OFCCP vs. Oracle

Three days before Barack Obama left office, his Department of Labor served a complaint against Oracle America, Inc., alleging gross systemic discrimination in both its hiring practices and its pay practices.

Specifically, it claims that Oracle discriminates against non-Asians in hiring for sixty-nine job titles, and discriminates against women, Asians, and African-Americans in pay for eighty job titles.

DID ORACLE DISCRIMINATE?

Is it strange that Oracle allegedly discriminates both in favor of and against Asians?

The OFCCP (the Office of Federal Contractor Compliance Programs) is the program at the center of this complaint; it is involved because Oracle is a government contractor. The only points supporting OFCCP’s claim are statistical analyses.

The complaint mentions exactly zero employee complaints, and it doesn’t even try to say that there is evidence that Oracle intended to discriminate.

It is difficult to determine and compare the myriad factors involved in assigning appropriate compensation, and the statistical analyses OFCCP conducted likely fall short. Economically speaking, any mutually agreeable level of compensation is appropriate, and in a free market, compensation will tend to be equitable.

SHOULD THE OFCCP HAVE THIS POWER?

However, when Oracle filed a countersuit on November 27, 2019, (yes, the case is still going on), its press release discussed none of those points. Instead, it focused on the unconstitutionality of the Department of Labor acting as “investigator, prosecutor, judge, jury, and appellate court.”

Of course, such arrangements are not limited to the Department of Labor; they have become unfortunately common throughout the Federal bureaucracies. This is despite the blatant violation of the Constitutional separation of powers, arguably the most basic fact of American civics. For most of us, as soon as we started learning about the US Government, we learned about the separation of powers, and how the Founding Fathers designed the system with the famous checks and balances that prevent tyranny.

How well has that tyranny prevention worked out so far?

Oracle argues that the situation is not only unconstitutional but also statutorily illegal. It remains to be seen how the suit and countersuit will turn out; typically, it takes extremely deep pockets to win such a fight against the feds. Oracle may yet come out on top, but so far, it appears that the checks and balances have failed to protect Oracle — a company that provides over 100,000 jobs and many billions of dollars of services to the economy each year.

COULD THE FREE MARKET HANDLE THIS?

The OFCCP has not made a compelling case for the existence of systemic discrimination within Oracle; its claims are prima facie incongruous and based exclusively on ambiguous data. Indeed, it appears that it has inserted itself into a situation in which no one has complained, no one has objected, no one has said that their compensation was not appropriate for their labor or that they objectively should have been hired when they were not.

But, what if there really were discrimination?

And, is there a better way to handle it than the intra-DoL system, or even the Constitutional system?

My interest is in how this situation would play out in a free market. Let’s consider it.

A free market, with total freedom of association, would probably have no claims of hiring discrimination, because no one would be compelled to hire or retain anyone against their will. Of course, a reputation for discrimination could easily lead to a loss of revenue, as a consumer base that opposes discrimination would likely choose to take their business elsewhere.

Furthermore, formal anti-discrimination regulations could be voluntary. Associations or organizations could prescribe standards for avoiding discrimination, as well as regular audits to ensure compliance, and consumers could choose to patronize only those companies that subscribe to sufficiently stringent standards and pass the audits.

HOW WOULD THE FREE MARKET HANDLE THIS?

What would happen with a discrimination claim in a free market?

Let’s say that Oracle is certified as discrimination-free by the standard-bearer anti-discrimination association. In this scenario, a prospective employee believes that Oracle has discriminated against him in the hiring process, or a current employee believes (despite mutual agreement) that Oracle has discriminated against him in his compensation.

He could discuss it directly with the appropriate people in Oracle, or he could take it to the anti-discrimination association that certifies Oracle as discrimination-free.

If his claim has merit, the association would need to ensure that Oracle settles the claim swiftly and fairly, or have its discrimination-free certification revoked. To do otherwise would risk the association’s reputation and tarnish the value of their certifications.

IS THERE ANOTHER WAY TO LOOK AT THE SITUATION?

Of course, this is just one way it could play out. The best part about the free market — wait, is there a single best part? —  is that one person can’t conceive of all the remarkable ways that collaboration and competition can make the world a better place.

On the other hand, you may have noticed some similarities between how a discrimination claim would work in a free market, and how it works with a state-run system. Part of that is because the free market is impossible to get away from completely, and part of it is because my imagination is likely affected by the status quo. The main benefits of the free market vis-a-vis the state-run system are the lack of coercion (in both funding and association) and the opportunities for innovation.

CONCLUSION

In summary, it appears that the Constitutional system isn’t working (since we have unconstitutional bureaucratic judicial pipelines all over the place), and those pipelines don’t work too well either (since they use sketchy math to find problems where no one involved sees a problem). So, do you think a free market system would work better? How do you think it would function? How would you design it?

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Coronavirus May Lead to “Mass Homeschooling”

As fears of coronavirus mount around the globe, cities and countries are taking action to prevent the new respiratory virus strain from spreading. While the virus has not yet hit hard in the United States, government officials and health agencies have enacted response plans, corporations are halting travel abroad, and education leaders are grappling with what a widespread domestic outbreak of the virus could mean for schoolchildren.

In countries where the virus is active, schools have been shut down and children are at home, learning alongside their parents or through online education portals. The New York Times reports that US schools have been prompted this week by the Centers for Disease Control and Prevention to prepare for a coronavirus epidemic that could shutter schools and require alternate forms of teaching and learning outside the conventional classroom. According to Kevin Carey of the New America think tank, coronavirus in the US could lead to “a vast unplanned experiment in mass home-schooling.”

Indeed, in Hong Kong this is already occurring. The coronavirus outbreak led to orders for schools to be shut down in the city for two months, affecting 800,000 students. An article this week in The Wall Street Journal declares that “coronavirus prompts a whole city to try home schooling,” noting that in Hong Kong many children are completing lessons virtually through online learning platforms or receiving live instruction from teachers through Google Hangouts or similar digital tools.

It’s unfortunate that it takes a viral epidemic to spotlight the many alternatives to conventional K-12 schooling. Not only is homeschooling widely popular in the US, educating approximately two million children nationwide, but other schooling alternatives, such as virtual learning, microschooling, and hybrid homeschooling continue to sprout.

Virtual learning programs such as the Florida Virtual School, founded in 1997 as the nation’s first fully online public high school, and K12, Inc., one of the largest providers of virtual schooling, enable young people to take a complete course load and earn a high school diploma without sitting in a traditional classroom environment. Supplementary online programs, such as Khan Academy and Outschool, expand learning options and allow young people to dig deeper into topics that interest them or those in which they may need some additional help.

Interest in online learning options is sure to increase as the coronavirus spreads, but other in-person schooling alternatives are also likely to gain notoriety. Microschools, for example, are small, home-based, multi-age learning environments that act like a one-room schoolhouse, typically with no more than 8 to 12 students at a time. Prenda is a fast-growing network of these branded, in-home microschools, with more than 80 schools in Arizona alone serving some 550 students, and plans to expand out-of-state.

Like microschools, hybrid homeschooling programs and small, community-based classes for homeschoolers are also gaining popularity and may be swept into the limelight if conventional schools are forced to temporarily close. Operating with small, age-mixed groups of children, these hybrid models and classes offer an alternative to institutional schooling, avoiding large classrooms and crowded buildings. I have recently launched a marketplace platform, Unschool.school, that connects educators, parents, and learners to these homeschooling models and out-of-school learning experiences, fostering small group, in-person interactions in local community spaces, such as art studios, makerspaces, and spare dining rooms.

These emerging learning options outside of traditional schooling show not only that “mass homeschooling” is possible but also that it may be highly desirable. Personalized learning, small group interactions that build community and connection, and education without the coercion inherent in standard schooling are beneficial whether or not a pending epidemic is what exposes families to these education possibilities. Mass homeschooling may be just the cure we need.

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Moral Approximates

 “I urge you to beware the temptation of pride–the temptation of blithely declaring yourselves above it all and label both sides equally at fault, to ignore the facts of history and the aggressive impulses of an evil empire, to simply call the arms race a giant misunderstanding and thereby remove yourself from the struggle between right and wrong and good and evil.” – Ronald Reagan’s “Evil Empire” Speech

During the Cold War, folks like Ronald Reagan accused their domestic opponents of believing in the “moral equivalence” of the United States and the Soviet Union.  Having lived through the era, I am confident that believers in moral equivalence existed.  Knowing the relevant history, I agree that this was an absurd belief.  However bad the United States was, the Soviet Union was vastly worse.

If you want to nitpick, admittedly, we never find literal moral equivalents in real world.  Why?  Because in a continuous world, one side in any conflict is bound to be at least a little worse.  Still, careful examination of real-world conflict does occasionally uncover not moral equivalents, but moral approximates.  Though the two sides’ moral status is not precisely equal, they are morally more-or-less the same.

It’s easiest to identify examples that are far away in time and place.  During the Wars of Religion, who was worse – the Catholics or the Protestants?  During World War I, who was worse – the Germans or the Russians?  During the War of the Roses, who was worse – the Yorks or the Lancasters?  You could plead ignorance.  Yet even if you studied the history for a year, you would plausibly conclude that the two sides were moral approximates – both sinned so egregiously that it really is hard to know who was worse.

For recent and ongoing conflicts, assertions of moral approximation naturally inspire far more pushback.  If we were rational, however, the opposite would be true.  The very fact that people have strong emotions about recent and ongoing conflicts is a strong reason to discount their judgment.  Furthermore, when a conflict is recent or ongoing, we usually lack a great deal of not-yet-released relevant information.  No one is likely to scare up shocking new revelations about the Lancasters, but in fifty years we’ll have a much better understanding of what the Trump administration actually did.

Those limitations in mind, here are the top three moral approximations I am willing to defend.

1. Communism and Nazism are moral approximates. Why?  Both movements were fanatical attempts to build dystopian societies – and both self-righteously murdered tens of millions of innocent people.  Contrary to much propaganda, Communists did not have noticeably better motives.  Both groups imagined that a totalitarian society would be a big improvement over the status quo – and recklessly embraced the necessity of mass murder to get there.

2. Socialism and fascism are moral approximates.  Why?  Socialism is a toned-down version of Communism; fascism is a toned-down version of Nazism.  As toned-down versions, they aim for much less, and murder far fewer people in the process.  Yet the vision of both movements – society as a big family with a common purpose – remains dystopian.  And while their methods are far less brutal than Communism or Nazism, socialism and fascism both casually advocate pervasive coercion for flimsy reasons.

(My main doubt here is that while I’ve repeatedly publicly debated socialists, I would not so engage a fascist.  Doesn’t that show that I think fascism is markedly worse?  Not exactly.  The main reason I don’t debate fascists is that avowed fascism is now so low-status that its adherents are low-quality and scary.  In a world where fascists were as mainstream as socialists, I would debate them).

3. The Democratic and Republican parties are moral approximates.  Why?  Both are dogmatic, emotional, and demagogic.  Neither party internalizes the maxim that with great power comes great responsibility – or dwells on the possibility that they might be mistreating people who don’t agree with them.  Both parties say they want various radical changes, many of which seem very bad.  The policies Democrats and Republicans actually impose when they have power are similarly mediocre, though that doesn’t stop them from rhetorically making mountains out of molehills.  On immigration, for example, the Democratic-Republican debate basically comes down to whether the border should be 98% closed or 99% closed.  Though I prefer 98% to 99%, it’s approximately the same.

I am well-aware that both Democrats and Republicans will protest angrily being lumped together; in their eyes, the differences between their parties are “huge.”  My question for them: In 200 years, how big will these “huge differences” look to historians?   Yes, during the Wars of Religion, Catholics and Protestants mutually called each other servants of the Antichrist.  Today, however, we can plainly see that both sides were unhinged.

Similarly, if you carefully studied the politics of, say, France in 1970, would you really conclude that the arguments that enraged contemporary French partisans were, in fact, a big deal?

Back in 2016, many Democrats told me that Trump’s election exposed the sheer evil of the Republican Party.  In a way, this understates.  I say that the mere fact that a man like Trump did well in the primaries shows that the Republican Party is rotten.  However, I’d say the same about Bernie Sanders’ success in 2016.  The mere fact that a man like Sanders did well in the primaries shows that the Democratic Party is rotten, too.

You could respond, “Suppose Democrats and Republicans really are moral approximates.  Shouldn’t an economist, of all people, still be eager to discover the slightly lesser evil?”  My answer: If I were America’s kingmaker, then yes.  But when I’m just one voice among tens of millions, no.  While I’m always happy to share my views with curious Democrats or Republicans, I’m too much of a puritan to ever join either party.

P.S. Lest anyone misinterpret me, I think the Democratic and Republican parties are markedly better than socialism and fascism, which are in turn markedly better than Communism and Nazism.  Mathematically: D≈R>>S≈F>>C≈N.

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Yale Study: Vast Majority of High Schoolers Unhappy at School

Most high school students are not happy at school. A new study by Yale researchers finds that nearly three-quarters of high schoolers report negative feelings toward school. The study surveyed more than 20,000 high school students in all 50 US states and found widespread dissatisfaction at school across all demographic groups, with girls reporting slightly more negative emotions than boys. According to Yale co-author Zorana Ivcevic,

It was higher than we expected. We know from talking to students that they are feeling tired, stressed, and bored, but were surprised by how overwhelming it was.

The Yale findings, which were published in the most recent edition of the academic journal Learning and Instruction, echo previous conclusions about young people’s attitudes toward school. According to a 2016 Gallup student poll of nearly one million children from approximately three thousand different schools, enthusiasm for school dropped dramatically between fifth grade and twelfth grade.

In another large-scale 2003 study, psychologists tracked several hundred elementary and secondary school students over the course of a week. The students wore watches that signaled them several times a day to record, at that moment, what the students were doing and how they were feeling. The results revealed that children were unhappiest while they were at school, and happiest when out of school.

Is There a Better Way?

Perhaps these results are not surprising. School isn’t supposed to be fun, right? Kids have to deal with the drudgery of school, buckle down, and do the work because that’s life. Or so the thinking goes. What a horrible message to send to children, and to internalize ourselves: Life is drudgery, work is drudgery, and the sooner people learn this in school, the better off they will be.

It doesn’t have to be this way. For young people who are educated outside of forced schooling environments, learning can be engaging, rewarding, and yes, fun. Free to pursue passions, explore talents, and set individual goals, young people who learn without schooling or who are educated in other non-coercive learning environments, retain and expand their curiosity and autonomy.

It’s the lack of freedom and personal agency that leads to negative emotions toward school or life. When individuals are empowered to take charge of their living and learning, negativity diminishes.

Parents should take seriously these negative emotions in their adolescents, particularly as youth anxiety, depression, and suicide continue to soar. Researchers at Vanderbilt University found a correlation between adolescent suicidal thoughts and actions and school attendance, reporting that these tendencies decline during the summer months and spike at back-to-school time. This is an opposite pattern to that of adults, who experience the highest rates of suicide during the summertime.

In sharing the results of their latest survey on high schoolers’ negative feelings toward school, the Yale researchers suggest that later school start times might help by allowing young people more time for sleep; but this merely puts a Band-Aid on a much deeper wound. Teenagers don’t like school because their freedom is tightly controlled, they are micro-managed by adults, and they have no or little input in what, how, where, or with whom they learn. On the brink of adulthood, teenagers are increasingly treated like toddlers.

Not only is it dangerous to dismiss adolescents’ antipathy toward school as normal and expected, it avoids an honest look at the impact of coercion on human flourishing. When people are free, they thrive; with force, they flounder.

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Elon Musk Wants Talent, Not Diplomas

Elon Musk says skills matter more than diplomas. The founder and CEO of corporate innovation giants Tesla and SpaceX tweeted on February 2 that he is hiring for his artificial intelligence group at Tesla and wants to recruit the most talented people he can find. Talent, to Musk, means “deep understanding” of artificial intelligence and the ability to >pass a “hardcore coding test,” but it doesn’t necessarily include degrees and diplomas.

“A PhD is definitely not required,” Musk wrote. “I don’t care if you even graduated high school.”

Musk went on to say on Sunday that “educational background is irrelevant”:

Musk Didn’t Like School

It’s not surprising that Musk would emphasize ability and knowledge over institutional credentials. Other Silicon Valley technology companies, like Google and Apple, no longer require employees to have a college degree. But Musk also had a personal dissatisfaction with his schooling, saying in a 2015 interview: “I hated going to school when I was a kid. It was torture.”

A billionaire inventor, Musk decided to build a better educational program for his own children and opened his experimental school, Ad Astra, on SpaceX’s Los Angeles campus. He was dissatisfied with the elite private schools they were attending and thought education, even at purportedly “good” schools, could be much improved.

In an interview about Ad Astra, Musk said: “The regular schools weren’t doing the things that I thought should be done. So I thought, well, let’s see what we can do.”

Ad Astra, which means “to the stars,” offers a hands-on, passion-driven learning environment that defies the coercion inherent in most conventional schooling, public or private. It has no grade levels, an emergent, technology-focused curriculum, and no mandatory classes. As Fortune reports, “There are no grades given to students at the school and if the children don’t like a particular class they’re taking, they can simply opt out.”

Schooling as Signaling

Despite a culture and economy now focused around technology and innovation, most conventional schooling is widely incapable of helping young people develop the knowledge and skills they need to do essential 21st-century work. Stuck in a 19th-century curriculum and instruction model, today’s schools are anything but modern.

The trouble is that schooling is more about signaling than learning, so the catalysts to change its basic structure and approach are lacking. It might not matter in the real world that you mastered middle school French, but moving successfully along the schooling conveyor belt offers a signal to potential employers. Economist Bryan Caplan writes about this signaling effect in his book The Case Against Education. He also explains how the quest for more signals, regardless of how hollow they may be, is leading to “credential inflation,” or the pursuit of more diplomas for occupations that really don’t require them.

Writing in The Atlantic, Caplan says:

From kindergarten on, students spend thousands of hours studying subjects irrelevant to the modern labor market. Why do English classes focus on literature and poetry instead of business and technical writing? Why do advanced-math classes bother with proofs almost no student can follow? When will the typical student use history? Trigonometry? Art? Music? Physics? Latin? The class clown who snarks “What does this have to do with real life?” is onto something.

More Signal Options Beyond Schooling

Fortunately, there are now many other ways beyond conventional schooling to gain skills and knowledge and signal your value to potential employers like Musk. More than 400 “coding bootcamps” are reported to exist around the world, helping people to master in-demand programming and software development skills. The online coding school, Lambda School, which has raised nearly $50 million in venture capital funding since its launch in 2017, has a fascinating business model focused on income share agreements. It is free to attend Lambda, but the company takes a percentage of its graduates’ earnings once they land a high-tech job. If the student doesn’t land a job, she doesn’t pay. Perhaps not surprisingly, it is estimated that Lambda is receiving over 1,000 applications a week from interested students. Other alternatives to college are sprouting, and apprenticeship programs like Praxis continue to be sought-after.

Entrepreneurs like Musk recognize what it takes to succeed in the innovation era, and it has little to do with conventional schooling. Discovering passions, pursuing personal goals, and developing essential skills to build on those passions and achieve those goals has never been easier than it is today with abundant resources and tools literally at our fingertips.

Musk and Tesla may be known for their visionary work in creating autonomous vehicles, but it’s autonomous humans with the agency, creativity, and opportunity to achieve their full potential that are the real breakthroughs.

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The Miracle of the Market

At this time of year especially, the wide variety of individual human preferences and interests becomes abundantly clear. My children’s Christmas lists display this diversity: Molly (13) wants a doughnut pan to feed her baking passion, Jack (11) wants anything tech-related, Abby (9) wants drawing supplies, and Sam (6) wants Lego pieces and stuffed animals. How do the elves satisfy these assorted preferences? It’s the miracle of the market.

FEE’s founder, Leonard Read, wrote about this miracle in his classic 1958 essay, “I, Pencil.” Writing cleverly from the pencil’s perspective, Read explains that even something as seemingly simple as a pencil is an extraordinary human creation involving countless decentralized, spontaneous actions prompted and facilitated by a free, global marketplace. The 18th-century philosopher, Adam Smith, described this unplanned process of social cooperation as the “Invisible Hand,” leading to collective human progress and abundance when each individual pursues his or her own interests. Read writes:

I, Pencil, simple though I appear to be, merit your wonder and awe, a claim I shall attempt to prove. In fact, if you can understand me—no, that’s too much to ask of anyone—if you can become aware of the miraculousness which I symbolize, you can help save the freedom mankind is so unhappily losing. I have a profound lesson to teach. And I can teach this lesson better than can an automobile or an airplane or a mechanical dishwasher because—well, because I am seemingly so simple.

Simple? Yet, not a single person on the face of this earth knows how to make me.

There is no central planner, no mastermind, as Read says, capable of making a simple pencil. Instead, there are the loggers who harvest the cedar from the Pacific Northwest and the innumerable actions that go into the loggers’ work, including the manufacture of their saws and machinery, the growing of hemp for their ropes, and even the cups of coffee they drink. All of these spontaneous actions contribute to the production of a simple pencil—and that’s only for its wood. Read then describes the graphite from Sri Lanka, the wax from Mexico, the miners of zinc and copper to create the small metal piece that attaches the eraser, which is made with rapeseed oil from the Dutch East Indies.

Read concludes:

There isn’t a single person in all these millions, including the president of the pencil company, who contributes more than a tiny, infinitesimal bit of know-how. From the standpoint of know-how the only difference between the miner of graphite in Ceylon and the logger in Oregon is in the type of know-how…Their motivation is other than me. Perhaps it is something like this: Each of these millions sees that he can thus exchange his tiny know-how for the goods and services he needs or wants. I may or may not be among these items.

More profound than the dispersed and unplanned creation of the simple pencil is, as Read explains, the fact that it is accomplished without coercion through the uniquely human act of peaceful, voluntary exchange. Read writes:

For, if one is aware that these know-hows will naturally, yes, automatically, arrange themselves into creative and productive patterns in response to human necessity and demand— that is, in the absence of governmental or any other coercive master-minding—then one will possess an absolutely essential ingredient for freedom: a faith in free people. Freedom is impossible without this faith.

There are many miracles that get celebrated at this time of year, but one we shouldn’t forget is the miracle of the market and the power of free, voluntary exchange to unleash human creativity and inventiveness. Let’s take to heart Read’s words:

Permit these creative know-hows freely to flow. Have faith that free men and women will respond to the Invisible Hand. This faith will be confirmed. I, Pencil, seemingly simple though I am, offer the miracle of my creation as testimony that this is a practical faith, as practical as the sun, the rain, a cedar tree, the good earth.

Happy Holidays!

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