Saturday, January 14

All Knowledge Is Incomplete Knowledge, But Some Is More Incomplete Than Others


Maybe it's the 'stache...

John Stossel, ABC-TV: "Stupid in America: How We Cheat Our Kids"

SO right off the bat you might be asking yourself just how balanced a report you're getting when it uses "Stupid" and "Cheat" in the title, but of course you don't ask because it's John Stossel. I know we repealed the Fairness Doctrine. When did we repeal fairness?

And I am not making this up, I've got it on tape. The show opened with successive clips of Fast Times at Ridgemont High, Bill and Ted's Excellent Adventure and Ferris Bueller's Day Off, the last featuring a clip of Ben Stein as a boring drone, the role he was born to play, followed by a Student on the Street interview with a young lady who said some of her teachers were boring. Oh, my god, it's worse than I even imagined!

I was certainly prepared for an hour of anecdotal or cherry-picked evidence. I was prepared to see vidclips of anyone who disagreed with Stossel's divine wisdom edited to make them look shrill or mendacious. I did expect there might actually be some reasonable doubt expressed reasonably, though I was prepared to be disappointed. But God help me, I'm not sure why it is I was unprepared for outright fabrication:
Here in Belgium the government spends less than American schools do per student..."

when that's easily checked using the figures from the very test program that Stossel is using (both in the sense of "to employ" and "to manipulate cheaply for one's own gain", though I'm not sure those don't mean the same thing to him), the Organisation for Economic Co-operation and Development's Programme for International Student Assessment, or PISA, tests. "Expenditure on Educational Institutions", from the chart on page 67 of the 2004 report:

Belgium: % of GDP, Public Schools: 5.97
United States: % of GDP, Public Schools: 4.66

Maybe it's just that some of our adults have a little problem with advanced mathematics, too. But then, per the report, Belgian funding "follows the student" into the school of his choice, so perhaps the 6.36% of GDP spent on public and private schools combined is more apt.

There's some more curious business involving Belgium and the PISA testing, but let's start at the beginning. I nearly did a full Kreskin on the thing, putting the following prediction in a sealed envelope: the first thing Stossel's gonna do is focus on New York City and Washington DC public schools. Why? Because those massive urban districts are a great favorite of the anti-union crowd, which likes to extrapolate to the entire country by inference, since they can't do it by fact. Sure enough, after we got done (with no apparent recognition of the irony, by the way) with showing that our perception of public schools comes from comedies aimed at young adults, we find the Mustachioed Muckracker trying, and failing, to get his cameras into NYC schools. Then DC alows him to tape, but only in an exceptional class taught by the National Teacher of the Year. No fair. They finally manage to get DC to agree to giving students (Stossel emphasized the district "hand-picked" the students, thereby underscoring the fact that he doesn't understand the first thing about supervising children) video cameras to film inside their schools. The results were suitably shocking:

•We see a young man remove his shirt and do a little spastic dance as the teacher sits apathetically in the background.

•We visit a geography class where students are playing Monopoly™. A smirking, attempted-teenage-bearded wiseass of the sort my wife treasures but I'd put in the hospital within twenty minutes of the bell leans directly into the camera to say "We're going to ask Mr. Dryner what Monopoly™ has to do with World Geography." We get a longer shot of Wiseass with his sandals ostentatiously up on his desk, and other students behaving badly.

Aha! Just the sort of thing we all knew was going on in "real" classrooms that weren't being taught by National Teachers of the Year.

Except, no, not quite. Even Lyin' John is forced to acknowledge that this class was taking place after finals. Any of you go to public school by any chance? Did you sit in your seat quietly and study on the last day of school? Could any thing short of the imminent application of superior physical force have made you?

Now, don't get me wrong. This sort of stuff drives my wife crazy. There are teachers who spend the last several days of the school year showing videos. She makes her students work until the final day, and every year has to endure the "Mr. So-and-so let us play games" bit. In fairness to Mr. So-and-so, she's teaching Art, and that's a lot more like play, plus it's a Magnet program, and students must understand that they aren't getting out of her class; they're going on vacation and will return to their chosen field of study in a couple months. In fairness to all of them, it's hot, not all the building was air-conditioned until this year, and the students just want to be out. It's discipline hell.

So the last thing you'd want in your class is a freakin' video camera, and I have to wonder about the mental competence of whoever it was agreed to (or was tricked into) it. It's not actually clear that the teachers knew they were being taped, but it's clear the children did.

This, of course, is not the view we get of the Miracle Schools Stossel shows us. Well-behaved children, often in uniform, eager to learn, required to police the grounds and set up tables for lunch, all of them progressing at remarkable rates. No attempts here to go behind the scenes for a peek at what "really" goes on. No complaints that we're being given the official tour by a hands-on administrator. Nope, this is how it really works when you give parents a choice.

"Choice" was a big theme of Act I. Why can't parents choose what school they want their children to go to? Why do some parents go so far as to lie about their place of residence to get their children into "good" schools? Most of the countries that score higher than the US give parents choice.*

This is going to take us to Belgium shortly, but let's just note a couple things first, here. Stossel has already told us money isn't the answer. So why, then, are these schools of choice uniformly in wealthier districts? Parents aren't clamoring to get their children into schools with poorer equipment and fewer programs. Yes, there are a number of factors involved, but the inequalities in the American public education system are a national disgrace. Why isn't that a part of the show? And what exactly is the Libertarian theory that excuses it? We believe that Choice is a supreme good, but children don't choose to be poor.

But teevee producers can chose to fly to Belgium, and this segment was verrrrry curious:
"We gave parts of an international test to some high school students in Belgium, and in New Jersey."

Tonite on ABC it's the Belgian Waffles vs. Your New Jersey Barrens in a Texas Chain Saw Math Test! Whoa. I know it would violate standard Stossel practice, but is there some reason you don't cite the test? There's only one international test to speak of: PISA. And so is there some reason you give the test to two small groups of students, rather than use the results of the much larger sample of the real test? Yeah, probably.

This has a distinct Pepsi Challenge air about it already, but let's dig a bit deeper. We have no information as to who these Belgian students are; we do know that the Americans are a diverse group from a Jersey public school. That "parts of" thing is a little hinky, too. The PISA test comes in three parts: reading, science, and math literacy. But in a moment we'll reveal the average scores of our two competing teams, and it'll be a single number. So we didn't give two of the three parts; did we give selected portions of the math test?

Math is where American students in the tests for fifteen-year-olds score the poorest. Our ten-year-olds score above international averages, but the fifteen-year-olds trail the country mean by 3%. Which gives Stossel grounds for claiming "the longer kids spend in school the worse they get." But one of the factors that've been cited for our poor performance is that middle school, which these students have just completed, is in America something of a spin-your-wheels period. We tend to use those grades to reinforce what has been learned, to prepare for more advanced study ahead, and to separate students in terms of academic achievement. And it's the time when students expand into other areas of study and encounter their first elective courses. The countries which score highest tend to have a more conservative approach, spending more time on traditional subjects and having fewer areas of study available, and generally use testing at that level to determine a student's further academic opportunities.

So at the very least we gave a small sample of the test to two groups when we could have just looked up the results of the real test. I'm assuming here it was math. And the final score? Belgium in a walk 76-47. Way to go, Waffles! Especially impressive performance, seeing as how in the real test the USA scores were 91% of the Belgians'.

This may have been partly explained by the Jay Leno routine we did with the class (after showing a couple of real Jay clips, that's weeknights at 11:30, right here on this station; Jay befuddles one young couple by asking which state hosts the Kentucky Derby, and hilarity insues). One student couldn't name a major cause of the Civil War; another couldn't tell what the Bill of Rights was. A third opined that "we're not stupid. It must have something to do with teaching," but honey, and I mean this in a nice way, if you don't know enough to say "Slavery" when someone asks you about the Civil War I'm not sure it matters whether your teachers are even breathing or not.

NEXT: Unions support child molesters, Phonics work miracles, and John gets bad service in a Soviet restaurant.


* This is probably a matter of educational organization, but given Stossel's track record with the truth I intend to research this one, too.

36 comments:

D. Sidhe said...

Holy God. You *watched* that thing? I mean, you know, you actually sat there and paid attention without barfing, screaming, or hurling bricks through your TV?

I am amazed, and in awe. And I appreciate the hell out of the deconstruction, because we no longer have a low-end TV on which my partner will allow me to watch John Stossel. (Don't ask. I swear it wasn't a brick. It's not like we have them just laying around the house.)

The pathetic thing is, it sounds like it unspooled exactly the way every Mr Moustache special ever does. Within the next week, we'll be getting press releases from the people involved explaining how he tricked them into participating, and then how he grossly distorted the results of things in the editing process.

And if past specials are anything to go on, he didn't cite the test because they didn't bother to administer one.

What we need is a group that figures out the next Stossel special when it's still in the contacting participants stages and shows all of the prospective suckers what they're signing themselves and often their children on for.

The man is a menace. I mean that. He gives ideological cover to the Screw The Poor and the Junk Science movements, and he makes people less likely to, say, donate to their local humane society or vote for school or library bonds.

There are nasty real-life consequences to his pseudo-libertarian babbling.

I hope there's a special little place in hell for him and Grover Norquist and Frank Luntz and the other leaders of the "Fuck The Common Welfare" movement.

Miss Dennis said...

Yes! People who make sense. Nice blog. I immediately tore 20/20 apart on my blog too. John Stossel: Stupid in the Studio
http://madtedious.blogspot.com

Chris said...

There are those who will mischaracterize Stossel as being “anti-education.” This label is inaccurately conveyed, as it should be labeled “pro-education reform”. So to use “anti-education.” and denominate those is misinforming.

The “War on Public Education” is a straw man. There has never been such a war. Any time spent defending against it is time that diverts much-needed time and energy away from the real issues. If there’s no war, then what’s the fuss? Who are these imaginary soldiers? They are simply observers, who pointedly remind us of the many facets of public education which can use serious reform. They however, are very interested in the views and observations of intelligent peers who can contribute to the debate in a constructive way. Part of the debate is calling a spade a spade, shining a light on egregious examples of the misdeeds of public educators, their union, administrators, and aspects of the system itself.

Yes, there are many public schools where excellence is part of the daily culture, where students are given the best chances to lead productive lives after graduation. There are countless public educators who nobly fight the good fight against ignorance and poverty, and who, despite terrible obstacles, defeat these foes daily.

It should not be offensive to truly dedicated teachers and administration to point out the ugly truth where it may lie. These blemishes aren’t just isolated in a system that is by far mostly good; they are endemic. Some examples of serious issues, in need of reform: teacher unions, political activism, teacher certification, mediocrity, opposition to competition, home schooling opposition, zero tolerance, and lack of accountability.

There are four kinds of teachers and administrators staffing public schools. First, there are dedicated teachers and administrators who are effective. Second, there are dedicated folks who aren’t. Third, there are people for whom “it’s just a job,” lastly, and most seriously, there are incompetent teachers and administrators.

Members of the first group should take no offense at any criticisms of the other three groups; they should be leading the charge for reform. The second group, (due to curriculum or techniques), can be retrained, the third group needs to be weeded out, and last group need to be fired, period.

These reforms along with tax credits and free market choice will provide the best environment. True competition can cure most of these ills.

Don’t fall for the ‘We are Great!’ mantra.

pebird said...

The U.S. spent around $3,700 per student in 1970. Using the handy-dandy government inflation calculator located at http://data.bls.gov/cgi-bin/cpicalc.pl, we find that would purchase $18,843 in 2005, pretty close to a private school tuition.

Good to know there hasnt' been a war on public education.

Don't fall for the "We Are Spending Too Much on Public Education!" mantra.

Pepper said...

I heart this. Over at the Pepper and at Ezra Klein, I pointed people over to you.

Thank you for taking one for the team and watching that crap.

Parents for Competitive Education said...

Your defensive tone, angry words, and shallow ranting proves unequivocally that Stossel and ABC are right on.

You must be an underperforming public school teacher. Who else could write such poppycock?

Introducing competition, and making schools and teachers accountable for student performance, would give the U.S. education system the intellectual and organizational reform it so badly needs.

The biggest obstacle to progress: the liberal, stubborn, powerful, left-leaning and well-funded NEA, the massive union that shields all public school teachers from the accountability parents so desperately need.

Accountability on the part of teachers would empower parents to make the best decisions for their children, not for teachers.

It's clear from the NEA's mean-spirited and self-serving agenda that "No Teacher Left Behind" is its mantra. I'm accountable for my professional performance, and teachers should be no different. It's time to put students first. Competition is public education is an idea whose time has come.

Peter Jackson said...

Say what you want about the 20/20 piece, but at the end of the day the fact remains that we educate our children the same way the Soviets used to try to make soap. And we get the same results. Surprise.

But really the main question I have for the anti-reformers is this: if a universal voucher system destroyed public education, how would we tell?

yours/
peter.

Karmakin said...

My god. This is like a MRA raid but it's for school choice :)

To start, I have to defend Stossel. It's true. Your comparison of GDP has nothing to do with the raw dollar per student figure. Your figure is useful, but it's very possible that you might both be right. I don't know off hand, and I'm not going to check. I don't feel like it.

Chris:There are four types of teachers and administrator staffing PRIVATE schools. What? Don't those things apply?

It is a war on public education, as the problems that are identified can be fixed relativly easily by unlinking school funding to local property taxes. As well, promoting a love of education rather than corporate drone factories would help. A lot.

PfCE:Competition doesn't work in education. Here's why. If a student gets a C in one school, and an A in another, it's obvious that the A school is better, right?

WRONG.

The A school could be dumbing down the tests, even worse, dumbing down the material presented in order to better compete in the marketplace. The C school could be a top notch school who's challenging that student to learn and grow as an intellect. Unfortunatly, most people, correctly, which is even more unfortunate, will identify the A school as being better for their child's long-term economic success.

And by the way. Most voucher plans would not spread universal testing to the private schools. I'm strictly against teaching to the test anyway. It kills any love of learning that kids might have.

And THAT. And ONLY that is the cause of "Stupid in America"

Cynthia said...

Public education is what made the USA so competitive in the past. The ideas that ALL of our citizens should be educated through 12th grade and that the cost of that education should be borne by all adult citizens (for a shared stake in our future) propelled us to economic dominance. This is very important. In many countries, parents have to pay to send their kids to any school. There are problems in some US public schools, but not all.

The main problem in US education today is that some parents don't value education. Sometimes this is due to the parents' own incomplete education, but sometimes parents undermine the teachers. In other countries that are usually cited in "studies" like Stossel's, there is little argument against teachers' unions as an educational bugbear. Teachers are highly respected, in general. Betcha Stossel left that part out.

In the US, there is now a common desire for the educated to be made fun of, especially if one values knowledge for knowledge's sake. This is very different from when I grew up in the 60's. We were encouraged to learn and study because we were going to the moon, we were going to be more productive to end world hunger, we were going to help other countries with medical advances, etc. There was no loud conflict about teaching science. It seemed obvious to everyone then that science education was important to keep us ahead of the Soviets. There was idealism involved in promoting education. Now the attitude is not "I need to study and learn everything I can so I can change the world", but "I'm only going to study and learn the bare minimum to earn big bucks".

We host exchange students from various parts of the world so we get their perspectives of the differences between educational systems. We also homeschooled one year because the writing standards for the TAAS test (thanks to then-Gov Bush) were so horrible that we didn't want the formula drilled into our child's head.

D. Sidhe said...

You do a lot of good for your cause by letting John Stossel near it, I can tell you that.

I don't think anybody characterized him as anti-education, by the way.
I think he was characterized as deceptive, glib, and displaying the same caustic approach he always takes toward anything that threatens to use his tax dollars.

He is best characterized as anti-government, unless he's being robbed.

The Department of Education is just another in a series of entirely interchangeable federal windmills against which to tilt. Don't think he won't abandon you tomorrow for some other shiny federal program that he resents paying for.

As for the argument that he must be right on if we're all attacking him, sure. Clearly, everything Bill Clinton ever did was right, too, since, hey, an awful lot of people attacked him every time he did anything, yeah?

In the words of Carl Sagan, "They laughed at Columbus, they laughed at Fulton, they laughed at the Wright brothers. But they also laughed at Bozo the Clown."

TangoMan said...

First off, congratulations on a thoughtful piece. I appreciate bloggers who actually write essays rather than just blurbs. So, it was a pleasure to read.

However, the piece was marred with some bad analysis. You quote Stossel as saying: "Here in Belgium the government spends less than American schools do per student..." and you offer some unlinked data to support your attempted falsification of his thesis. Because I couldn't easily find the data you were basing your analysis on, I searched and found better data. Here it is:

Expenditure on educational institutions per student (2000)

Belgium
Primary education: - $4,310.15
All Secondary education: - $6,889

United States
Primary education: - $6,994.63
All Secondary education: - $8,855.06

Expenditure on educational institutions per student relative to GDP per capita (2000)

Belgium
Primary education: - $16.33
All Secondary education: - $26.10

United States
Primary education: - $20.21
All Secondary education: - $25.59

So, Stossel is correct on his point. The only place you can find a technical violation is in regards to secondary education when analyzed on a per capita basis, and it's quite a minor quibble at that.

Further, your choice of using % of GDP is inappropriate. What Stossel asked was who spent more on education. If you don't see why it's inappropriate ask two neighbors who spent more on their new cars. They'll compare the actual dollars they spent, not the dollars they spent as a percentage of their incomes. The latter analysis is a whole different ballgame. Dollars spent tells you how much you are paying for a good/service. Percent of GDP tells you how much of a budget you're willing to allocate, in a sense how much do you value the service.

Because those massive urban districts are a great favorite of the anti-union crowd,

So, let me get this straight. Your criticism is that he targeted these districts as being unrepresentative of the nation's school districts but you let stand his characterization of the facts unchallenged. Is that right? Everything Stossel said was accurate,but only for NYC and Washington? If so, I'd appreciate your thoughts on how to justify the union situation in NYC.

"Choice" was a big theme of Act I. Why can't parents choose what school they want their children to go to?

Being a first time visitor to your blog I'm sure I'm missing quite a bit of past context but you seem to point to his quotes on choice as though they sufficiently, and self-evidently, damnable. Maybe you've explained in earlier posts why the argument against choice is robust, and if so could you post a link. If not, could you sketch out a cursory argument of the perils of choice.

So why, then, are these schools of choice uniformly in wealthier districts? Parents aren't clamoring to get their children into schools with poorer equipment and fewer programs.

One could argue that the parents are consciuosly, or unconsciously, racist. We know that:


Families originally living in public housing were assigned housing vouchers by lottery, encouraging moves to neighborhoods with lower poverty rates. Although we had hypothesized that reading and math test scores would be higher among children in families offered vouchers (with larger effects among younger children), the results show no significant effects on test scores for any age group among over 5000 children ages 6 to 20 in 2002 who were assessed four to seven years after randomization. Program impacts on school environments were considerably smaller than impacts on neighborhoods, suggesting that achievement-related benefits from improved neighborhood environments are alone small.


So the parents are acting to separate their kids from whatever bad influences they perceive, whether justified or not, whether rational or not, whether moral or not. Those parents are making choices but have to go through a convoluted process, rather than a straightforward one.

And so is there some reason you give the test to two small groups of students, rather than use the results of the much larger sample of the real test?

Umm, it's pretty boring for a TV reporter to stand in front of a camera and hold a document and tell the audience the content of that document. It's quite a bit more engaging to create a situation that is dynamic, such as using real students, the students taking the test, the commentary from the students.

As near I can tell your beef with Stossel is that the test results, which indeed supported his thesis, were unduly amplified by his selection bias. So, it's the amplification, not the binary truthfulness that is the problem. Aferall, by your PISA statistics, the Belgian students outperformed the American students.

But one of the factors that've been cited for our poor performance is that middle school, which these students have just completed, is in America something of a spin-your-wheels period.

Fair enough. You're citing Middle School curricula as a mitigating circumstance to excuse the lowering of student performance because middle school is preparing the students with a good foundation for later study. Is that right? If so, please back it up.

Looking forward to your next segments.

johnny magnum said...

Fair enough. You're citing Middle School curricula as a mitigating circumstance to excuse the lowering of student performance because middle school is preparing the students with a good foundation for later study. Is that right? If so, please back it up.

That's basic Middle School constructivist pedagogy.

TangoMan said...

Johnny Magnum,

That's basic Middle School constructivist pedagogy.

I fully aware of what it is because I follow the education journals, but I'd be interested in any link to data which purports to show that the pay-off comes in high school when the US students surge ahead of their international peers because of the solid foundation they've received in the wheel spinning years of Middle School. The data doesn't exist as far as I know, so the author needs to contend with this issue and either withdraw his reasoning or back it up.

Gahrie said...

Speaking as a Middle School teacher, my biggest problem is students and parents who don't give a damn. Give me either an involved and interested student or parent (ideally both) and I can teach anyone anything. Give me 5 classes of 37 dominated by apathy and disruption and I have trouble teaching the basics. I failed 100+ students last trimester (primarily for lack of effort) and less than a dozen parents contacted me, and fewer students sought my help.

Anonymous said...

If you really want to put your finger on the scale of comparing %GDP education spending, adjust for %GDP/pupil. Since Belgiam is skewed much older than the US you'll get an even bigger margin. Of course, by this logic, the proper price of a candy bar in the U.S. should be something like $17. But why start getting hung up on fairness?

Uncle Mike said...

One tiny point from this teacher:

The reason many private schools are so attractive and have terrific scores is that they get to pick and choose their students. There are actual applications that must be approved (I should know as I've signed a few for former students).

We public school teachers teach the rest of America.

Anonymous said...

A simple question: can anyone identify another monopoly, union-run industry which is innovative and efficient?

(Corollary question: can anyone identify another industry where free and vigorous competition did not result in innovation and improved efficiency?)

Anonymous said...

In response to the last anoymous, I'd suggest e start by looking at utilities.

julia said...

can anyone identify another industry where free and vigorous competition did not result in innovation and improved efficiency?

I can identify a shitload of industries where whining about regulation (and lots of money filtered through lobbyists) led to deregulation which resulted in plummeting innovation and efficiency, but I suspect that's kinda what you're looking for.

You fight for Enron. Kiss it. Love it. Marry it. It's yours.

Peter Jackson said...

Cynthia!

Public education is what made the USA so competitive in the past. The ideas that ALL of our citizens should be educated through 12th grade and that the cost of that education should be borne by all adult citizens (for a shared stake in our future) propelled us to economic dominance.

That was then and this is now. Just prior tol WWII, more than half of all Americans worked in agriculture. Illiteracy was ubiquitous and relatively few had a full high-school education. It didn't take much for the system to produce the large beneficial leaps in education that it produced. But you can only teach your population how to read o nce. Subsequent gains are smaller, cost more and produce less benefit. Today about 1% of us work in agriculture, and simply being able to read on a fourth-grade level isn't going to cut it.

=====

Uncle Mike!

The reason many private schools are so attractive and have terrific scores is that they get to pick and choose their students.

EXACTLY BACKWARDS. It's because the students got to pick and choose their schools. By the way, the average private school tuition in the US has been running about half of the average public school expenditure per pupil for thirty years now.

=====

gahrle!

Speaking as a Middle School teacher, my biggest problem is students and parents who don't give a damn.

Honestly, do you think parent and teacher interest would be better or worse if they were customers rather than subjects of the system?

Whenever I hear this complaint from folks I always get a little uncomfortable. Don't get me wrong, I don't doubt you a bit and I can easily empathize (I'm not a teacher but I come from a family of teachers and my wife has been an educator for fifteen years, so trust me, I've heard it all.), but in every conversation about education quality we always tend to frame the debate in terms of the problem being one factor, like "oh, it's the teachers," or "oh, it's the students," or "oh, it's the parents/pricipals/(fill in the blank)."

Schools are systems that are supposed to output education for students, and there are many inputs required for this to happen. Nowadays in business, it's understood that when you have a problem with output, it's almost never the result of a an issue with this input or that input, but rather it's understood to be a problem with the system itself. And it's the same way with schools: it's not a problem with [parents|teachers|money|etc], it's the system that is unable to deal properly with the inputs available.


julia!

You fight for Enron. Kiss it. Love it. Marry it. It's yours.

I seem to recall that Enron was run out of business overnight as a result of fraud. The government didn't put it out of business, the free market did.

Has it ever occurred to you that if the energy sector and Enron were run like our public school system that Enron would still be in business today, lying, defrauding and marauding as if it were "business as usual"?

Like the fall of Enron, public schools closing due to lack of attendence in a school choice system isn't a bug, it's a feature.

yours/
peter.

Peter Jackson said...

By the way, everyone's favorite Worker's Paradise,™ Sweden, has had school choice and for-profit schools since 1992 and their education system is thriving as a result.

http://www.friedmanfoundation.org/news/2003-01-06.html

yours/
peter

julia said...

Ya know, Peter? That's not true. The free market didn't have a chance, because Enron's friends-for-hire in government kept on shovelling money at them and changing laws to allow them to avoid regulation. They would have gone under years earlier and the public would have been saved a huge amount of money if the free market had applied to Enron.

The criminal justice system shut them down, not the market, because even though they got dropped in the corn, they just had to raid the wheat field, because (as Great Heroes of Business and The Smartest Guys in the Room) they weren't just pigs, they were stupid greedy pigs who just couldn't accept that limits applied to them, or that there was some reason that they shouldn't steal Grandma Millie's pension when they were already some of the richest guys in history.

Enron was a classic Republican ponzi scheme, and until the ship was under water George Bush was still their biggest fan (not to mention the guy they paid most to play). A real libertarian dream world.

If Enron were run like the school system, Ken Lay wouid be trying to pay off the mortgage on his one bedroom an hour from work. If, however, the school system were run like Enron, you'd get Chris Whittle. Who, I notice, you're carefully not talking about.

You know, this clearly isn't an issue that's excited you enough to learn anything about, and you're displaying that ignorance in the wrong place.

jmo

Chris Clarke said...

Well, Doghouse, congrats on attracting such an entertaining batch of Liberarian cultists.

can anyone identify another industry where free and vigorous competition did not result in innovation and improved efficiency?

I remember a time in the US when you could walk up to ANY payphone and it would work, unless it had been obviously vandalized. To the point where I would occasionally, in a dream, try to call someone on a payphone and the phone wouldn't quite be working, and I'd wake up and think "well, that was weird."

Then came the AT&T breakup. I had my first realtime experience with a shoddy payphone shortly afterward. In rather short order, it was not at all uncommon for payphones to work very poorly.

Peter Jackson said...

Julia!

Ya know, Peter? That's not true. The free market didn't have a chance, because Enron's friends-for-hire in government kept on shovelling money at them and changing laws to allow them to avoid regulation. They would have gone under years earlier and the public would have been saved a huge amount of money if the free market had applied to Enron.

Actually Julia, it is true, which a simple search on Wikipedia or CNN for the term "Enron" will confirm. There are more than four million corporations in the US alone, the vast majority of them are perfectly ethical, and to pass judgement of the whole lot of them, or the markets they make up, based on a handful of anectdotal exceptions is silly.

But look, I obviously stepped on some sensibilities where it wasn't my intent to do so, and I'm sorry. Also, I didn't intend to start a discussion about the free market vs. government run economies in general, because frankly it's 2005 and that argument is quite settled really, but still, it's also beside my point.

Ninety-five percent of the US population supports publicly FUNDED primary and secondary education, and I am one of them. But that still begs the question of why the system needs to be publicly RUN. So I'll just keep my argument in the realm of government programs.

If the food stamp program were run like public education:
1. Everyone would get food stamps whether they needed them or not.
2. You could only exchange them for government food grown on government farms.
3. They would only be redeemable in government-owned grocery stores.
4. You couldn't go to the government grocery that was closest to you, or one that you liked, you would have to go to the one that the government told you to go to.
5. About a third of the participants would still suffer malnutrition anyway, with a highly disproportionate amount of those being made up of poor inner-city minorities and rural folks.

If we always do what we've always done, we're always going to get what we've always gotten.

yours/
peter

Anonymous said...

Anonymous seems to suggest that utilities are an example of a monopoly, union-run industry which is innovative and efficient. I'd be interested in the details behind that claim.

Julia, in a rather mean-spirited response, states that there are 'a shitload of industries where whining about regulation (and lots of money filtered through lobbyists) led to deregulation which resulted in plummeting innovation and efficiency.'

Examples would be welcome.

Julia further implies, if I'm reading it right, that 'plummeting innovation and efficiency' is my desired outcome. I am apparently a big fan of Enron and, therefore, corrupt business practices.

I have absolutely no clue why the questions I posted create an impression that I support anything BUT innovation and efficiency.

It may surprise Julia to know that it is possible to be in favor of BOTH free competition and innovation. In fact, the consistent lesson of history is that the former leads to the latter.

If she is truly interested in understanding how, rather than simply throwing firebombs, I'd suggest Julia read Milton Friedman, especially "Free to Choose."

julia said...

Oh, Peter, really. You think that the fact that there are honest corporations in America means that Enron was operating in the free market? You can't be that silly.

Anonymous, go drink a big glass of water from a stream downwind of a power plant and get back to me.

Better yet, feed tuna to your child every day for a month.

Or, you know, don't, because I don't wish on you what you wish on those who are unfortunate enough to pay the price for your delusions.

Which, I think, takes care of the meanspritedness calculus in this discussion.

Anonymous said...

Other anonymous (I'll include my name at the end so that there's no confusion) should follow my suggestion; I was not saying that various untilities are such an example (I'm especially not sure about being union-run or innovative), but these are held up as a textbook, econ 101 example of natural monopolies where competition need not be beneficial. I guess I was primarily responding to your corollary question, looking back at it. Since you don't seem to actually want to look up the answer to your own question, I'd suggest you think about the California energy crisis of a few summers ago, and look up the new york times article about water privatization in Bolivia that was published about a month ago.

Friedman is your model economist, or at least the one you'd suggest others read? I'm sorry.

Matthew

Gahrie said...

Peter:

Just for the record, I am in favor of charter schools and school vouchers.

Anonymous said...

"Anonymous, go drink a big glass of water from a stream downwind of a power plant and get back to me.

Better yet, feed tuna to your child every day for a month."

It is not surprising that a lot of non-libertarians misunderstand what we are proposing because a lot of libertarians use our buzz words that we understand between ourselves but others aren't familiar with.

Julia is referring to public goods when she refers to streams and oceans, subject to the "tragedy of the commons."

Free market incentives require private property (among other things like protection of it and enforcement of contracts) to accomplish what we would prefer.

Also, we believe in something better not something perfect. The government currently runs these public goods!

So, in the case of pollution (tresspass) and overfishing (theft), we could sell certain property rights to individuals or organizations who benefit from taking care of these lands on conditions of a contract.

sapphic_beats said...

Peter said "There are more than four million corporations in the US alone, the vast majority of them are perfectly ethical..."

BWAHAHAHAHAHAHAHAHAHAHAHA...ahhhh...HAHAHA...ooohhh...ahem...teehee...
whooo...oh...wait...you were being serious.

oh. ahem...*chuckle*

Anonymous said...

Sorry for somewhat off-topic post, but I doubt many are reading this thread anymore anyway.

Anonymous that will not be named, you do well in your last post to demonstrate why the libertarian ideology is garbage.

First, and this is just something that I find annoying on an aesthetic level, is how you (or at least the liberatarians of my experience) seem to live and die by your "buzz words", even though they do not appear to be clearly defined in your mind. I'm thinking of some particular experiences with other libertarians, so I won't hold you accountable for their comments. At the same time, it's always seemed that your (libertarians in general) devotion to freedom or liberty or the free market is simply an attempt to exchange one form of infringement of liberty (the government's) for another (the free market's). Then you have to squirm around trying to define freedom in such a way that economic factors are less of an infringement than governmental when it comes to losing liberty. It seems to me that all you really accomplish with your program is to exchange a master that can be understood and, in ideal conditions, held accountable for one whose mechanisms are very difficult to discover (don't believe me on the last point? can you then explain why attempts at privatization in various South American countries have not panned out the free marketeers so confidentally predicted?). Personally, if I must serve a master, I'd like it to be one that I have a chance of influencing.

But that's somewhat of an abstract criticism. What really bugs me about libertarianism in general, and how you apply it in your last post, is fact that every decision is made subordinate to monetary interests, and the obvious consequences of such a decision. For instance, in response to the question of a company polluting a river, you write

"So, in the case of pollution (tresspass) and overfishing (theft), we could sell certain property rights to individuals or organizations who benefit from taking care of these lands on conditions of a contract."

Three points to this: First (again the minor point), who is the "we" that could sell property rights? The government? But that would admit that the government originally owned the property. Same if you meant society in general (then we'd have public ownership, which is of course an unspeakable heresy).

Second, suppose that we do have something like your scheme in practice. There are two main ways that I can see this accomplished. The first is that a company on the river is responsible for not polluting the water, and will be fined if it does. Suppose further that I am living downstream from the factory, and my water supply is derived from the river. Now, what happens to me if the company upstream decides that it is more cost-effective to pay the fine than not to pollute? In other words, suddenly my health is subject to economic decisions made by others in which I have no say. Am I supposed to stand for this? I suppose the good libertarian would go to his deathbed praising the miracle of the free market, since even if he were poisoned by it at least he didn't have the government's telling him what to do while he was alive.

Now, there is a second libertarian option, at least as I see it. This is that the company can pollute as much as it wants, and then someone (who? the people who live downstream and are being poisoned by someone else's economic decisions, if they can afford it) pays another company to clean up the mess of the first. Of course, suddenly we're back in the "natural monopoly" situation again (which is why I originally suggested you read up on utilities), since it doesn't make sense to have two companies actually competing with one another to clean up a river at the same time (once one does the work, builds the dams, etc., there is no point to the second). Thus we get the standard case where the one company that wins out originally is now solely responsible for potable water for whoever lives downstream, and can then charge whatever prices they want, so that those downstream are again held captive to economic considerations beyond their control (so much for your precious liberty). I can see two responses to this problem, and I have counter responses to both of them, but this is dragging on too long already. If care enough to respond, I wonder which you'll use, or if you'll surprise me with a third.

The third problem with this is the question of how the people living downstream know if their water is polluted or not. The libertarian government won't be around to tell them, since it's too weak to do anything beyond maintain a military and police force (to ensure contracts are upheld, after all), so now we need a third company to test the water and tell everyone whether it's safe to drink. Basic question: Once the knowledge that the water is polluted (or safe, for that matter), is made available, why should any given individual pay the third company for their service? Actually, the same question applies to the second company that was to clear up the water of the first: once it's cleaned up, why should any individual downstream pay for the service, since it's already been done? And, appealing to rational choice (a great lie propegated by the libertarians of the world), if it is not in any given downstream individual's interest to pay, no one will (there's an interesting demonstration of this point with a variant of the "Prisoner's Dilemma" game, but I won't get into that here). The the second and third companies will not be profitable, and therefore will not do business. So the people downstream will be poisoned, this time through a combination of libertarian ideology and market forces (did I mention that the market forces are beyond their control?).

Ok, that was long, but every now and then I think it's healthy (for me) to rant at a libertarian, and Anonymous who will not be named was kind enough to volunteer (and for no financial gain, curiously enough).

Matthew

Anonymous said...

Matthew,

You know, telephones used to be considered a natural monopoly. Then ATT was broken up, the market opened, and now we have a landscape very different. (Chris Clarke regards that as the advent of a decline in service, based on his observed increase in the frequency of payphones that don't work. Assuming that's true, and I have no idea, is it possible that another explanation is the significant reduction in the use of payphones caused by the ubiquity of cell phones? And by the way, Mr. Clarke, do you place no value on the significant declines in costs of local and international service, the increased convenience of cellular phones, the current developments in internet telephony? These are all classic examples of the benefits of competition.)

Back to the original point, changes in technology may mean a formerly natural monopoly no longer makes sense.

I would also think that the burden should be on the monopolist to justify its monopoly. If someone else is willing to try and complete, why not let them? I still haven't seen anyone present an example of a competitive market that didn't result in innovation and efficiency.

In the infrequent (to me) cases where a natural monopoly can be justified, I don't think you'll find them to be hotbeds of creativity. Any amazing recent innovations from your utility you'd like to share with us?

(And I didn't even mention the post office...)

Finally, your ad hominem slam of Milton Friedman may have felt satisfying, but it is not an argument.

Julia,

You do not seem to be interested in a serious discussion so I won't bang my head against a wall.

Doug

Anonymous said...

Doug,

I fear I may not have made myself clear. While my original post was a response to your question, in particular your corollary question (natural monopolies, in our discussion water purification, are an example of an industry where competition does not lead to innovation and increased efficiency, simply becuase competition in a natural monopoly is redundant and ultimately self-defeating), my last one should have been seen more directly as a criticism of the tenants of libertarianism (at least as I understand them) by laying out a very realistic problem that the free market is unable to solve. You do not actually address any aspect of the situation I describe; viewing my last post as a critique of the free market as panacea ideology, how do you respond?

Now, you do address the question of natural monopolies, but your response is really a dodge. First, if we're to consider your telephone example, it seems to me that the example of natural monopoly we should be looking to is whoever lays out the telephone lines and whoever provides the electricity to run the system, not the actual providers of phone service (who are after all in the business of utilizing the infrastructure that the natural monopolies provide). I'm not entirely sure about the electricity provider (though I am pretty confident that it would be inefficient to set up competing generators for a given area), the phone line bit is certainly an example of a natural monopoly. Think of what the result would be if there were even two phone line providers for a given area, and if on a certain block every other house used line provider A, and the rest used B. Provider A would still have to run lines past the houses that they're not serving, as would provider B--this is your notion of efficiency?

The whole "improvements in technology will lead to the breakup of natural monopolies" is the part that is in particular a dodge. This is simply closing your eyes and hoping that some miracle of science will save your economic theories, but consider what such a solution would have to look like. In the water clean-up example, we'd have to have two competing companies, where company A would somehow clean exactly the water that would reach exactly its customers downstream, and the same for company B, ignoring the basic fact that if either does not clean all the the water that passes it by there will still be pollution in the water for those living downstream. Innovation is wonderful, but it is still bound by basic physical laws.

I feel that our notions of natural monopolies are somewhat at odds. You write "I would also think that the burden should be on the monopolist to justify its monopoly. If someone else is willing to try and complete, why not let them?" When we're talking about natural monopolies, it's not that the monopolist needs to go out of his way to ensure no one competes with him, it's that it is economically disadvantageous for someone else to open shop (because they would be redundant--in the power line example--or useless--in the water purification example). You're also ignoring the whole issue of start-up costs (in the water purification example, this would make it even less economically feasible for a competitor to arise), but that's taking things too far afield. The point is that natural monopolies are a product, not of government control, but of the very free market forces to which you would subject us.

The point? If there exist natural monopolies, and I suggest that there do, then such a monopoly has extreme leverage to charge whatever it wants for what is possibly an essential service, at least in the libertarian setup. This is what I mean when I say that the libertarians are changing one master for another, but the master that they choose is one that is even less responsive to individual needs than the obvious alternative (assuming democratic government, etc.).

Finally, don't think that you're shedding any light by pointing out that my "slam" of Friedman (I hardly think it qualifies as such myself) isn't an argument. I am fully aware what constitutes an argument, and I suggest that you have yet to fully respond to those that I have provided. The Friedman comment was primarily motivated by my annoyance; after living under his shadow for a number of years, you'll pardon me if I don't exactly have the highest opinion of his disciples (of course I couldn't win an economic argument against him).

Ok, enough time wasted.

Matthew

Anonymous said...

Ok, I lied. Here's a basic example in game theory to consider (I think I heard about this in one of Hofstader's books). To be clear, I am trying to show a flaw in the notion that if each individual in society acts in his own best interests then society as a whole will benefit, which here I'll take to mean that the outcome is best for each individual in society. I'm leaving the discussion of innovation and efficiency for now.

I know this is very reductionist, but bear with me.

Let's suppose that you and twenty other people are approached by a very generous fellow, who is willing to make you the following offer: Each person is to write either "C" (for cooperate) or "D" on a piece of paper, along with your name, and hand it to the generous one. You're free to discuss what you'll write with the other twenty, but no one can force you to show what you actually write. After all the pieces of paper are collected, each participant is rewarded money according to the following scheme: If you wrote C, for each other person that wrote C you get $3, and for each that wrote D you get nothing. If you wrote D, for each person that wrote C you get $5, for each that wrote D you get $1. Question: What do you write?

Some basic points to consider: If every individual writes C, then everyone gets $60, while if everyone writes D, everyone gets $20. Also, regardless of what the other people write, you personally will always get more money if you write D (if everyone else cooperates and you defect, you get $100, for example, instead of just $60).

(Assume that you all would rather get more money than less.)

I don't know enough about game theory to carry the analysis any further, but I'm acctually interested in the "correct" answer...if you have any thoughts I'd like to hear them. So far as our discussion is concerned, though, I think the analysis I've given will suffice.

Now, you could rightly point out that this is a very simple case, and could then (wrongly, I believe) claim that it does not represent reality. What I'm trying to do here is to cut away the fog of unknowns and unknowables that affect our everyday economic decisions in ways that we can't understand. As for this being a realistic example or not, the letters C and D are chosen for a reason (this is basically a multi-person reverse "Prisoner's Dilemma" game).

I'm honestly interested in your thoughts on this, especially if you have any interesting analysis to offer.

Matthew

Lies said...

I would just like to point out that "the market" we have right now is not "free" at all. This is one of the most pervasive myths of capitalism, I think. E.g. as long as the government spends huge amounts of dollars to subsidize agro-businesses, even going so far as changing laws and regulations to benefit them (and other big-business players who donate enough cash to their re-election campaign), the little guy (inside and outside of the US) will keep losing out. Companies have the legal status of a person (totally insane), but they can't be imprisoned when they break the law. Somebody takes the fall, someone else moves into position and the company moves on. So they have the benefits but not the disadvantages, how convenient.

Anonymous said...

Matthew,

First, I'm excited because I just figured out how to use these HTML tags!!

Now then...
...natural monopolies, in our discussion water purification, are an example of an industry where competition does not lead to innovation and increased efficiency, simply becuase competition in a natural monopoly is redundant and ultimately self-defeating...

So competition does not work when there is not competition! Quite an insight.


...viewing my last post as a critique of the free market as panacea ideology, how do you respond?

First, I'm not sure I would say I regard the free market as a panacea (panacea, n. A remedy for all diseases, evils, or difficulties; a cure-all). It's more like what Winston Churchill said about democracy: "democracy is the worst form of Government except all those others that have been tried from time to time."

I am a firm believer in capitalism, both because I have seen it's power to benefit the societies which employ it, and because no other system has that same power.

Is it perfect? Sadly, no, but it (and all other systems) is subject to the 'human' factor. Humans are fallible, they sometimes have good intentions which lead to bad outcomes, they sometimes have bad intentions.

Adam Smith's invisible hand is an amazing insight. It is not at all like the 'game theory' example you cite, which depends on explicit cooperation (or betrayal) by a closed group of people. I'm sure this is nothing new to you, but the 'invisible hand' refers to the millions of people who make independent decisions, through voluntary exchange (driven purely by their self interest), which, as if guided by an invisible hand, increase the well being of overall society.

The classic example is the pencil. Did a group of people decide they needed a pencil, so they went and chopped down trees, obtained the other necessary materials, developed the machinery, and made pencils? Of course not. The loggers provide the wood because that is their livelihood. They may not even know if the wood is to be used for pencils or paper. Truckers transport the wood and other materials because that is their chosen livelihood, not becasue they want to help make pencils. And so on. You or I can now very conveniently obtain a pencil at our local store (which is also in business because of the self-interest of the owner). All parties are better off (except maybe the tree, but that's another debate!).


The whole "improvements in technology will lead to the breakup of natural monopolies" is the part that is in particular a dodge.

You are, I'm sure inadvertently, misstating what I said. I said, "changes in technology may mean a formerly natural monopoly no longer makes sense." That is inarguable. My point is based on my belief that monopolies are a bad thing, so I don't want them to stay around longer than absolutely essential.

Of course, you will rightly say, some natural monopolies have not been made obsolete by technology. Very true.

...such a monopoly has extreme leverage to charge whatever it wants for what is possibly an essential service, at least in the libertarian setup

I'm not sure how you determine that to be the 'libertarian setup.' Where there is a natural monopoly there can be one of three structures: we can have private unregulated monopolies (what you call the libertarian setup), private regulated monopolies, or public (government-owned) monopolies. Maybe you can think of another alternative. To me each of the 3 options I cite have major flaws, ranging from the potential for price gauging to corruption to inefficiency. None of the options has the stimulus of competition. What do you propose we do?


...if either does not clean all the the water that passes it by there will still be pollution in the water for those living downstream.

I gather you regard this as the 'libertarian setup.' (I actually consider myself a free-market capitalist rather than a libertarian, but I'm not looking to dodge the issue with labels.)

The role of government is to do the things that can't or won't get done by individuals acting in their self interest in a capitalist system. Classic examples are armies, police and fire departments, laws and judicial systems (all of the proceeding protect the people's freedom to operate in a system of voluntary exchange). Your water scenario is a case of what economists call 'neighborhood effects,' which are another potential role for government. The trick is how government gets involved, as government has a pretty poor track record of achieving what it sets out to do.

I don't have a good answer here, other than to say the people need to elect representatives who are able to deal with these issues. (Not a very good track record there, either.)


natural monopolies are a product, not of government control, but of the very free market forces to which you would subject us.

False, but this statement reveals some of your biases. (Please don't take that wrong, this is a good discussion.)

The minor point: natural monopolies are in no way a product of the free market. They are an interruption of it. The free market, sorry to be repetitive, consists of people with the freedom to enter into voluntary exchanges. It is not voluntary when one has no alternative. I have to get my water from the local monopoly utility. (I suppose I could move to another community or drill a well, but otherwise the purchases are hardly voluntary.)

The main point: saying we would 'subject' you to free market forces is like saying we would subject you to the laws of physics. Supply and demand, human reaction to incentives, human desire to improve one's lot - this is the real world! Recognizing it and acting accordingly is the appropriate response, not denial.

This is why I keep asking for contrary examples. I doubt there are any, or at least extremely few. Versus the multitude of examples of the successes of a capitalist system.


the master that they choose is one that is even less responsive to individual needs than the obvious alternative

I choose a free economic system, not a master.


The Friedman comment was primarily motivated by my annoyance; after living under his shadow for a number of years...

It's fine to disagree about Friedman's stature (even though he's short) and credibility. I happen to believe he has nailed it, and I'm not aware of many cases where he's been proven wrong.


Matthew, I consider myself open minded (you may not perceive that from what I've written!) but only with facts and logic will I change my mind.


I can't close without a comment to "lies" (who, giving the benefit of the doubt, may want to change his or her name to "mistakes.").

I would just like to point out that "the market" we have right now is not "free" at all. This is one of the most pervasive myths of capitalism


I agree completely with the first part. There is an insane amount of government interference in our economy - taxes, regulations, tariffs, minimum wages, subsidies - and in our lives - taxes, regulations, entitlements.

It is not, however, one of the 'myths' of capitalism. The real myth is that we are a capitalist society. We are more capitalist than most of the world, which accounts for our stronger economy and higher standard of living. We are leaving a lot on the table, though, which is the cost of all of these disruptions to the free market.


Doug