Peter Levine's "New Progressive Era"

I had previously blogged about Peter Levine's New Progressive Era when I was starting it. Now that I've finished it, I conclude that my initial reaction was correct. The ideology of the progressives, and of Levine, ignores long run effects; bounded rationality; processes of experimentation that are necessary to innovation; the importance of private property and the private sphere; the importance of individual rights to be free from the progressives' endless taste for attacking the individual; and the importance of free markets to create a wealthy society.

Deliberation and democracy are only beneficial if there are limits set to their scope. As de Tocqueville argued, tyranny of the majority is the chief threat to American democracy.

Having grown up in New York, the state and city where the deliberative state has grown most extensively, I grew up seeing the failure of Levine's ideas first-hand. In New York, progressivism degenerated into Robert Moses's capricious abuse of power. Although Levine argues that the earlier progressives were ambivalent about unions, Levine is very pro-union. In New York, I watched the business base disappear; property values soar to the point of crippling unaffordability; and the growth of the rat population in the subways. (The city had confiscated the subways during the post-progressive era thanks to the moronic deliberation of that era). The City has increasingly become an elite playground that excludes the middle class thanks to the practical effects of Levine's ideas, specifically, special interest pressure to support public sector unions who have fought for high taxes; special interest eminent domain actions that have closed small factories and destroyed inexpensive housing; and the use of urban renewal and the tax system to squelch start-ups that have yet to prove themselves.

Despite its claim to be democratic, progressivism is anti-democratic. It is anti-democratic because it aims to apply democratic deliberation inappropriately to economic issues and so must fail. Levine does not appear to grasp the concept of marginalism or marginalist decision making; nor does he leave sufficient room for the possibility that an artist, intellectual, inventor or entrepreneur might have ideas which the majority would rather suppress because it does not understand them. This has been the consistent failure of progressivism. Deliberation and progressivism are fine in the limited scope of public decision making as defined in the nineteenth century. The slightest expansions make them untenable. In areas like monetary policy, which are not that complicated, special interests leap to make the topics seem complicated, and the public is easily bamboozled. The result is the special interest constituencies, which Howard S. Katz has called the "paper aristocracy" in the case of money supply, who argue vehemently for the "stabilization of credit markets" and similar kinds of meaningless, self-serving nonsense in order to justify public subsidies. The public is deferential toward the quack claims of academics, and so democracy becomes a matter of special interest, privilege and fake authority.

The public is simply not equipped to engage in debates about engineering; economics; architecture; construction; manufacturing, etc., etc. This is understandable because no one has the mental capacity to absorb all of these issues. In arguing for the public to engage in debates about such a wide range of issues, Levine and his fellow progressives are paving the way to totalitarianism. This is not surprising because it happened in Germany, the first country to adopt a progressive policy.

The end result of Levine's progressivism is dictatorship. Far from being a reform movement, the "new progressivism" leads to the kind of totalitarianism to which Bismarck's progressivism led Germany.

There are more than a few evidences of authoritarianism in Levine's book. For instance, Levine implies that those who "admire the market" should not "have disproportionate political power as a result of their wealth". But this kind of distinction leads to suppression of speech. For instance, is it fair that people with higher IQs have disproportionate political power and so can manipulate the government to serve their interests as the financial community has been able to do with the Federal Reserve Bank and as business has been able to do with the department of labor and the federal trade commission? The fact is that Levine singles out business as a manipulator, when the only conceivable outcome of his progressivism is manipulation by special interest groups.

Given the repeated failure of the progressives' ideas, one would hope that their ideas would have been consigned to the trash bin. But their emotional hatred of business, which they cannot dominate and control, inspires their endless speculation as to how to suppress entrepreneurs and those who do not pay attention to their stale ideas.

West Shokan's General Store

The West Shokan Curmudgeon reports that the West Shokan General Store will close. According to the Curmudgeon, the owner of the store, Ruth Marzulli, has:

"offered to compromise on the rent and to extend the initial rental agreement. The Mansfields feel that it’s impossible to make the store viable even if the rent is almost nothing. I’m sure there’s a compromise in all this, but it doesn’t seem that the parties will figure it out."

The Curmudgeon suggests that a group might open the store in Snyder's, a bar famous for appearing in the film Wendigo, which has apeared on the Independent Film Channel and elsewhere.

Babs and Phil Mansfield, who moved up from the city to run the store (Phil is a professional photographer as well as a retailer) have done a great job with the store. The food is very good and they sell alot of neat stuff like milk in the old fashioned glass bottles that is organic (bottled by a local farmer), organic eggs and world-class soups, pot pies etc. The store is much more crowded than it was when Weber owned it and much more crowded than when the Marzullis operated it themselves.

Ruth's late husband Jerry had purchased Weber's store and refurbished it about 5 or 6 years ago. Unfortunately, rumor has it that the price was somewhat too high to be justified by the volume. The economics of the area may be that commercial properties cannot command the prices that would seem appropriate elsewhere, such as New York, because of insufficient traffic. It is understandable that Ms. Marzulli does not wish to rent or sell at a loss, and it is also understandable that Mr. and Ms. Mansfield cannot operate at a loss to cover Ms. Marzulli's cash flow gap.

As the Curmudgeon points out, the store is a major asset to the hamlet of West Shokan. For those who do not drink (Snyder's is a commodious alternative hangout if you do drink)it is the only "third place" to meet others in West Shokan.

Ms. Marzulli would probably be wise to compromise on the rent, especially if the Curmudgeon's concern that the West Shokan post office might close if the store closes again is true. If the p.o. does close, Ms. Marzulli will lose that rent as well as the store's rent. If so, she will be holding an expensive property with no tenant and will have to carry the interest (or imputed interest) as well as pay the taxes and maintain the property without any revenue.

It would make more sense for Ms. Marzulli to cover her variable costs and at least part of her fixed costs by offering the Mansfields a lease at a market rate. By market rate I mean a rate that is limited to the store's net income less a reasonable estimate of profit and wages for the Mansfields. I sincerely doubt that another buyer will be able to generate more traffic than the Mansfields have. Commercial properties on Route 28 in neighboring Boiceville have been sitting empty for years.

Warren Buffett Attacks Middle Class Businessmen and Farmers

On February 14, 2001 BBC News reported that:

"A group of the United States' most wealthy citizens have urged Congress to reject a plan by the new Bush administration to phase out taxes on estates and gifts by 2009...A petition, to appear in the New York Times on Sunday, is being organised by William Gates Sr, father of Microsoft chairman Bill Gates...Around 120 rich Americans, including billionaire investors George Soros and Warren Buffett, support the petition...Mr Buffett, who himself did not sign the petition because he thought it did not go far enough, said that repealing the estate tax would be a "terrible mistake."

Fox News reports today that Buffett:

"told the Senate Finance Committee on Wednesday that Congress should keep the estate tax rather than repeal it and help a few rich Americans like him."

When you think about it, it makes sense for America's wealthiest citizens to support the estate tax since it doesn't affect them. There has been an estate tax in effect for nearly 100 years, yet America's wealthiest families have mostly avoided it. In fact, virtually nothing in the tax code is as it seems. The tax code is full of exceptions, regulations, exceptions to the exceptions and regulations that regulate the exceptions to the exceptions.

In contrast, wealthy but middle class businessmen and farmers worth $3 or $4 million have trouble affording legal talent to lobby for or find the exceptions. Not so the Rockefellers. The Gates-Buffett pro-inheritance tax movement is an effort by the very wealthy to attack and impoverish the upper middle class.

Farmers and small businessmen may find that they lack the cash to pay an inheritance tax. Owners of expensive Manhattan apartments may have to throw their less lucky children onto the street because the parents fear that they will not have the cash to cover the inheritance tax on the apartment.

It is logical for the super-rich to favor the inheritance tax because the inheritance tax has never prevented them from establishing trusts. Many of the signers of the Gates petition may do so when the glare of the news media is turned away.

Moreover, cronyism and nepotism, the hiring of friends and relatives as opposed to the best qualified candidate, is morally indefensible. Yet, Buffett has appointed one of his children to run Berkshire Hathaway. The not-so-wealthy can't afford to appoint their children to a corporate sinecure.

The opposition of the super-rich to inheritance is hypocritical for another reason. If the state did not interfere with the money supply and the economy, an inheritance tax would not be so big a problem because asset values would be lower. But it is because the Fed inflates the money supply, artificially depressing interest rates, that illiquid estates are problematic. Apartments and houses that have been in families for generations must be liquidated. Small businesses must be broken up.

Were the Fed to allow interest rates to float to a market level, rates would rise. This would be fair because interest is just the price of money. We do not subsidize the price of shoes to benefit shoe retailers or of cars to benefit car retailers. Why do we need to depress the price of money, interest, to protect stock market investors, Wall Street and commercial bankers? Can't these guys create value in a free market?

Higher, market-responsive interest rates would depress the stock market and make the super-rich less rich. Moreover higher rates would stop inflation from elevating asset values. Thus, farmers' land and New Yorkers' apartments would become less unrealistically expensive.

Messrs. Buffett, Soros and Gates do not lobby for market-driven interest rates. Instead, Messrs. Buffett, Soros and Gates argue for tax code provisions which everyone knows are complex, often unnecessarily complex, frequently dodged and subject to manipulation by the very wealthy. Hence, we must suspect that Messrs. Buffett, Soros and Gates are insincere. If they were concerned about income inequality, they would speak out for market-neutral interest rates, not for complicated enhancements to the byzantine tax code.

Although financiers like Buffett, Soros, Gates et al. have above-average intelligence, this may not be true of all who have built successful businesses. Some may have average intelligence. Their children may also have average intelligence. Why should the hard work of the parents be forfeited? In contrast, because of income taxation, government regulation, licensure and inflation, success in today's world increasingly (and unfairly) depends on the ability to gain entry to Ivy League colleges and obtain a job on Wall Street, as has been the case with Messrs. Buffett and Soros. Mr. Gates attended an Ivy League college but did not work on Wall Street. If the children of Ivy League graduates are more likely to be able to attend Ivy League colleges because of inherited genetic endowment, then they benefit by inheritance tax. They benefit because small owners are forced to sell their family businesses to large businesses such as those that Messrs. Buffett and Soros own. The low interest rates benefit them; and the emphasis on academic scores tends to benefit them. In contrast, the hard working farmer sees the state violently rip his life's work from his children. But this is fine with Mr. Buffett because Berkshire Hathaway is ready to buy at bargain basement prices.

Frankly, I see little moral or respectable in the anti-inheritance or pro-inheritance tax position. Buffett's position is vicious. If the super-rich want to give their money to charity, they have every right to do so. But shouldn't the hard working upper middle class be permitted to shield their children from the rapacity of the marketplace? Or must their children be subjected to the inflationary stealing of a new generation of financial manipulators and beneficiaries of government intervention?

Vernon C. Polite's Provincialism

In June 2006 there was a debate about dispositional assessment in which I participated on the website of Inside Higher Education. About eight months later, in March 2007, Vernon C. Polite, dean of Eastern Michigan University's School of Education, added a lengthy comment, which Steven Head has brought to my attention.

Dean Polite begins by arguing:

"If law, social work, nursing, psychology, etc can speak the words, 'social justice,' professional educators certainly need to have an understanding of what social justice means in the preparation of professional educators."

But, of course, an understanding of "justice" is part of the undergraduate philosophy curriculum and can be gleaned in reading authors as Plato, Aristotle, Augustine and Kant, who are covered in any competently run undergraduate program. A graduate school, including one in the education field, need not cover undergraduate-level material. The question of "what is justice?" belongs in undergraduate philosophy classes. That is, unless the graduate school has a program of indoctrination in mind.

Dean Polite launches into a discussion of "minorities" which is not particularly relevant to the question of "social justice" dispositions. While there have been many injustices brought to bear on minorities, the issue of the existence of "social justice dispositions" is a deeper question. To take one example, in Malaysia the majority ethnic group has instituted an affirmative action program that amounts to apartheid-like discrimination against the minority Chinese. The minority Chinese are more economically successful than the majority Malay population, but is discrimination against this suppressed minority group just?

St. Augustine argued that a person's relationship with God is the basis of justice. Are we to accept St. Augustine's definition of justice? Plato argued that justice is rooted in society. But Karl Popper argued that Plato's definition is totalitarian. Are we to believe Plato's definition of justice, or Popper's? Hitler believed that murdering Jews is just. The Ku Klux Klan believed that lynching blacks is just. Whose definition are we to believe? Dean Vernon C. Polite's and NCATE's? Dean Polite writes:

"NCATE, however, could be most helpful to its member institutions by “defining” social justice rather than simply removing it as if it is no longer relevant or suggest that “it” is sufficiently “covered” under diversity. Some would argue that anything found in the NCATE standards should be measurable and observable in the candidates’ performance."

Yet, Dean Polite's cries for enforcing a rigid, authoritarian definition of social justice will lead not to justice, but to harassment of those who disagree with NCATE and with Dean Polite. It will lead to an authoritarian political correctness. Dean Polite further claims that:

"Social justice tends to equalize disparities in educational attainment, educational achievement and socio-economic status, and the impact of prejudice and discrimination on educational attainment."

But this may not be the case. The rigid definition of social justice as equality of outcomes is anything but just in terms of the thinking of Kant, Plato, Augustine, Aristotle and all other important philosophers outside of a few provincial leftists. Indeed, the moral depravity of the New Left is illustrated in its now-aged sociopathic leaders' ongoing defense of the Pol Pot, Mao Tse Tung and Castro regimes, which butchered 1.5 million, 25 million people and 100,000 people respectively.

Dean Polite goes on with a discussion that is remarkable for its provincialism:

"In essence, social justice is the one true ideal that ensures that “no child is left behind.”

Yet, there are many ways to attain the goal of improved social outcomes. In particular, the laissez faire economy of the late 19th century increased wealth dramatically because deregulation stimulated innovation. The invention of the telephone, AC electricity and the mass production of the automobile were improvements that have not been matched since the ideas of the suppressives/progressives, to include government regulation, have inhibited economic creativity. Justice is necessary for the fulfillment of human purpose, which means that government programs, regulation, whimsical legal requirements and pronvicial definitions of social justice ought to be eliminated. Justice means that each person should be permitted to keep what they produce and be free of the violence of political extremists and criminals.

Rules that suppress speech, that attack those who disagree, that expel students like Steven Head who disagreed with his professor are inherently unjust. Universities have been at the forefront of attacking individual freedom in the interest of a rigid, unjust ideology that argues for a logically impossible equality of outcomes. The concept of equality of outcomes that has no claim to "justice". It is a suppressive Procrustean bed that leads to murder. Far from being just, its advocates are killers.

If NCATE is to advocate justice, then it must advocate laissez faire capitalism. The only justice is equality under the law; freedom of expression; and the right to retain one's earnings. The only meaning of justice is:

"Laissez faire et laissez passer, le monde va de lui même!"