracy and Social Change, edited by Frank Lindenfeld and Joyce Rothschild-Whitt. The volume presents a rich and varied collection of 21 chapters, ranging from the clinically academic to the journalistic to the politically polemic, devoted to the subject of worker control over the conditions of production. This is a timely volume. For over the past decade, long-silent voices are once again starting to be heard, calling for the liberation of the human spirit through a radical reconstruction of the conditions of work.
The basic question addressed by the workplace-democracy movement is no less fundamental for having been suppressed by the establishment for the past 40 years. That question is, simply, who shall "control the conditions of work, the kind and variety of work done, the pace of work, and the product of work—in short, control over the whole labor process"? Shall work be organized hierarchically, where persons in authority give unchallengeable orders to subordinates? Or shall work be organized democratically, where all participate in the making of decisions and the performing of essential tasks? And if work is to be organized democratically, can production efficiency be improved upon, or at least maintained at the level of traditional economic organization?
The ultimate goal of the workplace-democracy movement is not merely to humanize the workplace or improve the quality of working life, to use phrases currently popular with well-read managers. It is "nothing less than the establishment and spread of a democratic economic sector…(accompanied by) a nonsectarian political movement dedicated to breaking up economic concentration and vesting a greater degree of control over productive facilities and service organizations in communities, municipalities, workers, and consumers."
This movement is anticapitalistic in the sense that it rejects what passes for the system of modern capitalism now in existence. "Neither the workers' councils, nor the factory or shop committees, nor the workers' power they stand for can prevail," declares revolutionary anarchist Andre Gorz, "unless the political power of capitalism is broken, unless the capitalist state itself is overthrown and the capitalist relations of production and division of labor are abolished. The struggle for workers' control must either develop an all-out attack against all forms of hierarchy, against all forms of monopolization of power and of knowledge, against all forms of domination and bureaucracy, including the so-called socialist state bureaucracy, or else whatever power the workers have won in action within the factories will be broken and rendered meaningless in a very short time."
And yet with the possible exception of Paula Giese's caustic description of the bourgeoisification of the old-line cooperative movement, Workplace Democracy and Social Change is not a Marxist tract. There are no demands for expropriating the expropriators, no paeans to the vanguard of the proletariat, not even a demand for government mandating of workplace democracy. In the tradition of 19th-century anarchists Pierre Proudhon and Petr Kropotkin more than Karl Marx and V.I. Lenin, the contributors, despite Gorz's outburst, seem to wish to create a peaceful economic revolution that will undermine the idea of authority in the workplace itself.
Such a revolution will not be easy—indeed, Giese says darkly that it will not be quiet or peaceful, either. One obvious reason for the difficulty is the hostility, whether knowing or inadvertent, of government. The book is replete with examples of hopeful worker collectives dragged down either by the deliberate prejudicial application of state power or by the total inadequacy of statutory law to deal with novel forms of economic organization.
Another major enemy—and here is where workplace democrats differ from much of the Old Left—is the union movement. Labor, as represented by union leaders, long ago made an implicit pact with Capital. It is the business of Capital to provide investment, organize production, tell the workers what to do, and generate profits. It is the business of Labor to discipline and control the workers, preventing such disruptive events as wildcat strikes, plant occupations, and—horror of horrors—challenges to management's authority to impose "scientific management"—notably, line organization and the minute division of labor. The price of this cooperation, of course, is a recurring and formalized conflict over division of the spoils. It is a price that corporations have generally been quite willing to pay, it being easier to deal with a handful of money-wise union bureaucrats than with a bunch of hotheads who have their own ideas about how the place should be run.
But perhaps the greatest threat to workplace democracy comes from workers themselves. It is no small matter for a worker—particularly one with 10 or 20 years on the job—to change his or her attitudes in order to adapt to a radically different form of organization. Drawing on experiences in an astonishing range of experiments, the contributors are brutally realistic about these problems.
One of the advantages of orthodox workplace organization is a sharp definition of roles and little or no creative interaction with the supervisors who decide matters. An unstructured participatory workplace can cause problems of severe emotional intensity. Jane Mansbridge reports the prevalence of rage, tears, splitting headaches, and other real stress afflictions when workers or citizens are suddenly cast into an unstructured decisionmaking forum. The appearance of one or more tyrants, bent on dominating the group, also seems almost inevitable. Implementing workplace democracy is hard enough when everyone involved comes from a common cultural, ethnic, racial, or political background. Where the membership is heterogeneous, success can be close to impossible.
Then there is the seemingly inescapable problem of cooptation into the traditional system. For all the idealism of workplace democrats, workers, like people in general, seem to have a need to dominate some people and submit to others. The ideal workplace democracy requires a sort of permanent horizontal equilibrium where everyone is approximately equal, a condition unlikely to continue over a long period of time without some massive reorientation of consciousness or a quasi-religious sense of mutual commitment.
And yet there are examples that give hope. The plywood cooperatives of the Pacific Northwest are perhaps the best known in the United States. There, over 60 years, Katrina Berman reports that "they have shown that persons in their capacity as producers can establish industrial self-governance and democracy, maximize participation, humanize work on a factory production line, improve income equality, and release the forces of productive energy, craftsmanship and pride in achievement." Similarly, San Francisco's cooperative refuse companies have survived for 40 years and have given that city the best sanitation service of any city of that size in the country. And in the Basque provinces of Spain, an incredible, self-financed, multifaceted industrial and social empire known collectively as Mondragon, carefully described by Ana Gutierrez Johnson, has astounded industrial engineers, social psychologists, and economists alike for the past 30 years.
Will the workplace-democracy movement steadily overthrow hierarchical capitalism? The easy answer is no, if for no other reason than the fact that it has never proven possible to make workplace democracy work respectably in organizations with large numbers of workers (several hundred seems to be the upper limit). And yet it is obvious that there is some movement away from the traditional scientific-management economy, with its emphasis on hierarchy and specialization. Much of this movement is guided, not by political theory or industrial sociology dissertations or radical wall posters, but by a realization that some element of self-determination and participation makes happier and more satisfied workers, and such workers are more productive than serfs and drudges ordered about by bellowing foremen.
The recent proliferation of worker-owned plants, many as the result of abandonment by a distant conglomerate, may well create the testing ground for many of the theories of workplace democracy. Worker Participation and Ownership, a product of an excellent research group assembled by William Foote-Whyte at Cornell, is a practical, nonideological treasure chest of incisive observation of the actual process of converting factories to worker ownership and of changing the roles of workers within those factories.
Where Workplace Democracy and Social Change aspires to the anarchist ideals of a world without domination and authority, the Foote-Whyte book eschews such inspirations to relate what really happens in conversions to worker ownership, why it happens, and what can be done to steer the safest path through this haunted forest. The various authors carefully set forth the who, what, when, where and, most importantly, why of the diverse approaches to worker control. For this reason the book should be high on the reading list of local plant managers, union stewards, chamber of commerce executives, and city officials, especially those facing the possibility of a plant shutdown.
What should the role of public policy be toward workplace democracy and employee ownership? At the very least, government ought to refrain from imposing obstacles, whether legal or institutional, to those wishing to experiment with new forms of workplace organization. This suggests revising incorporation, tax, labor, and security laws to give even novel types of cooperative efforts a fair chance at success. Government should also keep its police powers on a short leash, for when they are seized upon to tilt the scales in disputes among citizens of different interests and views, the era of tyranny has in principle begun. The laws should be shaped to encourage the widest distribution of genuine private property ownership, if for no other reason than that such ownership is in the last analysis essential to prevent a free republic from turning into an orgy of government redistribution and confiscation.
Finally, demands for some form of mandated industrial organization should be stoutly resisted, especially by those eager to expand the practice of workplace democracy. For it is precisely in such a regime, operated by bureaucrats at best and their pro-hierarchical antagonists at worst, that the innovators and creators of all kinds have the least to hope for.
John McClaughry served as a senior policy advisor in the Reagan White House. He is now president of the Institute for Liberty and Community in Concord, Vermont.
The post A Vote for Workplace Democracy appeared first on Reason.com.
]]>Is the U.S. Tax Revolt Ending?" So asked the Wall Street Journal in a recent headline following defeat of four antitax ballot initiatives (California, Michigan, Oregon, Nevada) in the 1984 elections. If history is any guide, the answer is almost certainly no. Tax revolts will continue so long as we live under political systems where politicians can gain power and rewards for raising, manipulating, and spending tax dollars that are extracted from citizens who would rather keep and spend the money themselves.
Such, at least, is the historical verdict announced in Secrets of the Tax Revolt, a work that stands in relation to its subject as Theodor Mommsen's histories to Rome or Francis Parkman's to the American West. In this work, James Ring Adams, a member of the Wall Street Journal's editorial board, examines the historical development of various theories of taxation, popular (and unpopular) reactions to their application, the recurring phases of fiscal crises, the anatomy of tax revolt, and most importantly, the economic and political lessons for our time.
Adams is a confirmed supply-sider, a believer in the idea that taxation diminishes things taxed. The concept permeates Adams's book. The book's major value, however, is not in any presentation of theory but in its careful examination of the economic results of tax raising and tax cutting in various states from early times to the present.
Adams defines three great waves in public response to taxation. In the first, concurrent with the movement for independence from Great Britain, the rallying cry was "No taxation without representation." That was fine as a slogan for severing the bonds of empire, but it wore thin when—especially as property qualifications for voting were removed—the representatives of the people began to increase taxes beyond what their constituents thought right.
To escape this taxpayer resistance without curtailing spending, politicians hit upon the idea of debt. Issuing state bonds permitted spending now, with the costs of retiring these debts spread across years into the future. Popular resistance to public debt sprees were notably associated with the Jacksonian era, which also featured strong opposition to the special privileges of banks and referendum approval for public debt issues. This was the second wave of public response to taxation.
The third wave of taxpayer revolts focused on constitutional limitations on the power to tax, requiring not only that taxation be proportional and uniform but also that it be limited in amount. This wave began in the South as a response to wild-spending Reconstruction governments, and it continues to the present day.
By careful historical and contemporary analysis of the tax experiences of eight key states, Adams illustrates sound policy and folly alike. His landscape is peopled with colorful figures on both sides of the fiscal divide.
Among the tax fighters are the frontier rebel Daniel Shays of Massachusetts, who was suppressed with armed force; the shrewd country doctor Michael Hoffman of Herkimer, New York, who dominated the New York "Peoples' Convention" of 1846; Gov. Oran Roberts, the "Old Alcalde" of 19th-century Texas; Lawrence A. Chehardy, the corpulent assessor of New Orleans who disapproved of taxing residences; Robert Tisch of Shiawassee County, Michigan, whose populist appeal produced a statewide uproar; and Howard Foley and K. Heinz Muehlmann, the high-tech growth twins who became effective advocates of supply-side policies in Massachusetts.
The most prominent names on the other side are contemporaries. Foremost among them, due to his insatiable passion for governmental spending, taxing, borrowing, and evasion of limitations, is the late Nelson Rockefeller of New York. Others who qualify for the taxpayers' curse include Mayor John V. Lindsay of New York City, Gov. Francis Sargent of Massachusetts, Gov. John Gilligan of Ohio, and the early Ronald Reagan, governor of California. Reagan qualifies for this Hall of Shame by the massive tax raising of his first term as governor, making use of a viciously progressive income-tax schedule. Happily, in the light of subsequent developments, Reagan by 1969 had accumulated a budget surplus that he rebated to the taxpayers and by 1973 was actively promoting a California constitutional amendment to limit taxes to 7 percent of total state personal income. This Reagan measure, Proposition 1, lost narrowly in a 1974 referendum but paved the way for the Jarvis-Gann Proposition 13 of 1978, the Hiroshima of the modern tax-limitation movement.
The Adams narrative, though, is not simply a journalist's history of taxers and tax fighters. He carefully examines the economic performance of states in the light of their tax policies, and his final nine-page chapter is a fountainhead of distilled wisdom. The secrets of the tax revolt can be summarized concisely. Economic growth requires falling tax burdens and rising technologies. Forget special tax breaks for business. Lower the personal tax burden. Assure the taxpayer—and particularly the entrepreneur—that the rate of change of the tax burden is downward and will not be reversed. Use tax dollars to produce a well-educated workforce and citizenry, so necessary to responsible growth.
Adams's case in support of these prescriptions is strong. States that followed this formula, such as modern New Hampshire and Massachusetts, are alive and well. States that rejected it in favor of ever more taxes and government intervention, like Ohio and Michigan, are in trouble. It would be worthwhile if the legislators of such troubled states studied these lessons carefully.
The flaws of this book are few and minor. In wading through the views of the ancients, from Arab historian Ibn Khaldun to Locke to Montesquieu to Adam Smith, it gets off to something of a slow start. Adams's only conspicuous failure of analysis is his too-superficial negative judgment of the Jacksonian free-banking era. As economic historians such as Hugh Rockoff and Lawrence H. White have shown, the defects of "free" banking were not a result of the inability of the free market to produce currencies of stable value. They stemmed from the insistence of state governments, notably in Michigan, that the private banks purchase large amounts of state debt and that their inflated currency issues be insulated from the discipline of prompt redemption across state lines. The free-banking era in New England, coordinated by the Suffolk Bank of Boston, without the foregoing defects, worked exceptionally well.
But this is a minor point. Throughout the work Adams constantly and effectively drives home a powerful economic message. Too much taxation, too much government, and too much public debt inevitably lead to the suppression of wealth creation, an exodus of would-be entrepreneurs, shrinkage of the tax base, and fiscal crisis. Absent external or fortuitous rescue, that crisis can be met by reversing the defective policies. It is a tragedy that this plain and simple lesson from 200 years of American history has to be learned over and over again.
John McClaughry spent a discouraging year as a senior policy advisor in the big-spending Reagan White House in 1981. He now heads the Institute for Liberty and Community in Concord, Vermont.
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]]>Proctor School, Hebron Academy, and Riverside School are all private institutions. There's nothing unusual about that. What is unusual about the education of these three children is that their families live in Vermont school districts that in effect offer tuition vouchers to some or all of their pupils. The Dorset School District pays about a third of the private-school costs for the Torregrossas, and the town school district of Kirby pays the entire $1,750 annual tuition for Anna McClaughry's schooling.
This is extremely unusual in the United States, and it's more than a little ironic. Washington bureaucrats, Chicago free-market economists, Harvard sociologists, and teachers-union officials from New York to California have argued for years over the idea of education vouchers, even seeing a much-ballyhooed but ill-fated "voucher experiment" come and go in the 1970s. Meanwhile, students in almost 100 Vermont towns have quietly received education vouchers from their local school districts, just as their parents and grandparents did before them.
Now Vermonters have never used the word voucher to describe what happens there, and some state officials were kind of skittish about a reporter coming around and asking questions. Nevertheless, long before the rest of the country had ever heard of the idea, many Vermonters were benefiting from a system whereby the local government uses tax monies to pay for education rather than to provide it.
Early Vermonters, like all New Englanders, placed great value on the education of their children. Vermont's 1777 constitution-the oldest state constitution still in force-provided that "a competent number of schools ought to be maintained in each town unless the General Assembly permits other provisions for the convenient instruction of youth." Citizens then undertook to found private academies to educate their sons and daughters. People's Academy in Morrisville, Bellows Free Academy in Fairfax, and Burr and Burton Seminary in Manchester are typical survivors from this early era.
As the idea of universal taxpayer-supported education took hold in the first part of the 19th century, the future of these local academies was questioned. Should the local school district finance a new public high school, thus dooming the local private academy? Or should the district simply pay tuition to the private academy, which would serve the purposes of a local public high school?
Since the prominent civic leaders of most Vermont communities had themselves graduated from local private academies, they usually exerted their influence against putting the school out of business by creating a new public high school. Taxpayers also were generally averse to the idea, since it was obviously cheaper for the school district to pay tuition for their children than to assume the capital costs of creating a whole new school. And so it became a tradition in many Vermont towns simply to have the taxpayers pay for the town's children to attend the local private academy. Where there was no private academy, the local school district created and supported a public high school or joined with nearby towns to create union districts. In a few cases, like Townshend's old Leland and Gray Academy, the private school was converted into a public high school.
Vermont's experience was not unique. Headmaster James Steenstra of the Gilbert School in Connecticut says that, beginning in the early 1800s, local governments throughout New England financed the education of school children at private academies. Today, vestiges of the system remain in three towns in rural Connecticut (Norwich, Winsted, and Woodstock) and at least three towns in Maine (Lee, Blue Hill, and Dover-Foxcroft).
Today 95 of Vermont's 246 towns have no public high school and do not belong to any of the state's 27 union high school districts. State law authorizes the school boards of these towns to designate a high school and to pay the full tuition for any local student to attend it. If a school district does not designate a high school, it must pay on behalf of any town pupil, to any approved high school in or out of the state, a tuition amount equal to the average Vermont union high school tuition ($2,675.67 in the 1983-84 school year). If tuition at the chosen high school exceeds that amount, the school district may choose to pay the full amount, but because of taxpayer pressure this is rarely done. The parents must chip in the difference.
Even if the local school district designates the local private academy as the town's high school, it may still be possible for parents to enroll their children elsewhere with voucher support. The town of Lyndon has a strict policy. It has designated Lyndon Institute as its high school and stoutly resists parents' request to send their children elsewhere. The reason cannot be economic, for the Lyndon Institute tuition is slightly above the state union average. The school board seems to believe that all local students simply should attend the local high school. On occasion, presented with a very strong argument, it has relented, but more commonly it will deny appeals. The state Board of Education has upheld the denials.
St. Johnsbury, nine miles from Lyndon, has the opposite policy. Rather than designating St. Johnsbury Academy as the official high school, the authorities allow parents to choose any approved school. But of the 419 high-school-age students in the district last year, 401 did attend St. Johnsbury Academy. Seventeen chose other nearby schools; only one student attended private school away from the area (in Connecticut). Since St. Johnsbury Academy's tuition is $465 above the state union average and the district chooses to pay the entire tuition, one would think that taxpayer pressure would encourage parents to select alternative schools-but this does not seem to be the case. St. Johnsbury Academy, with an excellent scholastic and athletic reputation, has long been the preferred choice of local parents. It also has a boarding department for approximately 40 additional students from elsewhere.
The Manchester-Dorset area, where the Torregrossas live, has a relatively high-income, well-educated population, famous for expensive summer homes and country clubs. According to state records, the two towns together had 344 high school pupils last year. Of these, 299 attended Burr and Burton Seminary, a nonsectarian private academy located in Manchester. Three attended public high schools in Vermont or nearby New York. Seventeen chose private schools elsewhere in Vermont. The remaining 15 attended out-of-state private schools from Phillips Exeter to Lawrenceville to Miss Porter's School. One of them ranged as far afield as Ketchum School in Idaho. To each school the Manchester or Dorset school district supplied a check for $2,480.20, the state-designated average for 1982-83. This covered 25-35 percent of the tuition, room, and board costs for such high-class private academies. Parents, of course, made up the difference.
Barre Town, a blue-collar rural area surrounding industrial Barre City and Vermont's famous granite quarries, presents an entirely different picture. Of the 594 high school pupils in Barre Town last year, 521 attended public high school in Barre City. Another 72 went to public high schools in nearby towns, presumably for geographical reasons. Only one went to a private secondary school in a nearby town.
There is an important limitation on the voucher system. Payments can be made only to nonsectarian private schools approved by Vermont's Department of Education. This at once leaves out the state's three Catholic high schools and one fundamentalist Christian school. The department maintains a list of approved schools, which includes most of the established private academies in New York and New England. When parents propose to send a child to a school not on the list, the department will investigate. For well-established schools, a call to the department of education in the other state may suffice. In some cases the Vermont department will dispatch a field investigator. According to department officials, in one recent case the school was not approved, and the parents, informed of the reasons, chose another private school. Ordinarily, there is some presumption that parents who can ante up $5,000 above the value of a voucher should have some idea of what they are buying.
My own town of Kirby, population 285, is one of about 25 Vermont towns that has a voucher system for all grades, not just for high school. Kirby, which reached its peak population of about 500 in the late 19th century, once had six separate school districts. In living memory there have been five operating one-room schools in the town. In 1978 the townspeople voted to close its last school, which had only 11 pupils in grades one through six. (Although there are enough children in the town to support a one-room school, their geographical distribution means that there is no convenient place to locate such a school.)
So, since 1978, taxpayers have paid the full tuition for Kirby's grade-school children to attend school in adjacent towns (and at least the state union average for high-school pupils). The town continues to pay for two school buses to transport most of its pupils to the schools of their choice, although some must arrange their own transportation.
Among the available schools is Anna McClaughry's. Three years ago a private grade school in Newark, 18 miles from Kirby, closed its doors when the proprietor decided to take a sabbatical. Some of the suddenly unemployed teachers and the parents of the pupils founded Riverside School, located on the Kirby side of nearby Lyndon. The school offers instruction in grades 5-8, emphasizing literacy, the mastery of traditional subject matter ("social studies" has been banned), French and Latin, environmental appreciation, and computer knowledge. In contrast with most public middle schools, three of its six teachers hold degrees from Yale, Harvard, and the Sorbonne.
Five of the "orphan" Kirby pupils are attending Riverside, their full tuition of $1,750 paid by the taxpayers via the Kirby school board. (Parents of the remaining 21 pupils, who come from towns that maintain public grade schools, must pay the tuition themselves.) Headmaster Richard Koehne told Reason that he is very pleased to have the Kirby pupils, noting that the town's voucher system creates more potential customers for his school. "We especially like having kids come from Kirby on the voucher plan because it broadens our student body mix," he says. "Otherwise, we would have only children of parents who could afford the tuition on top of the property taxes they pay to support the public schools."
While Vermonters, unbeknownst to the rest of America, have been carrying on their voucher-like tradition, a debate about vouchers has been part of a growing movement in the country to change public policy so that more parents will have a meaningful choice about their children's education. The reason for this movement, as Harvard law professor Charles Fried aptly summarized recently in the New Republic, is that "many individuals are deeply dissatisfied with the public education system and the network of union and political alliances that make it particularly hard to change."
Parents have traditionally had the option, of course, of sending their children to private schools. This option was threatened in Oregon early in this century when the state legislature passed a law requiring attendance at government-operated schools. Fortunately, that law was struck down by the US Supreme Court in 1925. Justice James McReynolds, speaking for a unanimous Court in Pierce v. Society of Sisters, declared that "the fundamental theory of liberty upon which all governments in this Union repose excludes any general power of the state to standardize its children by forcing them to accept instruction from public teachers only. The child is not the mere creature of the state; those who nurture him and direct his destiny have the right, coupled with the high duty, to recognize and prepare him for additional obligations."
The Pierce case ended the legal threat to the existence of private schools, but parents who desired private education for their children have still faced the problem of cost. There is no exemption or rebate from the various taxes used to support public education. And thus nonpublic education has been the province either of the affluent, who can afford to pay both bills, or of parents whose church-notably the Roman Catholic and Lutheran-has managed to offer parochial schooling at less than its true cost.
The double burden is not insignificant. The Census Bureau figures that total expenditures for elementary and secondary schools in the 1980-81 school year had to be funded by $444 in taxes per man, woman, and child in the United States. So a couple with two children was paying $1,776 in taxes to support the public school system that year, regardless of whether their children were actually attending government schools. If a family chose to send their children to private schools, they would pay, in addition, around $400 a year for church-affiliated elementary schools and $1,500 for other private elementary schools; private high schools cost even more.
In the late 1940s, the hierarchy of the Catholic Church made a serious push in Congress for government aid to parochial schools, triggering a spirited church-state controversy that ended in the proposal's defeat. Over the next 20 years, however, a new proposal emerged from three quite different quarters. Called the "tuition voucher," it provided for government grants directly to parents, who could then use the proceeds to purchase education for their children from the school of their choice, whether public or private.
An early and eloquent advocate of tuition vouchers was free-market economist Milton Friedman. In 1962, in his influential Capitalism and Freedom, Friedman stood the time- honored argument for public education on its head. Do public schools produce a healthy mix of rich and poor, black and white, etc.? Perhaps in the days of the small town with only one school, but not with the rise of populous urban and suburban areas that are economically and racially stratified. A poor black urban family, Friedman pointed out, could possibly save its money and buy the same fancy car owned by a well-to-do white suburbanite, without also buying a fancy house in the suburb. But it was highly unlikely that the black family could afford to send its children to first-class schools located far away from the lower-income black neighborhood. (And a recent study by the National Institute of Education suggests that, after two decades of efforts at integration, minority parents are in the same position today.)
How could a system widely regarded as incompetent, over-costly, and perhaps unjust be most improved? Some people favor an end to all state involvement in education, but that is "outside the range of political feasibility today," Friedman wrote in a 1973 New York Times Magazine article. In an essay published in 1955, however, Friedman first wrote of vouchers, saying that they would "give competition and free enterprise greater scope" and "pave the way for the gradual replacement of public schools by private schools."
For most of America this was a startling new idea, but Friedman's proposal was close to the system already in place in some Vermont districts. He would have local school boards provide parents of every school-age child a voucher for an amount equal to the average cost of educating a child in the local government schools. The parents would "be free to spend the voucher and any additional sum they themselves provided on purchasing educational services from an 'approved' institution of their choice," Friedman explained a few years later in Capitalism and Freedom. "The role of government would then be limited to insuring that the schools met certain minimum standards, such as the inclusion of a minimum common content in their programs."
Friedman emphasizes that parents should be able to use their vouchers in both private and government schools, whether in the school district or not, if the schools are willing to accept the children. This, he argues, would give parents real freedom of choice, encourage healthy competition among schools, and inject a market standard for teachers' salaries.
Nothing came of Friedman's proposal at the time, but others began to think along the same lines. Christopher Jencks, a liberal professor of education at Harvard University (now at Northwestern University), advocated a voucher system as early as 1966. In 1970 he argued that vouchers could meliorate the plight of black children in underfunded and ineffective ghetto schools. Since despite a decade of civil rights agitation and progress, it did not appear that black schools in white-dominated cities would ever be brought up to the level of the better white schools, Jencks favored vouchers to allow blacks to attend the white schools instead of the schools nearest their homes.
Meanwhile, a few Catholic educators were warming up to the voucher idea. Unlike the earlier proposal to divert tax monies directly to parochial schools, the voucher plan ostensibly subsidized parents, just as the post-World War II GI Bill had subsidized students. It would then be immaterial whether the parents cashed their vouchers with parochial schools or nonsectarian private schools or public schools. Inasmuch as the earlier GI Bill had stimulated a wave of trade schools created expressly to relieve veterans of their GI Bill dollars, this contention was somewhat transparent; but the movement still grew.
During this period, however, the opposition was far from asleep. Advocates of public schools saw that a movement toward vouchers would threaten their effective government monopoly over education. Local school boards and superintendents didn't like the proposal. Teachers unions particularly opposed the idea, it being easier to organize a relatively small number of large public-school systems than a large number of small private schools. In addition, as Friedman had argued, the teachers recognized that a real marketplace for education would mean competitive pressure to hold down their salaries. So the National Education Association and the American Federation of Teachers began to allocate substantial resources to heading off the voucher scheme.
Indeed, vouchers probably have no more passionate enemy than Albert Shanker, president of the American Federation of Teachers. For years, Shanker has written a column published as a paid advertisement in the New York Times, and several have been devoted to lambasting vouchers.
In 1971, Shanker wrote, "The greater the free choice granted by a voucher plan, the more will the educational interests of poor, black and difficult children suffer." (Never mind that "poor, black and difficult children" under the current system are ordinarily the ones with the least possibility of affording private alternatives to inferior government schools.) "Our public schools…are designed to keep our society together," he opined in 1979. "Vouchers are designed to use tax money to pull our society apart." (Never mind that the all-important purpose of schools is educational, not social, and that in this purpose they have by wide agreement failed miserably.)
And in a 1980 column: "There would be competition among schools in much the same way as there is now competition among toothpaste companies, auto manufacturers and department stores. Some enterprising schools might offer gifts to newly enrolling students in much the same way that savings banks offer such gifts to new depositors. Or…students might be offered rewards for enrolling their friends!" (Never mind that precisely such competition has resulted in largely satisfied toothpaste, auto, and department store customers.) Shanker and his teachers union colleagues were first mobilized by a voucher study conducted in the late '60s under Christopher Jencks's direction at the Center for the Study of Public Policy in Cambridge, Massachusetts. The authors of the study endorsed education vouchers; but unlike the simple Friedman plan, theirs included a number of special restrictions on the vouchers. For example, they recommended that local government agencies be given a mandate to:
-establish higher voucher payments for poor and mentally handicapped students;
-regulate schools' admissions and expulsions policies ("one critical notion in our report was that a voucher school should admit nearly everyone who wanted to attend, space permitting," Jencks recently told Reason); and,
-forbid parents to pay any tuition out of their own pockets to supplement their children's vouchers.
The Nixon administration's Office of Economic Opportunity (oeo), still populated with a number of Great Society bureaucrats, had supported this study. Bolstered by rhetorical support from Friedmanite libertarians, OEO began in 1970 to look for a test site for a voucher experiment. But when they broached the idea in Seattle, San Francisco, and Rochester, they ran into a buzzsaw of opposition.
Those who favored racial integration opposed vouchers because they saw in them a way out for white students, not a way in for blacks. The more OEO tried to contend with their objections, the more the anti-integration forces shied away from the idea. Church-state separationists were put off when Catholics supported the plan. Local superintendents and board members began to view the whole scheme as causing far more trouble than it could possibly be worth, especially in view of the continuing necessity for taking in enough revenues to meet long-term fixed costs for school plants. Teachers unions, as usual, were strongly and actively opposed.
Vouchers' best chance came in New Hampshire, which had no racial-integration problem and a governor and state board of education chairman who were ardent free-marketeers. They prevailed on the Nixon administration to offer New Hampshire a "free market voucher," considerably less restrictive than the "regulated compensatory voucher" urged by Jencks and the OEO liberals. Fortified with ever-increasing federal funding, OEO and the state finally got five school districts to plan for a test-until the teachers' unions let loose their adamant opposition, and all five districts backed down.
Finally OEO found a test site, Alum Rock School District, a largely lower-middle-class and lower-class area in San Jose, California, with one of the lowest assessed property valuations per student in the state. After lengthy negotiations between the agency and school district officials, a three-year demonstration project was established in 1972.
It was set up to include 6 of the district's 24 public schools. Under the plan, 22 "minischools" were formed at the six participating schools. Eleven of the minischools emphasized general basic academic skills, while various others emphasized reading, math and science, fine arts, cross-cultural learning, and learning basic academic skills through practical everyday activities.
In the spring, each school would plan its minischool programs for the next year, and descriptions of all the district's minischools were compiled and sent to parents along with voucher forms. For each child, parents indicated on the voucher form their first three choices of programs and of schools where the programs were being offered. Each student had a spot guaranteed at his or her neighborhood school ("squatter's rights"). When there were not enough spaces in a minischool to accommodate all the applicants from outside the neighborhood, the available spaces were rationed out by lottery.
A "compensatory voucher" allotment addressed a worry of Jencks and his colleagues that in a voucher system, teachers and schools would want to teach middle-class and wealthy children while ignoring poorer children. To create a greater incentive for minischools to teach poor children, the voucher amount for Alum Rock students who were eligible for the federal school-lunch program was 30 percent higher.
"Alum Rock can show the way," the Los Angeles Times announced in 1973. They spoke a bit too soon. On the whole, the Alum Rock experiment proved to be a fiasco. A Rand Corporation study in 1974 found that in every voucher school, in all grades but one, students fell behind in achievement while students at Alum Rock's nonvoucher schools essentially held their own. Robert Klitgaard of Rand called it "one of the starkest downward effects I've ever seen."
But the Alum Rock project was hardly a test of the voucher idea. From the start, the experiment's design was far removed from an authentic voucher plan. For one thing, private schools were effectively excluded. They were technically eligible for vouchers but had to comply with a host of district regulations concerning teacher certification, curriculum standards, student discipline, and more. For that reason, no private school ever actually received a voucher.
Also, the minischools' admissions and expulsion procedures were heavily regulated, so they had none of the freedom that private schools have to enforce strict educational and conduct requirements. Moreover, schools were given enrollment ceilings. Thus, the schools that offered the best programs, by parents' lights, could not expand to accommodate more students, and the schools in lesser demand inevitably enrolled the overflow from the more sought-after schools. Moreover, in stark contrast to a competitive market situation, teachers who garnered few students were guaranteed a salary on the OEO payroll, while good teachers whose reputation or teaching competence attracted more students would not be rewarded with higher salaries.
Mercifully, the entire Alum Rock experiment ended in 1975. Not a single school district in the country followed its example.
As dismayed voucher advocates examined the results of Alum Rock, many were worried that this bad imitation of vouchers would be taken to reflect on vouchers generally. Certainly, confirmed voucher opponents seized on Alum Rock to try to discredit vouchers. Voucher arch-enemy Albert Shanker crowed in the aftermath, "The washout serves to remind us that panaceas sold to the public rarely work in practice."
But Shanker and company were not entirely successful. An infrastructure of intellectual and academic support for vouchers continued through the 1970s and into the '80s. The idea today is kept alive partly by the efforts of the Education Voucher Institute (EVl), a think tank in Ann Arbor, Michigan, whose executive director is University of Michigan professor William Coats.
As in the beginning with free-marketeer Milton Friedman and liberal Christopher Jencks, support for vouchers over the years has come from across the political spectrum. On the right, William F. Buckley argued for vouchers in his book Four Reforms; sociologist Edward Banfield endorsed them; and in the past, the Young Americans for Freedom has made vouchers a high priority.
On the left, liberal and radical advocates of education reform such as John Holt, Nat Hentoff, and Jonathan Kozol-and, less enthusiastically, politicians like Sen. Daniel Patrick Moynihan (D-N.Y.)-have come out in favor of vouchers.
Nat Hentoff, columnist for the Village Voice and the Progressive, is typical. In a 1972 magazine article, he wrote about choosing schools for his own children. "I did visit our local public school," he recalled. "The children there were being treated like automobile parts on an assembly line. So my four children are in four different private schools, because each learns in a different way."
He continued, "If I were not able to afford those four tuitions, my children would be compressed into the single mold the public school chooses for all children, and at least two of them might well have dropped out by now…. Why not allow for some real democratic pluralism in public education by ending that monopoly through making public independent education also possible? Consider the range of choice that would then be available to parents now restricted to the monopoly system."
Hentoff recently told Reason that he still supports vouchers if they are given to schools that do not discriminate on grounds of race, sex, etc., and if they are not given to church-related schools.
Politicians have generally been skittish about the issue of vouchers. Few doubt that it has a lot to do with the political pull of the two big teachers' unions, the National Education Association and the American Federation of Teachers.
Vouchers found a desultory champion in Ronald Reagan. While governor of California, Reagan called for vouchers in his 1972 "state of the state" message. Voucher legislation was introduced, but disappointed supporters in the legislature complained to the Los Angeles Times that Reagan "gave the measure little support," and it died in committee.
Last spring, the Reagan administration proposed giving local school districts the option of converting their federally funded Title I program (billed as supplemental education services for educationally disadvantaged children) to a voucher system. A bill was drafted by the administration and sponsored by Rep. John Erlenborn (R-Ill.), but history may be repeating itself. After a single day of House subcommittee hearings, the legislation faded away, and the administration has reportedly done little to promote it.
There is one state government where vouchers may be getting a fair hearing. Rep. John Brandi (D) has introduced a bill in the Minnesota legislature to provide vouchers worth $1,475 per pupil for low-income families. The vouchers would be good at any school. Minnesota's Democratic governor, Rudy Perpich, is reportedly "committed to the market-based system" in education but has not yet endorsed the legislation (see Trends, Aug. 1983). Minnesota has already instituted a tax deduction for education expenses, and the measure survived a legal challenge on church-state grounds when the Supreme Court recently upheld its constitutionality.
Elsewhere, voucher advocates who have not met with success in state legislatures have turned in some instances to the ballot referendum. The first major campaign of this sort was in 1978 in Michigan, which lost by 59-41 percent.
Perhaps the most ambitious campaign came in California two years later. John Coons and Stephen Sugarman, two liberal Berkeley law professors, drafted a ballot initiative that would have set up a two-part voucher-a base amount allocated for all students no matter what their family income and a supplementary amount proportional to their family income.
Coons and Sugarman's "Family Choice Initiative," as it was called, was hotly debated in late 1979 and early 1980. As could have been predicted, the state's educational establishment was bitterly opposed. Wilson Riles, then the state superintendent of public instruction, stormed, "The idea is crazy….1 see chaos [if it passes]." In the face of this opposition, the initiative was unable to gather sufficient signatures for ballot status.
An interesting coalition of liberal and conservative Californians believe the time may now be ripe for another attempt at the ballot box. Roger Magyar, a Republican Party activist and state official during Reagan's administration in Sacramento, and Leroy Chatfield, a former United Farm Workers organizer and the manager of Jerry Brown's 1976 presidential campaign, have put together an organization called Parents Choose Quality Education. Their voucher plan has won the endorsement of Milton Friedman, and they hope to win sufficient signatures for placement on the June '84 primary ballot.
There has been a dramatic increase in popular support for vouchers in the last few years. Indeed, 1983 was the first year in which a majority of Americans in a national survey expressed support for education vouchers. A Gallup Poll conducted last June indicated that 51 percent of Americans would like to see a voucher system adopted in this country; 38 percent would not, and 11 percent had no opinion. The favorable responses were up from 43 percent in 1981 and 38 percent in 1971.
The youngest group surveyed-people 18-29 years old- were most in favor of vouchers (60 percent for, 29 percent against, 11 percent no opinion). And blacks at the grassroots level are even stronger in their support (64 percent for, 23 percent against, 13 percent no opinion). Yet many veteran civil rights leaders are adamantly hostile, because a variant of vouchers was briefly used in the South by local school boards and state governments during the 1950s to try to stave off school integration.
Likewise, despite the strong support among Catholics for vouchers (63 percent for, 29 percent against, 8 percent no opinion)-not to mention the fact that some 3 million youngsters are attending Catholic schools in 1983-84-the US Catholic Conference has never taken a public stand for vouchers. Individual priests and bishops have supported the idea, but they have no solid institutional backing.
Roger Magyar told Reason that in California, church officials are apprehensive that a voucher system might exclude parochial schools, either from the beginning or later at the behest of a court ruling. Meanwhile, the American Civil Liberties Union is against vouchers for the opposite reason: it's worried that a voucher system would include parochial schools. Burt Neuborne, legal director of the ACLU, told Reason that the organization is opposed to vouchers on Establishment Clause grounds (the constitutional provision that "Congress shall make no law respecting an establishment of religion").
The irony here is that civil libertarians should be a natural constituency for vouchers. After all, government-run schools routinely trample on the civil liberties of families who disagree with the way their children are educated.
Clearly, the popular support for vouchers in this country has survived and prospered without nurturing by the political establishment. One can only conclude that parents' alienation from the current state monopoly in education is very strong indeed. So while economists propose and teachers unions dispose, the mass of parents out there may well come to consider education vouchers as natural as generations of smalltown Vermonters have found them.
John McClaughry, formerly a senior policy advisor in the Reagan White House, went home to Vermont in 1982, where he runs the Institute for Liberty and Community "way back in the woods." This article is a project of the Reason Foundation Investigative Journalism Fund.
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]]>New York Post financial columnist Maxwell Newton is not happy with the Federal Reserve system, and this polemic against the Fed could well have been subtitled "The Monster That Ate America." The Fed, claims Newton, "has proven a highly destructive force in the economic and financial affairs of America. It has been the unique source of America's financial crisis today.…Single-handedly it has brought economic growth in the United States to a halt."
In support of this condemnation Newton displays an impressive array of facts and figures. What it comes down to is approximately this: The Fed is a body surrounded by a self-generated aura of independence from the nation's political processes. Its seven governors serve 14-year terms. They have enormous leeway to employ the sweeping powers conferred upon the Fed by Congress in pursuit of whatever goals they find desirable. Those powers include the power to create money out of thin air through credit purchases of securities in the marketplace, to lend money at below-market rates to member banks, to require banks to maintain non-interest-bearing reserves in the Fed's custody, and to enforce countless regulations of the banking industry.
In exercising these powers until October 1979, the Fed bought securities from the banking system in an attempt to keep key interest rates within a narrow range. This, however, generated massive increases in the money supply, which in turn signaled increasing inflation, the fear of which put sharp upward pressure on interest rates, which required the Fed to create even more money to keep interest rates within its prescribed range.
Although, in a celebrated action, the Fed then disavowed stabilization of interest rates and embraced stabilization of the money supply as its guiding policy, Newton shows how in practice the old policy crept in through the back door. Three years later, in October 1982, the Fed abandoned its money-growth targets, muttering excuses about "financial innovation" making it too difficult to keep track of monetary aggregates.
Newton correctly brands the 1980 banking deregulation act a "vicious" and "abominable" piece of regulation. This act sucked all depository institutions into the Fed's regulatory web, not just the larger member banks, and imposed a substantial tax on them through non-interest-bearing reserve requirements. This envelopment of previously excluded banks, savings and loans, and credit unions was a desperate effort to maintain the Fed's control of money in an economy steadily inventing new money substitutes precisely to escape government regulation.
Newton fails to mention one of the most calamitous provisions of the act—the section now allowing the Fed to use even worthless foreign government securities as collateral for a flood of new money. This provision may soon become useful to the Fed in escorting the nation's largest banks through their self-made Third World debt crisis, at the expense of everyone else.
Mexico, for example, could issue worthless peso bonds to its US bank creditors. The banks would then sell the bonds to the Fed at an unrealistically high exchange rate. The Fed would credit their reserve accounts, and the banking system would translate the higher reserves into another inflationary surge. When the Mexican bonds eventually defaulted, the Fed would simply create more inflationary money. The original lending banks would long since have gotten off the hook.
Newton offers a clear explanation, too, of a crucial point. Unlike the old days (before 1963), the production of new money by the Fed no longer works to lower interest rates. After a decade and a half of wild inflation and uncertainty, traders in the financial market now react differently from the classic model. They see the creation of new money not as an increase in supply that eases interest-rate pressure but as a forerunner of a new inflationary burst. So they respond to money creation by demanding higher interest rates to protect against the expected inflation.
But with all of his facts and figures, all of his incisive indictments of the Fed's behavior, and all of his accurate descriptions of the effects of monetary uncertainty on the nation's economy, there are certain points in Newton's work that are confusing, to put it mildly.
Consider the vaunted "independence" of the Fed. Newton writes that "one of the most important single justifications of the so-called independence of the Federal Reserve was and is to remove it from control by the administration and thus to oblige the administration to finance its expenditures by taxation, rather than by demanding cash from the Federal Reserve." On the final page of the book, however, Newton looks with favor upon the incorporation of the Fed into the Treasury Department, so that "monetary policy could be integrated with the other economic policies of the administration." What makes Newton think this will lead to more-responsible behavior? The only possible improvement would be that the president could then be held responsible for the Fed's errors, but that is small comfort when one contemplates the possible magnitude of the errors.
Then there is the matter of zero money growth. Newton thinks this is the "ideal arrangement." Three hundred pages earlier, however, he describes the May–October 1981 period of zero money growth and ruefully observes that "the American economy collapsed, under the influence of money starvation." Then he hastens to add that he doesn't think that this freeze-and-collapse scenario indicated any kind of mistake by the Fed. He only wants to show that zero money growth will reduce interest rates. So, one might add, will a total collapse of the economy.
Like all monetarists, Newton is convinced that there is something out there that can be measured and called "money." For him, it is M1, the sum of cash and checking accounts in the nation's banks. Others have made the point that, with the many new varieties of money substitutes now in increasing use (largely as a result of the market's need to escape economically foolish and burdensome government regulations), controlling M1 alone is a fool's errand, and trying to control everything leads to a Soviet-style controlled economy.
Not so, says Newton. If M1 becomes an inaccurate indicator, the Fed can simply adjust its M1 growth targets to compensate. So Newton ends up at the same place as those whose every action for the past 15 years he finds defective. If the Fed can't hit its targets, well, then, define some new targets.
Newton is profoundly uninterested in gold or any other economic mechanism for disciplining the money-creation machine. Indeed, the existence of gold is barely mentioned in the book, and reading The Fed, one would have no reason to suspect that the ending of gold convertability had anything at all to do with the Fed's subsequent running wild.
On one page of his book—the last—Newton decides that the "incorrigible" Fed should be eliminated. He notes correctly, but so briefly as not to persuade the uncommitted, that the Fed's principal functions either could be provided by the marketplace or would be better left unprovided. He cites Hong Kong and 19th-century Scotland and America as places where economic growth took place without the benefit of a central bank.
But his argument seems too tentative and far too brief. One gets the impression that his death threat against the Fed is only a tactic to pressure it to adopt the monetarism Newton so enthusiastically embraces.
The lack of any historical treatment of the Fed, the ignoring of the role of gold, and the confusion about remedies mar Newton's work. But as a trenchant commentary on the failures of the Fed over the past two decades, The Fed is useful and, indeed, devastating. If it persuades its readers that there has to be a better way, it will have served admirably in accelerating a vital national debate. Max Newton's brays are bonny, if not his proposals for change.
John McClaughry is a former policy adviser to President Reagan.
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]]>Mark Satin is a 34-year-old former Marxist, labor organizer, draft evader, and exile in Canada who over the last few years has groped his way to a new understanding of the psychological and cultural roots of the human condition. Unlike Paul on the road to Damascus, Satin did not experience that great searing flash of insight that made a different man of him. But slowly, day by day, in the coffee houses of Vancouver and the classrooms of Toronto, wrapped in earnest conversation with fellow leftists and exiles, cloistered in the gloom of library stacks, Mark Satin came to realize that the path to progress, human values, and survival led not to a political ism, but to a new, transformed consciousness about human life and the responsibilities of human beings.
The result is this second edition of New Age Politics, superseding a first edition that the author painstakingly set in type himself in a small print shop in Vancouver. What Satin has tried to do in this work is to bring together and synthesize into a coherent whole the thinking of numerous "new age" writers and thinkers. Though that synthesis is occasionally marred by the author's obsession with recognizing the source of every thought, even the most mundane, it is nonetheless an important achievement, important enough that one can fairly recommend New Age Politics as the indispensable introduction to what is now being called "new age thought."
To attempt a brief definition, new age thought seeks to define a new, transformed consciousness that can help people to contribute to the creation of a more purposeful, humane, life-oriented, responsible, and satisfying society. New age thinking seeks higher levels of synthesis, beyond the ordinary level of political and doctrinal strife. It seeks to transcend a narrow materialism in favor of a heightened awareness of spiritual truths and mythic values. It steers away from the desire to accumulate wealth and power and dictate the affairs of others.
To illustrate this approach, Satin offers the paradigm of "The Six Sided Prison," a condition that he views not only as contrary to the flowering of human growth, love, and responsibility, but also as inimical to human survival in a very real sense. The first side of the prison is patriarchy, which Satin defines as a system of power relationships dominated by males. The new age answer to this is labeled androgyny, used not in its more common sense as "bisexual" but as "sex-transcendent." The second side of the prison is egocentricity, to which new age thought opposes a broad spirituality, a recognition that the self, while important, is not the force that makes the world go round.
The third side of the prison is scientific single vision, or reductionism—the attitude that nothing exists that is not quantifiable and that the whole is no more than the sum of its many parts. A "multiple vision" that recognizes the unmeasurables, the imponderables, and the mysticals is the new age alternative. The fourth side is the bureaucratic mentality, which views order, status, depersonalization, efficiency, predictability, and discipline as its highest goals. This mentality is contrary to the new age ideal of cooperative, participatory processes. The fifth side of the prison is the religion of nationalism, which new agers would replace with a combination of local patriotism and global consciousness. Finally, the new age approach places strong emphasis on the importance of human scale in all things, not a giantism that overcomes and dwarfs human beings and human values.
New agers emphasize such ethical values as self-development, ecology, cooperation, and nonviolence. Their social values include a sense of enoughness, autonomy, community, diversity, many-sidedness, humility before nature, reverence for life, and responsibility for other humans, for the earth, and for posterity. Their bane is monstrous, rigid systems—the defense establishment, compulsory educational systems, organized churches, mass-produced housing, nuclear energy—all of which constitute monolithic organizations and modes of production.
In economics, new agers reject the frenzied pursuit of profit, wealth, and power that they associate with the idea of capitalism. At the same time—and this is of profound importance—new agers are drawn, though not without some kicking and screaming, in the direction of a simplified, pure, small-scale economic system featuring a widespread dispersion of productive property, sound money, limited interference by the State, moral responsibility for one's acts, and freedom of exchange. This is obviously not a form of enforced collectivism but of anarcho-capitalism. But where capitalists, after Adam Smith, assume that the vector result of human acquisitiveness will equal the maximum benefit to society, new age thinkers insist that capitalism as a system must exhibit a concern for right livelihood, for human growth and development beyond the appearance of profit on the balance sheet, and for the social benefit from economic activity.
So much for a concise overview of the kind of thinking Satin organizes and summarizes in New Age Politics. The question now is, of what interest is all this to libertarians? The answer, I believe, lies in the fact that what appears to be a large and growing movement, not only in the United States but across a large part of the world, has converged upon a philosophy that, though it begins far removed from the libertarian premises of nonaggression, the free market, and individual liberty as against the State, nonetheless struggles toward the conclusion that new age values can best be achieved through libertarian means. Indeed, it may become evident that those values can be achieved only through libertarian means, particularly if libertarian is defined broadly enough to include some varieties of left-anarchism.
This should be a matter of great importance to libertarians. For it offers hope for, at the least, a compatible tactical alliance, and at best, a new creative synthesis that preserves libertarian values but adds to them a broader and perhaps deeper understanding of the role of man in the universe, nation, village, and homestead.
It is always dangerous to characterize libertarians as a whole—careers have been destroyed in the attempt—but oblivious to the risk I will dare to suggest that the predominant concern of modern libertarians is the liberation of man from the clutches of the State. And well it should be, for the State has become a vast, oppressive engine, awesomely destructive of the energies and the very humanity of what Murray Rothbard calls "its hapless subjects." But exposure to new age thinking—and there is no better place to start than Mark Satin's book—will do much to sensitize libertarians to the importance of advancing a fully rounded philosophy of human liberty, self-development, cooperation, humanity, and moral behavior. This is not to suggest—God forfend!—that such concerns are absent from libertarian writings. But it is true, I think, that libertarians tend to lavish more attention upon invasions of liberty and the marketplace by the State than on the transformation of mankind into a new kind of creature who can, at last, achieve the highest and most cherished values of our race.
New Age Politics is, however, far from immune to criticism. While its synthesis of diverse new age points of view into one coherent whole is a major achievement, the book is marred by the author's virtually total lack of familiarity with libertarian writings. Indeed, Satin views libertarianism as an outmoded "industrial era philosophy" concerned only with protecting the marketplace from State interference in the name of greater production of goods and services—some useful, but many unnecessary and harmful. Of the 250 new age books listed in an appendix, only three—by Karl Hess, Scott Burns, and Leopold Kohr—can even remotely be considered libertarian. As to conservatives, with whom Satin is almost equally unfamiliar, only Robert Nisbet, Michael Novak, and Aleksandr Solzhenitsyn make an appearance. Inquiry magazine is listed, doubtless a tribute to its efforts to achieve respectability with the left, but no other libertarian publication appears among the 50 new age periodicals. At the same time, on the other hand, New Age Politics rarely misses an opportunity to kick the hell out of socialism and Marxism generally, a reflection of the author's personal hegira.
Finally, New Age Politics unwisely devotes 21 pages to a chapter hesitantly entitled "A New Age 'Political Platform' Offered as a Discussion Document." Better this discussion had never taken place. Satin has rummaged through public policy recommendations from sources as diverse as the contributors to the earlier part of his volume and has selected an astonishing assortment of proposals. To his credit, a number of the proposals are culled from a recent LP platform. But they are combined with a gallimaufry of statist claptrap that not only makes the whole thing absurd but also calls into question the value of a philosophy that can combine such hopeless incompatibles into one document, even a document labeled "for discussion only."
There is, however, in the new age philosophy a real possibility of a political platform tailored to advance new age values. And in the last analysis, that platform would look suspiciously like a libertarian platform. For it is becoming ever more apparent, to "new agers" as well as everyone else, that new age values cannot be realized by decree of the State. New age values spring from the hearts of people, and the role of the State, if any, must be to allow those values to express themselves in voluntary, free activity for the benefit of society. That freedom, deriving from libertarian principles, coupled with a renewed sense of moral responsibility and spiritual appreciation drawn from the rich lode of new age thinking, can produce a higher synthesis acceptable to a large number of citizens, perhaps even a majority. By showing the way to this synthesis, however imperfectly, New Age Politics makes an extremely valuable contribution to contemporary political dialogue.
John McClaughry is president of the Institute for Liberty and Community, Concord, Vermont.
The post What's This New Age Stuff? appeared first on Reason.com.
]]>Viewed one way, Bernard Frieden's Environmental Protection Hustle ranks with The Best of the Marx Brothers as an outrageous catalog of lunacy. Viewed another way, it is a compelling, fact-filled indictment of the antigrowth movement in America, made more telling by the author's almost superhuman self-discipline in restraining himself from exploding in outrage.
The meat of the book is a series of capsule histories of residential development projects in the San Francisco Bay area. Frieden has methodically compiled a chronicle of events from five sizable developments and presented the results in readable form. While easy to read, however, it is not particularly easy to digest, because—to continue this metaphor—the more one reads of this stuff the more likely one is to want to throw up.
In 1971 a firm named Challenge Developments decided to construct a planned residential development of 2,200 townhouses and condominium apartments on a 685-acre site in the foothills of Oakland, California. The plan was well within the existing land use plan of the city of Oakland. Still, the developer sweetened his proposal by agreeing to donate 480 of its 685 acres to the city for a regional park—a form of bribery and extortion roundly condemned in an earlier version by Pope Gregory VII 900 years ago. So induced, the city planning commission approved the project.
Then began what has become the inevitable litigation. A group called Citizens against Mountain Village sued the developer, claiming that it had not complied with the California Environmental Quality Act, a piece of legislation that has done more damage to home building in that state than anything since the last ice age and the San Andreas Fault.
The lawsuit was successful. The city council rescinded its approval. Finally, in desperation, the developer presented a revised plan for only 150-200 single-family homes, plus 100 estate lots ranging in size from 3 to 15 acres. The Sierra Club, having succeeded in transforming the original 2,183 units averaging $28,750 in price into less than 300 units averaging $60,000, dropped its opposition.
The epic of Harbor Bay Isle is even more outrageous. This landfill development on the east side of San Francisco Bay resulted in so much litigation that when it was finally settled, observes Frierden, "the San Francisco Bar Association might well have considered declaring a day of mourning." The actors here were the developer-victim, the Alameda City Council, the Airport Land Use Commission, the Bay Conservation and Development Commission, and the Oakland Airport. The net result was that the projected 9,055 condominium apartments designed to sell for about $30,000 in 1972 became 3,170 single-family homes selling for an average of $65,000 in 1976.
In the case of another major development, San Bruno Mountain, the end result was zero housing—the project was cancelled after 10 years of planning, replanning, appealing, litigation, harassment, and anguish. As the proposal stood at the time it was scrapped, an original 12,500 middle-income homes had shrunk to 2,235 upper-income homes.
A major factor in the process of obstruction in this case was the existence—alleged but never proven—of the "endangered San Francisco garter snake." There was also the problem of the "protected" red-legged frog—protected, it turned out, because California has general laws governing the taking of frogs. Finally, there was a weed called coast rock cress, which was not only common over wide areas of the state but had actually been reseeded on the parts of San Bruno Mountain planned for open space instead of housing.
The fourth major case study—of Blackhawk Ranch—is unique in illustrating how opposition from public bureaucrats can tilt the balance against a proposed development. In this case the planning staff of Contra Costa County systematically rejected all evidence that tended to support the argument for a 4,500-unit development on the slopes of Mt. Diablo. The main reason for this opposition appeared to be that the bureaucrats had recently completed a general plan for the county that did not provide for the proposed development, and approving it would have called into question the sanctity of the plan. The county planning staff achieved a pinnacle of creativity in discovering useful objections to the project.
For example, the planning commission shed hot tears for the Alameda striped racer, which, if it exists, is a snake. This valuable creature had not been located in the vicinity of the development, a fact offered as proof of its claim to rarity. The more rare a creature is, the more it is entitled to be protected, and a creature infinitely rare deserves infinite protection.
While the planning staff could produce no evidence that the protected American bald eagle had ever set foot upon the property, it was dutifully noted that there was a possibility that this splendid bird occasionally flew over the project area. All the more reason not to develop in haste—or not at all. (Blessed be the noble eagle that flyeth over the county planning office and unloadeth upon the occupants thereof!)
Frieden aptly summarizes the upshot of these and other case histories explored in the book. The environmental protection movement is simply at war with the idea of housing.
Outlying valleys should be spared from development because urban sprawl is energy-intensive and destructive of badly needed prime farmland (which produces the avocados and walnuts essential to fending off starvation in Bangladesh!). But hills should also be spared from development to preserve aesthetic vistas and prevent soil erosion. Oh, yes, no development on large tracts in the central city area—the urban public badly needs more open space. And forget about intensive in-fill housing—density leads to congestion, you know.
In short, the only housing development that the California environmental movement seems willing to allow is that which comes in small packages. The only reason even this is not the subject of attack seems to be that the resources of the environmental opposition can be better employed stopping the larger projects.
Frieden has studied the rationalizations for environmental opposition to housing and finds them a confused and bewildering melange. What it seems to boil down to is that environmental activists are well-educated, upper-income, almost invariably white, property owners who have seized upon the supposedly public-spirited concern for the environment to protect themselves and their property from competition. They want open space. They want low tax rates. They want high property values. And they want working-class families kept out. They do not dare to expose this naked self-interest to public view, so they cast about for high-minded environmental and ecological rationalizations to protect their private interests.
Frieden has done an excellent job in condensing the case histories into modest length, in cataloging the possibilities for obstruction made available by various laws, and in identifying the true motives of many of the opponents of housing and growth. He patiently dissects the slogans—like the need to preserve farmland or protect various obscure or loathsome fauna—and shows that they have little basis in reality. He recognizes the vice of fiscal zoning (preventing development that does not "pay its own way") and the serious adverse effects upon the poor of efforts by the privileged to defeat development.
What Frieden fails to do, however, is to explore the desirability of the laws and regulations that have socialized the costs of public services. If everybody's property were not assessed to finance the education of some people's children, for instance, the taxpayers would be deprived of a major argument against new development in their taxing jurisdiction. We have proclaimed socialism in education, in highways and streets, in police and fire protection, and in many other "public" services. Now those who benefit from this socialism are trying to make newcomers "pay their own way," which is another way of saying "socialism for the rich, free enterprise for the rest." Better we should have free enterprise for everybody.
Frieden's book, however, should not be faulted for declining to pursue that thought. As it stands, it is a careful description and a devastating indictment of the war of the privileged elite against the underprivileged many, who are unable to organize to fight for their interests. Those who read it carefully will be stimulated to seek the solutions that Frieden stops short of offering, and that in itself is a major contribution long overdue.
John McClaughry is the president of the Institute for Liberty and Community, in Concord, Vermont, and was recently a member of the National Commission on Neighborhoods.
The post Housing Protectionism appeared first on Reason.com.
]]>The hour of seven o'clock arrives. The doors swing open, and a torrent of excited humanity pours into the old meeting house. The hour is at hand for the adoption of resolutions damning the unholy alliance of State and Monopolists which has crushed the small businessman, mechanic, artisan, and workingman under a burden of special privilege and manipulated debt.
But wait! The multitude are not yet in their seats, but George D. Strong, president of the Commercial Bank, has already nominated bank director Isaac L. Varian for chairmanship of the meeting! The bankers have rigged the meeting! But the Equal Rights Democracy is equal to the occasion. Before the eyes of the multitude a banner unfolds, bearing the slogan "Joel Curtis—the Anti-Monopolist Chairman." The invincible leader of the people, Alexander Ming, Jr., demands that a vote be taken, and the walls echo with cries of "Curtis! Curtis! Curtis!"
Isaac L. Varian, in temporary possession of the rostrum, is helpless to restore order. Nervously he devises a plan to escape the platform but is restrained by bank president Strong. As they jostle, the chair is overturned,and quick as the bullet from Andy Jackson's dueling pistol, the true-hearted workingman Joel Curtis leaps to the rostrum. A great cheer goes up. The people of the Democracy have slain the demon of Monopoly in its very temple!
Varian and Strong disappear down the back stairs from whence they came. A moment later, the great hall lapses into darkness. The scoundrels! They have doused the gas lights on their precipitate flight from the scene of their defeat. But the Equal Rights Democracy is once again prepared. "Let there be light!" shouts the redoubtable Ming, and as if by magic the members of the Equal Rights Democracy bring forth the new strike-anywhere "Loco-Foco" matches and ignite candles brought for just such a contingency. The last foul strategy of demon Monopoly has been vanquished!
FREE AND EQUAL And then, in the candle-lit auditorium, amid ringing huzzas that shake Old Tammany to its foundations, the Equal Rights Democracy of New York City endorses the anti-monopoly Democratic ticket and adopts a host of thunderous resolutions:
Resolved: That in a free state, all distinctions but those of merit are odious and oppressive, and ought to be discouraged by a people jealous of their liberties.
That all laws which directly or indirectly infringe the free exercise and enjoyment of equal rights and privileges by the great body of the people, are odious, unjust, and unconstitutional in their nature and effect, and ought to be abolished.
For all amounts of money, gold and silver are the only legitimate, substantial and proper circulating medium of our country.
That perpetuities and monopolies are offensive to freedom, contrary to the genius and spirit of a free state and the principles of commerce, and ought not to be allowed.
That we are in favor of a strict construction of the Constitution of the United States, and we are therefore opposed to the United States Bank.…
That we are opposed to all bank charters granted by individual states, because we believe them founded on, and as giving an impulse to principles of speculation and gambling, at war with good morals and just and equal government, and calculated to build up and strengthen in our country the odious distribution of wealth and power against merit and equal rights.…
Additional resolutions favored direct election of the president and vice-president, short terms for all offices, strict accountability to the people, and the right of instruction by the party of its candidates for office.
Thus concluded the most dramatic event in the short but influential life of the "Loco-Foco" Party, as it was derisively termed by the Democratic and banking establishment.
HARD MONEY The seeds of the Equal Rights Democracy had been sown in the late 1820s in a brief movement called the Workingmen's Party. When that movement collapsed, its spirit lived on in the scathing editorials of the New York Post's brilliant William Leggett (see "Leggett: 19th-Century Libertarian," REASON, Feb. 1977), until the arrogant actions of the bank monopolists called forth public outcry within the ranks of the New York Democratic Party.
In those days, a bank might do business only if granted a charter by special act of the legislature. Since private banking offered a golden opportunity to issue unsecured bank notes to the gullible, it was a much- sought-after privilege. Indeed, it was so much sought after that on occasion considerable sums of real money were said to have changed hands prior to a legislative vote. When in 1829 the New York banks–backed by a compliant state government in Albany—contrived a "Safety Fund" to avert the consequences of bank runs and insolvencies, this union of predatory bankers and captive government sparked the Loco-Foco revolt.
The Loco-Focos were, in the words of financial historian Bray Hammond, the proponents of an urban and industrial version of Jeffersonian agrarian egalitarianism. They were the mechanics, small-tradesmen, and workingmen of emerging capitalism, and they were increasingly outraged at the machinations wrought upon them by special privilege conferred by government.
The 1836 Loco-Foco Declaration of Principles laid down their fundamental belief: "unqualified and uncompromising hostility to bank notes and paper money as a circulating medium, because gold and silver is the only safe and constitutional currency." The Loco-Focos recognized that government-authorized issue of private paper money, not backed by specie, meant that increasing amounts of "money" would inflate the prices of rents and commodities, thereby penalizing savings and honest labor. "As the currency expands," they cried, "the loaf contracts." They saw fortunes made in manipulation of intrinsically worthless paper, under the protection and encouragement of a state government hypocritically pretending to protect the rights of the people.
DEBASEMENT Their objection was not only that they were the victims. It was far more principled and high-minded than that. The Loco-Focos sincerely believed that stock-jobbing, speculation, and manipulation of worthless paper were fundamentally immoral and that those who sought to profit by these practices were infecting republican institutions. The result could only be a debasement of the sacred principles of the Declaration of Independence.
Their pure view of government was clearly expressed in their 1836 Declaration. "The rightful power of all legislation," they proclaimed, "is to declare and enforce only our natural rights and duties, and to take none of them from us. No man has a natural right to commit aggression on the equal rights of another; and this is ALL from which the law ought to restrain him.…The idea is quite unfounded that on entering into society, we give up any natural right."
The Loco-Focos also had a high-minded view of how an honorable credit system would operate. Enthusiastic applause punctuated the reading of a letter from Samuel Young to a party meeting in 1837, in which Mr. Young set forth these principles: "Credit is the offspring of the individual confidence which one man reposes in his fellow-man. It results from the security which one individual feels in the integrity and ability of another. Like love, joy, hope, faith, confidence, &c., it is an emotion of the heart which was bestowed upon man for beneficial purposes, and can be well regulated only by individual impulse and direction. Legislation cannot create, but may mar and destroy it. If government should institute monopolies to make discounts of love and matrimony, those commodities would soon become as spurious and as much below par as the bills of the broken banks. The late explosion of the banking system [the Panic of 1837] is an eminent example of the extent to which the misdirected framers of human government in the creation of monied monopolies may paralyze and extinguish individual credit and confidence. The principle of free competition which was implanted in man by his maker, is the only sure and safe regulator of all the business purposes and pecuniary transactions of human society. But the [advocates] of legislation have pronounced the great Architect to be a bungler, and have essayed to better the movements of the machinery, by applying to the community the strait jacket of restraining and usury laws, and the complex tourniquet of 'safety fund' and 'credit system.' Demoralisation, oppression, taxation, fraud, perjury, and failure, ever have been, and will ever be the result, until mankind shall acquire sufficient strength and confidence in themselves to tear off these shackles."
RISE AND FALL The dramatic Loco-Foco takeover of Tammany Hall caused extreme consternation among the Regency Democrats and their bank allies. "The cholera itself scarcely carried with it more terrors," wrote one leading New York Democrat to President Van Buren. Governor Marcy, with an utterly straight face, lamented the appearance of the "hideous monster of Loco-Focoism." Certainly, if the Loco-Foco movement were to prevail, many a sweetheart deal between the politicians and the bankers would be swept away, exposing the latter to the unspeakable perils of free competition.
After one turbulent mass meeting in February 1837—which degenerated into the looting of various provision houses by some hungry hangers-on excited by the Loco-Foco rhetoric—the Loco-Focos came together in May to again denounce the banks and to "adopt measures to retrieve our country from the desolating influence of paper money." A few days later, runs on several banks, leading to the suspension of specie payment, were interpreted by the Loco-Focos (without justification, as it turned out) as evidence of growing public support for their principles. So was the outcome of the 1837 legislative elections, in which a Democratic majority of 82 in Albany was converted to a Whig majority of 64, a net change of 146 seats. While the Loco-Focos, as a faction of the Democratic Party, had little reason to support the largely unprincipled Whigs, they had great reason to punish backsliding and corrupt Democrats, which accounted for a handful of the Democratic defeats.
Meanwhile, in September 1837, President Van Buren, a New Yorker, asked Congress to create an independent sub-Treasury system to manage the government's accounts in specie only, ending all reliance on private bank deposits or notes. Damning the incestuous relationship between the banks and the government, Van Buren declared that "government was not intended to confer special favors on individuals or on any classes of them.…The less government interferes with private pursuits the better." This was pure Loco-Foco doctrine, and the New York faithful toasted the message with shouts of exultation.
For seven years, 1837-1844, the anti-monopoly, hard-money, Jeffersonian tenets of the Loco-Focos dominated national Democratic Party doctrine. But in the city of its birth, Loco-Focoism fell prey to the fate of many an idealistic reform movement. With Van Buren's apparent espousal of their doctrines, the Loco-Focos, in modem parlance, "had the action." So the regular Democrats, yielding to unpleasant necessity, recruited the most electable and least ideological leaders from Loco-Foco ranks. The movement split into "rump" and "buffalo" factions, the one holding out for a restoration of true Jeffersonian democracy, the other seeking a tactical alliance with the party regulars.
By 1840 it was finished. Of the Loco-Foco faithful, only one remained, a mildly retarded but enthusiastic gentleman who, at the appointed time for monthly meetings, religiously repaired to the old Fifth Ward Hotel. But the meeting room, for so long the scene of tumultuous demonstrations against special privilege and for the equal rights of the people, had long since fallen silent. And when one day the wrecking ball came to the Fifth Ward Hotel, that abandoned old man stood on the sidewalk, tears running down his cheeks, as the last symbol of Loco-Focoism passed silently into history.
John McClaughry, a frequent REASON contributor, is the director of the Institute for Liberty and Community and is presently serving on the National Commission on Neighborhoods.
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]]>Housing Costs & Government Regulations, by Stephen R. Seidel, New Brunswick, NJ.: Center for Urban Policy Research. 1978. 434 pp. $15.
Zoning and Property Rights, by Robert H. Nelson, Cambridge, Mass.: MIT Press. 1977. 259 pp. $16.95.
For many years there has been a pressing need for a thorough, reliable, and readable volume that can serve to initiate the intelligent layman into the mysteries of housing, mortgage finance, and government regulation of development and construction. Martin Mayer's The Builders largely fills the bill. In fact, his book is to the American housing industry about what War and Peace was to 19th-century Russia in panoramic description.
Four hundred and twenty-three pages into The Builders, author Mayer remarks, with a slight trace of surprise, that "this whole long book turns out to be, not by design, virtually a compendium of the ways government actions have inflated housing costs." Indeed it is. For throughout the preceding pages the reader sees a ghastly procession of foolishness, venality, stupidity, incompetence, and calamity, practically all of it caused, encouraged, or demanded by one or another level of American government.
Thus we see, like hideous vignettes in a Fellini film, city code enforcement producing widespread abandonment in Chicago's Woodlawn ghetto; onerous regulation in center cities driving development to the suburbs; abandoned parcels frozen out of the market, while their scavenger owners work to persuade the urban renewal agency to buy them at inflated prices; slum arsonists given priority for occupancy of public housing units; HUD bailing out Manhattan Plaza in New York (where else?) by promising to pay a $600 per month subsidy on two-bedroom apartments over the ensuing 40 years (cost: $460 million or more); and the "moral decay of numerous middle-level federal bureaucrats" in FHA field offices.
There is more, much more: the FHA sternly prohibiting lenders from offering insured mortgages to blacks in white neighborhoods (a practice now presumably discontinued); the union electrician standing a lonely vigil over one burning light bulb while other workers do their jobs; New York City building inspectors turning away preassembled plumbing trees; landlords (again in New York) deliberately renting to criminals and undisciplined welfare families to get even with tenants who, thanks to rent controls, had been robbing the landlords for years; the madness of RESPA (the 1974 Real Estate Settlement Procedures Act), which provoked a successful revolt by realtors and bankers akin to that of car owners against seat belt interlocks; San Diego's "controlled growth" plan, through which a $5 fee for a lot map in 1972 became a $1,011 fee by 1974; and the FHA/EPA requirement in Phoenix that all insured houses have $70 water softener attachments, even though the water softeners could not be installed because disposal of the salts threatened the state's water supply.
Mayer's compendium of crimes by the government is not the only value of the book. In between a recitation of various outrages, Mayer offers a few nuggets of wisdom. He points out that the prevalence of "rapacious developers" can be traced directly to the fundamental capriciousness of zoning and environmental regulations, which make home building so risky an occupation that only high profits on successes can make up for disastrous losses on government-induced abortions. He is sharply critical of tax systems that "could be advocated only by people who believe in their hearts, as so many do in Washington, that all income really belongs to the government, which out of charity permits private persons to use some of it some of the time."
"Because the people who buy houses have a higher average income than the people who put their money into savings institutions," Mayer observes, "the ceiling on interest rates can be condemned as a subsidy from lower-income households to higher-income households." Has government housing aid helped society as a whole? Well, says Mayer, "there is a strong case for the proposition that the net impact of the programs has been negative for the population as a whole—that there would be fewer run-down neighborhoods, fewer blighted urban apartment houses, and certainly a lesser allocation of family income to housing costs if HUD had been kept on a tight leash."
Mayer puts his finger on a key point when he remarks that "the great threat to the quality of life in America is not so much the things that get all the publicity as the erosion of the doctrine of personal responsibility for individual actions." And yet, rather distressingly, Mayer does not seriously address himself to the problem of changing the system to maximize acceptance of personal responsibility. While he notes an occasional nongovernmental alternative—such as the British-inspired Home Owners Warranty system, lamentably ruled illegal by the consumer watchdog, the Federal Trade Commission—Mayer's concluding recommendations are confined to changes in governmental practice, while preserving the spirit of intervention that has caused most of the problems he so ably describes.
For instance, Mayer repeatedly shows how continual inflation has disastrous effects in a marketplace where items are purchased and built over prolonged periods of time. But instead of mounting a no-holds-barred attack on the deficit financing that causes dollar depreciation, he settles on new coercive measures to cope with inflation's baneful effects. His proposals are, first, mandatory allocation of a portion of the funds of tax-exempt institutions into the housing finance industry, and second, a national usury ceiling for mortgage loans. This combination of forced investment in specified securities and a governmentally enforced ceiling on returns would be a lamentable turn of events, reminiscent of the national plans of totalitarian nations.
Mayer also favors a land sales tax to dampen speculation in land, which he rightly sees as the action of investors seeking a hedge against inflation. He admits that this will lead to a "distasteful political struggle," akin to the one that brought down the Dutch government in 1977; but he seems unwilling to accept the proposition that when the government continues to debase the value of the currency, citizens have a right to protect their assets the best way they know how.
Some of Mayer's remaining prescriptions are much more consistent with his analysis: repeal of the Davis-Bacon "prevailing wage" price-fixing act, a shift of emphasis from rental to ownership in public housing, and opposition to so-called anti-redlining statutes, which Mayer rightly describes as "King Canute stuff."
Those who favor a free society, however, should be lenient with Mayer. For despite something of a "pragmatic collapse" in the final chapter, he has done an outstanding public service by bringing to the average reader a message well known to anyone involved in the housing industry. That message is, simply, that no matter how well-meaning it may profess to be, government is, in the last analysis, a menace to decent housing for Americans.
Whereas Martin Mayer's book is written for, and will be read by, the general public, Stephen Seidel's book is aimed at economists and public policymakers. It lacks the breadth and the entertainment qualities of The Builders, but it is nonetheless a valuable work. For what Seidel and his associates at the Rutgers Center for Urban Policy Research sought to do is to estimate just how much Americans are paying for unnecessary and foolish governmental regulation of the housing industry.
Seidel proceeded in a highly systematic way. First, he surveyed building code administrators in 100 municipalities, and zoning and subdivision control officials in another 80 cities. Then he sent questionnaires to some 33,000 land developers and home builders, yielding 2,500 responses; of these, 400 were personally contacted and interviewed. Finally, Seidel conducted an extensive literature survey and completed three case studies.
Perhaps the most dramatic finding was the rapid rise between 1969 and 1975 in governmentally caused obstacles to the creation of housing. From 1964 to 1969, according to surveys conducted by the National Association of Homebuilders, problems directly related to government regulations (codes, zoning, FHA/VA, etc.) declined in importance from 15.4 percent to 4.1 percent of responses. But Seidel's survey revealed that by 1975 government regulation had skyrocketed, being cited by 38 percent of respondents as the most significant problem for staying in business.
Seidel goes on to discuss the problems and costs caused by building codes, energy conservation regulations, subdivision controls, zoning, growth controls, environmental regulations, and financial regulations. Like Mayer's book, Seidel's volume contains numerous horror stories. The city council of St. Petersburg, Florida, in 1974 actually gave preliminary approval to an ordinance requiring the last 25,000 residents to arrive in that city to take on illegal alien status, which could be converted to citizen status only when a vacancy opened up via death or emigration. (Fortunately, the council had a last-minute change of mind.) In New York (yet again) Seidel cites a survey by an undercover investigations unit that "found virtually 100 percent of the City employees with whom we had contact were directly involved in corrupt acts or had knowledge of their existence." In that city, inspector graft was estimated at $25 million per year, enabling the average inspector to at least double his salary at the ultimate expense of housing consumers.
The principal value of Seidel's book is its systematic methodology for estimating the costs imposed on consumers by insane governmental regulation. Like Mayer, Seidel seemingly lacks the nerve to recommend slashing the Gordian knot of governmental madness. Indeed, Seidel believes that the government should even intervene more forcefully in the housing industry—an idea that, especially after Seidel's careful analysis, has about as much merit as that of drinking oneself sober. While he occasionally drops a tantalizing hint of a possible alternative—for example, the French system of insurer-enforced codes—he simply makes no effort to rethink the whole subject in the light of his depressing findings. Seidel, like Mayer, has performed a real service, but it remains to others to move ahead with a free-market policy initiative.
An author who seems to think he is doing that, in the area of zoning, is Robert H. Nelson. He is a sharp and often perceptive critic of zoning in theory and practice, and his criticism abounds with phrases to call forth libertarian excitement. Unfortunately, the starting point for Nelson's recommendations is a highly dangerous proposition: "Neighborhood zoning…creates a collective property right to the neighborhood environment that is effectively held and exercised by its residents." The problem, Nelson maintains, is that there is no legal market for the exchange of this collective property right.
What, one may inquire, is the origin of this "property right"? To allege such a right is like saying the pedestrian has a right not to be hit over the head by a mugger, where it is meant that for this "right" the innocent citizen must hand over his watch and wallet. In fact, zoning is a simple expropriation of private rights—not of "rights" to invade or injure the property of the neighbors, which are not rights at all, but of the rights to the peaceful use, enjoyment, exchange, bequest, and management of one's property. Depriving a landowner of these genuine rights is not the creation of a collective right. It is theft. A reform of zoning based on the legitimacy of theft is not the sort of "reform" that an honest person will embrace.
After a rather disjointed trip through zoning history, environmental protection, growth controls, and feudalism—a trip enlivened with numerous tributes to private enterprise and property rights that become incongruous when the author's proposal is made—Nelson unveils his plan. He calls it a new form of "private tenure"—"collective neighborhood tenure." The alleged "collective property rights" appear as the property of the "neighborhood association." This supposedly private organization would have the power to levy taxes and adopt and enforce regulations on land use and behavior. Most importantly, for Nelson's argument, the neighborhood association would collectively decide if and when any zoning reclassification should occur in its territory. It would act to rezone when the price became high enough that the great majority of members couldn't refuse. Residents, however, would continue to exert effective control over the interiors of their homes—certainly a reassuring thought.
Nelson is deceiving himself—but probably not many of his readers—by trying to portray this invention as "private tenure." His neighborhood association is a neighborhood government. While a respectable case can be made for decentralizing governmental functions to a neighborhood level, no such case can be made for trying to disguise this fish—a carp, at that—as fowl.
Nelson seems to be the first, and hopefully the last, modern commentator to advocate the resurrection of simony, branded a mortal sin by Pope Gregory VII in 1073. Simony is the sale of ecclesiastical favors, and those who practiced it were consigned by Dante to one of the lower levels of the Inferno. These favors were not property, any more than anyone's power to forbid another's peaceful use of his land is property. But the sale of favors is precisely what Nelson advocates, not as an evil to be tolerated, but as a reform to be desired.
As a means of inserting certain limited free-market devices into socialism, Nelson's "reform" might have some merit. But in an economic system purportedly built upon a widespread distribution of private property rights, Nelson's attempt to pass off "collective neighborhood tenures" as a form of private property is little more than a Trojan Horse for increased collectivism. While decentralized oppression may be preferable to centralized oppression, it does not share any moral basis with freedom.
What, then, should be government's role in the housing industry? After reading Mayer and Seidel, one is hard put to disagree with Elbert Hubbard's pungent phrase: "Keep away from that wheelbarrow! What the hell do you know about machinery?"
Mr. McClaughry, a frequent REASON contributor, is a member of the National Commission on Neighborhoods.
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]]>So REASON decided to try to seek out a list of more suitable children's books for the family oriented toward individual liberty. We sent letters to the children's book editors of 36 publishing houses. First we explained a little about the libertarian point of view and about REASON. Then we invited them to submit for review any of their in-print books, suitable for children ages 2-10, which:
• avoid racism, sex-role stereotypes, and violence and brutality and promoted racial brotherhood, decency, nonsexist role choice, etc.;
• encourage self-directed personal growth and instincts for free cooperation and avoid glorification of authority, including and particularly governmental authority:
• avoid emphasis on peer-group norm setting or approval;
• contribute to character formation and development of moral awareness (without invoking religious authority);
• encourage acquisition of knowledge, clear thinking, imagination, and reading skills and have a coherent story line or plot.
We also promised that if the books submitted were stinkers, we would mercifully omit them from the review.
The results can be summarized briefly. Of the 36 publishers contacted, only 10 responded. We received a total of 29 books. Despite the fact that our letter to publishers specified ages 2-10 in three places—once underscored—7 of the 29 books were clearly for ages 10 or up. Another 5 books were not unsatisfactory but bore little in common with the REASON criteria, and 10 more ranged from vapid to utterly deplorable. Of the 29 books received, only 7 were judged worthy of favorable mention.
Perhaps the best of the "winners" is Johanna Johnston's Harriet and the Runaway Book (Harper & Row, ages 7-11, $5.95). This is a child's biography of the celebrated 19th-century author whose writings did so much to inflame public opinion against the evils of human slavery.
Harriet Beecher was one of eight children of the famous minister Lyman Beecher. As a child, she eagerly competed with her three older brothers, both in performing homestead chores and in the family debates Lyman Beecher encouraged around the dinner table. She became so accomplished for her age that Lyman Beecher would say, "Hattie should have been a boy!" At 13 young Hattie began as a teacher's aid—in Latin—with students often bigger than she.
When her father moved to teach at a seminary in Cincinnati, young Harriet had her first opportunity to observe the system of slavery, across the river in Kentucky. She was horrified. Soon she learned of the Underground Railroad and its tales of desperate escapes from the slavers' bloodhounds to freedom in Canada.
Harriet married Calvin Stowe, moved to Bowdoin College in Maine, and began to raise a large family. At this point in life many young women of her day would devote themselves to purely domestic pursuits. But Harriet was aflame with indignation at the Fugitive Slave Act. Her brothers Henry and Edward denounced slavery from the pulpits of New York and Boston. Harriet, now mother of six young children, determined to use her talent to strike down slavery. Her talent was the pen, coupled with her passionate opposition to an inhumane system that denied black Americans their natural right to freedom. The result was Uncle Tom's Cabin, the sensational novel that persuaded hundreds of thousands of Northerners that slavery was a moral evil that must be destroyed.
Ms. Johnston tells the story well, and Ronald Himler's evocative charcoal sketches do much to hold reader interest as the book builds to the climax of Emancipation. Harriet Beecher Stowe provides a fit subject, for she dared defy both the power of slavery and the power of sexism that disapproved of feminine participation in controversy. The book is highly recommended for young people, particularly girls.
Our second favorite is The Alligator and His Uncle Tooth, by Geoffrey Hayes (Harper & Row, ages 8-10 $5.95). This is the clever and whimsical story of a young alligator, who yearns to break out of his humdrum life as a clerk in his Auntie's stationery store, and his blacksheep Uncle Tooth, an unhappily retired sea captain.
As a youth, Tooth ran away from home to pursue a glorious quest at sea. He was determined, he tells his young nephew, to be the first to sail to the place where the sun sinks below the horizon. Through great—and amusing—deeds of cleverness and daring, Captain Tooth gains renown throughout the Seven Seas. In a dangerous voyage in search of a pirate treasure in the forbidden Sea of Spume, Tooth first wins, then loses, his heart's desire. Crushed, he retires to a shack on the beach, living in the past. But his nephew's enthusiasm rekindles the old alligator's spirit, and as the book closes the youngster and his grizzled uncle sail off together to perform great new deeds on the bounding main.
The Alligator and His Uncle Tooth is not only a clever and charming tale that will capture the imagination of young (and older) readers. It is also a song in praise of motivation, courage, stamina, ingenuity, decency, and high ideals that cannot fail to have a salutary effect on youngsters of both sexes. Highly recommended.
Three of our recommended books are the product of Lollipop Power (Chapel Hill, NC), a feminist collective dedicated to "writing, illustrating, and publishing books to counteract sex-stereotyped behavior and role models presented by society to young children." Not surprisingly, all of the Lollipop Power protagonists are females.
Ann Tompert's The Clever Princess (ages 5-9, $5/$2) is the best of the three. Princess Lorna's widowed father, the King, rules rather lackadaisically with very little imagination, along the lines of "anything not required is prohibited." Lorna thinks this regimentation is outrageously stupid. She spends a lot of time absorbing wisdom and magic lore from The Old Krone who lives in the nearby forest.
Finally the King decides it would be far more satisfying to go fishing than to police his kingdom, and he tells his counsellors that it is time to turn the kingdom over to Princess Lorna. The male-chauvinist-pig counsellors are aghast at the idea of a female ruler. They first insist that she be married off to some young man fit to rule as King, but Lorna is simply not interested in marriage. The counsellors, desperate, then persuade the King to require his daughter to pass a series of riddles and tasks. This she does with great cleverness, although she finally has to invoke The Old Krone's magic.
Lorna becomes Queen, repeals all the rigid and foolish laws of her father, and allows everyone to do his or her own thing. The kingdom blossoms with happiness and creativity, and everyone lives happily (and freely) ever after.
Amy and the Cloud Basket by Ellen Pratt (ages 3-8, $2) is the fantasy story of a girl who wants to help the males spoon clouds over the moon each day instead of hauling baskets of cloud-stuff up the mountain with the other females. The males are, as usual, aghast at the idea. Finally, when no one can think of any good reason not to let Amy do her own thing, all the sex-role stereotypes are abandoned. The story concludes, rather inexplicitly, with Amy bunked out with her friend Fred the Moon-Cow, revealing that the author has never spent much time in a cow barn.
Carlotta and the Scientist, the third Lollipop Power book, by Patricia Riley Lenthall (ages 5-9, $2), gets a somewhat more mixed review. (My four-year-old daughter loves it, which is why it stayed on the list.) Carlotta is a penguin, a species of creature distinguished by the fact that daddy penguins hatch the eggs while the mommy penguins march off to sea to collect fish for the family. (Discovery of this fact may have been a high-water mark of feminist research.) Carlotta is inquisitive, and for her curiosity is much abused by her peer group. On her way to the sea, she discovers a (female) scientist lying on the ice, a mile from her base camp. She has, it seems, twisted her ankle, and from all appearances she plans to lie there whining until she freezes solid.
The helpful Carlotta assists the scientist to return to camp, where she is repaired while Carlotta explores the curious ways of humans. Finally the expedition members take Carlotta back to her faithful husband and now-hatched chick, along with a large bag of fish.
My problem with Carlotta is the sorry picture it paints of the injured female scientist. Here she is, only one mile from her camp, with a sprained ankle. She is lying on the ice "whining." Now when one thinks of Sir Douglas Mawson's desperate and solitary march across 90 miles of Antarctic wastes, pausing now and then to pour the blood out of his boots and tape the soles of his feet back on to the uppers (not his boots, his feet), and painfully pulling himself out of a crevasse in which he is dangling, exhausted, on a thin rope at 40 degrees below zero, the whining female scientist presents a rather pitiful contrast. One cannot help but believe that Harriet Beecher, Uncle Tooth, and the clever Princess Lorna would have improved considerably on this sorry performance.
Elizabeth Catches a Fish by Jane Resh Thomas (Seabury Press, ages 6-9, $6.95) is the story of a very small adventure by a seven-year-old girl. Her father gets her a fishing rod for her birthday, and they go out at the crack of dawn to try it out. It is raining, cold, and uncomfortable, and Elizabeth more than once longs for the warm hearth of home. But she is determined, and sure enough, she finally lands a big one that is much admired by the boatman, the restaurant crowd, and her family. The story is very simple but illustrates the virtues of determination, perseverance, and mastery of new skills.
The last of the seven is Eleanor B. Heady's Safiri the Singer (Follett, ages 8-10, $5.95). This is a traditional East African Aesop's Fables, as told by a wandering "safiri," or storyteller. Like Aesop, Safiri relates wondrous tales of the animals of the forest that illustrate virtue and folly. Although the setting and character names will be unfamiliar to young Americans, the tales are readily understandable and well written for young readers.
This project has been something of a disappointment, for several reasons. The first is the low rate of response from publishers. We have no way of knowing whether the nonresponding publishers simply were not interested or whether they conscientiously searched their lists of titles without being able to produce even one suitable book for review.
The second disappointment lies in what we learned about the mentality of editors who did submit review copies. Despite our repeated insistence that the books be suitable for ages 2-10, we received seven books that clearly aimed at older children. This made us wonder whether many of the editors could read. Then there were the 10 books we received that could not, even by the most liberal construction, come close to complying with our criteria. Did the editors really believe that those books met those criteria? This troublesome question raises real doubts about the mentality of children's book editors.
The third disappointment lies in the all-too-abbreviated repertoire unearthed by our efforts. We are sure that there must be many more children's books in print that meet REASON's criteria. Unfortunately, we can not think of any better way to identify them for the benefit of the parents. Several REASON readers submitted titles (see box) of books they found commendable, but these books were not submitted for review by their publishers.
Well, maybe some other time we can make a bigger catch.
John McClaughry is president of the Institute for Liberty and Community in Concord, Vermont.
CHILDREN'S BOOKS RECOMMENDED BY REASON READERS
The Carrot Seed. Ruth Krauss. Scholastic Book Services, 1971. Ages 5-8.
Ben Goes into Business. Marilyn Hirsh. Holiday House, 1973. Ages 6-10. $4.95.
The Toothpaste Millionaire. Jean Merrill. Houghton Mifflin, 1974. Ages 7-10. $6.95.
The Man Who Made Fine Tops. Marie Winn. Simon & Schuster, 1970. Ages 5-8. $2.95.
A Mouse To Be Free. Joyce W. Warren. Sea Cliff Press, 1973. Ages 6-9. Avon Paperback, 1975. $1.25.
Nobody's Family Is Going to Change. Louise Fitzhugh. Dell, 1975. Ages 7-10. $1.50 (paper).
Lift Her Up Tenderly. Robert LeFevre. Pine Tree Press, 1976. Ages 8-10. $6.95.
Anatole. Eve Titus. McGraw Hill, 1956. Ages 3-6. $5.95.
The post A Few Good Children's Books appeared first on Reason.com.
]]>The movement has a catechism of slogans. "Land is a resource, not a commodity." "The public has rights as well as property owners." "Land 'owners' are really land holders, who must exercise stewardship for the benefit of the broader community and unborn generations." Leaving the slogans aside, however, it is clear that the operational goal of this movement is the complete centralization of control over what until now have been known as private rights in land.
The supreme irony of this movement is its determination to move forward by moving backward—backward to feudalism. For its advocates' ideal society is one in which all property in land is not held in fee simple, as we now know it, but "of a superior." That superior is no longer the king—since in a moment of possible irrationality our forefathers scuttled the idea of monarchy—but the State, a less personal but more permanent institution.
Since Vermont has by now run through the full cycle of environmental hysteria, state development controls, a statewide zoning battle, a catastrophic defeat, a sober reappraisal, and the slow beginning of a serious search for alternatives, it may well prove instructive to describe the land-use control movement in Vermont since 1969. It might also shed some light on the direction of Federal legislation, since the Vermont "process" was frequently lauded as a model of that envisioned under the Jackson-Udall bill.
In 1968 the nation's economy was in high gear. People had money to spend, and many of those living the larger cities of the Eastern seaboard began to consider buying second homes in relatively accessible yet unspoiled rural areas. Vermont had long been a beautiful but somewhat distant backwater, but in the mid-sixties something new came to Vermont—the interstate highway system. By 1968 southern Vermont was a mere two hours' drive from Boston, four hours' from New York City. With its scenery, skiing, summer sports, and relatively cheap land, it suddenly became a mecca for urban expatriates and vacation-home buyers.
By summer of 1968 second-home developers were gobbling up southern Vermont's countryside, leading Gov. Deane C. Davis to name a Commission on Environmental Control in May 1969. By the fall of that year the commission, chaired by Representative (now Senator) Arthur Gibb, issued its report, which formed the basis for enactment of Act 250 by the 1970 legislature.
That the Gibb Commission might have proposed a libertarian-oriented solution was, unfortunately, far too much to hope for. It could, however, have relied upon the traditional Vermont practice of local government control of development, that is, decentralized coercion. Indeed, as of mid-1968 Vermont towns had sweeping powers to control development. But the Gibb Commission did not believe that local people would implement sufficiently stringent local rules to guide large developments.
So the commission embarked on state control over development. In a gesture to local control it recommended the creation of district environmental commissions, staffed by laymen, to pass on permits. The criteria for the issuance of permits would be written into state law. A State Environmental Board would prepare guidelines for the permit process and act as an appeals board. Finally, two important plans were to be prepared for subsequent legislative approval—the "capability and development plan" and the "land-use plan."
Initially it was intended that the first be a sort of master plan for the state, indicating which kinds of development were best suited to which areas in light of numerous policy decisions. The plan made public by the Environmental Board in November 1972 made only a feeble attempt in this direction. The sweeping statements in the plan alarmed opponents of centralized planning, while the lack of detail and general vagueness dismayed the environmentalists.
The result was something of a legislative debacle. The capability and development plan submitted by the board was promptly scrapped, as was an equally inchoate land-use plan. In its place came a bewildering series of legislative drafts. Finally, on the last day of the 1973 legislative session, a bill bearing the name of a "capability and development plan" squeaked through to final passage. As the state planning director later admitted, however, the bill had little of a "capability and development plan" in it. Instead it added numerous refinements to the permit criteria section of Act 250 and stated 19 policies for future land-use planning. These policies, however, had no regulatory force and were not codified into the state statutes.
The other plan, the "land-use plan," was to be state zoning, pure and simple. It was to "consist of a map and statements of present and prospective land uses based on the capability and development plan,…to be further implemented at the local level by authorized land use controls such as subdivision regulations and zoning." The appointed State Environmental Board would supervise the process.
The first attempt at a land-use plan, unveiled in late 1972, was so inept a document that neither outgoing Governor Davis nor incoming Gov. Thomas P. Salmon was willing to sign it. But it underscored an important fact: the ultimate end of the "Act 250 process" was not merely requiring environmental permits from "larger developers" but the complete centralization of power over the use and exchange of land.
For the first two and a half years after enactment of the Act 250 land-use plan there had been no organized opposition, although there was some unhappiness among developers. Ironically it was not that act at all but a related measure, the Health Department subdivision regulations, that provoked the organization of opposition, culminating in the smashing defeat of Act 250.
To stall development until a comprehensive law could be passed, Governor Davis in September 1969 approved the adoption by his health commissioner of "subdivision regulations." Their ostensible purpose was to prevent the subdivision of land into lots lacking adequate sewage disposal capability. November 1972 saw the adoption of horrendous new subdivision regulations requiring, for example, a costly percolation test on every acre of a thousand-acre parcel divided into three parcels for sale. Bearing only marginal relation to sewage disposal, the new regulations were clearly designed to prevent subdivision of land.
At Lyndonville, in the state's relatively undeveloped northeast kingdom, 75 citizens came together in a spontaneous protest meeting. About a third of those present were associated with the real estate business. Others were just landowners, large and small. Many were notably conservation-minded, although that was more than the environmentally oriented daily press was willing to concede. The meeting resulted in the formation of the Landowners Steering Committee to fight back against the bureaucrats. To get public attention the group pledged to post some 100,000 acres of Vermont land against hunting, fishing, or snowmobiling.
While the cause of the protest meeting was subdivision regulations, the Steering Committee quickly recognized that far more of the same kind of thing lay on the horizon. The committee adopted a reasonable and balanced five-point program:
Despite this very moderate program the Steering Committee was roasted in the daily press. Its members were castigated as irresponsible hucksters and polluters, hell-bent on personal profit at the expense of present and future generations.
The committee quickly broadened its board to include representatives from 10 of Vermont's 14 counties and launched a series of public meetings and radio spots to alert Vermonters to the issues. The environmental organizations responded with meetings of their own and attempts to suppress the opponents. Due in part to the vigorous efforts of the Steering Committee and circulation of some 10,000 copies of its tabloid newspaper, the Vermont Watchman, the 1973 "capability and development plan" emerged from the legislature minus most of its teeth. Its main significance was that it was admittedly the legal foundation for the land-use plan to be presented in 1974.
Following the 1973 legislative session Governor Salmon called a press conference to announce that he intended to take personal direction of the program to develop a land-use plan for 1974. From the beginning, however, the State Planning Office and the State Environmental Board engaged in a running battle over the form of the plan to be produced. To the delight of the opposition, the Governor seemed either unwilling or unable to insist on a resolution of these differences.
In September 1973 the Planning Office, in conjunction with the various regional planning commissions, conducted a series of hearings on its proposal. Scarcely had these hearings concluded when the Environmental Board took to the field for its own set of hearings. Expressly disavowing the Planning Office draft, the board offered no draft whatsoever. The purpose of the hearings was merely to gather opinion, said the board; then it would retire to its chambers and bring forth the plan for submission to the governor and the legislature. This rather cavalier approach produced prompt criticism, and the board was ultimately forced to produce a draft plan and conduct several additional field hearings on it. Now, with the board's intentions revealed, public reaction arose quickly.
The proposal was simply a state zoning scheme. The state was to be subdivided into seven zones, each with its own set of purposes, allowed uses, prohibited uses, and density limitations. Local towns were given a year to prepare a zoning map "furthering the purposes of the State Land Use Plan." If they failed to do so the State Environmental Board would supervise the zoning of the town. To satisfy the board, a town plan would have to comply with 16 detailed criteria. Any mention of compensating landowners for violated property rights was scrupulously avoided.
A howl of protest went up at the unveiling of this plan—not only from landowners but also from local government officials. The plan's emphasis on keeping rural areas undeveloped clearly meant that growth in taxable development would be directed to regional centers. The plan promised tax chaos, as the restrictions changed the value of land drastically and unpredictably. It virtually ordered the towns to provide adequate housing for such people as the state thought ought to be living there.
The uncautious declaration by the chairman of the Environmental Board that "local control is out of the Dark Ages" did much to inspire and enlarge the opposition. So did the deliberate refusal of the board to produce the map clearly called for by the statute. Key legislators gave prompt notice to the board that if it intended to zone everyone's property it would have to present the required map to the legislature. Two lawsuits to force the board to produce the map were filed, and although both were dismissed on technical grounds they further dramatized the issue.
Throughout this furor Governor Salmon sided with the Environmental Board. Before a sportsmen's gathering in January he said that publication of the zoning maps would kill the whole plan—and that since his plan was too important to suffer this fate at the hands of an outraged citizenry, no maps would be published!
But pressure built up rapidly, until the board reluctantly asked the Planning Office to bring forth the maps, which were released in mid-February. Due to the necessary imprecision in zoning a whole state from the capital and to the extreme haste in which the maps were completed, they carried countless errors that were immediately detected by local officials and landowners. But more importantly the maps dramatized the land-use plan as statewide zoning, a charge frequently made but until that point not clearly proven.
The board did another thing in its draft plan that produced a new wave of opposition. Since 1971 the board had been concerned about the inapplicability of the land-use plan to developments too small to be required to obtain a permit, that is, with less than 10 units of housing. So in October 1972 it adopted a resolution asking the legislature to amend the law to make it applicable to even the surveying of lot lines on a single lot! Not only did the legislature not honor this request, it responded by inserting in the law a sentence affirming that the land-use plan would explicitly not apply to anything but "developments" as defined in the act—those with 10 or more housing units, and industrial and commercial development on 10 or more acres (one acre in unzoned towns).
When the board began to prepare a land-use plan for 1974, this provision caused great perplexity. How could a meaningful statewide zoning plan be put forth, argued the planners, when anyone might build nine houses in any open field without being governed by the restrictions in the plan? The board decided to ignore this provision of the law by presenting a plan that covered every single acre, every single lot, in the state of Vermont.
Within 60 days of its approval by the Governor and within 40 days of the publication of the maps, the 1974 Land Use Plan was stone-cold dead. The end came at a tumultuous public hearing before the House Natural Resources Committee on February 26, 1974. Farmers, landowners, and just plain citizens flocked to Montpelier 800 strong to berate the plan for over four hours, while only a handful of special-interest representatives, principally architects, rose to defend it. The committee, which had voted in favor of a watered-down version of the plan by a 7-to-4 margin the previous day, voted 9 to 2 the following day to shelve the whole project for 1974.
Recognizing that the map was a major cause of the public uproar, Salmon quietly caused to be introduced into the house a modest measure eliminating the requirement that any state land-use plan "shall consist of a map." This measure was dutifully brought to the floor by the Natural Resources Committee, where, in the words of the ardently proenvironment Rutland Herald it was "belted out of sight." As a desperate effort to salvage something from the legislature, the Governor finally pried from it a bill to require Act 250 development permits whenever more than five lots were to be sold at public auction. This wholly illogical piece of legislation was based on the idea that, since public auctions are highly visible, imposing regulations on them would satisfy the more distraught environmentalists favoring an embargo on the sale of land by other people.
Finally, the legislature established by resolution a Land Use Study Committee, charging it to meet during the eight-month recess period "to review all laws, rules, and regulations relating to land use planning." Despite its mandate to review the entire subject, the majority of the committee voted to allow discussion only of zoning and capital-investment controls. Its final report was little more than a watered-down version of the defeated land-use plan, and was never seriously considered.
Disappointed with the committee's product, Governor Salmon promptly began work on his own version for 1975, placing the responsibility, not on the Environmental Board, but on the State Planning Office. This had the incidental effect of permitting circumvention of the requirements of Act 250 that any land-use plan be aired at public hearings in each of the nine environmental control districts and that it be submitted to the more than 200 town and regional planning commissions for a 30-day review period before being sent to the legislature.
On January 17, 1975, Salmon unveiled his new model to the public. It preserved the basic state-supervised zoning scheme intact, relaxing various requirements as to designation of zones, deadlines for compliance, burden of proof, and the imposition of state controls in the case of towns whose citizens were so backward and reactionary as to fail to zone themselves to state satisfaction on schedule.
The Salmon plan was introduced in the General Assembly, along with the plan favored by a majority of the summer Land Use Study Committee. Despite the election of a sharply increased number of legislators of the Governor's Democratic party, the wave of enthusiasm so evident in 1972 was strikingly absent. Indeed, the first chairman of the Environmental Board came before the legislature to state in no uncertain terms that no regulatory land-use plan of any kind should be adopted. Instead, he said, the state should prepare a sound technical data base as to the environmental impact of development and create controls over public investments by public bodies at all levels. He continued to support the present permit system for so-called larger developments. Meanwhile, the chief drafter of the original Act 250 and its various amendments publicly stated that the 1975 legislature should not attempt to adopt any kind of land-use plan.
With these two defections the cause was seriously weakened. When the 1975 legislature adjourned without taking action on land use, the state planning director jumped ship, advising the Governor not to attempt yet another plan in 1976. In July the Environmental Board's chairman, perhaps the most vigorous booster of statewide zoning, caved in. This rash of desertions left Salmon a noticeably isolated advocate of a state land-use plan, and late in the year he announced that he would not ask the 1976 legislature to take any action.
The House Natural Resources Committee, however, made one last attempt, introducing a bill late in the 1975 session, basically the 1974 Salmon plan with every provision watered down as far as possible. The bill was buried in the House Ways and Means Committee upon adjournment of the 1975 session in April. When it was ultimately dragged to the house floor in March 1976 the committee amendments were defeated on a 73-to-65 vote, after which the bill itself was overwhelmingly rejected by voice vote.
Over the ensuing weekend the chief sponsors of the bill worked desperately to find a member who would switch his vote, and the following Monday the bill was brought back for reconsideration on an 82-to-65 vote. The Governor now leaped back into the act. Notwithstanding his earlier abandonment of support for any land-use control effort in 1976, he called Democratic house leaders into his office and pleaded for passage of the measure. Admittedly, he said, the bill was toothless and largely symbolic; but it should be passed to shore up Vermont's sagging reputation among environmental groups across the nation.
On March 16, after a bloody floor debate, the house passed the bill by a four-vote margin. It received final approval by the same margin the following day, but not until an amendment had stripped from it the only overtly coercive section: a provision that Federal and state permits and grant-in-aid funds would be cut off if local governments failed to impose satisfactory zoning by 1981.
As passed by the house, the bill merely required that every town designate which lands lay in five state-specified zones. Local zoning was not affected by any such designation, however. In passing on land development permits, the district environmental commissions could deny a permit if the project was not compatible with the list of uses specified in the legislation for each type of zone. This provision clearly would prevent any further ski-area development, as all suitable land in the state above 2,500 feet was defined to be in "conservation" zones, where practically no use was to be allowed.
The measure was quickly reported to the senate, but opponents, including house members, ski-area operators, farmers, and other landowners, actively urged that the bill be killed. On March 24 the bill was quietly shipped off to the Senate Agriculture Committee, where it died a natural death with the adjournment of the legislature at the end of the week.
With this overview of the six-year Vermont experience it is now appropriate to identify some of the important features of the campaign to centralize power over land. While there is no reason to believe that the same features will appear in every state afflicted by the New Feudalism, or in Federal land-use control movements, the list is nonetheless instructive.
Underlying the movement for the New Feudalism is the concept of "social property," the polar opposite to the "sole and despotic dominion" claimed for the freeholder by Blackstone. Under the "social property" concept, common both to feudalism and socialism, land is always held at the sufferance of a superior. In olden times there was a long chain of superiors starting at the top with the king and extending downward to serf. Under the New Feudalism the ultimate superior is the state—or possibly the Federal—government. The once free and independent landowner becomes the modern counterpart of the serf.
The ideas of freehold and social property necessarily tend to approach each other. No freeholder, Blackstone notwithstanding, may use his property in a manner infringing upon the property rights of another. Nor may he claim access to facilities provided by the public on his, rather than the public's, terms. But under freehold land ownership, the presumption favors the use, enjoyment, power to convey, and power to exclude of the landowner of record, and the various qualifications, though not unimportant, are incidental.
Under social property, by contrast, land is presumed to belong to society; so-called land "owners" are merely land "holders" with a temporary usufruct, subject to termination upon society's demand. But since continuous governmental management of every square foot and every use is not administratively feasible, the social property school concedes to the "holder" the privilege (though not the right) to engage in various small-scale and relatively innocuous uses without obtaining governmental permission. But such "freedom" derives only from administrative limitations—there is no right of the "holder" to act independently.
In Vermont, with a relatively conservative political history, the "social property" theory was rarely enunciated with any great precision. It is even possible that some of the advocates of land controls sincerely failed to recognize that their proposals were based on such a doctrine. Some, however, were willing to bite this bullet. In the April 16, 1973, Boston Globe the former chairman of Vermont's House Appropriations Committee was quoted: "I advocate nothing less than doing away with private ownership as it concerns real estate. We will have to change our legal philosophy to do that. We will have to stop thinking of land ownership and start thinking of land holdership." And a letter in the Rutland Herald, July 24, 1974, he declared: "The property you possess in the form of real estate does not belong to you. It belongs to the government and the government is the people."
The preamble of every environmental bill sets forth a series of lofty goals that it is said society must achieve—or else. It is significant that individual liberty and a republican form of government never appear in such a list, although at least a few Orwellian attempts have been made to equate "planning" with "freedom."
Section 6042 of Vermont's Act 250 is a classic example of the recitation of lofty goals.
The board shall adopt a capability and development plan…with the general purpose of guiding and accomplishing a coordinated, efficient and economic development of the state, which will, in accordance with present and future needs and resources, best promote the health, safety, order, convenience, prosperity and welfare of the inhabitants, as well as efficiency and economy in the process of development, including but not limited to, such distribution of population and of the uses of the land for urbanization, trade, industry, habitation, recreation, agriculture, forestry and other uses as will tend to create conditions favorable to transportation, health, safety, civic activities and educational and cultural opportunities, reduce the wastes of financial and human resources which result from either excessive congestion or excessive scattering of population.…
There is to be a bureaucracy charged with achieving those goals. That bureaucracy will never be able to achieve those goals so long as free citizens go about their business in ignorance of the Grand Design revealed to, or at the least prepared by, the planners. Thus the combination of lofty, unattainable goals and a bureaucracy charged with their achievement must necessarily lead to steadily advancing controls over individual freedom of action. There can be no logical end to this process.
The bane of Grand Designers is local control over land use and development. What satisfied them in 1925, when the Grand Design was envisioned only at the local level, is now anathema. That control process has been captured by local interests oblivious to the needs of the "broader community"—most commonly the region or the state, but occasionally the whole of North America and even all of "Spaceship Earth." The time has come for the government representing the "broader community" to at least supervise the local land-use control process, and perhaps to recover the police power delegated decades ago and exercise it from some more elevated vantage point.
There can be little doubt that local governments have in many cases used the police power unwisely and even corruptly. But the thought that perhaps the defect lies not in the level of government but in the exercise of the police power itself rarely seems to occur to the New Feudalists.
There is a host of techniques for guiding responsible growth that do not require a New Feudalism: public investment controls, transferable development rights, graduated taxation, public acquisition and land banking, a reformulation of nuisance law, guaranteed value and compensated regulation plans, and an institutionalized private covenant system.
Rejection of these alternatives by Vermont environmentalists was significant, for it revealed that their goal was not so much protecting the environment, guiding responsible growth, etc. but the concentration of power over the use and exchange of privately owned land. Throughout the six-year struggle they steadfastly refused to even discuss anything other than uncompensated police-power controls.
The first round in any environmental control battle will almost necessarily be an impassioned appeal to "stop pollution" and "save the environment" for "our children's children" against the "ravages of uncontrolled development." Any voices of balanced judgment are banded together with "unscrupulous developers and land speculators."
A second ingredient might be called clamor generating. This is an attempt to persuade the average citizen not only that he is deeply concerned about growth and development—which many citizens are—but also that increasing public controls over private property is the sole solution to the problem. The Vermont Natural Resources Council obtained a grant of $120,000 in 1971 from the Ford Foundation to underwrite an Environmental Planning Information Center.
According to the Ford Foundation Letter announcing the grant, a major function of the council was "to ensure the widest communication and understanding of facts and maximum public participation" before a plan was submitted to Vermont's legislature. For openers, the program produced a slide show entitled "So Goes Vermont…" As noted in a report of the same name, prepared by The Conservation Foundation (Washington, D.C.): "The sound track's only voices were those of Vermonters who watched brutal subdivision builders chop away at their land and expressed their hope that Act 250 could put a stop to haphazard growth." "So Goes Vermont…" was shown extensively at public meetings and on television.
Third, following the generation of sufficient clamor for stopping pollution, comes the bait and switch so beloved by discount merchandisers. Once Vermonters were foaming at the mouth about the iniquity of pollution, Governor Salmon pulled the switch. Instead of antipollution laws, he explained, the real need is to put the state in charge of growth. The state must have the power to veto growth, he stated, even where the proposed development meets ecological standards.
Fourth, the marketing strategy calls for outspoken vilification of opponents. It is necessary to portray opponents of state land-use controls as, to use Governor Salmon's terms, "land rapists and fast buck artists," whose every argument is unworthy of a public hearing.
Perhaps the nadir of this technique was reached on February 15, 1973, when the environmental conservation secretary launched this missile at the Landowners Steering Committee: "This group is using tactics we have seen throughout the nation—techniques of fear, distrust, distortion, hysteria, misstatement, and innuendo. All these far out types, regardless of what they are pushing—crime, drugs, prostitution, communism, fascism, or land speculation—use these same techniques and then try to hide behind our Constitution."
Fifth, the legislative component of the strategy calls for the progressive expansion of the controls to every single lot in the state. Otherwise, small operators will "nickel and dime" the environment to death. The Grand Design cannot be effected if small operators can do as they please.
Sixth, the map is to be avoided at all costs. Production of a map has a strong impact on the public. It dramatizes that a state land-use plan is state zoning, something backers in Vermont were at pains to deny until the appearance of the map made further protest pointless. The last-ditch attempt of Governor Salmon to eliminate the map requirement in the 1974 legislature underscores the truth of this observation.
The central thrust of the Vermont experience was to replace freehold property with social property, the desirability of which is the basic tenet of the New Feudalism. The Old Feudalism was not without virtue. It meant military security in an age of brigandage and invasion. It curbed economic fluctuations by preventing alienability of land. It was a strong force for social stability. It imposed a system of mutual rights and responsibilities tied to the use of land, some of which might profitably be restored in our own day.
The problem of the Old Feudalism was that it stifled freedom, productivity, and self-government. And that will also be the problem of the New Feudalism. If fully implemented, it will mean the concentration of all power to use, exchange, and perhaps even to enclose land in the hands of a governmental bureaucracy. With the government in control of all land-related economic activity, in addition to all the functions already under governmental control, clearly property would cease to be the basis not only of economic activity but also of individual liberty. Could John Adams, James Madison, Thomas Jefferson, or even Alexander Hamilton have conceived of a republic of free citizens in which the State holds full control over land? Merely to ask such a question is to answer in the negative.
The choice, happily, is not between the New Feudalism and destruction of the environment and natural resources. As noted above, a host of techniques exist for guiding responsible land use and growth—techniques that may not be wholly laissez-faire but are not founded on the doctrine of social property. After six years of near-hysteric thrashing about in pursuit of a restored feudal society, the tide in Vermont has now turned in the direction of alternative techniques. The same result can occur in other states-provided the New Feudalism can be held off long enough for wiser heads to prevail.
John McClaughry is president of the Institute for Liberty and Community, Concord, Vermont. This article is adapted from his "The New Feudalism," which appeared in Environmental Law 5, No. 675 (1975), © Environmental Law, Inc.
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]]>Richard Cornuelle is the latest in a long line of modern-day Americans who have tuned out and turned on. Unlike countless young people awash in Consciousness III, however, Cornuelle had actually amounted to something before chucking it all. He rose through corporate and foundation ranks to the awesome position of Executive Vice President of the National Association of Manufacturers, a title which, Cornuelle admits, tended to produce fear and trembling among people introduced to him at cocktail parties.
But Cornuelle, after an intense period of soul searching—or, more accurately, searching for his increasingly elusive soul—finally quit. He gave up the perquisites of his plush office, which included a "girl" to perform chores, a skyscraper suite with a window, and the privilege of supervising the annual printing of "Industry Believes." He let his hair grow, moved out of the Metropolitan Club to groovier quarters, and began to dig life.
This hegira from orthodoxy was accompanied by the recognition that authority is not only bad for you and your family, but also doesn't work. We are in the throes of a new revolution, Cornuelle says. It is a widespread, grassroots rebellion against all sorts of authority. America is becoming unmanageable because people don't want to be managed any more. The Consciousness III attitude that Charles Reich discovered among the campus generation is rapidly pervading our entire society.
Will society collapse from this defiance of authority? No, says Cornuelle, there is hope because millions of people across this land keep on quietly getting their jobs done, building their communities, and creating reasonably satisfactory lives for their families, all by generally ignoring edicts and fiats imposed upon them by all sorts of would-be managers.
Government, business, foundations and the media all come in for some sharp words. The media limit coverage to events of importance, thereby neglecting the millions of small non-events which, taken together, constitute a leaderless revolution in American life. The foundations spend their funds to start up projects which they hope the government will take over in a year or two, or on exercises like "Airmail from God," a project one of Cornuelle's foundations funded some years ago whereby Protestant literature was leaflet-bombed on Catholic provinces of Mexico. (It should be noted, however, that some of the foundation projects that Cornuelle finds meaningful—such as "building self-esteem among female flight attendants" and "a skiing program for blind people," might well be ranked with the salvation-through-litter program he ridicules.)
Despite the obligatory rhetoric, Cornuelle reports from considerable experience, businessmen have "never hesitated for a moment to conspire with government officials to shelter themselves from the harsher half of the free enterprise gospel," i.e., competition. The worst report card of all, not surprisingly, goes to government, particularly the Federal government. Besides meddling unconscionably, and usually disastrously, in social and economic matters, government also obstructs peoples' efforts to deal with their own problems.
Citing with approval recent advances in performance contracting and voucher systems, Cornuelle states that the role of the government should be "to modify the atmosphere of incentives in which people and institutions function." REASON readers may find this an insufficient policy prescription. For it is precisely the determination of governments to "modify incentives" in every area of human activity that has gotten us into this sorry state. It might well be better for government to continue disincentives to threats to life, liberty, and property, and leave their presently over-managed subjects free to grapple with the problems of their lives, among which foolish, expensive and coercive governmental schemes would no longer be included.
De-Managing America, for all its good intentions, is something of a series of Rotary Club addresses-glimpses, snippets, and anecdotes not developed in any depth. Each chapter would doubtless make for an entertaining half hour between the orange sherbet and the 1:15 mandatory adjournment. But as a serious analysis of our overly managed society, the book fails to offer any satisfactory explanation for the genesis of this anti-managerial revolution, and it fails to distinguish between counterproductive, oppressive and stupid management on one hand, and the necessary organization of the productive process on the other.
Cornuelle's theme is one that will win the assent of libertarians, but a convincing explanation of the de-management rebellion it is not, nor is it a persuasive, documented guidebook to redesigning our institutions to make room for a salutary dose of anarchy.
John McClaughry is president of the Institute for Liberty and Community in Concord, VT.
The post De-Managing America appeared first on Reason.com.
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