The Important Distinction Between Political and Personal Morality

            Within the realm of morality we can distinguish two broad categories of moral tenets. The first are moral tenets, the general observance of which we believe would result in greater well-being for most members of society, and which we believe would best be enforced through physical coercion or the threat thereof, usually through the agency of a government. We may call these tenets of political morality. The second are moral tenets, the general observance of which we believe would result in greater societal well-being for most members of society, but which we believe would best not be enforced through physical coercion or the threat thereof, but rather instilled through persuasion and deterred through the disapprobation of other members of society. We may call these tenets of personal morality.

            

           Thus, the ethical thinker has two jobs to accomplish with regards to each moral tenet he favours. First, he must prove that the general observance of that moral tenet would result in greater well-being for most members of society. He must prove the utilitarian credentials of the tenet as a general rule in order to establish it as a legitimate moral tenet. Secondly, he must try to determine whether the moral tenet would best be enforced through physical coercion or the threat thereof, or whether this would be inexpedient and the tenet would best be operationalized through persuasion and disapprobation. He must determine whether the tenet should be classified as political or personal morality.

             

           As regular readers of this blog will know by now, I think that the general observance of the moral tenet of respect for private property and of general individual freedom from aggressive physical coercion in most regards, would result in significantly greater well-being for most members of society than a lack of this observance. I think that because of its relative clarity as an enforceable moral tenet and because of the serious danger to other individuals that can result from even a small number of people who don’t abide by this tenet of morality, this tenet is best enforced through physical coercion or the threat thereof. I would thus classify this tenet as a tenet of political morality, and as the pre-eminent one at that.

            

           Nevertheless, I by no means think that it is the only moral tenet that can be justified on utilitarian grounds. Others, such as general respect for and politeness towards others, familial solidarity, non-contractual reciprocity between friends, showing gratitude when another does favours for you, and more, I also consider sufficiently backed by utilitarian credentials to count as tenets of morality. But, as mentioned above, establishing something as a tenet of morality is only half the job. Because I don’t think that these tenets of morality either can or should be enforced through physical coercion or the threat thereof, I would classify them as tenets of personal morality. People who believe in these tenets should try to convince others to follow them, and can show disapprobation or can societally alienate those who refuse to follow these tenets, but they shouldn’t try to enforce these tenets through physical coercion or the threat thereof.

            

           Why shouldn’t they be enforced through physical coercion or the threat thereof? Why should private property rights and rights to individual freedom be enforced through physical force and tenets such as politeness, familial solidarity, etc… should not? For the remainder of this post, I will give various reasons why I think that political morality should by and large be confined to the tenets of respect for private property and individual freedom, and why many tenets of ‘conservative’ or ‘leftist’ morality discussed today are either not legitimate tenets of morality at all or should be classified as tenets of personal, not political, morality.

1. Many tenets of ‘conservative’ or ‘leftist’ morality fail the test of rough direct utility cost-benefit analyses:

            

           Consider the issue of gay marriage. American conservatives think that homosexuality is ‘unchristian’ and that they should not be allowed to pervert the ‘sacred’ meaning of marriage. Gay marriage is thus, according to conservatives, immoral. Gay people, on the other hand, typically argue that homosexuality is an individual characteristic, like race or gender, and possessing an individual characteristic shouldn’t bar people from getting officially married and enjoying the benefits thereof. Gay marriage thus has the exact same moral status as straight marriage.

            

           Let us now consider the utilitarian credentials of this conservative ‘tenet of morality’. Whether classed as a tenet of political or personal morality, even the cost-benefit analysis in terms of direct utility effects is probably unfavourable to this tenet. If gay marriage is outlawed or generally frowned upon, then gay people, about 10% of the North American population, are prevented or seriously discouraged from entering an important, voluntary, mutually beneficial bond with another, and prevented from enjoying the legal status thereof. This would probably result in a relatively serious hit to both people’s happiness, or utility. What is gained by the moral tenet? The presumably relatively minor benefit of homophobes being able to believe that they now live in a more ‘moral’ or more ‘Christian’ country, and deriving a small amount of utility from this belief. The tenet significantly harms gay people seeking to get married, in order to give homophobes a tiny, perceptual, benefit. By producing significantly more direct misery than direct happiness, this ‘moral tenet’ fails the very first utilitarian test that any moral tenet must go through, and thus must be rejected wholesale.

      

           A similar situation probably applies for such tenets of ‘conservative’ morality as hatred of pornography, no sex before marriage, women must be housewives, etc…

            

            It is not similar when we discuss the respect for private property tenet of morality. Here, all people who have claims to private property are clearly directly benefitted, while only those who would like to take away the property of others are directly harmed. At this superficial direct level, respect for private property does not yet come away with a resounding utilitarian victory, but it probably does still win a small one, given that most people experience more unhappiness from losing what they already have than they experience in happiness from gaining what they do not yet have, other things equal.

2. Even if they pass the direct utility test, it is less likely that it can be determined that tenets of ‘conservative’ or ‘leftist’ morality definitely have net benefits when enforced as general rules than it is for the tenet of respect for private property:

            

           Consider a country that could benefit from an increase in its population. In this country at this time, it is likely that the tenet of ‘conservative’ morality that contraception and abortion are evil might pass the direct utility test. Parents may have to put up with some unwanted children, but the rest of the population gains from the increase in the division of labour and rise in the general standard of living that this population increase will bring in its wake. With this, have we proved that this is a legitimate tenet of morality? We have not yet, because in order to have useful behavioural effects, codes of morality must be based on general, universal rules, not situational, particularistic ones. Contraception and abortion are evil, while having many offspring is good, when in an under-populated country, but contraception and abortion are good, while having many offspring is evil, when in an over-populated country. This formulation is highly unsatisfactory as a moral rule because it is too situational, and will not be accepted as a fixed standard for evaluating good and evil by the human mind. Rather, if we wish to have a tenet of morality on the issue, it either has to be: ‘Contraception and abortion are good’, or, ‘Contraception and abortion are evil’.

            

             If ‘Contraception and abortion are evil’ is accepted as a moral tenet by people living in an overpopulated country, and especially if accepted by poor people in an overpopulated country filled by poor people, the results are disastrous, whether accepted as a tenet of political or of personal morality. It is unclear whether accepting this tenet as a general, universal rule of morality will result in net benefits or net costs, it depends in what particular situations it is applied in most instances. In this case, it is likely that the tenet will have net costs, since people in under-populated countries will generally be encouraged by economic forces to have more children anyway even without the tenet, and the tenet will probably be applied most often and most disastrously in overpopulated countries by poor people who can least afford it.

            

           The same does not apply for the tenet of respect for private property. Here, it applies pretty well in the vast majority of situations, and the net benefits of adopting it are pretty enormous. All the incentives to produce for the consumers and to accumulate capital to increase the productivity of the economic system are activated, things that only respect for private property applied fairly consistently as a general rule can activate. These benefits are not really situational or particularistic, but fairly general and universal. Some minor exceptions might be cases of land monopoly, stubborn hold-outs blocking infrastructure projects, and people on the verge of death due to poverty, in which respecting private property does not have good results. In these cases though, whether some exceptions are made to the moral tenet or whether the negative results are put up with due to the vast positive benefits of the general rule, the general rule itself is pretty darn sound and should not be discarded or compromised lightly.

           

3. Even if they are legitimate moral tenets, many tenets of morality other than respect for private property tend, if deemed to be tenets of political morality, to set political precedents justifying more and more harmful violations of the tenet of respect for private property:

            

           Consider the tenet of morality of anti-discrimination. In its current popular form, it says that businesses, both when hiring employees and when choosing which customers to serve, should not discriminate based on the race, gender, or sexual orientation of potential employees or customers. This tenet is deemed by many to be important enough and clear enough to be enforced as a tenet of political morality, through ‘civil rights acts’ and other such policies. 

            

           Now, as a tenet of personal morality, and when applied reasonably, the tenet of anti-discrimination passes the utilitarian tests, both directly and as a general rule. Discrimination based on largely irrational criteria such as race, gender, and sexual orientation in business hiring and decision-making means that more able people will be passed over for the positions in which they can best serve the consumers based on such irrational criteria. This directly hurts the person discriminated against, the non-racist/sexist/homophobic stakeholders of the business, and indirectly hurts all of the world’s consumers, while only directly benefitting the racist/sexist/homophobic employer or owner. While the tenet can be pushed too far and applied in unreasonable ways (such as obliging ‘Hooters’ to hire ugly, disabled men as servers), if reasonably qualified the tenet can serve as a good general rule of personal morality.

            

           Why just as personal morality, why can’t we legitimately enforce anti-discrimination as a tenet of political morality? There are two main reasons why this would be ill-advised. Firstly, enforcing anti-discrimination, and others like it, as a tenet of political morality means violating the general rule of respect for private property. Owners of property are forced, through physical coercion or the threat thereof, to make choices that they would not otherwise have made with their property. This is something that is incompatible with a complete right of private property, which means the right to use the property as the owner sees fit, as long as it is not used to infringe the similar right of other property owners. If we accept both respect for private property and anti-discrimination as tenets of political morality, we have a conflict of tenets. 

            

            Secondly, tenets such as anti-discrimination, because they are only legitimate moral tenets when applied ‘reasonably’ rather than in all possible cases, can set some dangerous political precedents if enforced as a tenet of political morality. These tenets are somewhat ambiguous and situational, and power-hungry governments could take advantage of this by using prior precedents, based on the tenet, to justify the further extension of their power in more and more areas. This would result in further and further compromising the tenet of respect for private property. In this case, if you can’t discriminate in hiring or in customer choice, couldn’t the logic extend to preventing ‘discrimination’ in private club membership, friendships, and even in the choice of significant others or sexual partners? Would a certain percentage of inter-racial marriages be mandated based on quotas? Also, within hiring, couldn’t the anti-discrimination categories keep multiplying (race, gender, general beauty, income status, religion, able/disabled, etc…) until the freedom of the employer to hire the person they think is most suitable for the job is turned into a sham? Such extensions are less likely if the tenet remains one of personal morality, because then each individual can judge for themselves or can persuade others accordingly, when and in what ways to adhere to the tenet. When government gets involved, these kinds of tenets can be extended for reasons far different than reasonableness or advancing the ‘common good’, such as ambition for power over others or to please loud special-interest groups.

            

           This kind of reasoning can be applied to quite a few tenets of morality that are legitimate when they are tenets of personal morality only. Consider the tenet of morality that taking narcotic drugs that are harmful to the long-run health of the taker is bad. When governments try to turn this into a tenet of political morality, not only are laws based on such tenets largely unenforceable and mainly lead to an increase in criminal activity, but they also set dangerous political precedents. If narcotics can be prohibited because of their long-run health consequences, why not unhealthy foods? In fact, why not just force the populace to eat healthy foods and to do regular exercise, if concern for the long-run health of people is a legitimate basis for tenets of political morality? The further the logic of the tenet is extended as a tenet of political morality, the further from its utilitarian roots the tenet goes, and the more governments assume tyrannical powers and become contemptuous of the tenet of respecting private property rights.   

             

           Consider the tenet of morality that writing inflammatory, hateful things based on irrational criteria such as race or sexual orientation is wrong. All well and good if it remains a tenet of personal morality, but it becomes dangerous when made a tenet of political morality. If the government can censor hateful racist or homophobic writings, why not censor things that religious people find ‘offensive’ and ‘inflammatory’ too, such as atheistic tracts that say that religion is illogical? How bout politically ‘offensive’ and ‘inflammatory’ writings, shouldn’t they be censored too? The writings of libertarians are ‘offensive’ to people who believe in statism or egalitarianism, and are ‘inflammatory’ in calling the government incompetent and tyrannical. Perhaps these writings should be censored too? Holocaust denial is hateful and ignorant, the tenet would call for its censorship. But if so, how about those ‘ignorant’ and ‘fanatical’ Austrian economists who claim that Roosevelt’s New Deal did not solve the Great Depression, based solely on their ‘hate’ for governments? (I am speaking as a government censor here, not as myself obviously). The mighty sword of censorship is simply too dangerous to leave in the hands of government. People can and should self-censor based on their own moral senses, and perhaps in some cases based on the disapprobation of others. The tenet should remain one of personal, not political, morality.

            

           How about the tenet of respect for private property, surely it is liable to the same kinds of abuses when considered a tenet of political morality? In fact it is, but there are reasons why it is less serious for this tenet than for the foregoing. The most obvious source of abuse is the question: to what lengths can the government go to prevent invasions of private property rights or individual freedoms? After the September 11 attacks, the US government passed all kinds of laws, in the name of stopping further terrorist attacks, that were terribly invasive of the privacy of US citizens, and started all kinds of wars in the Middle East that were terribly detrimental to the persons and property of people living there. The end of stopping further terrorist attacks was sound, justified by the sound tenet of respect for private property and individual freedom, but the means adopted resulted in many governmental invasions of those very rights they were supposed to be protecting from terrorists. Whether good intentions or lust for power prompted the government’s action, the result was an unreasonable interpretation of the tenet of respect for private property.

            

           It was to combat the potential for such abuses that, in the Anglo-Saxon countries, such doctrines as the right to a fair trial by jury, innocent until proven guilty, and rigorous search warrant requirements, were developed. If governments were to take these seriously again, such abuses would occur less often. Also, when the benefits (protection of private property) and the costs (invasion of private property) are denominated in a similar ‘unit’, it is easier to find an objectively reasonable solutions than when the benefits (less employer discrimination, less drug addicts, less ‘hateful’ publications,  for instance) and the costs (invasion of private property) are denominated in different ‘units’.

            

           As a general rule, the number of tenets of political morality should be kept to a minimum. Unlike tenets of personal morality, it is a characteristic of tenets of political morality that they be universal across a given society, as those who do not follow these tenets are to be stopped or punished through governmental physical coercion or the threat thereof. People have a wide range of different tastes and preferences, and a moral tenet that seems perfectly reasonable to one person might seem entirely unreasonable and oppressive to another.

            

           The good thing about the tenet of respect for private property is that its aim is to enable people, as much as possible, to best fulfill whatever ends that they might choose to pursue. The fact that free-market prices are structured by consumer demand and that producers are rewarded to the extent that they sell to the consumers what they want is what enables everyone to pursue most of their subjective ends more effectively in a free-market society based on private property than in any other society. Virtually the only ends that the free-market society demands that individuals renounce are those based on aggressive violence and disrespect for the private property rights of others. In fact, the free-market society even provides things like combative sporting events and violent or ‘sneaky’ video games and movies to cater to those who see some desirable aspects in violence or theft. All it asks is that people do not actually, physically, attack their fellow citizens or steal or damage their property. Some who would have been more suited to a ‘Viking’s’ life of murder and plunder might be hurt by this, but for the vast majority there are only benefits. 

           

            For most other propositions that could be considered tenets of morality, the same does not hold. They are often controversial and the benefits are far from as clear as they are for the tenet of respect for private property. As a result, when one group of people tries to impose them as tenets of political morality on another group of people, violence can erupt or hatred can arise. In more religious ages, brutal ‘Wars of Religion’ were the worst manifestations of this phenomenon. In our more secular, democratic age, the primary manifestations are intense, unproductive political polarization, particularly seen in the US, with the ‘leftist’ proponents of ‘egalitarian’ tenets of political morality clashing with the ‘rightist’ proponents of ‘conservative’ tenets of political morality. Distracted by these seemingly irreconcilable clashes, many important political issues are left unexamined and bad government continues along its merry way. If it were just recognized that not all tenets of morality, no matter how firmly you believe in them, should be enforced as tenets of political morality but can profitably be left as tenets of personal morality, these negative effects would have been, and can still be in the future, largely avoided.

           

A Model For Preventing Educational 'Poverty Traps'

            In a previous post, (http://thinkingabouthumansociety.blogspot.ca/2013/04/why-free-market-society-is-not-caste.html), I argued that, contrary to what some of the advocates of public education think, a free-market educational system would not turn a society in which it was implemented into a rigid caste society. Recently, some of my views on this subject have been criticized. The objective of this post is to answer those criticisms by elaborating more fully on my views regarding education, and by making a slight modification to my previous argument.

            So that we are all on the same page, and so that I can avoid repeating myself, I will reproduce some of the relevant passages from that previous post here:

           

“Firstly, many successful people did not attain their success because they had a certain degree or certification, but succeeded because they had the brains to be able to serve the consumers in a more efficient way than their competitors. This will be especially true in a free market, where professional associations and unions will not be permitted to use force to restrict entry into a profession and where it will be easier, due to less taxes, licenses, and regulations, for small upstart companies/individuals to compete with bigger established companies/individuals.

Secondly, education is an investment where a sufficient return is expected, just like for starting a business, and for this investment, like for starting a business, loaned funds will be forthcoming if the creditor believes that the investment is a good one. Thus, if having a good education is really as important for making it in the free market as leftists generally claim it is, then financial institutions, and perhaps even the educational institutions themselves, should be happy to give out loans to students, in the expectation that their future incomes, with the education, will be high enough to enable paying back the loan with interest.

Thirdly, in a free market the price of education will go down from what it is currently. At the post-secondary level, without the government giving guaranteed student loans, the universities will be forced to attract students based on quality and price, and they will compete with each other in this regard, instead of inflating tuition fees because they know that the government will almost always enable students to pay them. At the primary/secondary level, in the absence of public schools, not only will the tax money used to pay for them be returned to the citizens, but in their absence there will grow a wider variety of private schools at different price levels, instead of just expensive ones for rich kids whose parents don’t want them to go to public school. Private tutors too could even provide different levels of education for a wide range of prices in a free market for education.

Fourthly, if the government is subsidizing education or even operating schools, it must of necessity decide what is taught and what is not, thus creating conflicts between parents and not supporting the teaching of certain views in schools, something that the flexibility of the free market would quickly solve. 

All that being said, I do recognize that basic literacy and numeracy is a vital necessity in our society, but if someone cannot even afford to give their children this kind of basic education, they are probably a good candidate for the minimal social safety net of the kind I have expressed support for elsewhere, which will provide basic primary education for children. As with welfare generally, there is no need to strangle the education market for the relatively minor problem (in a prosperous free market society), of children whose parents can’t afford to give them the most basic level of education.”

            Now, the main criticism of my views on this subject center around point #2, where I argued that student loans would be forthcoming if creditors expected the educational investment to be a good one in terms of the higher future income of the debtor that it would enable. The criticism was that while this might be true in higher and more technical levels of education, no rational creditor would lend their money to the poor family of a four year old in the hopes of the investment in early education one day paying off in terms of the higher future income of the now-literate child.

            I gave an undeveloped response to this criticism in the last paragraph of the quoted text above, saying that basic literacy and numeracy are so vital for living in modern society that parents who couldn’t afford to give their children this would be good candidates for my minimal social safety net policy discussed elsewhere (http://thinkingabouthumansociety.blogspot.ca/2013/03/issue-analysis-welfare-social-safety-net.html).  

            Now that I think back on it though, it seems that a better solution to this problem could be, instead of sending to the minimal social safety net families who couldn’t afford basic education for their children but could support themselves otherwise, a primary education voucher program would work better.

            The program would work as follows. Educational vouchers (think gift certificates that can only pay for primary educational services) amounting to enough to send kids through Grade 1-6 at an average class-size/quality of school would be provided to every family by the government out of their general tax pool. Parents can supplement these vouchers with their own money if they want higher quality education for their children, or they could spend less than the full amount of the voucher on formal, institutional schooling and spend the balance on tutors or extracurricular programs such as Kumon or reading programs instead. There would be no public schools and no legal tolerance for teachers’ unions who choose to use coercive activities such as forced strikes to achieve their demands. There would be no educational licensing requirements, and voucher acceptance limitations would be minimal. As long as an education provider teaches Reading, Writing, and Arithmetic as a part of their service offering sufficiently, they will be eligible for voucher payments from the government.

            I choose this voucher scheme rather than the traditional public schooling model to introduce more parental choice, competition, and dynamism into the education market, which is currently characterized by monopoly, limited parental choice, stagnation, and bureaucracy. Besides offering more choice and dynamism, competition between educational providers would probably result in tendencies towards lower prices for the same services over time and a much wider variety of differently priced educational services. This would both save the taxpayers money and allow even poor parents more educational choice than they currently enjoy.

            I have chosen to make this somewhat un-libertarian concession because Reading, Writing, and Arithmetic are the common, universal, intellectual pre-requisites for functioning in modern civilization. They are also the keys that unlock all the doors to further knowledge, which the students can then pursue themselves later if they are so inclined.

            This scheme is intended to help parents who are capable of supporting their kids until about age 16, but who cannot afford give them education or choose not to give them education. If the family were poorer than this, they would qualify for my minimal social safety net, which includes basic education for children. If the family were richer than this and could in fact afford to pay for the education of their children, the program is not intended to help them, as if it did, it would morph into an egalitarian-focused educational policy like the current one, which is not what is intended.

            Once the child is done 6 years of government-supported schooling and has reached the age of 13, they should be able to read, write, and understand arithmetic, and they should be aware of other areas of knowledge, which they could potentially pursue further. After this, in contrast to the current model, I think that from then on, education should be specialized or career-focused, and no particular educational path should be forced on students. What is currently learned in grades 7-12 is mostly either useless, not focused enough, could be picked up through self-study, or could be included, if relevant, at the beginning of more career-focused educational programs.

            I expect that after age 13, what I call an iterative education model would prevail, especially for children of poorer or middling families. I will spend the rest of this post discussing this model, which I think provides not only financial advantages, but also pedagogical and developmental advantages over the now-prevailing educational model.

            What I mean by an iterative educational model is this: education and work are to be done either in alternating shorter periods, or are to be done concurrently (think continuing education). This is in contrast to the current prevailing model where post-primary education is done in a big chunk (age 13 to age 22 or later) and then real, paying work is to be started only after all this.

            In this model, money from previous (or current) work is used to finance education leading to a higher level of job. Or, in anticipation of the education leading to a better paying job in a reasonable period of time, financial institutions, the educational institutions, or hiring companies themselves could advance credit to the students, to be repaid with interest out of the higher income of the future job that the education in question is geared towards.

            This means that rather than a very long-term educational investment being made as in the current model, education becomes a series of shorter-term investments that build on one another, facilitated and focused by income the student makes by working during this period.

            This iterative model works because most career paths feature both semi-skilled or skilled ‘technician’ jobs that can be started after a relatively short course of practical, job-related training. Most career paths then have ‘managerial/professional’ jobs that may require more theoretical, and perhaps lengthier, courses of education, but which nonetheless are generally done better by people with prior experience in the lower-level ‘technician’ positions of that career path.

            For instance, people aiming to be accountants could be bookkeepers or financial administrators first. Prospective mechanical engineers could be mechanics, machinists, or machine operators first. Prospective plumbing engineers could be plumbers first, electrical engineers electricians first, etc… Prospective lawyers could start as law clerks or paralegals. Prospective doctors could start as nurses or pharmacists. Prospective business mangers or executives could start in the operational positions within their respective departments (sales, marketing, logistics, manufacturing, etc…). Prospective architects could start as draftsmen or architectural technologists.

            The point is that while working in the ‘lower’ positions, students can get both valuable work experience and the financial resources (or credit-worthiness) necessary to purchase education leading to higher positions in the future. Best of all, they can get this process started maybe with an unskilled job from 13-15, then pursing a short course of training for a skilled/semi-skilled technician position (facilitated by the income made from the unskilled job), and then they could begin thinking about further education once comfortable in this technical position, maybe by around 22. This would put these students, with significant relevant work experience and education that is actually career-focused, ahead of the 22 year olds in the current system who have little work experience and who might have been pursuing an impractical or unsuitable course of study.

            In the trendy terminology of modern business and product development, this iterative education model could be called a ‘lean’, ‘agile’, or ‘just-in-time’ education model, as opposed to the traditional ‘waterfall’ education model. The main idea of lean/agile business methodology is to commit time and resources only in shorter spurts and only when really necessary, then observing the results, and then using these observations to make beneficial adjustments for the next commitment of time and resources. This is in contrast to the traditional ‘waterfall’ model, where a lot of the available time and resources are committed up front, in the hopes of getting the product right the first time. The now-prevailing educational model clearly follows the ‘waterfall’ methodology, where students spend around 9-12 straight years doing post-primary education, with little chance to test whether they will even like the kind of career they’re working towards or of determining whether pursuing that career is even economically realistic. Huge up-front financing requirements, significant chances of making educational malinvestments, and little concentration on an important factor in job success, work experience in the industry, all result from this uneconomical educational model.

            Now, for the iterative educational model to work, there must be an unhampered market for post-primary education. This means a system free of government licensing restrictions, of subsidies and privileges, and of artificially inflated, government-sponsored student demand for higher education through give-away student loans that can be used for unpractical programs.

            An unhampered education market like this would almost certainly result in more flexible (online, part-time, self-study, tutor, continuing education), more content based rather than hours based (think CFA exams versus current law or medical school), more career-focused, and less expensive, educational offerings. This would be the result of allowing the needs and financial realities of students and employers to structure the education market, rather than the dictates of government and established-university bureaucracies.

            On such a market, I suspect that the iterative model will be more financially realistic, and hence more desirable, for students and families at all sensitive to financial considerations. Students and families who could afford it could of course opt to continue with the traditional ‘waterfall’ model of education if they so chose, and there would certainly be educational institutions that would cater to this demand. In most cases though, due to its financial, pedagogical, and developmental advantages for students, I suspect that the iterative model I described would be more popular on an unhampered education market.

            Now, egalitarians will no doubt find many aspects of my suggestions to be ‘unfair’. People who, for whatever reason, value societal economic equality as an end significantly more than I do, might not be convinced by what I have said. All I can do to try and convince them is to point out the impoverishing results of pursuing egalitarian government policies (many of the posts on this blog), and to try to explain why I do not believe in egalitarianism but subscribe to another conception of ‘fairness’ (http://thinkingabouthumansociety.blogspot.ca/2013/09/in-praise-of-market-meritocracy.html).  If this is to no avail though, then, alas, I am powerless to change their opinion. To my great sorrow, such people and I would, unfortunately, have to ‘agree to disagree’.

            This post wasn't designed to appeal to egalitarians, but to those who worry about poor kids falling into ‘educational poverty traps’ and who aren’t otherwise strongly committed to egalitarian ideals. I hope that my discussion of the iterative education model that would probably be more popular in a free-market education system, my discussion of the advantages of such a model and of a free-market educational system in general, and my un-libertarian primary-school voucher policy concession, will help to dispel such fears.

             

               

             

World Welfare State or International Economic Freedom?

            In a previous post (http://thinkingabouthumansociety.blogspot.ca/2013/03/issue-analysis-welfare-social-safety-net.html), I came out in favor of a governmentally-provided minimal social safety net for the desperately poor. When I was writing that post, the implicit context was that this policy would apply in a sovereign nation-state in a relatively economically developed part of the world (North America, Europe, some of East Asia). As was recently pointed out to me though, the question remains: what to do about desperately poor people in ‘third-world’ countries? Do they get a minimal social safety net too?

            

            The question is complex because of the fact that there isn’t a single world government, but multiple territorially-bounded governments in the world. One could just recommend that every government apply that policy, but what if they don’t? Then the question becomes: what can the government of the first-world country that I live in do to help desperately poor people in the third world countries?

            

           One option is to get the first world governments in question, with their own taxpayers’ resources of course, to bankroll minimal social safety nets for people in the third-world. There are numerous problems with this solution though, above and beyond the problems of just providing a social safety net nationally. They are:

1.  Administrative Difficulties: Who exactly is going to operate the safety net programs? Will it be the foreign first world government who is funding the program, or will it be the government of the third-world country in question? If the former, the government of the third-world country might protest that allowing foreign governments to administer programs within ‘their jurisdiction’ is a violation of their sovereignty, thus potentially creating international tensions. Also, there would be personnel issues and language/cultural-barrier issues, as the first world government would need to hire all manner of personnel to operate in the third-world country, personnel who might not speak the language well enough or be familiar enough with the country’s culture. If the third world government administers it, how can the first world government ensure that the program is being administered properly? How can they ensure that it is not turning into something that was not intended or ensure that the money isn’t being misappropriated by corrupt officials?

2. The ‘Bad Government’ Trap: As many international charities have found out, it is difficult to make a lasting difference in the living standards of the people they are trying to help if these people live under a government that is corrupt, oppressive, or that generally adopts policies that are not at all conducive to economic development. Most people would probably agree with the adage that it is better to teach a man to fish so that he can support himself in the future than to just give him some fish to eat in the present. But under a terrible government, trying to help people to help themselves is like trying to teach someone to fish in an area where government officials have prohibited fishing. It must be very frustrating trying to help people whose governments, through corruption, oppression, or bad policies, basically prevent those people from using the help to actually better their material conditions in a sustainable way. If first world taxpayers are to be expected to fund a social safety net for the third world, they should at least be assured that the government of the third world country won’t be able to seriously reduce the effectiveness of their help through corruption, oppression, and bad policies. The only real way to assure this though, is for the government of the first world country, or for a world government, to take over the administration of the third world country. Though possible, it seems highly unlikely that this would ever occur, due to the territorial jealousy of every government in the world and because of the memories of 19^th century European imperialism that this would bring up.

3. Magnitude Issues: One of the reasons why, in my previous post linked to above about welfare social safety net policies, I came out in favor of a very minimal safety net was because I assumed that, being applied in a developed country, the cost to the taxpayers wouldn’t actually be that high, and thus it wouldn’t too seriously hamper economic development through the higher taxes it would entail. If first world taxpayers are to be expected to fund a safety net that covers all the impoverished masses of the third world, this assumption has to go straight out the window. Also, because the wage rates and standard of living of the poorest working members of third world societies are substantially lower than those of the poorest working members of first world societies, the standard of living provided by the minimal social safety net would have to be set at a much lower level in the third world country than in first world countries, if the safety net is not to dissuade people who are capable of it from starting to work their way up the employment ladder of their society. If it was set at this much lower level in the third world countries, this would help make the program less costly for first world taxpayers and help minimize the perverse incentive problem. This would make the program more feasible to implement, though the egalitarians of the world would no doubt oppose this ‘unfair treatment’, and would undoubtedly push for a more generous safety net program in the third world.

4. Sympathy Issues: As a general rule, people have more sympathy for others who share things in common with them. In particular, geographical vicinity, cultural similarity, and sharing a language generally results in more sympathy between people than when these things are absent. For a welfare social safety net program, which heavily relies on sympathy for its popularity, getting first world taxpayers to pay for the safety net of people who live halfway across the world, have completely different cultural traditions, and have a completely different language would probably make the program more unpopular than the same program applied on a more local scale. This is not a decisive objection against the program, but it is definitely something to keep in mind when considering the feasibility of the program.

            

           Now, the establishment of a world government or of colonial government could potentially solve the first and second problem, but the third and fourth would remain. Since the establishment of either a world government or a colonial government over a populous third world country is incredibly unlikely, all four problems will probably remain, making a world minimal social safety net, in my view, unfeasible.

            

           If we admit that this idea is unfeasible, what can be done by citizens of first world countries to help the impoverished masses of the third world? Before we answer this question, we need to understand why inhabitants of third world countries are so much poorer than inhabitants of first world countries in the first place. For that, we need to keep in mind a few fundamental principles of international economics:

1. The only way to make real wages (wages in terms of the real resources the money wage can buy, as opposed to the money, or nominal, wage rate alone) go up significantly and sustainably is to increase the average productivity of workers. The more productive the worker, the more they can contribute to the production of an employer, and the more they can contribute, the more (real resources) employers are going to be willing to pay for their services. The major way to increase the productivity of workers is to equip them with more and better capital goods (capital goods including machines, tools, equipment, vehicles, factories, commercial buildings, etc…), and to integrate them in a more sophisticated production structure. In turn, the only way to do this is through saving and capital accumulation, as I talk about briefly in tip #27 here: (http://thinkingabouthumansociety.blogspot.ca/2013/03/how-to-think-about-human-society-tips.html)

2. The more incentive to produce well for the consumers and to save resources for the future, and the more resources that are left in the hands of thrifty, productive people who are skilled at investment for them to save and invest, the more saving, investment, and capital accumulation will occur. Levying high taxes on corporations, the incomes of rich people, and inheritances retards capital accumulation or, if pushed far enough, can result in capital consumption, as I talk about in effects #1 and #3 here: (http://thinkingabouthumansociety.blogspot.ca/2013/03/issue-analysis-higher-taxes-on-wealthy.html)

3. The main reason for significant real wage differentials between different parts of the world is differing amounts of capital available per active worker. Many third world countries have a higher population density than first world countries, meaning more active workers to ‘distribute’ capital to, and they generally have less accumulated capital available within their borders than first world countries do.

4. Luckily for the inhabitants of third world countries, the owners of capital seek to invest capital in locations where, other things equal, there is better land/natural resources available and where, due to a higher supply of active workers, market conditions allow for a lower wage rate to be paid to acquire the services of workers. This latter condition especially is fulfilled by many third world countries, and as long as the governments of these countries aren’t too predatory or disrespectful of the property rights of foreign investors, foreign capitalists will be eager to invest their capital within these countries. This explains the phenomenon of ‘outsourcing’ a lot of manufacturing that is destined to be consumed in the first world to China and India. Even with the extra transportation costs that must be paid, the lower wages prevalent in these countries makes the outsourcing economically rational. The more such foreign capital is invested within these countries, the more the real wages of workers in these countries will go up, as long as their populations do not expand too rapidly.

5. Though land and natural resource sources are immovable, labor is mobile, as long as immigration or migrant labor is permitted. Thus, in the absence of immigration barriers, the laborers from relatively overpopulated countries will tend to be drawn, as long as their psychic attachment to their homeland is not powerful enough, by the allure of higher prevailing real wage rates, to relatively under-populated countries with more capital accumulated within their borders.

            

           With these principles in mind, we can now think of things that could help the working populations of third world countries improve their standards of living. The first is not to place any restrictions on the natural flow of capital from relatively under-populated to relatively overpopulated countries, and for the governments of third world countries to respect the property rights of foreign investors. This will tend to increase the average real wage in these countries, and give them a head-start on further economic development.

            

           The second is to allow people from impoverished, relatively overpopulated and capital-poor countries to immigrate to, or work as migrant laborers in, developed, relatively under-populated and capital-rich countries. This will allow these workers to earn higher real wages and to enjoy a higher standard of living.   

            

           Besides directly helping workers in poorer areas of the world, these policies would also be beneficial to the world’s consumers, taken as a whole, and would increase the general productivity of the world economy. This is because the more capital is allowed to be invested freely in areas with relatively favourable land and labor conditions, the more the international division of labor can be extended and the more efficient it can be made, and thus the more productive the world’s workers and the world economy as a whole can be.

            

           Contrary to Marxist fables, this increased productivity does not just result in higher profits for ‘exploitative’ capitalists, with the living standards of workers and consumers remaining unchanged. In reality, an increase in productivity that begins as a source of exceptionally high profits for the innovative businessmen and capitalists who push for it, soon becomes, due to the imitation of these successful profit-making tactics by other businessmen and capitalists or even the potential threat of such imitation, indispensable means for even keeping up with the competition at all. In a drive for increased market share and competitive advantage, businessmen will use the lower unit costs of production, made possible by the increase in productivity, to lower the market price of the good or service in question. This, in turn, increases the purchasing power of everyone’s income, which means that the same money income can now buy more in terms of real goods. Among other things, this means that every worker gets an automatic real wage increase, even if their money wage rate stays the same or is  lowered by less than the increase in productivity.

            

           Besides this, these more productive arrangements will most likely result in more capital accumulation. This is because if the average productivity of capital goods is increased by them being invested in areas with more favourable land and labor conditions, a greater share of the producers’ (as opposed to the consumers’) output of those capital goods can be devoted to producing additional quantities of capital goods, rather than to just maintaining intact the existing quantity of capital goods or their substitutes. The likely result is real capital accumulation, that can take place even if more monetary saving does not take place, and thus which can take place alongside the increased production of consumers goods mentioned in the preceding paragraph.

            

           It is with these beneficial effects in mind that we can now turn to examining the arguments against the free international flow of capital and the free international movement of labor. The primary economic objection is made on behalf of the workers of the first world, relatively under-populated, capital-rich countries. If more capital is exported from these countries than is imported, or if the supply of labor, due to immigration, is increased faster than capital is accumulated or imported, the money wages of the average worker in these countries will fall.

            

           In response, though such a fall in money wages for first world workers could happen, the increased productivity of free international economic arrangements would result in an increase in the purchasing power of each monetary unit of wage received, as outlined above. It would also result in real capital accumulation, meaning more real capital to go around, meaning a higher real wage for the workers of any areas this additional capital is invested in, as also discussed above. How quickly this rise in general real wages would make up for the possible fall in the money wage rates of first world workers is an empirical question, open only to estimation.

            

           At the end of the day though, the objection is not consistent with the context of this discussion in the first place, which is how best to help the impoverished masses of third world countries. If the goal is to maximize the short-term incomes of first world workers, than neither a world welfare state nor allowing the free flow of capital and labor would be the way to go.

            

           If, however, the goal is to help these impoverished masses, preferably in a way that doesn’t require too much sacrifice on behalf of first world citizens, than the free flow of capital and labor most certainly is the way to go. This policy has the potential not only to help impoverished third world residents without requiring too much first world sacrifice, but to help them while increasing the long-run standards of living of the entire world, including the first world workers who might experience a short-term drop in their real wages. And given that a world welfare state is both unfeasible, as we discussed above, and even if feasible would require actual long-run and short-run sacrifices in living standards on the part of the first world, capitalists and workers alike, to implement, I can only conclude that allowing the free flow of capital and labor is the best solution to the problem of third world poverty.