What Cues Can South America Take From Europe?

Over the past few years Greece has probably made the news more than ever before. Whether it be protesters in the streets, election results, or the announcement of some new government policy, whatever happens in Greece seems to be written about in all corners of the world. Just recently the fierce rhetoric of a relatively obscure populist left-wing party made international headlines and fueled new speculations about the future of one of the world’s major currencies, if not the world economy and financial markets. The eventual ascent of that same party, Syriza, to Parliament has all eyes both on the Old Continent and across the world focused on its plan of action. Mind you, we are talking here about a country whose GDP represents less than 0.4% of the world economy.

In the meantime, incessant government intervention into the economy has caused major upheaval in several countries in South America. Venezuela is currently experiencing the worst depression in decades, Argentina’s economy is in shambles once again on the heels of its most recent default, and since the World Cup bubble popped Brazil has equally dipped into recession. These countries dwarf Greece in terms of population as well as contribution to world GDP, and some of their resources make them important players in global commodity markets. Yet aside from some news outlets’ reporting on Venezuelans having to stand in line for hours for even the most rudimentary items or the mysterious death of a federal prosecutor in Argentina, major media are hardly paying attention.

The latter, far from being the result of a massive media cover-up, reflects a general sentiment in South America. Here in Chile, for instance, nobody in their right mind would dream up some theory about the aforementioned woes causing a spillover effect that might bring the entire continent to its economic knees. Unlike in Europe, xenophobia has not been on the rise here, nor have there been any incidences of heads of state being compared to blood-thirsty dictators. As much as some populist leaders like to speak of a “Latin American brotherhood”, in truth the misery even in neighboring countries is hardly discussed except in case of any personal ties.

While it would clearly not be a fair comparison to put the South American economy on equal footing with that of Europe, the events that have unfolded in recent decades can certainly serve as valuable lessonsEurope-SouthAmerica for the continent. The mere suggestion that one day, Europe’s economic fate would seemingly come to hinge on the outcome of Greek elections would have seemed outright preposterous as recent as the nineties or even in the early 2000s. Indeed it would be like predicting that two decades from now, all of South America would be trembling at the prospect of a severe recession in Guyana.

Still, a lot more can be drawn from European history than simply a long list of don’ts. Going further back just a few centuries can literally provide a blueprint for sustainable growth and pave the way for prosperity on a continent too long haunted by the destructive and backward forces of socialism. Historians and other scholars have written extensively on “the European miracle” and its foundations. As it turns out, the terminology belies an astonishingly simple recipe; defense of property rights and decentralized power structures limited by competing jurisdictions in their ability to intervene in and expropriate resources out of the market.

Whilst academia and politicians would have us believe economics is an incredibly complex field of study that should be left safely and exclusively in the hands of the “experts”, historical evidence proves them utterly wrong. In fact, the more power is centralized into the hands of these conmen, the lower the odds of the kind of sustainable economic growth that has permanently lifted millions out of poverty, and continues to do so to this day.

Political leaders and their outdated and misplaced allegations of imperialism cannot be allowed to stand in the way of free people and free markets in South America. In the words of Ron Paul: “An idea whose time has come cannot be stopped by any army or any government”!

Why True School Choice Requires a Free Market

After pointing out the failures of public schooling here and here, now is probably a good time for the upside of the story. After all, given how broken the current system is, there have got to be better alternatives! And there are.

While modern technology has bettered the lives of hundreds of millions across the globe in many different ways, the education system has hardly been on the forefront in taking advantage of these revolutionary new tools. Which should be no surprise considering the heavy hand government has in schooling..

Yet the cracks are beginning to show, as an increasing number of parents consider homeschooling their children or free_market_educationat least sending them to private schools. Or, as a free market economist might put it; the market is starting to reject the public “education” system that persists in churning out ever dumber students despite rising tuition fees.

In the United States 73 percent of respondents to a public opinion survey said they support school choice. Furthermore, more than 6 out of 10 parents said they would send one or all of their children to a different school “if given the financial opportunity”. They also feel there aren’t enough school options for their children. On the other side of the pond, a UK government report found that “too many pupils drift, become disenchanted with school or get into trouble and drop out at 16”, and that “A large number of adults lack vital skills in literacy and numeracy”. In addition, British state education appears to entrench social segregation rather than improve social mobility.

Although no private school receives taxpayer funding most are still subject to the same regulations as public schools if they are to be formally accredited, meaning tuition fees can be very high. Consequently, homeschooling can be a more viable alternative for many parents. In fact, the number of homeschooled kids in the United States is rising steadily, and has been for several decades. Unfortunately not all parents in the world have that choice, as many governments mandate public education. And even those that do often find themselves under considerable peer pressure as a result of some of the common misconceptions surrounding homeschooling.

One of those misconceptions, and possibly the most persistent one, has to do with the perceived lack of socialization of homeschooled kids. After all, the theory goes, if you don’t go to public school you spend less time around other people, increasing your chances of becoming a social misfit. Still, the statistics don’t bear this out.

A 2003 research survey of adults who were homeschooled found that homeschool graduates are much more involved in their community, as well as more likely to be engaged citizens than the general population. Moreover, homeschool graduates were found to be more content and nearly all were glad to have been homeschooled, while more than 8 out of 10 said they would homeschool their children (74 percent already were). Needless to say, the above cannot be said to be typical of social misfits. In the words of the late Dr. Raymond Moore, author of over 60 books and articles on human development: “The idea that children need to be around many other youngsters in order to be socialized is perhaps the most dangerous and extravagant myth in education and child rearing today.”

The point here, however, is not necessarily to make the case for one type of schooling over another. Regardless of one’s opinion on what is best for a child’s development, the issue is whether the current system truly provides parents with options. Given the laws many governments have put in place to force children into public schools, the answer is obvious. Fortunately there are still some countries where government regulation is a lot less draconian. Nonetheless, the very existence of a public school system as well as economic conditions aggravated by central planning, severely limit school choice even in those countries.

And that is why we need a free market in education.

The Failures of Public Schooling (Part I)

As detailed by Albert Jay Nock[1], the three ideas or principles historically underlying the theory of education are equality, democracy, and the notion that a literate citizenry assures good public order and honest government. With these ideas in mind, it is often concluded that schooling should be considered a “public good”, or even a right.

On the topic of equality it is fitting to echo the words of economist and historian Murray Rothbard:

“It is evident that the common enthusiasm for equality is, in the fundamental sense, anti-human. It tends to repress the flowering of individual personality and diversity, and civilization itself; it is a drive toward savage uniformity. Since abilities and interests are naturally diverse, a drive toward making people equal in all or most respects is necessarily a leveling downward. It is a drive against development of talent, genius, variety and reasoning power. Since it negates the very principles of human life and human growth, the creed of equality and uniformity is a creed of death and destruction.[2]

free_market_educationStill, it could be argued that the least we should do for equality’s sake would be to make schooling accessible for all children regardless of race, color, creed, or socio-economic background. After all, few would contest the argument that getting a good education generally increases one’s chances of being successful in life. But how does that relate to schooling? If equality were the overarching goal, why not have other necessities of life such as food, clothing and shelter – arguably more important than schooling – funded by taxpayers and their consumption mandated by law? Exactly what kind of equality are we talking about?

Understanding the term “equality” in the context of schooling to refer to equal access, let’s try to put the current situation in historical perspective. It is worth noting a few historical facts that help dispel some of the myths and commonly held beliefs many seem to have. What was education like prior to the dawn of “public”, mandatory schooling?

The supply of schooling in Britain between 1800 and 1840 was relatively substantial, despite educational institutions having to depend on private funds, mostly from working parents and the church[3]. Needless to say, education was in less abundant supply than today, just as can be said about virtually everything else. Yet the percentage of the net national income spent on day-schooling of children of all ages in England was higher in 1833 than after schooling had become tax funded and compulsory[4].

On the other side of the pond, before the dawn of taxpayer funded schools, the state of New York appointed five commissioners to analyze the common school system in the state. The commission acknowledged that in order to credibly make the case for public schools, it would have to prove that the existing system was failing to meet children’s educational needs. Except what they found was the opposite: “(..) there is a natural stimulus to education; and accordingly we find it generally resorted to, unless some great local impediments interfere” [5]. Schooling was already widespread!

Judging by their actions, though, government bureaucrats were nonetheless determined to intervene. The Free Schools Act of 1867 abolished rate bills (fees) in taxpayer-funded public schools, thereby bringing an end to the level playing field in which public and private schools had been competing freely. Predictably the effect was the crowding out of the private by the public sector[6]. The public school system was further strengthened by the introduction of laws for compulsory schooling[7].

Over time this monopoly has become so entrenched that any policy to re-introduce competition in whatever form would be, and has been, vehemently opposed by teachers’ unions like the National Education Association (NEA) and the American Federation of Teachers (AFT) and subsequently voted down by their political minions.  Naturally the same can be said about their European counterparts such as the NUT and NASUWT in Britain and the GEW in Germany, not to mention the global teachers’ union federation Education International (EI). These organizations lobby for and massively benefit from maintaining the status quo in education, keeping competition out of the market and prices artificially high.

But what of equal quality? In the current system the majority of children do end up attending school because (a) they are forced to and (b) the taxpayer is made to foot the bill. The current system also mandates that a central government set the educational standards for all schools within its borders, whether public or private.

Quality control is thereby put into the hands of bureaucrats in a faraway government building. The standards and requirements are passed on from the top all the way down to those actually in the field working with the children that are supposed to meet said demands, or fail. Conformity and obedience are rewarded while the creative, critical thinkers are deemed “difficult” if not given the label of having a mental disorder.

Stay tuned for part two with which we’ll start 2014 in style!

Nock, A.J. (1932). The Theory of Education in the United States. Rahway, NJ: Quinn & Boden Company. p. 27.

[2] Rothbard, M.N. (1999). Education: Free & Compulsory. Auburn, AL: Ludwig von Mises Institute.

[3] West, E.G. (1996). The Spread of Education Before Compulsion: Britain and America in the Nineteenth Century. Digital version available here.

[4] Ibid.

[5] The Common School System of the State of New York. (1851). Report by S.S. Randall and the New York Dept. of Public Instruction. p. 18. Digital version available here.

[6] West, E.G. (2000). Public Education and Imperfect Democracy. p. 4. Digital version available here.

[7] Ibid.

True Healthcare Requires a Free Market

Last week’s blog post dealt with the health crisis we are witnessing in the developed world and the role the State-granted pharmaceutical monopoly plays in this crisis. Rather than dwell on how or why healthcare (or what passes for it these days) has gotten progressively worse over time however, let’s instead focus on how we might solve the crisis. How would a free market do better?

Free Market HealthcareReally all one has to do to find the answer to that question is a little research. An abundance of information on preventative measures and cures for all of the most serious diseases of affluence (e.g. cancer, heart disease, diabetes) we are seeing today is available online, hidden in plain sight. Unfortunately, most practicing physicians will not tell you about alternative forms of treatments or nutritional approaches, as they are not exposed to any – or very little – of that information themselves in medical school. Consequently, they tend to opt either for drugs or scalpels. “Sir, I’m afraid your cholesterol is a little high. But don’t worry, just take this statin drug and you’ll be fine! Once you come down with cognitive problems, diabetes or muscle pain we’ll get you another prescription for that!”  If your doctor tells you that, there is a good chance he or she has no clue that there are many natural ways to lower your cholesterol if you even wanted to do so. Yet he will be more than happy to write you a prescription for a statin drug, especially if he needs to make a little extra money in bribes to take his family on that long-awaited vacation to Honolulu this summer!

The sad truth of the matter is that many so-called “terminally ill” people are needlessly suffering and dying and ignorant people (probably well-meaning but ignorant nonetheless) are still filling the coffers of Big Pharma, “running for the cure” or “raising awareness”. Funneling more money into a system that is broken beyond repair does not help anyone. What good is “early detection” if the subsequent treatment involves poisoning your body, thereby making cancer worse and triggering tumor growth?

Luckily there are much safer, holistic alternatives out there with little or no side effects. Dr. Max Gerson developed the now famous Gerson Therapy ninety years ago to help treat and cure a variety of degenerative diseases such as lupus, heart disease, diabetes, rheumatoid arthritis and even cancer. Rather than introducing toxic chemicals into the body, this therapy is all about removing those toxins through an organic, vegetarian diet, raw juices, coffee enemas and natural supplements. The treatment does not rely on removing tumors or lopping off perfectly healthy body parts (are you listening, Angelina Jolie?!) or radiation that creates cancer cells 30 times more potent than regular cancer cells.

Thanks to the internet, other success stories of nutritional approaches to combat supposed chronic diseases such as diabetes are only a few clicks away, much to the chagrin of the medical “authorities”. But the genie is out of the bottle, as evidenced by the growing health food movement currently sweeping the globe, as well as increased awareness of the crimes of Monsanto and the like.

Needless to say, the free market in and of itself does not solve any problems in a literal, physical sense. Rather it acts as a conduit, providing the platform for the innovative thinking and imagination of the human mind to solve problems and make our lives better. Still, this fact alone already sets it apart from the crony capitalist/corporatist system we live under today.

Benito Mussolini, in his “Doctrine of Fascism”, described fascism as the merger of the State and corporations – the “Corporate State” -, an apt description of the system as it has been set up in most of the world. To (attempt to) socialize such a system would be to jump out of the frying pan into the fire. When left to their own devices, human beings will naturally start looking for real cures and change their lifestyles to prevent and treat disease rather than entrusting their well-being with pharmaceutically conflicted “healthcare professionals” ordered around from the top down by bought-and-paid-for politicians.

When that day comes we will know what true health freedom is. The choices you make today will determine whether you will be on the winning team.

Austerity Protesters Should Be Protesting IMF, EU Loans – Not Austerity

Though the attention of the media has largely turned elsewhere recently, protests against austerity measures are still raging in Greece, Italy, Portugal, Spain and France, among other countries. Strikes abound as people take to the streets by the tens of thousands to express their discontent. Unfortunately, the protesters have been misguided to protest the wrong thing. They have confused cause and effect to the point where they have totally lost sight of the source of what they are protesting.

As a result of the introduction of the euro, high-quality goods, mainly from Germany, suddenly became a lot cheaper for consumers in the eurozone’s peripheral countries – the same goods that their weak currencies had previously prevented them from buying. This allowed for an unprecedented spending spree in countries that had not exactly built up a reputation of being thrifty, anyway. Imports ballooned and trade balances consistently deteriorated[1]. The single currency boosted the northern countries’ exports while offering the southern countries a level of wealth that seemed too good to be true. And it was. .

We have come to find out that as Europeans we have all been living beyond our means. We bought into the fable that somehow the euro brought us Heaven. We thought we were getting something for nothing. Now that the boom years are over the so-called experts are desperately trying to keep the bust from happening, thereby only aggravating the problem. In typical Keynesian fashion, the European Central Bank and the IMF have rushed in with loans to the tune of hundreds of billions of euros. However, those on the receiving end will not be helped anymore than a heroin addict would benefit from being given another shot of heroin.

Needless to say, none of this would have ever happened without the euro in its current form. Still, even if any of the “PIIGS-countries” would have run up debt the way they have, the solution would have been very simple and much less painful: curb spending, let your currency devalue to boost exports and let the free market do the rest (i.e. free up resources that have been locked up in unsuccessful investments and corporations and divert them to where they can be put to use more efficiently). Today, however, taxpayers across the eurozone are on the hook for the debt crisis, thanks to the collectivist European Union. (More on that in a future blog post.)

It naturally follows, then, that the only way out of this quicksand is for the eurozone to break up so that all European nations can go back to their own currencies. Would this be the end of “the European dream”? Quite the contrary. It would be the resurrection of Europe, only in a different form. Besides, it would save us all a lot of money and we would at least get some of our sovereignty back.

Let’s face it, the idea of a “United States of Europe” was laughable from the start, dreamed up by dunderheaded collectivists with no connection to reality.

The dream is over. It’s about time we woke up.

[1] Eurostat. External and Intra-European Union Trade.  p. 134. Retrieved November 10, 2012.