Sunday, September 28, 2008

The Unintended Consequences of School Vouchers

Individual progress

The individual works for real progress. Inflation, or monetary expansion, behaves like a tax. In the absence of inflation, incentives to save arise. Without the threat of inflation destroying the individual's savings, he or she would invest more. 

Workers will work their way up with a true free education system in a free society. Without the constant theft from inflationary, regulatory and tariff pressures, workers will accumulate wealth to invest in real education, not the state "education" in which it wastes and too expensive.

In the current system, the state regulates education, even the so-called "privatized" voucher schools. Amazingly, these voucher schools function similarly to the state-funded "public universities." The state funds voucher schools similar to how the state funds the "public universities." We cannot distinguish between the terms "private" and "public." This exemplifies that we should use "private" and "pubic" relatively.

In the "developing" countries in Asia and Latin America, the worker currently works for long hours in slave conditions, with little income. Inflation destroys the worker's savings, preventing him or her from stepping up the ladder. Their subsistence quality of life impedes their progress, as it prevents them from getting an education. The "free" trade agreements, which set special quotas, tariffs, patents, and regulations, privilege the monopoly corporations at the expense of the worker. 

Subsidized education, or any education funded by vouchers by the state, harms the workers more than it helps. The state must implement all its subsidized services with regulations,  otherwise subsidies would misdirect. The state must specify the criteria required by these services to subsidize them, to prevent misuse of funds to firms that fail to pass the criteria. For example, the state must specify the curricula for voucher-funded schools, otherwise the voucher-funded schools would misuse their funds to teach something unrelated to education. The state must regulate student loans the equally as subsidized education. When the state gives a student a loan, it must regulate the schools that the student uses the loan. The state must regulate the curricula by these schools. Otherwise, the student would spend it on something else unrelated to "education," such as an athletic school.

Besides the regulated curricula, the state must perform some tests to test the effectiveness its education subsidies. In that way, the state will not fund any school that fails to pass the test. The state uses tests as a strategy to avoid wasting funds to the "bad" schools. However, since the state makes the "tests," it can choose any question to test that it want to ask. The state controls the curricula that the subsidized schools teach by a curricula or standardized testing. These curricula and tests might contain propaganda.

Proponents of "school vouchers," particularly the so-called "free market" economists, cite that it results in more freedom than "state-regulated" education. We proved that "school vouchers" function the same as "state-regulated" education, as the state must regulate the curricula and provide tests to prevent misuse of the "voucher funds." 

We see the "developing" countries as highly corrupt and frequent abuses of power. In a less totalitarian area, such as the developed countries, we see more sole proprietorships and small businesses than the corporations. However, the reverse occurs in the "developing" countries. Corporations vastly outnumber sole proprietorships and small businesses. In the "developing" countries, we see a few multinational corporations dominating the country.

The corporatist "free" trade agreements only defend the existence of multinational corporations. The written agreements contain special privileges, such as favorable regulations and patents. Corruption and the favorable treatment to the large corporations arise at the expense of small businesses. This results in a monopoly, a state-granted privilege prohibiting competition of the large corporations with smaller businesses. These corporations can charge as high and pay as low to the workers as they want. 

Until the state-privileged corporations can compete with new businesses entries, they will continuously enslave workers. Until the state withdraws all funding for "education," workers will not really learn. The workers cannot pay for even low-quality state-education.

As we proved that the free society will provide higher quality education from the lack of state controls, and the free society also will make individuals afford education as the privileged corporate monopolies paying slave-like wages would not exist.

We omitted the situation in which an individual who possesses relatively diminutive wealth wants to make money in a field requiring a long time of expensive education, but he or she lacks the patience to save. We see three advantages in a free market:

  • In a free society with free competition, the corporate parasites will not confiscate the individual's wages, thus letting he or she save the education sooner.
  • The state will not regulate the curricula, which will let the free market education services compete until the education costs reduce to a fraction of the state-regulated or subsidized, while providing higher quality education. 
  • In a free society, individuals can freely start working without state-required licenses. In a closed society, however, the state requires individuals to own a license before working. The licenses often contain special provisions mandating the individual to study at a school for a long period in order to work. For example, the state forces individuals who wants to work as a medical doctor to study in an university for ten years. This increases the costs of education tremendously.

The individual will easily get his or her education, and these three reasons may make him or her well sufficient. In a free society, even more advantages will make everyone, including the ones who resided in the "developing" countries, to afford an education. As discussed in the previous section, in a free society interest rates will significantly lower. The impatient individual can afford education even sooner, by borrowing at significantly lower interest rates. After completing his or her education, the individual would directly benefit in the increase of productivity. The individual could easily pay back the loan from his or her directly increased productivity, and in the absence of the opportunity losses from taxes and regulation. This encourages a productive society.

If the free society suddenly arose from a fast, peaceful Agorist revolution, we would indeed see a temporary adjustment to a more equal wealth and income distribution fixes. We see the temporary adjustment as fast, as individuals would possess the incentives and the freedoms in the absence of the parasites. Any worker would use the cheap, high-quality and fast free education to raise his income more quickly than anyone can guess.

The productive society

As incomes approach more equality in a free society, workers will increase productivity. As noted in Artificially high interest rates?, the state taxes individuals 50% of their income and an 80% opportunity loss exists in the parasitic society.

We should not imply that income will double due to 50% less tax. We should not imply that income will increase by a factor of five due to 80% opportunity cost. As productivity increases, individuals work less. Some individuals will work as hard in a free society as they worked in a parasitic society, to amass great wealth. Some individuals will reduce their work time by half, as they still can receive wages 2.5 times than they live in the parasitic society. Some individuals will reduce their work time by five in the absence of 80% opportunity cost, while still resuming the equivalent pay as they worked in the parasitic society. 

GDP, or gross domestic production, measures the gross production in a select number of individuals who happens to locate in the same geographical territory. As GDP measures production, it lacks opportunity costs. Lower opportunity losses mean higher productivity. For example, open source "free software" increases productivity, but decreases GDP. Taxes increase opportunity losses, but might increase GDP, as individuals might produce more for the state to confiscate.

I wrote this article as valid E-Prime, avoiding the "to be" inflections (be, is, am, are, was, were, been and being). In addition, to avoid redundancy, I avoided the terms: (has, have, had, does, do, did, becomes, become, became, left-wing, right-wing), the ontological terms (belong, type, kind, class), relative terms (most, overall, generally, very, few, many, majority) and all the terms that ended in -ism, -ist and -ian (capitalism, communism). I tried to use avoid the passive voice if possible, and including the actor if possible. Although I believe in abstract thinking, I wrote unambiguously, concretely, and precisely as possible, to avoid potential conflicts in communication. I avoided abstract terms such as Malthusian, Darwinian, and Marxian. 

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