The British Labour Party and economic decision making

It appears the British are getting ready to elect a Labour Party government which is hoping to introduce some “structural” changes to economic decision-making.

This blogger believes economic changes are urgently needed but also figures the changes proposed by the Labour Party will only change the faces making decisions and will do nothing to change the well-being of English people.

0*V_sRwC4Rvi4GfN3ZWhen socialists realize that central planning does not accomplish what they want they try to reform by decentralizing the central planning. To see how the British are likely to try this, see this article in The Economist.

The main issue in capitalism versus socialism is who gets to make decisions about what economic projects are undertaken and who gets to do them.

There are three main ways in which this decision-making can be done.

The first is that major decisions are made by bankers who get to do this via their control over money creation. Fractional reserve banking means bankers create money when they make loans and this gives them a great deal of power to decide what projects go ahead and by whom. The capital in capitalism comes from the money created when loans are made. Even small decisions like who gets to build housing and who gets to buy the houses are made by bankers when they approve the loans and mortgages. Any meaningful reform will require changes in the way in which money is created. There are ways to do this. Not only will bankers object to the loss of power but a lot of people have an emotional committment to money and will fiercely oppose changes. Another strong feature of this system is that governments pass legislation that restricts competition and allows some people to make profits. This system we call capitalism.

The second approach to decision-making is called socialism or central planning. Decisions are made by political leaders or their bureaucrats. Socialists like to use words such as “democratic” and “public interest” but in reality make decisions according to their own values and interests. Because of this socialist economies tend to be an inefficient use of resources. Decision making is still made by a few people even if they claim it is on behalf of others.

The third way of making decisions is a true market or perfect competition. We like to think our economy is based on markets but a lot of it is based on legislation that restricts competition such as patents, copyright,licensing and tariffs. In North America one area of life in which competition is allowed is religious services. As we are committed to freedom of religion the government does not interfere. One often hears of people who go church shopping.

Greens often say they want an economy based on small business but they also automatically reject everything said by economists. This is unfortunate because economics has worked out the theory of small business and can say exactly what to do.

In order to have perfect competition all participants in a market, sellers and purchasers, must be so small that no one can influence the price by increasing or decreasing the amount they buy or sell. There must also be perfect knowledge. All participants need to know all prices. Entry to and exit from an industry needs to be easy which means there can be no patents or copyright.

For the purposes of this post decision-making is made by customers who vote with their buying decisions. Price changes are signals to producers to increase or decrease production.

One of the reasons this blogger likes the true market economy is that it allows a lot of decisions to be made by individuals. One of the problems is that individuals to not have a lot of power. People with common vested can form powerful lobbying groups and can get governments to pass legislation which restricts competition and provides them with excess profits.

Socialists talk of giving workers influence over economic decisions, but their proposals give decision-making to boards or councils. Workers are also consumers and with a market system they will have the same influence as all consumers. A market system also allows for a great variety of products. For example, if schools were based on a market there could easily be schools based on different educational philosophies and parents could choose which they wanted for their children. A voucher system could ensure that all children got an education.

Socialists also argue that capitalism encourages greed. This may be true when decisions are made by bankers, but in a true market there are no profits, just wages and a return on investment. If there are profits being made in an industry, more people will go into it until there are no profits.

If the British Labour Party gets elected and is successful in changing the “structure” of their economy, they may change the size of a few of the units for which decision are being made. However, they will still be steering the same ship in the same ocean. Jeremy Corbyn is not radical or brave enough to change the way in which money is created or to drop a committment to economic growth, both of which are urgently needed to protect people from an economic collapse.

 

 

 

 

 

 

 

 

 

 

 

Why we need free range kids and free range education

There is an ancient wisdom saying that happiness is the result of right action. Therefore, if one wants to be happy one should be careful in chosing one’s actions. This blogger would also say we should choose our actions ourselves rather than letting others do it for us.

These thoughts were prompted by an article in The Economist about educating bright children so that they can contribute the most to society. The issue is who decides what is “the most”.

Student Character Holding Big Pencil ClipartMy concern is that The Economist is evaluating education by the incomes and the numbers of patents that people produce in their careers. This is from a magazine whose writers are dedicated to continued economic growth at a time when further growth may be difficult. It may be that in the future success will go to those capable of coping without a lot of material things.

As this post is mostly about values I should state I value highly individual thought and decision making. People should be encouraged to have different life and educational experiences. Children should be raised “free range” and education should cover a variety of topics including cross discipline. One of my concerns about educational trends as reported by The Economist is that the goal is to have every body thinking the same – with a common devotion to economic growth. If we are to cope with negative growth we must have people educated to think outside the box represented by The Economist.

How do we define success? How do we measure success? Is economic success the responsibility of schools? For some people success is living a long time, or ending life with lots of money and/or toys, or having done lots of travel, having done lots of things or having had lots of sex. Each of us should define success for ourselves rather than going with another person’s definition.

Economics is about relationships and economic success should be about good relationships rather than resource exploitation. One of the fundamentals of good relationships is that there should be a more or less equal exchange between those involved.

Sometimes it feels as if a lot of people are prepared to sacrifice ethics for profits. Corporate culture appears to encourage this. That some major Canadian corporation (banks and telecommunications) encourage their sales people to use exploitive techniques is an indication that our economy is not based on good relationships

When the economy is on a down trend education is so young people can get good marks on exams. Some people spend large sums of money hoping to give their children a slight edge. If we were not so competitive we might find a greater happiness in co-operation.

The future is going to be difficult because we do not have the energy and mineral resources to support continued economic growth and even more people. To survive we need to educate children to think outside the economic box; we need free range children and free range education. We need people who will not accept the status quo and who will think independently of Bill Gates and Mark Zuckerberg, both of whom are dedicated to conning us into buying more stuff – or voting for candidates of their choice.

 

 

 

 

 

 

 

 

Monopoly education, unions and parental responsibility

A bitter teachers’ strike in this blogger’s corner of the world, British Columbia, Canada illustrates how public education has become monopoly education and has taken from parents responsibility for schooling their children.

 The founders of this country believed that all children should have an equal opportunity for schooling and established publicly funded schools.  Through the years this has developed into a huge infrastructure and bureaucracy.  We now have a legal requirement that parents must send their children to school.  There are a few private schools and some home-schooling but the public school system is an effective monopoly. 

We also have the British Columbia Teachers Federation which has used its strength to appropriate the monopoly profits for its members.  Education is such an emotionally important thing that in the past the threat of a strike has been enough for the government to give in.  This strike, now resolved after two weeks before the summer break and three weeks in the new school year,. has shown the lack of alternatives.  Public  education has become monopoly education with all the problems associated with monopolies including high prices and mediocre services.

The current strike appears to be a conflict between the union and the government over who is going to control the education system and especially spending decisions.  It appears the government is taking a stand and refusing to put lots more money into the system.

I believe education is first of all a parental responsibility, something which has been forgotten as the BCTF and the government fight for control.  Most parents have the skills and knowledge to teach their children but chose to hire others to do that for them.      Parents should have the right to determine curriculum, the philosophy of education and which teachers educate their children. 

One way to accomplish this would be a voucher system which would allow parents to decide which school their children would attend according to their values.  This would be true to the wishes of our founding fathers and most of us that all children should have an equal opportunity for an education.  It would also transfer decision making and power from the bureaucracy to parents.  Expect the people currently employed in the system to scream.

Other occupations thrive on competition. If teachers had to compete for students they would be innovative and find the stimulation invigorating.  Most of them would be more satisfied and pleased to see what it does for students.

This blogger’s recent experience of schools has been limited to an annual Christmas concert at the local elementary school, but during the strike  I was hearing complaints from teachers of up to five or six special needs students in each class.  I am horrified.

This may be an old issue already won by parents who want their children to be treated as normal and included in the normal school system.  This should be revisited.  We want all children to be educated to their full potential but not everyone has an equal potential.  Trying to teach children of vastly different potentials in one classroom must be asking for problems. How well do students learn from a teacher who is about to have a nervous  breakdown?

While this post was waiting for its final editing the strike was settled and monopoly power reigns supreme.  Poor students,

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The complexities and limitations of freedom

We value “freedom”  so much that people have lost their “freedom” by fighting to death for it.  But it is a complex concept with lots of limitations.

This post was inspired by an article on economic freedom with a nice graph showing we now have more economic freedom than we have ever had..  I was too lazy to try to figure it out but it did get me thinking.

Definitions are sometimes fuzzy. For for this post there are two aspects to freedom.  There is the freedom to make decisions and to act accordingly and there is the freedom from having to do what others tell us.

The main factor affecting our freedom is the agricultural surplus because that relieves us of the drudgery of producing or gathering or hunting for food.  The less time we use for food the more time we have with which to do what we want or which other people want us to do.  If the agricultural surplus per person were to decrease we may find ourselves with less freedom.

Freedom varies in different parts of our lives.  In British Columbia we have freedom of religion and can attend any church of our choosing – or mostly not.  However, we are required by law to educate our children.  The options are home schooling, a few expensive  private schools (mostly religious) or public schools (in effect a monopoly) over which we have very little say.  So we have freedom of religion but very little freedom as to how we educate our children.

Here are some of the things which limit our ability to make and act on decisions.

Our own values, morals and religion.  If your religion tells you salvation comes from work, then that limits your right to goof off.  The work ethic is part of many people’s belief system but it is also very much in the interests of people who want others to work for them.

The values, morals and religion of other people.  The most evil of all people are those who try to force their values, morals and religion upon others.  Unfortunately my belief in this evil does not stop others from trying and often succeeding.  The greatest evil comes when these people get into government.

Politicians and their bureaucrats sometimes like to tell the rest of us how to live and our commitment to the “rule of law” gives them means to do so.  Try to sell unpasteurized milk in Canada and you will probably have a rule of law learning experience.

At least in the industrial countries many people worry, and probably rightly so, about their pensions and their well-being in retirement.  This could be a natural need for security or it could be a result of marketing by the financial industry.  In any case it limits our freedom to do things that do not contribute to a pension plan such as extended travel or going to live in the forest.  The problem is that our well-being in retirement will depend up on the quantity of goods and services the economy is capable of producing at that time.  Pensions and savings are vulnerable to inflation or bankruptcy.

Economics is about relationships and relationships can  be both supportive of freedom or restrictive.  I believe relationships are most satisfactory when there is a more or less equal exchange but there is no law which states that relationships have to be satisfactory.  Relationships are as complex as the personalities of the participants.  The key to happiness may be in finding a partner whose personality compliments our own.

I have long believed that little girls should not be allowed to play with dolls because they learn that they can have relationships in which they have total control over actions and thoughts.  When they grow up this tends to limit the freedom of their husbands.  Us guys have to learn to be assertive.

It may be that some people can’t cope with a lot of freedom and seek out life situations where their right to make their own decisions is limited.  Erich Fromm was concerned about populations giving up political freedom to dictators and wrote a book in 1941 called Escape From Freedom.

There are people who feel they have the right to tell others how to live their lives and these people limit the freedom of others.  There may have been times and places where these people could use force but at least is some places today force is not easy.  It is much less messy to use psychological tactics.  For example the work ethic,  fears about future security or psychological marketing can be used to encourage people to do what somebody else wants them to do.

It may be the great industrial societies in which some of us live and which we associate with freedom were in fact created because most people have given up a some of the freedom of the agricultural surplus.  Sometimes I think we have overdone the technological development and work for the sake of work although there is a lot I would not want to give up.

Freedom appears to be a complex concept which varies by individual and by the different aspects of our lives. Those of us who value the right to make our own decisions should fare reasonable well and those with a submissive personality should find it easy to meet their needs.

 

If you liked this post your are invited to comment, press the like button and/or click  one of the share buttons. If you disagree you are invited to say why in a comment.  While I like the idea of sharing this platform, my personality is such that I don’t reply to many comments.

Ministers, teachers and consumer power in the economy

How much power do consumers have in our economy?  In theory they have all the power but in reality their power varies according to the degree of competition in any industry and their own personality.

Economic power means the ability to make decisions about what and how much is produced. If we lived  in small self-contained communities such as a Pacific island these decisions would be made mostly by people for themselves.  If we had perfect competition we would also make these decisions for ourselves and the market mechanism would transmit our decisions to producers.  As there are lots of people who want to make decisions for others one of the conflicts of our society is over economic decision-making.

Two examples illustrate how decision-making by individuals can vary according to competition in the industry.  The provision of spiritual services is, at least in Canada, the industry which comes closes to perfect competition.  Education is a mostly a monopoly.

As most of us Canadians have a strong commitment to freedom of religion people are free to attend the church of their choice or not at all. This means governments do nothing to restrict competition. Anyone with an inclination to preach can rent a school or community hall on Sunday mornings and some congregations allow anyone to do services.  No licenses are required by the government although some denominations use ordination, a form of licensing.  A minister’s career path is determined by his ability and his/her reputation. The Bible and most other religious texts are not copyrighted.  Churches receive no government subsidies other than an exemption from property taxes (which makes entry into the business easier).

On the other hand governments interfere extensively in education.  Parents are required by law the send their children to school, teachers must be licensed and governments closely supervise curriculum. Teachers generally must be licensed and are very difficult to fire.  Job security goes with length of service rather than teaching skills.  The result is a monopoly which is strongly defended by its employees.

In the spiritual world the customers are kings and make their own decisions.. :People can and do express dissatisfaction with their feet and some people go church shopping.  Ministers can be and are fired.  (My observation is that ministers are asked to leave for one of two reasons:  They get into an inappropriate relationship or they stay too long.)  Those people with the right skills rise to the top and those without the skills drop out.  To survive churches and staff must satisfy the spiritual needs of their congregations.

In education the customers (or their parents) make very few decisions.  They have no say in the curriculum and very little over who teaches their children.  Education is one of the most important things parents should give their children, yet it is where they have the least control.  This may be why home schooling and private schools are appealing to those who can manage them.  I believe education is too important to leave all decision-making to those employed in the field.

In other sections of the economy producers have to be more creative in influencing customer decision-making. Governments are usually willing to limit competition with licensing, tariffs, subsidies, patents and copyright.  Some firms can use the media to make emotional appeals to customers. Consumer power comes from being able to switch to another provider. The reaction to emotional  appeals may vary by person and personality. Maybe those people who don’t watch television have it easier when it comes to economic decision-making.

Another aspect of economic control is money creation.  The fractional reserve money we currently use creates money when bankers make loans.  This gives bankers a great deal of power to decide what economic activity happens and who does it.  On the other hand creating money  via a national exchange trading system as proposed in the essay “LETS go to market: Dealing with the economic crisis” on this weblog would transfer this power to individuals.

Some of us like to make our own decisions, some people like to make decisions for others and probably some people don’t care.  As one of those who likes to make his own decisions I like the perfect competition model.

 

If you liked this post your are invited to comment, press the like button and/or click  one of the share buttons. If you disagree you are invited to say why in a comment.  While I like the idea of sharing this platform, my personality is such that I don’t reply to many comments.

Treating young adults as children and healthy eating

When I first saw this column I thought it was about our right to make our own decisions about what we eat.  But at a closer look  it was about treating young adults as children.

The column was criticizing conservatives for supporting some high school students who objected to restricted choice of menu items in their school cafeteria thanks to some nutrition guidelines for foods sold in schools.

It bugs me that some people consider others to be children until they are 16, 17 or even 18 years old.

“Remember, though, that students are still students for a reason — they aren’t adults,” says the author of the column.

A year ago while on a cruise through the Panama canal my wife and I did an excursion to a native village  in Panama.  On the way out we were told that generally by the time the girls were 14 years old they had two babies.

I don’t want my granddaughters to have children at that age but I do think that once people reach puberty  we should recognize they are no longer children.

The other issue in this column is that there are always people who want to tell others how to live their lives and they come from all parts of the political spectrum.

Some people have trouble letting others make their own mistakes and taking the consequences.  The most important things in life we have to learn for ourselves.

Probably the best way to prevent health problems is education about what makes for a healthy lifestyle.  However, it is easy to know what to do or not to do but not always so easy to practice what we know.  Most of us do things that contribute to our own demise.

School vouchers and public schools

Here’s a link to a report that mothers are generally in favor of a voucher system for schools in which parents are given a voucher and can use it for education at a school of their choice.

The idea behind public schools is excellent but one that has gone in a different direction.  All children should have the opportunity for the best possible education.  This has not always been the case and in many parts of the world still is not the case.

The result  (at least in British Columbia) has been  schools run by a huge bureaucracy and controlled by people who claim to be professionals.  (True professionals have specialized knowledge they can use to help one out of a crisis situation.)

A voucher system should allow for schools based on different curriculum, different teaching philosophies and different approaches to discipline.

Education should first of all  be the responsibility of parents. A voucher system would return that responsibility to them and allow them to determine how they want their children to be educated.  It would still allow the state to ensure that all children get educated.

Education is much too important to leave to a monopoly.

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