The Fault Is Not in Our Stuff But in Ourselves

Bruce Sacerdote‘s NBER Working Paper, “Fifty Years of Growth in American Consumption, Income, and Wages” provides a nice update on the measurement of CPI Bias.  The punchline should be obvious, but it’s great to hear such an eminent economist say it: “Meaningful growth in consumption for below median income families has occurred even in a prolonged period of increasing income inequality, increasing consumption inequality and a decreasing share of national income accruing to labor.”

Highlights:

Table 3 shows estimates of annualized growth rates in wages by decade. The first column shows growth in real wages using CPI deflation. This column show real wages fell by 0.8 percent per year during the ten years January 1975-January 1985 and fell by 0.6 percent per year during the ten years ended in 1995.10 In the subsequent two decades wage growth is positive 0.8 percent per year and 0.7 percent per year respectively.

The next three columns calculate growth in real wages using a) PCE adjustment, b) an assumption of 20% upward bias in CPI growth, and c) Hamilton/ Costa adjustment to CPI. The picture looks progressively more optimistic as we move from left to right. PCE adjustment still has negative wage growth in the first two decades (75-85 and 85-95) but the decreases in real wages are smaller. Hamilton/ Costa bias adjustment implies annual real wage growth of 1.4% during 1975-1985, .2 percent per year during 1985-1995, 1.4 percent during 1995-2005 and .8 percent in the most recent decade.

The table in question:

More:

Consumption for below median income families has seen steady progress since 1960. My preferred point estimates are based on CEX measures of consumption where the price index has been de-biased following Hamilton and Costa. These estimates suggest that consumption is up 1.7 percent per year or 164 percent over the whole time period. These estimates of growth strike me as consistent with the significant increases in quality and quantity of goods enjoyed by Americans over the last half century. And my conclusions are consistent with the findings of Broda and Weinstein (2008). Estimates of slow and steady growth seem more plausible than media headlines which suggest that median American households face declining living standards.

The bias adjusted estimates also provide a more positive outlook on real wage growth in the last 40 years than standard media headlines. PCE adjusted wages appear to have grown at .5% per year during 1975-2015 while the de-biased CPI adjusted wages grew at 1% per year over the same time period.

Key caveat:

Importantly these estimates do not tell us anything about why wages grew more slowly than GDP or why inequality increased. CPI bias does not explain decreases in labor’s share of income (Krueger 1999) or the associated rise in inequality (Pikkety and Saez 2003). Adjusting the price index downward leads to higher estimated real wage growth and higher estimated real GDP growth.

The big unanswered question:

What I do not address here is why Americans feel worse off if consumption is actually rising. There are at least four important explanations that may be at work. First, I am only examining consumption within very large sections of the income distribution and there may be specific groups (for example less than high school educated men) for whom consumption is actually falling. Second, it’s possible that the quality of some services such as public education or health care could be falling for some groups. Third, the rise in income inequality coupled with increased information flow about other people’s consumption may be making Americans feel worse off in a relative sense even if their material goods consumption is rising. Fourth, changes in family structure (e.g. the rise of single parent households), increases in the prison population, or increases in substance addiction could make people worse off even in the face of rising material wealth. A deep future research agenda would be to understand how America has lost its sense of optimism about living standards and whether the problem is one of consumption, relative consumption (relative to other people) or something entirely different.

My favorite candidate for “something entirely different”: false consciousness.  Most people embrace a dogmatic pessimistic ideology, and believing is seeing.  Hedonic adaptation amplifies the problem.  After all, it’s easier to deny that your standard of living is great than to admit that you’re unhappy despite your affluence.  The fault is not in our stuff but in ourselves.

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The History of Private Schools: How American Education Became a Political Battleground

“He alone, who owns the youth, gains the future.” – Adolf Hitler

Public schools are so ubiquitous and ingrained in American culture that one could easily be forgiven for thinking that we, as a nation, have always had them. However, public schools are a relatively recent invention. Federal funding for public schools is a recent anomaly, dating back to the days of President Jimmy Carter. His successor, President Ronald Reagan, famously tried to dismantle the Department of Education to no avail.

Public schools being an arm of the state are indoctrination centers. This becomes increasingly true as basic skills such as the old “three Rs” of “reading, writing and ‘rithmatic” are jettisoned in favor of climate changecritical race theory and gender ideology – all of which are now part and parcel of a public education in the United States. As if this weren’t troubling enough, public schools are largely funded by property taxes on housing. These taxes, which are paid generally on a bi-annual basis, are confiscated from people whose children do not even attend public schools. What’s more, these taxes require people to effectively pay rent on owned property under penalty of losing their homes.

We do not have to look far for an alternative to the world of public schools. Throughout most of American history, education has been the purview of parents, the church, and other private institutions. The rise of public education in the United States is a story of violence and coercion that is largely hidden from the public record. After reading this, you will never view public schools in the same light ever again.

Continue reading The History of Private Schools: How American Education Became a Political Battleground at Ammo.com.

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Why Culture Matters

What is Culture?

As individuals, people experience consciousness (identity, intelligence, soul, conscience), develop character (will, agency, behavioral patterns, habits), and demonstrate preferences of style (taste). Biological traits and tendencies both enable and limit perceptions and abilities, but all people have the ability (and unavoidable responsibility) to shape their character and develop to their potential.

By natural extension, groups of people also experience a sort of shared consciousness (shared identity, values, perceptions, language, epistemological orientation), develop a shared character (ethics, norms/rules, priorities, organizations, obligations, expectations, group dynamics, reputation), and express shared style preferences (aesthetics, dress and grooming, design, cuisine, music, humor, communication patterns, leisure activities, rhythm of life). Culture is an umbrella term for the shared identity, values, perceptions, perspectives, knowledge, beliefs, organizations, practices, and preferences of a group.

Culture is Fundamental

Culture is about much more than just style. Style is a very visible part of culture, but it is also comparably superficial and inconsequential. Style differences rarely cause significant conflict (except, perhaps between significantly shallow people). On the other hand, differences in things like ethics, rules, and behavioral patterns are at the heart of very serious conflicts, indeed. In fact, many conflicts that on the surface appear to be motivated by ethnic identity, political ideology, or religious affiliation are fundamentally cultural.

But understanding culture is not just about conflict; it’s also about the progress of civilizations and quality of life for people everywhere. Key adjustments in culture can have profound effects on group dynamics and future generations.

Cultural Advancement and Decline

The word “culture” comes from the latin cultura referring to the care, development, and protection required to develop something, as in “cultivation” and “agriculture”. The weeds and rocks have to go and the soil has to be prepared in order for precious seeds to be carefully planted and become a beautiful garden that bears fruit and is worth preserving.

In other words, a culture must be both conservative and progressive in order to develop. That is, its members must conserve positive elements while also abandoning negative ones and adopting additional positive ones. All cultures should embrace the best practices of other cultures while conserving and promoting their own.

Here are some examples of elements of high-performing cultures that have proven their value and are worth adopting: coherent philosophy, individual self-determination, reciprocity ethics and natural law, clear and noble grand narrative, private property norms, freedom of association, monogamy, incest avoidance, courtesy, hygiene, industriousness, low time preference, precise and high-minded language, appreciation of / participation in / contribution to sophisticated pursuits.

Cultural decline is marked by the abandonment of such elements and their replacement with corrupt and perverse ones.

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Homeschooling, Ideology, and The “Culture War”

Homeschooling, as characterized by someone who prefers “public” [sic] schools: “it’s all about ideology first; creating soldiers for the culture war“.

Sure. In some tragic cases, that is what is going on.

And how exactly is that different from government schools? What does he think government schools are doing?

Yes, some people use home education to teach their kids harmful lies while insulating them from competing ideas (truth, reality, and ethics). That’s bad. They should not do this to vulnerable children.

Yet, government schools do the exact same thing— even teaching some of the same harmful lies the worst of the homeschoolers are teaching.

If you are teaching your kids to pledge allegiance to a flag, to honor political “authority“, that government is good or necessary, you are teaching a toxic ideology to kids too young to know any better– whether they are being taught at home or in a theft-funded kinderprison.

If you expect these kids to go out and become “good citizens” while promoting your favorite flavor of statism, you’ve done nothing but indoctrinate these trusting children into your death cult religion. The religion of Statism. You are training them to be soldiers in the culture war, fighting for the side of statism.

It’s kind of pathetic to criticize someone for doing the same thing your preferred cult is doing– even if the details differ a little.

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Education Entrepreneurs Are the Only Ones Who Can Disrupt the Status Quo

Transforming entrenched systems and industries comes through disruptive innovation and entrepreneurship. Coined by Harvard Business School professor Clayton Christensen, disruptive innovation is the process by which new ideas and inventions create value and ultimately topple existing competitors. A visionary individual or group spots opportunity and develops new solutions that meet consumer demand faster, better, and more cheaply. This innovation improves our lives through efficiency and cost-effectiveness, allowing us to keep more of our hard-earned money with better service and satisfaction.

Independent and Innovative Education

It shouldn’t come as a surprise that most of the organizations I highlight in Unschooled are independently run. Disruptive innovation may originate with individual ingenuity, but it is fueled by consumer demand and value creation within the private sector. Not that the public sector hasn’t tried. Back in the 1960s and early 1970s, there was a surge of interest in reforming mass schooling from within. The Open Classroom movement emerged, encouraging less restrictive classrooms and more choice and freedom for students.

In Philadelphia, Pennsylvania, in 1967, the city’s public school system launched its Parkway Program, sometimes known as the “school without walls,” in which young people were able to select their own classes and learn throughout various spots across the city, including private businesses, museums, local universities, and public spaces. In 1970, the New York Times called the Parkway Program “one of the nation’s boldest experiments in public education,” noting that over ten thousand students applied for only five hundred available slots.

Any meaningful and lasting transformation in American education must come from the private sector.

Within a decade, though, momentum for programs like Parkway waned. New public education fads appeared and old ones faded. Ultimately, Parkway was reabsorbed into the larger school district, becoming indistinguishable from Philadelphia’s other public schools.

More recently, a fully self-directed district high school that I also write about in Unschooled was set to open this fall in Somerville, Massachusetts, a city just outside of Boston. Powderhouse Studios had everything going for it, including relief from onerous public schooling requirements under the state’s Innovative Schools legislation and a $10 million grant from XQ Super School, an organization co-founded by Laurene Powell Jobs, wife of the late Steve Jobs of Apple, Inc. After seven years of concessions and compromise by the school’s leaders, the city’s school committee ultimately voted unanimously this spring not to approve Powderhouse’s opening.

Private Sector Reforms

As much as many parents and educators would like to believe that meaningful reforms can occur within the mass compulsory schooling model, real education innovation occurs most successfully and enduringly through the private sector. Free from state curriculum requirements, standardized testing mandates, and restrictions on hiring and firing, private educational organizations are able to experiment and innovate, with parents as the key stakeholders to ensure accountability.

Many of these schools and organizations are tiny non-profit enterprises that serve a small group of children and are often financially inaccessible to many families. But disruptive innovation in education has the capacity to bring real change to the masses—if educators embrace an entrepreneurial, free-market mindset.

In his book, Conscious Capitalism: Liberating the Heroic Spirit of Business, Whole Foods co-founder John Mackey writes about his early days immersed in the left countercultural movement of the late-1960s and 1970s. He lived on a commune in Texas for two years and became active in the local food co-op movement.

Entrepreneurship and Capitalism

Mackey writes in the book’s introduction:

Politically, I drifted into progressivism (or liberalism or social democracy) and embraced the ideology that business and corporations were essentially evil because they selfishly sought only profits. In contrast to evil corporations, I believed that nonprofit organizations and government were “good,” because they altruistically worked for the public interest, not for profit.

The longer Mackey was part of the non-profit food co-op movement, the more disenchanted he became with its ideology. He writes:

I ultimately became disillusioned with the co-op movement because there seemed to be little room for entrepreneurial creativity; virtually every decision was politicized.

Discovering the power of free-market capitalism, Mackey was able to scale his vision for healthy food and a healthier planet in ways that small, local, non-profit food co-ops were unable to, leading many more people to have access to organic food and many more jobs created to provide that food.

Mackey writes about his path from progressive anti-capitalist to proud entrepreneur:

I learned that free enterprise, when combined with property rights, innovation, the rule of law, and constitutionally limited democratic government, results in societies that maximize social prosperity and establish conditions that promote human happiness and well-being—not just for the rich, but for the larger society, including the poor. I had become a businessperson and a capitalist, and I had discovered that business and capitalism, while not perfect, were both fundamentally good and ethical.

Education needs its own Whole Foods moment. It needs entrepreneurial innovators to move small, non-profit organizations into larger-scale, profitable enterprises that serve more families and students with better outcomes and lower costs. Now with Amazon’s acquisition of Whole Foods, the potential for greater accessibility at lower costs increases.

Seeds of an enterprising moment in education are beginning to sprout. Acton Academy is a low-cost, self-directed network of private schools, often operating on a hybrid homeschool model, that is expanding across the country by educators committed to entrepreneurship and educational creativity. In an article for Forbes, Bill Frezza describes Acton Academy’s potential to remake the educational landscape. He writes:

With the right program as a model, anyone who home schools his kids can operate an Acton Academy. And not just for his or her own children, but for a schoolhouse full of them. Run the numbers and you can even make a lucrative living while charging tuition well below than that of most conventional private schools.

Standardized Equals Restrictive

Similarly, the Academy of Thought and Industry is a for-profit network of schools that could trigger necessary disruption in education. Founder Michael Strong acknowledges the power of profit-driven free enterprise to create lasting educational change that is higher-quality, lower-cost, and ultimately scalable. He says:

Any time something is profitable, that is what makes it able to go to scale. The reason we have low-cost groceries now (compared to 100 years ago) is because it’s profitable to bring food to millions and millions of people.

Any meaningful and lasting transformation in American education must come from the private sector. Public schools have tried to innovate; yet compulsory mass schooling has become more restrictive, standardized, and all-consuming of American childhood than at any other time in our history. To enact real, scalable change in education—just as Whole Foods did with the organic food movement—entrepreneurial parents and educators will need to imagine and implement new models of learning. These models must be rooted in the time-tested principles of free-market capitalism, or what Mackey describes as

the heroic nature of business, its essential virtues, and its extraordinary potential to do more good for more people in a sustained manner than any other social or economic system ever invented by humankind.

Entrepreneurs can help to replace an obsolete schooling model of education with a new learning one fit for the innovation era. In fact, they may be the only ones who can move us from where we are to where we could be.

Listen to Kerry McDonald discuss unschooling with FEE president emeritus Lawrence Reed (12:00 mark):

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The Art and Science of Physical Removal

Part 1: Removing Yourself

I have long been of the opinion, as a Voluntaryist, that there are only two legitimate ways of voting: With your money, in terms what products and services you choose to buy (outside of taxation, of course, where you are effectively given no choice), and with your feet – choosing where you prefer to live, all things and circumstances taken into consideration. It follows, then, that most libertarians of whatever stripe gravitate towards locales where, at least, the politics and general presence of government are not as aggressively antithetical to the basic enjoyment of life as others. For example, at present, I am seriously considering getting out of Vermont sometime during the next few years, and taking up residence in Wyoming – where taxes are both less numerous and lower, the cancerous hysteria of gun control has not yet taken root, and where there is still a rural, low-population environment (not to mention one almost certain to contain a higher percentage of like-minded people). In short, all the things Vermont had once upon a time, and no longer does.

There is certainly nothing wrong or immoral about wishing to improve one’s circumstances by choosing to go and live somewhere else – so long as one has every intention of paying one’s own way rather than leeching from whatever Welfare State may exist in one’s new chosen location. There is nothing wrong with wanting to cohabitate amongst one’s own “tribe,” as it were. Having libertarians (and even a couple of conservatives here and there…maybe) as neighbors is always preferable – to me, at least – than being surrounded by roughly 70% Democratic “progressive” lefties who are almost sexually enthralled by Marxism of every conceivable variant. Surely, the former promises a better life. So, I’ll be investigating that – thoroughly and in full – over the next couple of years. You’ll likely hear from me more on that as things unfold. Stay tuned.

Part 2: Removing Others

So now suppose I’m living my new life happily in the Big Sky Country of Wyoming, enjoying that big boost in freedom that was rapidly dying back over my shoulder there in Vermont…and before too long, the same kind of leftist disease begins to take hold within Wyoming’s Forever West political system.

Hans-Hermann Hoppe has this rather blunt commentary to make about just such a situation: “There can be no tolerance toward democrats and communists in a libertarian social order. They will have to be physically separated and removed from society.”

Now this is not to say, first off, that Wyoming is a strictly “libertarian social order” to begin with. More accurately, it might be characterized as predominantly conservative Republican in flavor – with some inevitable libertarian blandishments as a consequence. That stated, conservative and libertarian camps both, I would think, have a mutual vested interest in seeing that leftist ideology does not gain serious ground or take root in the Wyoming landscape. Such concern can be quite correctly characterized as nothing more nor less than self-defensive in nature: People who are paying few and low taxes, enjoying virtually unrestrained gun rights, and relishing most or all of the trappings of rural rugged individualism do not want these conditions to be reversed or undone – most especially not at the hands of some Marxist-inspired brigade of self-styled do-gooders who believe with almost religious fervor that they’ve come to the unwashed lands to teach the heathens how to live a better, more civilized life under full-on socialism.

So for the conservatives, the solution to this equation is very easy: Out come the pitchforks, and away we go. For the libertarian camp though, there’s a bit of a problem.

Unlike all forms of statism, libertarian ethics demand tolerance. Unlike libertarianism, however, statism requires force. I think you can see the quandary this seems to present.

And I’ll repeat a line from above: Such concern can be quite correctly characterized as nothing more nor less than self-defensive in nature.

Ever since my awakening as a libertarian some 25 years ago now, I have spoken with probably a couple of thousand leftists – from garden-variety Democrats, to hardcore Marxists. Out of all of them, I have come across maybe two who I sincerely believed when they told me that they did not wish their views or economic system to be imposed on others by force. One of them even used the term “libertarian socialist” – which made me laugh derisively at the time. But I’m older now, and no longer laughing. I think that’s a valid term to describe such a philosophical position. I also think, through experience, that scarcely one in a thousand leftists possess a viewpoint of such benign integrity. The overwhelming majority of them are more than willing to use whatever level of violence and brute force they feel is necessary to bend you to their will – to force you to be subjugated to their ideas whether you agree with them or not.

And I will say unequivocally that these are the leftist elements about whom Hoppe is spot-on correct. Those who would agitate and proselytize for the dismantling of a libertarian socio-economic environment – which, no doubt, would have likely taken tremendous efforts and sacrifice in order to build in the first place – in favor of mandatory economic regulations, taxation, gun control, redistribution of wealth, etc. – such individuals must indeed be “physically separated and removed” from the midst of a region or territory which has managed to construct a libertarian society.

As would, for that matter, anyone from any ideology that sought to reinstitute involuntary political governance in any form.

Legitimate self-defense, after all, should never require apologism.

That said, it is the even smallest potential for “libertarian socialism” that causes me to distance myself somewhat from Hoppe. That one-in-a-thousand leftie who just wants to live peacefully in a commune with his or her buddies down the road – so long as their chosen lifestyle and preferred economic models are kept among themselves and other willing participants who are free to leave at any time – is not and should not be considered a problem. So long as, being the phrase of paramount import here. Hoppe’s absolutism lends itself too readily to a total witch-hunt mentality otherwise. Thus, allow me to offer a revision of his above maxim, more in line with purist libertarian sentiment:

“There can be no tolerance toward democrats and communists who agitate for political and economic control over others in a libertarian social order. They will have to be physically separated and removed from society.”

Liberty, sovereignty, and autonomy are key elements of my own personal vision. Not living as a slave to a bunch of parasitic politicians and soul-sick bureaucrats, as the Left would have us do – all the better to control, manipulate, and dominate us to death. It is a vision worth both projecting and fighting for, I think, especially in the face of a world bent on ever-increasing authoritarianism and control.

I’m thinking I may be able to do that more effectively by physically removing myself to a different geographical locale, surrounded by a different culture. We’ll see. Life is strange, and can take many unexpected twists and turns.

Should I get there, however, when I do, I’ll then be prepared to defend my place, person, and property in it. Not with indiscriminate prejudice against others whose philosophies I find abhorrent, but with a more finely targeted and focused sense of just what is absolutely necessary in order to do so.

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