But

“I’m for free enterprise, but –” You can hear it coming. “I’m against all these government giveaway programs, but –” It’s a common and frustrating experience for a libertarian, hearing a ringing declaration of principle followed by a qualification that the speaker doesn’t have any intention of giving up his own subsidy, regulation, tariff, or pet project.

Years ago, when I was raising money for a free-market business group, I remember one of those letters: “I agree with everything you say. Government is too big. Subsidies and regulation are impeding the operation of our free enterprise system. But the Hawaiian sugar industry is unique.” A friend told me once that he’d persuaded his father, a dentist, to become a consistent libertarian–except on licensing for dentists. What about licensing for brain surgeons? I asked. No, my friend said, I think he’s OK with letting the free market work there.

And now NPR has brought us the latest example. On the way home, my mind wandered as “All Things Considered” reported on a biodiesel refinery in Washington state. And then I heard a familiar opening line from the tech millionaire who is now the CEO of Imperium Renewables, which built the refinery.

I’m a pretty conservative guy, generally. I’ve voted Republican my whole entire life. And I’m very skeptical of the government’s role in any kind of market.

Wait for it, wait for it – you just know there’s a “but” coming.

But, in this case, there’s no other way to do it but with government support and mandates.

Turns out biodiesel is profitable with a federal tax subsidy of up to a dollar a gallon, and with the anticipation of restrictions on greenhouse gases. So a guy who’s normally “very skeptical of the government’s role” supports subsidies in this case because there’s “no other way to do it.” But that’s the whole point of markets and prices–to tell us what economic endeavors make sense. If Hawaiian sugar, or South Carolina textiles, or biodiesel fuel isn’t economically viable without subsidies, then that means it’s not the best use of our limited resources.

One of the values of a political philosophy–sometimes dismissed as “ideology” or “dogma”–is that it gives us a rule, a set of principles, for deciding such questions. We don’t have the time to look at all the data and decide what we think about every issue, and we’re certainly all subject to personal biases on the issues that touch us. There are lots of speakers I’d personally like to shut up, but if I remember that I do believe in the First Amendment, I realize I have to allow even offensive speech. I may want Amtrak to run fast trains between Washington and New York, or I may want to keep my own factory in business. But if I remember that the free-market economy produces the best results for all of us, then I will accept the outcomes of the market process.

People should think about the benefits of the whole libertarian system–free markets, free speech, freedom of religion, constitutional limits on government–whenever they’re tempted to say “I’m for freedom, but–”.

Sawing Through the Limb You’re Standing On

I was just asked by a business reporter about the state of economics education in the United States, and thought I’d share my response:

There are no national or international benchmarks for student achievement in economics, so it’s hard to precisely gauge Americans’ grasp of the subject. The available evidence is not comforting, however. An academic survey study conducted in 1990 compared how much Americans and Russians understood about the way markets work. It found no significant difference. Americans understood free markets no better than a nation of people with virtually no personal experience of them. That’s sobering. And since the heaviest academic emphasis of the last fifteen years has been on elementary mathematics and reading, there is little reason to believe that we have improved our grasp of economics in the interim.

This should come as no surprise, for a couple of reasons. First, and most obviously, the academic performance of U.S. twelfth graders is at or near the bottom in mathematics and science according to the Third International Mathematics and Science Study, when compared to the performance of students in other industrialized nations. We’re doing poorly in other subjects, why should economics be any different?

Second, it would be institutionally suicidal for a monopoly school system to do a good job of teaching market economics. The very fact that we continue to have a monopoly school system is retroactive proof that market economics has not been well taught. Monopolies, after all, tend to be frowned on by the economically savvy.

Note that this observation does not assume that government school officials are deliberately neglecting instruction in market economics. It simply posits that if they had been doing a good job of it, the system would already have been supplanted by one organized along free market lines.

Reality Hits 4 Public Schooling

Perhaps with the Supreme Court hearing a case on Monday pitting a student’s right to proclaim “Bong Hits 4 Jesus” against a public school’s need to maintain order, it was inevitable that public schooling conflicts would get some attention. If nothing else, what media outfit would pass up the chance to grab peoples’ attention with a phrase as absurd – but vaguely subversive – as “Bong Hits 4 Jesus”?

But maybe it’s not just a banner emblazoned with a bizarre phrase – which then-high school senior Joseph Frederick says he held up as a joke that ultimately got him suspended when the Olympic torch was run past his high school in January 2002 – that has brought attention to the fact that public schooling forces people and their values into conflict. Maybe, as I chronicled in Why We Fight: How Public Schools Cause Social Conflict, it’s that such battles are constant – indeed, almost inevitable – in public schools for which all people must pay, but in which only one set of values can prevail.

Illustrating just how common such fighting is, at the same time the bong hits case was grabbing headlines this week, several other public schooling conflicts were in the news, including skirmishes over dress codes, a teacher giving kids material containing Biblical references, photo standards for yearbooks, the Pledge of Allegiance, and the content of public school library and text books. And just yesterday, the Milwaukee Journal-Sentinel ran a piece by columnist Patrick McIlheran that examined several battles being fought in public schools, and reached the only conclusion possible:

Nothing so fractures society as imposing beliefs people loathe….Of course the culture wars rage around schools. They will rage there as long as we hold to the idea that common schools can establish a unanimity that no longer exists, if ever it did. …

School choice is the answer. However it works, by charters or open enrollment or by vouchers, it recognizes that parents aren’t willing to think of their children as the common property of the state.

That schooling grounded in coercion and forced unity is doomed to constant rancor is a message, it seems, that might finally be getting out. If it does, we just might have the silly phrase “Bong Hits 4 Jesus” – as well as countless public schooling battles – to thank for it.

Is Hillary 2008 like IBM 1984?

The Washington Post has a big story on a “viral attack ad” about Hillary Clinton that’s been viewed more than a million times on YouTube. Jose Antonio Vargas and Howard Kurtz report:

It’s a “mash-up” of Ridley Scott’s 1984 Super Bowl commercial that portrayed IBM as an Orwellian Big Brother and introduced Apple’s Macintosh as the bright new vanguard of computing. But now it’s Big Sister, Clinton, vs. the upstart, Sen. Barack Obama.

The ad shows the oppressed masses staring in unison at a huge screen featuring Hillary Clinton as phrases from her deadly “conversations” lull the viewer into a stupor. As she drones on, a young blond woman in athletic gear twirls with a sledgehammer, then hurls it into Clinton’s giant image.

The ad concludes with the tagline “On January 14, the Democratic primary will begin. And you’ll see why 2008 won’t be like 1984.”

The most interesting point in the Post story is that Vargas and Kurtz were unable to find out who created and posted the ad. It ends with a plug for Barack Obama, but the Obama campaign denies any knowledge of it. On YouTube, the creator claims to be 59 years old and gives the user name ParkRidge47. He or she didn’t answer emails from the Post. But Vargas and Kurtz note that Hillary Rodham was born in Park Ridge, Illinois, in 1947, which makes her 59 years old.

Did she post the video herself? It hardly seems likely. But then – just last night, on FX’s “Dirt,” an actress gained great notoriety, then sympathy, then career advancement after a graphic sex tape featuring her was posted on the internet. And after much investigation, it was discovered that she posted it herself.

Still, it surely wasn’t Clinton or her supporters. It was created by someone who prefers Obama. And it’s a great example of anonymous pamphleteering for the internet age. As Jonathan Wallace pointed out in a Cato study, that’s a tradition that goes back to Cato’s Letters and the Federalist Papers. But our modern election laws have tried to stamp out anonymity. All expressions of political support are supposed to be disclosed, reported, and regulated. But why do we need to know who created this great ad? If you take offense at it, create a better one in response.

Europe’s Rising Tax Burden

A new report from Eurostat shows that taxes in the average EU nation confiscate nearly 41 percent of national economic output. Sweden and Denmark compete for the dubious honor of imposing the most onerous tax burden. Flat tax nations in Eastern Europe have the lowest tax burdens, and Ireland also scores well. For what it’s worth, the tax burden in the United States is lower than it is in any EU nation, almost certainly because America is not burdened with a value-added tax. Tax-news.com reports on the Eurostat findings:

The European Statistics Office (Eurostat) on Tuesday published figures examining taxation in the EU from 1995 to 2005. According to the Eurostat report, in 2005, tax revenue in the EU27 stood at 40.8% of GDP, compared with 40.4% in 2004. In the euro area, tax revenue was 41.2% of GDP in 2005, compared to 40.9% in 2004. Over a longer period, tax revenue as a percentage of GDP in both the EU25 and the euro area were in 2005 slightly below the levels recorded in 1995. …In 2005, Sweden (52.1%) recorded the highest ratio, followed by Denmark (51.2%), Belgium (47.7%), France (45.8%), Finland (44.0%) and Austria (43.6%). The lowest ratios were observed in Romania (28.8%), Lithuania (29.2%), Slovakia (29.5%), Latvia (29.6%), Estonia (31.0%) and Ireland (32.2%). …With regard to taxes on income and wealth, Denmark (31.2%), Sweden (20.1%) and Finland (17.5%) recorded the highest ratios to GDP, compared to an EU27 average of 12.8%, while Romania (5.3%), Bulgaria and Slovakia (both 6.1%) registered the lowest ratios. For actual social contributions, the highest ratios to GDP were observed in Germany (16.7%), France (16.4%) and the Czech Republic (15.1%), compared to an EU27 average of 13.0%, whereas Denmark (1.1%), Ireland (4.8%) and Malta (7.2%) recorded the lowest ratios.

Congress Is Concerned about Your Mental Health

Congress is debating a new “mental health parity” law, which would require those who purchase mental health care coverage to buy the same amount of mental health care coverage as medical and surgical coverage. 

The Congressional Budget Office (CBO) just released this not-too-technical summary.  The CBO projects that the law would increase the cost of employer-sponsored health insurance by 0.4 percent.  That means it could add another $46 to the (already rising) cost of a job-based family plan.  Not a huge amount.  But every little bit hurts.  And Congress wonders why the number of Americans without health insurance keeps rising.

Of all the purposes government might serve, there can be none higher than telling people how much insurance they should purchase for mental health care, if they purchase insurance for mental health care.

Romneycare: The Slippery Slope Slips Some More

Massachusetts has now set the minimum level of insurance required to comply with the state’s individual mandate. Not only will every resident of the state be required to have insurance by July of this year, but by January of 2009, no one in the state will be allowed to have insurance with more than a $2,000 deductible or total out of pocket costs of more than $5,000. In addition, every policy in the state will be required to cover prescription drugs, a move that could add 5-15 percent to the cost of insurance plans.

In my paper on then-Governor Romney’s plan, I warned that the state’s new managed competition bureaucracy, the Commonwealth Health Insurance Connector Authority, would operate as a regulatory body, setting up just such a slippery slope to government control of health care. The more we see from Massachusetts, the more it looks like I was right.