See What You Can Build on Your Own

There’s a sense of personal accomplishment, of self-worth, when you make something with your own hands through your own efforts. Even if you seek guidance from someone with experience, you’ve learned more than you knew before. You’ll probably value the results more than if you had no part in making it.

If, after you do the work yourself, you decide you’d rather pay someone to do it for you next time, at least you now know what’s involved. You will probably have a better sense of whether someone is doing a good job or not. You might be able to tell if they are trying to scam you or overcharge for their services.

To prevent someone from making things on their own is bad in two ways. You show you don’t trust them to be competent, and you keep them from becoming competent; from learning how to do things they’ll value. If you never allow someone to succeed or fail on their own, always doing everything for them, they’ll never really grow up. They’ll never learn responsibility.

Self-government is the same way. Until you try to govern yourself, without any laws or representatives to fall back on, you’re not a fully competent human being. You may even surprise yourself when you discover you don’t need those things, nor do you want them imposed on others. I have more respect for myself than to look for someone to govern others — even my enemies — on my behalf.

To me, insisting that others must be governed for my benefit is a sign of weakness and immaturity.

People tend to live up or down to your expectations.

So how do you govern yourself with your own two hands? Be responsible. Don’t pawn your responsibilities onto others. Don’t expect others to take care of you, or to protect you from threats you should be dealing with on your own. Mind your own business and expect others to mind theirs. If someone violates you, deal with it yourself. Only seek help if absolutely unavoidable, and then only from truly voluntary sources. You aren’t entitled to other people’s time or money, so don’t act as though you are. Governing yourself isn’t achieved through voting or expecting representatives to fix anything. If you want to do that anyway, don’t stop there and think you’ve accomplished something.

See what you can build with the effort of your own mind and hands. I think you’ll be pleasantly surprised.

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In Sync: How Business Responds to Gratis Government

Whenever people criticize government provision of a product, clever analysts often demur that private suppliers who compete with government have exactly the same problems.  Part of Helland and Tabarrok‘s case for the Baumol effect in education, for example, is that prices have risen at the same rate in both the public and private sectors:

Prices are much lower at public than at private institutions. The vertical scale is a ratio scale, so equal slopes mean equal rates of growth. Thus, although prices are lower at public institutions, the rate of growth in prices has been similar at private and public institutions. Between 1980 and 2015, real prices more than doubled.

OK, let’s step back.  Picture a typical government service.  The price: gratis.  The quality: mediocre.  Private competition, however, remains legal.  Should we expect the private part of the market to look just as it would under laissez-faire?

No way.  Unless the government rations the free mediocre product, consumers have virtually no reason to ever pay for products of mediocre or lower quality out of their own pockets.   At minimum, then, government’s gratis products kill private production of all products of equal or lower quality – a textbook case of predatory pricing.

That’s not all.  Gratis production also effectively kills private provision of products of moderately higher-than-mediocre quality.  After all, if you can get a C+ product for free, who wants to pay full price for a B- alternative?  With gratis public provision, private providers must convince consumers that the marginal quality improvement is worth the total price of the product.  A tall order.

What does this mean?  Well, if public schools add more low-value services, private schools must keep pace in order to compete.  If public schools add more sports, more specialized teachers, or more courses, private schools that fail to keep up will lose their customers.  The first rule of private competition against gratis government is: Always keep your product quality well above the government’s.  This remains true even if the government adds services that consumers value well below cost.  If you can get them for free from the government, why pay extra for a private school that refuses to offer them?

The lesson: When government supplies free (or highly subsidized) products, we should expect private suppliers to supply gold-plated versions of the standard government-issue.  As a result, their prices and costs will be closely synced.

There are admittedly some exceptions: If government is spending money for no gain at all, private competitors needn’t bother.  If government supplies numerous expensive low-value services, private competitors might decide to just outshine the government on other dimensions.  Most realistically, if government refuses to provide some cheap, highly-valued options (such as religious education), then private competitors can win customers by filling the gap.

Yet overall, when there is a dominant public sector with a private fringe, we should expect the Helland-Tabarrok pattern – without or without a Baumol effect.  Given the pathologies of the public sector, it’s nice to have a private option, but don’t get too excited.  The private options will generally be extravagant, because gratis government strangles budget-friendly alternatives.  Tragically, this in turn sustains the illusion that in the absence of government, only the rich would be able to afford whatever the government now provides.

P.S. Another reason to expect public and private education to closely resemble each other is that both are almost always non-profit.  Morally, yes, there is a major difference between public and private non-profits.  Economically, however, they’re very much alike, because both give managers flimsy incentives to raise value or cut costs.

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If You Hate it, You’re Not the Audience

A lot of people who work in venture capital hate the show Shark Tank.

They feel it portrays an unrealistic image of investing; one that will spread and cause viewers to misunderstand the business and then go on to make terrible choices because of it.

There’s definitely a bit of the Theoretical Man argument going on here, but it’s more than that. The investors who hate the show aren’t the show’s audience. They misunderstand the show’s purpose (besides to entertain).

They compare the show against what they would put in a TV show about investing, which is all the stuff they think is important. But they’re so deep in the business, they don’t realize how many steps a total noob must take to even understand what they consider basics.

I love Shark Tank. I used to watch it with my kids. It exposed them to tons of new concepts. The idea of building a business with someone else’s money was novel. The realization that you’ve got to have a story that’s compelling enough to convince the holders of that money to join. The concept of a “pitch”. The understanding that a good pitch and a good company aren’t always the same thing. The realization that investors can be wrong and can be jerks. And founders can be nice or idiots. The knowledge that investors might collaborate or compete with each other on deals while remaining friends.

It doesn’t even matter if the stories are real or realistic. Uninitiated viewers take away the basic insights. These are so basic that VCs forgot everyone doesn’t know them. But if someone doesn’t know it yet, there’s no way they’ll understand a Medium article about power laws and term sheets.

When you hate something popular, it’s prudent to pause and consider there’s probably something in it that is doing something for those who love it. You don’t have to love it, but it’s probably not supposed to serve your ends anyway. If you can discover the reason it brings value to others, you might navigate the world more effectively and enjoy it more.

(Still trying to understand this when it comes to Old Town Road. I’m not ready to give up yet…there must be something valuable in this song to those who like it).

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Trade, Tariffs, and some Basic Economics

Why does trade occur? Fundamentally, trade takes place in order to better the lives of those participating in the trade. You trade money for food because you are hungry and money doesn’t taste very good. Each party values what they are trading away less than what they are receiving in return. That is why the trade occurs.

Another way to look at trade is that it increases efficiency. As people (and companies) trade, they move closer toward an optimized equilibrium. There is an economic principle known as marginal utility. The idea is that the more of a thing one consumes, the less valuable each subsequent unit of the thing becomes. If you are hungry, a hamburger may be very valuable to you. You might even be so hungry that a second burger sounds good too. But how about a third or a fourth burger?

If you were willing to pay $10 for the first burger, does that mean that you would also be willing to pay $100 for ten burgers? Of course not. The utility of the tenth burger is far below that of the first. The reason this is relevant to efficiency is because trade allows people who have more of something than they need to transfer it to someone who values it more highly. You were willing to pay $10 for a burger. Presumably so are others. You aren’t willing to pay $100 for ten burgers. What about $50 for ten burgers? It’s a better deal on a per-burger basis, but you still aren’t hungry enough to consume ten (or even five) burgers.

What to do with all those extra burgers? Trade, of course. At $5 per burger, you can now trade them to people who want them enough to pay $10 a burger and make a nice profit in the process. By the time the trading is complete, everyone in the room will have had a burger and everyone will be (presumably) more satisfied than they were before the trades occurred.

Another important economic principle here is the subjectivity of value. Value is not an intrinsic quality of a good. It is an externally ascribed quality that is unique to each individual. A burger is not objectively ‘worth’ $10. It is ‘worth’ only what someone will pay for it. If you are willing to pay $10 for a burger, that means you value that burger at a minimum of $10. Someone else might value a burger at $8. This means they would pay $8 for a burger, but no more.

So what does all of this have to do with tariffs? As we already discussed, trade increases efficiency. It allows people to balance their subjective values and surplus goods as the economy (which really just means all the people in the economy) moves ever closer to that optimized equilibrium. It never reaches 100 percent optimization, of course, because people’s wants and needs are always changing.

Government intervention in the economy reduces efficiency. Every tax (and a tariff is just a tax) and regulation serves to decrease the efficiency of trade. Remember the $5 burger you sold for $10? Now imagine a 10 percent sales tax being added to it. Now you either have to sell the burger for $11 to get the same $5 profit or you can still sell it for $10, but only receive $4.09 in profit. Either way, efficiency is lost because some of what is being traded is removed from the equation. In the next trade, either you or your customer (or both) will have less to spend.

In a free market, the more trades the better because even trades that only increase efficiency slightly are worthwhile. In a market saddled with government intervention, the loss added to every transaction makes some previously beneficial transactions impractical. The more taxes or tariffs that are added to transactions, the fewer transactions occur and the less efficient life becomes.

Some people who advocate tariffs believe in a concept called protectionism. This is the idea that if the inefficiencies of high taxes are added only to some goods (or to certain suppliers) of these goods, it will protect other goods or suppliers. Imagine that the 10 percent tax added to the burgers only applied to beef. Turkey burgers could be sold tax-free. This might seem to benefit sellers of turkey burgers as some consumers would see turkey as an acceptable substitute good for beef.

Why is this a bad idea? There are several reasons. The first is that the burger market with the tax on beef is still less efficient than the burger market with no taxes at all. The second is that the consumers who opt for turkey instead of beef just to avoid the tax are not as satisfied as if they had their first choice. A third reason is that the artificial advantage given to sellers of turkey burgers will discourage them from seeking out greater efficiencies or improving their quality or customer service. They don’t need to make these improvements, as their products are already cheaper thanks to the protectionist tax system.

Prosperity is maximized when efficiency in the market is maximized. Your dollars go further, your trades are more beneficial, and your options are expanded. On the other hand, wellbeing is reduced as government intervention increases. Every obstacle which is erected in the path of trade reduces the efficiency that promotes prosperity.

Regulations are another form of mandated inefficiency that governments may inject into an economy. Imagine a new law which requires that every burger be sold with a bib. Who would want such a thing? The bib industry, of course. They would love this idea. Such a mandate might be justified as “saving thousands of jobs in the bib industry,” but would that actually improve the economy?

At first glance, it might appear so, but what is seen is often dwarfed by what is unseen. All the money spent buying unwanted bibs would be diverted from other uses. Every dollar that is spent requires forgoing other options. These rejected alternatives are the opportunity cost of your decision. A dollar spent buying a useless bib can’t be spent on something else that is more desirable or productive. These lost opportunities make the bib mandate a net negative for the economy, diverting resources that would have otherwise been used more efficiently.

There are more problems with the bib mandate, however. A protected industry has little reason to innovate or seek out greater efficiency. The bib industry protected by our hypothetical mandate would have no reason to improve their unneeded product or to adapt their industry in response to consumer demand. Those employed in it would not learn new skills or make any meaningful contribution to human wellbeing.

What of trade deficits? Advocates of tariffs often cite a supposed trade deficit as a justification for intervention in the economy. In short, a trade deficit is the amount by which a country’s imports (typically from one country) exceed its exports (to that country.) The idea that a trade deficit justifies a tariff is incredibly flawed, however. Think about it like this: You buy gas for your vehicle from a gas station. What does the gas station buy from you? According to the theory of a trade deficit, the total amount you spend at the gas station represents a “trade deficit” because the gas station (in all likelihood) isn’t buying anything from you. If you are like most people, the same is true of the grocery store, movie theater, and most other places you frequent.

Is this a bad thing? Not at all. On the contrary, attempting to balance your trade with every trading partner would lead to massive inefficiencies and impose all manner of hardship as you sought to trade your particular skills directly to suppliers of the goods and services required to keep you alive.

Instead, you trade your skills to those who need them, accept money in return as an intermediary, and then trade that money to sellers of the goods and services you actually desire. In this way, you maximize your earning potential by focusing on what you do best and obtain the things you need from those whose areas of expertise are different from your own. This idea is known as comparative advantage. If you are good at painting houses and not very good at sewing clothing, it makes sense to spend your time painting houses and using the money you receive for your painting to buy clothing from someone who is better at sewing. This is another way in which a free market increases efficiency.

Imagine if you had to make everything you consumed. Imagine trying to grow your own food, sew your own clothing (from cotton you grew yourself), and build your own house (from trees you cut down). Yes, people did that for centuries, but now imagine trying to do everything required for a comfortable life in the modern age. Can you make a car? A computer? A smartphone? Can you build an air conditioner or perform surgery on yourself?

Why is it that you can enjoy all of these things without knowing how to make or perform most or any of them? The answer is simple. Trade makes all of this possible. Thanks to trade, you can focus on the one thing at which you are the most skilled while still enjoying thousands of other goods and services provided by other people acting according to their comparative advantage.

Economics can be a complicated subject and many people don’t really understand why the economy works the way it does. That’s okay, but learning about economics and economic principles can also be very rewarding because it helps to explain so much about our world and about human behavior. Learning about economics also tends to make one recognize the foolishness of government intervention and central planning. Such interference not only does not improve human wellbeing, it quite literally cannot do so. The efficiency of the free market cannot be improved through taxation or regulation. The imposition of tariffs or mandates cannot get humanity closer to the equilibrium which all of our trades are chasing. The free market may not be perfect (which is ultimately a subjective opinion), but I truly believe it is as close as mankind will ever get to perfection.

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100 Reasons to Homeschool Your Kids

This is my 100th article for FEE.org, so here are 100 reasons to homeschool your kids!

  1. Homeschoolers perform well academically.
  2. Your kids may be happier.
  3. Issues like ADHD might disappear or become less problematic.
  4. It doesn’t matter if they fidget.
  5. YOU may be happier! All that time spent on your kids’ homework can now be used more productively for family learning and living.
  6. You can still work and homeschool.
  7. And even grow a successful business while homeschooling your kids.
  8. Your kids can also build successful businesses, as many grown unschoolers become entrepreneurs.
  9. You can be a single parent and homeschool your kids.
  10. Your kids can be little for longer. Early school enrollment has been linked by Harvard researchers with troubling rates of ADHD diagnosis. A year can make a big difference in early childhood development.
  11. Some of us are just late bloomers. We don’t all need to be on “America’s early-blooming conveyor belt.”
  12. Then again, homeschooling can help those kids who might be early bloomers and graduate from college at 16.
  13. Whether early, late, or somewhere in the middle, homeschooling allows all children to move at their own pace.
  14. You can choose from a panoply of curriculum options based on your children’s needs and your family’s educational philosophy.
  15. Or you can focus on unschooling, a self-directed education approach tied to a child’s interests.
  16. Homeschooling gives your kids plenty of time to play! In a culture where childhood free play is disappearing, preserving play is crucial to a child’s health and well-being.
  17. They can have more recess and less homework.
  18. You can take advantage of weekly homeschool park days, field trips, classes, and other gatherings offered through a homeschooling group near you.
  19. Homeschooling co-ops are growing, so you can find support and resources.
  20. Homeschooling learning centers are sprouting worldwide, prioritizing self-directed education and allowing more flexibility to more families who want to homeschool.
  21. Parks, beaches, libraries, and museums are often less crowded during school hours, and many offer programming specifically for homeschoolers.
  22. You’re not alone. Nearly two million US children are homeschooled, and the homeschooling population is increasingly reflective of America’s diversity. In fact, the number of black homeschoolers doubled between 2007 and 2011.
  23. One-quarter of today’s homeschoolers are Hispanic-Americans who want to preserve bilingualism and family culture.
  24. Some families of color are choosing homeschooling to escape what they see as poor academic outcomes in schools, a curriculum that ignores their cultural heritage, institutional racism, and disciplinary approaches that disproportionately target children of color.
  25. More military families are choosing homeschooling to provide stability and consistency through frequent relocations and deployments.
  26. While the majority of homeschoolers are Christians, many Muslim families are choosing to homeschool, as are atheists.
  27. Homeschooling has wide bipartisan appeal.
  28. More urban parents are choosing to homeschool, prioritizing family and individualized learning.
  29. Religious freedom may be important to many homeschooling families, but it is not the primary reason they choose to homeschool. “Concern about the school environment, such as safety, drugs, or negative peer pressure” is the top motivator according to federal data.
  30. Fear of school shootings and widespread bullying are other concerns that are prompting more families to consider the homeschooling option.
  31. Some parents choose homeschooling because they are frustrated by Common Core curriculum frameworks and frequent testing in public schools.
  32. Adolescent anxiety, depression, and suicide decline during the summer, but Vanderbilt University researchers found that suicidal tendencies spike at back-to-school time. (This is a pattern opposite to that of adults, who experience more suicidal thoughts and acts in the summertime.) Homeschooling your kids may reduce these school-induced mental health issues.
  33. It will also prevent schools from surreptitiously collecting and tracking data on your child’s mental health.
  34. Your kids’ summertime can be fully self-directed, as can the rest of their year.
  35. That’s because kids thrive under self-directed education.
  36. Some kids are asking to be homeschooled.
  37. And they may even thank you for it.
  38. Today’s teens aren’t working in part-time or summer jobs like they used to. Homeschooling can offer time for valuable teen work experience.
  39. It can also provide the opportunity to cultivate teen entrepreneurial skills.
  40. Your kids don’t have to wait for adulthood to pursue their passions.
  41. By forming authentic connections with community members, homeschoolers can take advantage of teen apprenticeship programs.
  42. Some apprenticeship programs have a great track record on helping homeschoolers build important career skills and get great jobs.
  43. Self-directed learning centers for teen homeschoolers can provide a launchpad for community college classes and jobs while offering peer connection and adult mentoring.
  44. With homeschooling, you can inspire your kids to love reading.
  45. Maybe that’s because they will actually read books, something one-quarter of Americans reported not doing in 2014.
  46. Your kids might even choose to voluntarily read financial statements or do worksheets.
  47. You can preserve their natural childhood creativity.
  48. Schools kill creativity, as Sir Ken Robinson proclaims in his TED Talk, the most-watched one ever.
  49. Homeschooling might even help your kids use their creativity in remarkable ways, as other well-known homeschoolers have done.
  50. With homeschooling, learning happens all the time, all year round. There are no arbitrary starts and stops.
  51. You can take vacations at any time of the year without needing permission from the principal.
  52. Or you can go world-schooling, spending extended periods of time traveling the world together as a family or letting your teens travel the world without you.
  53. Your kids can have healthier lunches than they would at school.
  54. And you can actually enjoy lunch with them rather than being banned from the school cafeteria.
  55. Your kids don’t have to walk through metal detectors, past armed police officers, and into locked classrooms in order to learn.
  56. You can avoid bathroom wars and let your kids go to the bathroom wherever and whenever they want—without raising their hand to ask for permission.
  57. Research shows that teen homeschoolers get more sleep than their schooled peers.
  58. Technological innovations make self-education through homeschooling not only possible but also preferable.
  59. Free, online learning programs like Khan Academy, Duolingo, Scratch, Prodigy Math, and MIT OpenCourseWare complement learning in an array of topics, while others, like Lynda.com and Mango, may be available for free through your local public library.
  60. Schooling was for the Industrial Age, but unschooling is for the future.
  61. With robots doing more of our work, we need to rely more on our distinctly human qualities, like curiosity and ingenuity, to thrive in the Innovation Era.
  62. Homeschooling could be the “smartest way to teach kids in the 21st century,” according to Business Insider.
  63. Teen homeschoolers can enroll in an online high school program to earn a high school diploma if they choose.
  64. But young people don’t need a high school diploma in order to go to college.
  65. Many teen homeschoolers take community college classes and transfer into four-year universities with significant credits and cost-savings. Research suggests that community college transfers also do better than their non-transfer peers.
  66. Homeschooling may be the new path to Harvard.
  67. Many colleges openly recruit and welcome homeschoolers because they tend to be “innovative thinkers.”
  68. But college doesn’t need to be the only pathway to a meaningful adult life and livelihood. Many lucrative jobs don’t require a college degree, and companies like Google and Apple have dropped their degree requirements.
  69. In fact, more homeschooling families from the tech community in Silicon Valley and elsewhere are choosing to homeschool their kids.
  70. Hybrid homeschooling models are popping up everywhere, allowing more families access to this educational option.
  71. Some of these hybrid homeschool programs are public charter schools that are free to attend and actually give families access to funds for homeschooling.
  72. Other education choice mechanisms, like Education Savings Accounts (ESAs) and tax-credit scholarship programs, are expanding to include homeschoolers, offering financial assistance to those families who need and want it.
  73. Some states allow homeschoolers to fully participate in their local school sports teams and extracurricular activities.
  74. Homeschooling may be particularly helpful for children with disabilities, like dyslexia, as the personalized learning model allows for more flexibility and customization.
  75. Homeschooling is growing in popularity worldwide, especially in India, Australia, the United Kingdom, Israel, and even in China, where it’s illegal.
  76. Homeschooling grants children remarkable freedom and autonomy, particularly self-directed approaches like unschooling, but it’s definitely not the Lord of the Flies.
  77. Homeschooling allows for much more authentic, purposeful learning tied to interests and everyday interactions in the community rather than contrived assignments at school.
  78. Throughout the American colonial and revolutionary eras, homeschooling was the norm, educating leaders like George Washington and Abigail Adams.
  79. In fact, many famous people were homeschooled.
  80. And many famous people homeschool their own kids.
  81. Your homeschooled kids will probably be able to name at least one right protected by the First Amendment of the US Constitution, something 37 percent of adults who participated in a recent University of Pennsylvania survey couldn’t do.
  82. Homeschooling can be preferable to school because it’s a totally different learning environment. As homeschooling pioneer John Holt wrote in Teach Your Own: “What is most important and valuable about the home as a base for children’s growth in the world is not that it is a better school than the schools but that it isn’t a school at all.”
  83. Immersed in their larger community and engaged in genuine, multi-generational activities, homeschoolers tend to be better socialized than their schooled peers. Newer studies suggest the same.
  84. Homeschoolers interact daily with an assortment of people in their community in pursuit of common interests, not in an age-segregated classroom with a handful of teachers.
  85. Research suggests that homeschoolers are more politically tolerant than others.
  86. They can dig deeper into emerging passions, becoming highly proficient.
  87. They also have the freedom to quit.
  88. They can spend abundant time outside and in nature.
  89. Homeschooling can create strong sibling relationships and tight family bonds.
  90. Homeschooling is legal in all 50 US states and has been since 1993, but regulations vary widely by state.
  91. In spite of ongoing efforts to regulate homeschoolers, US homeschooling is becoming less regulated.
  92. That’s because homeschooling parents are powerful defenders of education freedom.
  93. Parents can focus family learning around their own values, not someone else’s.
  94. Homeschooling is one way to get around regressive compulsory schooling laws and put parents back in charge of their child’s education.
  95. It can free children from coercive, test-driven schooling.
  96. It is one education option among many to consider as more parents opt-out of mass schooling.
  97. Homeschooling is the ultimate school choice.
  98. It is inspiring education entrepreneurship to disrupt the schooling status quo.
  99. And it’s encouraging frustrated educators to leave the classroom and launch their own alternatives to school.
  100. Homeschooling is all about having the liberty to learn.

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Don’t Advocate Against Property Rights

Libertarians who support the Big Government “border security” welfare program don’t understand property rights. Property rights are the foundation of all rights, so if you don’t understand and support property rights, how can you credibly claim to be libertarian… or to value liberty at all?

“Taxation” is a violation of property rights. If you advocate funding “border security” through “taxation” you advocate violating property rights.

“Eminent domain” is a violation of property rights. If you advocate taking property through “eminent domain” for “border security”, so as to place a wall, fence, or other structure on this property against the true owner’s wishes, you advocate violating property rights.

If you make up rules which prevent people from employing whomever they choose, trading with whomever they want to trade with, associating with whom they prefer, or renting to whomever they reach an agreement with, you are violating property rights. If you support these kinds of rules you are no friend of property rights. You are just as bad as any other thief or trespasser.

Respect– or lack thereof– for property rights doesn’t depend on where a person was born. Those most threatening to my property rights have always been home-grown archators. This doesn’t mean others can’t also be a problem, but to focus on “others” while supporting those who are actually committing the violations right here right now is to miss the point. It looks statist.

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