Dear Jason:
Here’s my brief response. I favor any and all tax reductions. Period. However, I also oppose government picking winners. The state apparatus can do this in two ways: outright subsidies, and tax reductions. If we are to have the latter, I’d prefer them to be across the board. If they are focussed on any one thing, then government is picking winners.
Consider tax reductions for making movies. As I say, I favor any and all tax reductions, so I favor tax reductions for making movies on that ground. But, this is a paradigm case of the state picking winners, so I oppose it on that ground. I oppose, even the more, tax reductions, or credits, for education, for here, not only is picking winners in play, but so is at least tacit support for the idea that we have a “market failure” in this area, namely, external economies, or positive externalities.
Let’s reduce taxes (give tax credits) for anything and everything: bubble gum, shoes, pickles. In that way, we don’t enmesh ourselves in picking winners, or, central economic planning, as we do for tax credits for education, movies, green fuels like Solyndra, etc.
Best regards,
Walter
Walter E. Block, Ph.D.
Harold E. Wirth Eminent Scholar Endowed Chair and Professor of Economics
Joseph A. Butt, S.J. College of Business
Loyola University New Orleans
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Dear Dr. Block,
I appreciate and agree with your desire to minimize the extent to which the state distorts taxpayer behavior via the tax code. As I see it, though, education is a special case since the government already taxes residents to pay for its monopoly school system. So, in this case, a tax credit reduces the existing level of distortion. Under a credit, residents can choose to continue funding the state monopoly, or instead give to an SGO to support educational choice for low-income families.
Not only is this an improvement over the status quo, it is an improvement over vouchers. Vouchers are funded by compulsory taxation and all taxpayers must fund all approved types of schooling—conflicts over the teaching of hot-button issues are guaranteed. Under well-designed SGO tax credit programs, donors have a choice of multiple SGOs, each of which may limit its scholarships to schools that satisfy certain criteria, so donors can choose an SGO compatible with their most deeply held beliefs: e.g., Catholic, secular, liberal, traditionalist.
SGO tax credit programs are not perfect, but seem superior in this and other respects, to the viable alternatives.
Best,
Andrew
Andrew J. Coulson
Director, Center for Educational Freedom, Cato Institute
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Dear Andrew:
Please call me Walter, and allow me to call you Andrew.
You are probably correct. The key word in your thesis is “viable.” These sorts of tax credits probably are the best of the presently viable or politically possible, options. But I oppose viability and the politically possible. These sorts of second best options will be the ruination of libertarianism (the promotion of which is my prime goal as a libertarian writer, speaker).
Consider an analogy, free trade. Now, I expect you’ll agree with me, the best of the most “viable” options is to negotiate free trade agreements with all and sundry, and then have congress vote up or down on them, with no possibility of adding riders. But, to support this is anathema to libertarianism. From the perspective of this philosophy, the ONLY policy is a unilateral declaration of free trade with everyone. No negotiations. No NAFTA, CAFTA, etc. Is this “viable?” “Politically possible?” Of course not. But that and only that is what libertarianism is all about. All other “viable” options merely detract, contradict, the libertarian philosophy.
Too bad that Cato deviates from true or pure libertarianism on so many issues, chasing the will o the wisp of “viability” and that which is “politically possible.” The job of a libertarian think tank is to render that which is not now “viable” and “politically possible” into what is “viable” and “politically possible” in the future. But the ONLY way to do that is to favor the pure libertarian position, not some semi, demi, quasi libertarian compromise. Why not become more like the Mises Institute and uphold pure libertarianism?
Best regards,
Walter
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Hi Jason,
I just saw that WSJ quoted you. That's great!
Leo [Krasnozhon]
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Dear Jason:
Congrats on the coverage. Please consider promoting pure libertarianism.
Best regards,
Walter
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Walter,
I guess the question is whether we take half a loaf today and fight for the other half tomorrow, or sit and starve while we hold out for the full loaf.
In terms of education, do we move in the direction of liberty and get lots of kids out of the government school system? Or do we hold out for Libertopia while the government runs the schools that 90% of our children attend?
As I've said before: your absolutism is de facto support for the government monopoly.
Best,
Jason
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Dear Jason:
If you, and Milton Friedman, and Cato, were alive during 1850, and you stuck to the principles you articulate below, you would not have been an abolitionist. You would have been some sort of compromiser on slavery.
Why not allow the conservatives to take your position? Surely, we can count on the AEI or Heritage to make these sorts of points. To put this in other words, my hope for you, and Cato, is that you leave off your compromising conservatism, and become libertarians. Isn’t Cato described in the press as “libertarian.” You should correct journalists who do so, and insist that you and Cato are not libertarians, but rather are conservatives. Until you all change, that is.
Don’t we need abolitionists nowadays, in the face of an overwhelming and overweening state?
Best regards,
Walter
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Walter,
I think we can all appreciate the difference between slavery and a government monopoly over education. The former requires an absolutist position that accepted no compromises along the way to freedom, while an absolutist position in the latter situation is essentially support for the status quo.
A "conservative" would be supporting the status quo (like you, de facto), not seeking to change it as we are.
And again, if we at Cato aren't libertarians because of our view of education, then neither are Hayek, Ron Paul, or Ayn Rand, all of whom recognized the dire need to move in the direction of liberty in education, and supported tax credits (or even vouchers, as Hayek did) as a means of getting there.
Best,
Jason
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Dear Jason:
Hayek was a splendid economist, but not a very good libertarian:
Block, Walter E. 1996. "Hayek's Road to Serfdom," Journal of Libertarian Studies: An Interdisciplinary Review, Vol. 12, No. 2, Fall, pp. 327-350, http://www.mises.org/journals/jls/12_2/12_2_6.pdf; reprinted in Ama-gi: Journal of the Hayek Society at the London School of Economics, Vol. 1, No. 1, pp. 22-25
Block, Walter E. 1999. “The Gold Standard: A Critique of Friedman, Mundell, Hayek, Greenspan from the free enterprise perspective,” Managerial Finance, Vol. 25, No. 5, pp. 15-33, http://giorgio.emeraldinsight.com/Insight/viewContainer.do?containerType=Issue&containerId=13529; http://www.mises.org/etexts/goldcritique.pdf
Block, Walter E. 2006. “Fanatical, Not Reasonable: A Short Correspondence Between Walter E. Block and Milton Friedman (on Friedrich Hayek ’s Road to Serfdom).” Journal of Libertarian Studies, Vol. 20, No. 3, Summer, pp. 61-80; http://www.mises.org/journals/jls/20_3/20_3_4.pdf
Rand, Ron Paul, even Murray Rothbard, also favored educational tax credits, but only based on a general case for reducing all taxes. I certainly agree with you and them on that. But, you are subtly changing the topic when you mention this. Our debate has nothing to do with reducing taxes. The two of us, and all libertarians, agree with that. Our present debate concerns picking winners, industrial policy, economic fascism, second-bestism versus libertarian principle.
Don’t you believe in specialization and the division of labor? AEI, Heritage, as I say, are good on these issues. Why not leave this to them.
Of course there is a great difference between slavery and education. Again, you are changing the topic. I’m not discussing the relative rights violations of the two. I’m talking about maintaining a consistent, pure, libertarian position. I’m only arguing by analogy here, as I did regarding free trade.
You know, it is interesting, Friedman was an absolutist on free trade. He recommended unilateral declarations of free trade with all other countries, instead of NAFTA, CAFTA, etc. He was an absolutist on minimum wage. He did not recommend lowering it, but getting rid of it. Ditto, rent control. Ditto, magnificently, occupational licensure for doctors. It is only on education that he was a compromiser. Why the difference? Surely, the same utilitarian case for moderation can be made in any of these other issues. So, forget about slavery. Surely, it is more politically possible to keep the minimum wage where it is now, or slightly lower it, than get rid of it. Ditto free trade, rent control. Are you a moderate on all these other issues too, God forbid. If not, then you must see some utilitarian value in sticking to principle.
Best regards,
Walter
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Dear Walter,
At the risk of disappointing you, I should clarify that I consider myself a scientist and engineer first, a libertarian somewhere down the list, and a philosopher not at all. What motivates me is understanding which policies work and why, and then educating the public about my findings. I’ve found that freedom works better than anything else humanity has tried in education. As a result, I am trying to reveal that to the public.
But, contrary to your opposition to the consideration of political viability, I have concluded that merely advocating separation of school and state is a route to policy irrelevance. So, in addition to revealing the superiority of education markets (as in my book Market Education and my paper “On the Way to School”), I feel it necessary to also present a viable policy that can move us in the direction of freedom.
For a few years, my focus was on analyzing which policies would best accomplish that “step in the right direction.” More recently, I’ve spent a lot of time on a communications project that will more fundamentally explain why we need freedom in education. I can’t say more about it just yet, but when it’s released (probably not ‘til 2016) I’ll look forward to your reaction.
Best,
Andrew
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Dear Andrew:
I beg to differ with your account of what it is that you are doing. You say that you are doing positive economics (as a value free scientist). If this were true, you would merely be saying something like, full free enterprise enhances human welfare to the greatest degree, tax credits second, school vouchers third, charter schools fourth and public schools last, and give reasons for this sort of thing. You’d be doing something similar to what I did in this book:
Gwartney, James, Robert W. Lawson and Walter E. Block. 1996. Economic Freedom of the World, 1975-1995; Vancouver, B.C. Canada: the Fraser Institute (308 pages); http://www.amazon.ca/Economic-freedom-world-1975-1995-Gwartney/dp/0889751579/ref=sr_1_1?s=books&ie=UTF8&qid=1336605884&sr=1-1; http://www.fraserinstitute.ca/pdf/catalogue.pdf; isbn: 0-88975-157-9;
But, instead you are URGING adoption of what I think both of us agree is the second best option on my list above. You don’t urge the first, since you think it politically unviable (I agree with you on that point). However, for the true value free positive economist, all of this is irrelevant. You would just rate options, describe their strengths and weaknesses, etc. Consider another analogy: you’re a medical chemist doing research on the relationship between cigarette smoking and cancer. You calls ‘em as you sees ‘em. You don’t give a fig for what is politically feasible, what is practical for you to espouse. You ignore that. You just say that based on your research, thus and such is the correlation, and you see a causal connection. You don’t urge tax or subsidy policies.
Yes, we both agree, “freedom works better than anything else.” If you would stick to that, you’d be fine in my book. But you have “concluded that merely advocating separation of school and state is a route to policy irrelevance.” True scientists don’t give a fig for policy relevance. They just report their findings and let the devil take the hindmost.
No, you are not doing value free, purely scientific, positive economics. Instead, you are doing, value laden normative economics. You are doing public policy analysis, urging the adoption of plan A and not plan B. And, you are doing it poorly. You are betraying you own statement, which I enthusiastically support: “freedom works better than anything else.” Note, this does not say that “(second best) freedom works better than anything else.” It says, instead, that plain old “freedom works better than anything else.”
Do you favor total elimination of rent control, minimum wage laws, tariffs, prohibition of marijuana? All libertarians do. Why don’t you apply your sensitivity to political viability to these issues? Why not advocate, instead, partial elimination, or, reduction, in these rights violations. Why the logical inconsistency?
Best regards,
Walter
Oh man, Block just destroyed Coulson's argument. That's twice today I've had to use the word "destroyed", I better go get a thesaurus.
ReplyDeleteI love this back and forth. I have a friend that must see this as well.
I'm so glad Block is on "our" side.