Flood of Immigrants

An Economist Looks at Europe

by Pedro Schwartz (Jan 4, 2016)

Quite some years ago, when I was a very liberal young man writing a doctoral dissertation on John Stuart Mill, I asked my supervisor Lionel Robbins what he thought of the restrictions newly introduced on immigration by the then Conservative government. Robbins answered with another question: “Would you make immigration totally free?” I did hesitate but suggested immigration should be as lightly regulated as it was in the United States at the end of the 19th century—just a medical and fifty cents per head on Ellis Island. I want to consider whether I would give that same answer today for Europe, seeing the size of the displacements caused by the civil wars in Libya, Syria, Iraq, Afghanistan and the Horn of Africa. In what numbers should immigrants from the poorer parts of the world be let into Europe? Should there be limits to internal migration within the European Union? What methods are acceptable to stem the flow of people fleeing violence or seeking a job? Liberal democracies in North America and Australasia face the same general question, to wit: does the philosophy of freedom include the right of people to travel and settle as and where they want?

Mass migrations are not a new phenomenon in Europe. The end of World War II made for very large displacements, whether voluntary or not: the borders of Germany and Poland were moved westward at the stroke of a pen, with millions of people forcibly changing their place of abode. Later came the voluntary migration of thousands fleeing communist oppression and, after the demolition of the Berlin Wall, even more people from Eastern Europe seeking new opportunities in the West. The independence of Algeria from France led the former metropolis to open its doors to people of both French and Algerian extraction. And Spain in the 1980s not only allowed many Moroccans to settle in its cities but was also very generous in granting double nationality to Latin Americans, blessed as they were with the same language, customs and even religion. (My mention of religion is not fanciful,

“Liberal democracies face the same question: Does the philosophy of freedom include the right of people to travel and settle as and where they want?”

for much heavy weather is made of the difficulty of assimilating a large Muslim population in countries of Christian tradition today.)

A further development in the European Union is that its treaties mandate the free movement of European citizens within the EU, including the full enjoyment of their welfare and social rights. This freedom is reinforced by the obscurely named “Schengen Treaty”, whereby there are no inside border controls in the EU, so that you can drive or fly freely from Finland or Hungary to Portugal or Malta, just as when you travel from Maine to New Mexico. Even where border controls remain, as in the United Kingdom and Ireland, Europeans can seek employment there: ‘the Polish plumber’, as the catch-all phrase goes, allegedly puts the local worker out of a job. Finally, you have immigrants from outside the EU, either applying for refugee status or simply slipping in illegally—or drowning by the thousands in their attempt to come in by sea.

Let us see some numbers. The EU has become one of the regions that the rest of the world looks up to as a destination for a better life. According to the European Commission, immigration into Europe excluding refugees and asylum seekers was from 2010 to 2014 a steady 1.4 million per year. The result is that in 2014, residents in the EU born outside Europe numbered 33 million—or 7% of its population. This may look large but not when compared with the 14% foreign born in the US, 20% in Canada or 27% in Australia, also in 2014.

Thus the immigration phenomenon is one of old standing, but the present rush to enter the EU at any cost by people coming from Africa or the Middle East is causing alarm. Asylum applicants plus people crossing illegally were 540,000 in 2013, 911,000 in 2014, and 1.5 million in the first six months of 2015. Though 40% of asylum applicants are currently being rejected, this progression will certainly increase the 1.4 million immigrants per year entering the EU that I mentioned above.1

This poses two kinds of problems for the EU. The most immediate one is the bureaucratic nightmare of dealing with unmanageable numbers of destitute people banging on its doors. According to European law, it is the country of first arrival that should check and classify the newly arrived. But the main points of entry are the minute Italian islands in the Mediterranean, the tiny member-state of Malta, and the Greek islands a stone’s throw away from the Turkish coast. They cannot cope, nor can the small states on the mainland crossed by refugees and illegal immigrants heading towards Germany and Sweden, where most want to go. The second is the hopeless attempt to distinguish between ‘asylum seekers’ fleeing political or racial oppression and ‘economic migrants’ who simply come to find a job or learn a new trade. That distinction is artificial: though some are forced to move under duress, all come for a better life for themselves and their families. An indication of this is that 65% of the applicants for refugee status in the first nine months of 2015 were young men, clearly looking for employment, and that a sizeable proportion of the ‘refugees’ is made up of unaccompanied children who have a greater chance to be allowed in and start a new life.

The EU is being less than efficient in dealing with the immigration phenomenon as a whole. “Frontex”, a European Agency for the management of external borders is just beginning to help frontline states to cope with the refugee influx. A European coast guard is in the process of being launched. There has been an attempt by the Brussels Commission to set minimum quotas for the numbers of refugees that the different nations must accept but most are refusing the imposition. Germany is among the exceptions for it has promised to accept an even large number in 2016 on top of the 800,000 taken in last year. The United Kingdom is among the least generous of European countries, as it has limited its total intake to 20,000 refugees over the next five years. Political resistance is growing in Hungary, Poland, Denmark, and France. Even Angela Merkel is seeing dissent in her party. The anti-refugee reaction in some European countries has led Peter Sutherland, the UN special envoy for migrants and refugees, to condemn it as contrary to UN principles and international law: he has reminded Hungary that free Europe accepted 200,000 refugees after Russia put down the Hungarian revolution in 1956.

The debate on an open door policy

For background information, seeImmigration, by George Borjas in the Concise Encyclopedia of Economics.

Ted Rall is not my kind of liberal but he recently drew a cartoon for the Los Angeles Times that goes to the heart of the immigration problem. A poor white man sitting before his TV screen sheds a tear for the drowning Syrians and wonders aloud why Europeans do not let in all those refugees; but he calls for his gun when his wife cries ‘Mexicans in the garden’.2 This ‘not-in-my-backyard’ attitude to immigration of so many otherwise generous people may be understandable, but is misguided.

As Peter Sutherland has put it, “locals in destination countries believe that migrants are stealing their jobs, depressing their wages, or exploiting their welfare systems”. A widely unionised and protected workforce will indeed complain that enterprising, hungry-for-work entrants unfairly compete with them. It is true that in the short run immigration exerts downward pressure on local wages, especially of the less well prepared. But over time competition forces progress, which can be painful but will in the end be for the good of all concerned. This resistance is on a par with the attitude of trade-unions in Europe when they resist legal changes to allow older people to prolong their working lives: they fear this will reduce jobs for the young. Behind these arguments lurks the fallacy of believing that the total number of jobs is a fixed quantity. Much to the contrary, the greater the number of people in gainful employment, the more jobs are created, both directly by increasing productivity and indirectly by demanding labour inputs from other suppliers.3

On the same lines, the middle classes in Europe and in America complain about their lost status compared with the famed 1% at the top and blame it on globalisation and its concomitant, immigration. But surely accepting immigrants must be seen as a reduction of inequality. It is only human that people should squint up the earnings scale and reject more equality with those below them.4 To quote Peter Sutherland again: “Migration—when it is safe, legal, and voluntary—is the oldest poverty reduction and human development strategy”.5

Then there is the pressure on public services, especially schools, health care, and eventually pensions. The concern under this heading has two elements. One is that limitless benefits granted in welfare states are a powerful magnet for immigrants. The other is that entitlements for immigrants increase the cost of public services for existing taxpayers. I have indeed witnessed abuses of the free National Health Services in the

United Kingdom and in Spain by immigrants with a short history of Social Security contributions, who then bring in their families for expensive operations. But immigrants, as I said, tend to be young, healthy, and eager for work. If they are legal, the present value of their taxes and contributions will cover their social costs, except for schooling—but this can be seen as a beneficial investment for the host country in the long term. The positive effect is even greater when one notes the importance of young workers for alleviating the finances of non-contributory pensions. Also, this cost benefit analysis is not complete unless one takes into account the more than off- setting contribution of immigrants to the national product.6

For more ideas and information, see Changing the Continent?, by Anthony de Jasay, Library of Economics and Liberty, November 2, 2015; Schengen, adieu, by Alberto Mingardi, EconLog, December 14, 2015; Why the Conventional View of Immigration Is Wrong, by Daniel Kuehn, Library of Economics and Liberty, September 2, 2013; and An Economic Case for Immigration, by Benjamin Powell, Library of Economics and Liberty, June 7, 2010.

Finally there is the question of the cultural shock that the arrival of large numbers of immigrants from societies with different traditions, habits and religions may cause to the countries accepting them. Under this heading we can include a number of points. One is the treatment of women by immigrants from different cultures, not only the more conservative Muslims but also the less cultured among Latin-Americans: in fact, in Spain much of the violence visited on women and children comes from immigrant men. However, if one looks carefully, sexist violence is not the monopoly of migrants from alien cultures. In Britain much cruelty to women and their children comes from men who are not married to the mothers and who are not the biological fathers of someone else’s offspring. The real danger comes from their ‘partners’, British or immigrant, who father children with one welfare reliant woman after another.7 This kind of behaviour is not limited to immigrant men, be they Muslim or Mexican. Immigrants always face resistance when they arrive in an established society. 8 The crucial point is that they and their offspring should have no excuse not to look for work and have the opportunity to find it.

More recently, there is the drift of some young Muslims of both sexes towards radical positions and even participation in terrorist groups.9 In the opinion of many, this is the result of the failure of Islamists fully to integrate

in the societies that so openly accepted them: they resist Western values of respect for the ways of others and separation of State and Church. This stress on religion does not go deep enough. Education systems are blamed for failing to teach the young these values. One should rather say that on the whole public education does not teach, full stop. Public education simply does not deliver the service expected of it. Two simple indicators: in Europe and America from 15 to 20 per cent of adults are functionally illiterate, let alone proficient in arithmetic; and many families are led to changing their domicile to place their children in the catching area of decent schooling. Public housing has created ghettoes of destitution and lawlessness in France, Germany and even Britain. These young drifters and their families often lead effortless lives under the dispensation of the welfare state. If school had to be paid for; if health care were mainly based on private insurance; if the young did not automatically have access to unemployment benefits; and if the labour market were truly de-regulated: then immigrants and their families would have to base their lives on steady work and personal effort, free of the incentive to sponge off the state.

There have been many attempts in Europe to make public assistance compatible with poverty reduction, less unemployment, greater self- reliance, and renewed family life. Free public schooling is being extended to include nursery at one end and apprenticeship at the other. Austria makes pensions portable from one job to another and adds whatever the individual has not spent in unemployment benefits to their future pension entitlements. Denmark has made the labour market fully flexible while having government actively retrain the unemployed. In the United Kingdom there are fewer limits to dismissal than is the norm in the EU, but the state demands firms pay a ‘living wage’ over and above the minimum wage. And there are small charges for public medical services in France, Germany and other EU nations. These minimal changes are clearly not enough. As Michael D. Tanner has written (2003), “it is time to end Welfare and replace it with an invigorated system of private charity”.10

Milton and Rose Friedman

In their charming book Two Lucky People (1998) the Friedmans told us how they and their families came to be Americans. Rose was born in the Jewish part of what today is a Ukrainian village. Preceded by her father, the whole family repaired to Portland, Oregon. She moved east to study at the University of Chicago, where she came to share a desk with Milton at Jacob

Viner’s economics course. Milton was born in Brooklyn but his parents came from the Jewish quarter of Berehovo in today’s Ukraine. The Friedmans, when they arrived in America got no help from the state. They were helped by relatives and made their way up by hard work. Milton’s parents met and married in New York. His mother worked in a cloth-making sweatshop and his father tried his hand at business. Young Rose and Milton both worked in their free time.

Children of immigrants, and in Rose’s case an immigrant herself, we are rather typical of our contemporaries, though less so of our successors, as the melting pot has increasingly been replaced by multiculturalism, and rugged individualism by a welfare state. (Two Lucky People, Preface)

Milton wrote the following words of another immigrant,Arthur F. Burns, but they apply equally to the Friedmans: “What a testament to the benefits that a policy of free immigration has conferred on the United States!” (page 31)

Friedman himself pointed out later in life how big an obstacle a policy of free immigration was to the welfare state. David Cameron, the British Prime Minister, wants to exclude EU migrants from all entitlements for four years after their arrival. He thus falls into the trap of tarring all immigrants with the brush of exploiters of the welfare system. I would put it another way. Since immigration seems to be incompatible with the welfare state, a flood of immigrants, be they political, economic, or stowaways, could be a blessing in disguise: it may have the effect of proving what we suspect: that the welfare state is unsustainable.

Footnotes

  1. See the detailed articles on the European Migrant Crisis in Wikipedia for the sources of all these figures. Accessed 26.iv.15. Most of the figures mentioned come from Eurostat.

2. You can see the cartoon on Rall’s blog at rall.com -> african-vs-mexican-immigrants-get-my-gun

3. Dr. Raúl Hinojosa-Ojeda (2010) has noted a counter-productive effect in the United States of the refusal to legalise unauthorised immigrants. Paperless workers tend to accept, and employers to pay, lower wages, thus depressing the wage level. Their emoluments increase as soon as they are legalised. “Raising the Floor for American Workers: The Economic Benefits of Comprehensive Immigration Reform,” Center for American Progress. Available online at:https://www.americanprogress.org/issues/immigration/report/2010/01/07/7187/raising-the- floor-for-american-workers/.

4. As regards the United States of America, from 1970 to 2013, median real income per head has been growing in the US by 1.70% one year with another, which puts inequality figures in perspective. (Bureau of the Census).

5. Peter Sutherland and William Lacy Swing (2014): “Migration on the Move”, Project Syndicate https://www.project-syndicate.org/commentary, March 17, 2014.

6. In the United States, the federal budget gets more from income tax paid by immigrants than it spends on Medicaid, Medicare and pensions for the same group, while states and municipalities incur a net loss due to the weight of public school costs. Daniel Griswold (2012): “Immigration and the Welfare State”, Cato Journal, 32, 1(Winter), pages 159-174. [Available online at:http://object.cato.org/sites/cato.org/files/serials/files/cato-journal/2012/1/cj32n1-11.pdf.] Apart from helping considerably with the pensions burden Griswold mentions different studies in states of the Union, where the supply of goods and services added by immigrants more than outweighs the cost of social services, especially that written by Dixon and Rimmer (2009): “Restriction or Legalization”, Cato Trade Policy Analysis, number 40, August 2009. [Available online at: http://www.cato.org/publications/trade-policy- analysis/restriction-or-legalization-measuring-economic-benefits-immigration-reform.]

7. See James Bartholomew (2004, 2013): Chapter 6, The Welfare State We’re In. Biteback Publishing, London.

8. Friedman was lucky that he suffered no discrimination as a Jew except once in his life, in his failed appointment for tenure at the University of Wisconsin in 1941, expressed by the chairman of the Economics Department, a gentleman who later repented his attitude. However, in an interview after being awarded the Nobel Prize he did remember his surprise on hearing his Jewish colleagues at Columbia and more generally New York students complain about anti-Semitic attitudes. (Academy of Achievement, “Milton Friedman, Ph.D.” accessed 18 December 2015). This is the fate of all immigrant stock: yesterday the Jews, today the Muslims.

9. The horror of the terrorist crimes at the beginning of the present century has made us forget that terrorism is an old and repeated occurrence in Western societies. We need only remember Joseph Conrad’s novels The Secret Agent (1907) and Under Western Eyes (1911). Terrorism must be prevented and fought decisively but we must not forget it is a price we pay for liberty.

10. Michael D. Tanner, The Poverty of Welfare: Helping Others in Civil Society, (2003), Preface. Tanner examines in that book the 1996 Personal Responsibility and Work Opportunity Reconciliation Act signed into law by President Clinton. He shows that the Act had good consequences critics at the time of its framing did not expect, such as the shrinking of welfare rolls and the reduction of poverty, especially for children. But he laments that one cause of poverty, out-of-wedlock childbirth, has not abated, and that government assistance is still tying down many recipients to a life of dependence. (chapter 4)

In memoriam Juan Carlos Cachanosky

In memoriam Juan Carlos Cachanosky

Juan Carlos Cachanosky     With the untimely death of Juan Carlos Cachanosky (13. 10. 1953 – 31. 12. 2015) we have not only lost a very dear and reliable friend. We have also lost a brilliantly insightful and resolute free-market scholar who managed to get so many things right and who could explain real world economic behavior with incision and clarity. Among the small number of true Austrians in Central- and South-America, identified with the European liberal tradition that produced such great thinkers as Ludwig von Mises or F. A. von Hayek, ‘Cacha’ as he was called by his friends, was one of the most enterprising minds, tirelessly working hard to turn his ideas into viable international projects. Despite his remarkable academic achievements in Austrian Economics, he always remained a generous and modest chap, who came as close to the vanishing ideal of an honest mind as perhaps human frailty will ever permit. With his dry sense of humor, his striking energy and passion for spreading sound economics, and his cheerfulness it was at all times intellectually very rewarding to be with or just around him. I feel privileged indeed to have been among his friends and collaborators.

    Juan Carlos Cachanosky studied Economics at the Catholic University of Argentina and was awarded a PhD by the International College of California. Following various academic appointments he was elected Director of Research at ESEADE, a major university and free market hub in Buenos Aires, Argentina. At the same time he successfully directed the Economics Department at the Catholic University in Rosario, Argentina. Among countless other important students, Juan Carlos served as the thesis advisor for Máxima Zorreguieta Cerruti, now Queen Máxima of the Netherlands. For well over a decade Juan Carlos was Dean of Universidad Francisco Marroquín’s Business School in Guatemala City, Guatemala. It was him who helped to push this unique place into an internationally recognized university. After hard work and until his premature death, he worked not only as professor and academic President of CMT Group in Edinburgh (UK), but also as a close collaborator with ECAEF (LI) and the Liechtenstein Academy (LI). As a much sought after lecturer Juan Carlos Cachanosky was active on almost all continents, but his enterprising spirit was mostly appreciated in Central- and South America, in Scotland, and the Principality of Liechtenstein, possibly the last stand for sound economics and free market ideas. Cacha’s work developed from a comprehensive approach to various disciplines that condition and influence one another. His countless publications, especially in the field of monetary theory and the history of economic thought are fine cut jewels.

We at ECAEF and Liechtenstein Academy are very saddened and we will miss him dearly. Our heartfelt condolences go to his family.

Kurt R. Leube
Academic Director, European Center of Austrian Economics

Let Rwandans decide whether to stick with success

In a referendum last week on their country’s constitution, the people of Rwanda overwhelmingly approved an amendment that changed presidential term limits. The new rules mean that 58-year-old President Paul Kagame can run again for the presidency in 2017, and could theoretically serve until 2034, writes Prince Michael of Liechtenstein in his latest GIS publication.

Rwanda, Africa’s most densely populated country, had suffered through civil war and genocide for years until a rebel force commanded by Mr Kagame ended the slaughter in 1994. He then served as vice president and minister of defence until 2000, when he acceded to the presidency. Under a new constitution, Mr Kagame was re-elected to seven-year terms in 2003 and 2010.

President Kagame is probably Africa’s most successful leader. His goal is to develop what was once among the poorest nations on the continent into a middle-income country by 2020. Rwanda boasts few national resources, but under his leadership has achieved impressive growth rates of 7 to 8 per cent annually. Inflation has fallen to single digits. Although the majority of the population still makes its living through subsistence farming, an impressive services sector, especially in IT and telecommunications, has developed. Education and health care are priorities, crime is low and the country is safe.

Mr Kagame – in contrast to many other African leaders – has not been tainted by corruption. Though he has been accused of supporting the M23 rebels in the east of the Democratic Republic of the Congo (DRC), the extent of that support, if any, is unknown. It is important to note that the situation in the eastern DRC is extremely fragile and that the government and its troops have a track record of committing atrocities. Rebels sometimes act in defence of minorities though they may, unfortunately, also commit cruel acts.

All in all, Mr Kagame’s track record is good. Unfortunately, Africa is a place where corrupt leaders tend to cling to power, as is happening now in neighbouring Burundi. However, Mr Kagame continues to enjoy the support of a solid majority of the population – as shown by elections whose results, on all evidence, have not been manipulated.

The administration of United States President Barack Obama has come out strongly against measures taken to allow Mr Kagame to run again. ‘President Paul Kagame has an opportunity to set an example for a region in which leaders seem too tempted to view themselves as indispensable to their own countries’ trajectories,’ said Samantha Power, the US ambassador to the United Nations, at the beginning of December. ‘We expect President Kagame to step down at the end of his term in 2017.’

The initiative has also been widely criticised in Europe. But the choice does not lie with the Americans or Europeans. The decision is the Rwandans’ alone to make. The international community should abstain from judgement.

We do not know what path President Kagame will take in the future, nor the details of how his succession will proceed. We do know, however, that he has promoted integration in a country with a history of discord, and that he has a clear, positive vision for its future. No critic of Rwanda’s choice has come forward with a credible alternative. In a country at an early stage of development, continuity can be essential – and President Kagame is not yet an old man.

Europas Wertegemeinschaft ist ein Wieselwort

Wertegemeinschaft Europa

Europas Wertegemeinschaft ist ein Wieselwort

von Frank Schäffler (Prometheus – Freiheitsinstitut, Berlin)

Europa droht zu zerfallen – und die EU-Kommission beschäftigt sich mit einer Kerzen-Verordnung und einem Kerzen-Verbot. Aber geredet wird von europäischen Werten. Weiter können Sprüche und Wirklichkeit nicht auseinanderfallen.

Erst durch konkrete Institutionen werden die europäischen Werte fassbar. In diesen Tagen der europäischen Krise werden wieder die europäischen Werte beschworen. Europa sei eine Wertegemeinschaft, betonte Bundeskanzlerin Angela Merkel neulich im Parlament der Europäischen Union. Merkel bezog diese floskelhafte Aussage auf die Flüchtlingskrise. Sie forderte, Europa müsse sich an Menschenwürde, Rechtsstaatlichkeit, Toleranz, der Achtung von Minderheiten und Solidarität orientieren.

KAMPF UM WERTE IN EUROPA

Zweifelsohne sind dies wichtige Werte, die Europa historisch verbinden. Es waren spanische Dominikaner, die im 16. Jahrhundert beim Anblick der Unterdrückung der Bevölkerung in Mittel- und Südamerika die Menschenwürde als universelles Grundrecht gegenüber dem spanischen König einforderten. Es war im 13. Jahrhundert die Magna Charta, die die Willkür des englischen Königs beschnitt und den Weg zum Rechtsstaat bahnte. Schon im 16. Jahrhundert wurden die Werte Toleranz und Achtung von Minderheiten eindrücklich verwirklicht, als etwa das Königreich Polen-Litauen verfolgten Protestanten aus ganz Europa eine neue Heimat gab. Und es war der als Sankt Martin verehrte Bischof von Tours, der im 4. Jahrhundert seinen Mantel aus freien Stücken mit einem Bettler am Wegesrand geteilt hat.

Ob Angela Merkel wohl an diese historischen Ereignisse gedacht hat? Es spricht nicht viel dafür. Doch da ist sie nicht alleine. Heute werden die Werte Europas umgedeutet und in Sonntagsreden banalisiert. In der real existierenden Europäischen Union wird unter Menschenwürde der Beschäftigung vernichtende Mindestlohn und unter Rechtsstaatlichkeit die Vertragsbrüche von Maastricht und Dublin verstanden, unter Toleranz die Regulierung von Kerzen, Ölkännchen und Glühbirnen, unter der Achtung von Minderheiten die Förderung der Nomenklatura in Brüssel und unter Solidarität die Rettung europäischer Banken. Die europäische Wertegemeinschaft ist ein Wieselwort. Erst durch konkrete Institutionen werden abstrakte Werte real und fassbar.

Die Trennung von Kirche und Staat, Marktwirtschaft, individuelle Freiheitsrechte, Rechtsstaat und Demokratie sind Institutionen, die diese Werte Wirklichkeit werden lassen. Die Trennung von Kirche und Staat ist das Ergebnis eines über Jahrhunderte ausgetragenen Machtkampfes zwischen den Kirchen und den weltlichen Herrschern. Der Drang der Kaiser und Könige, sich in innerkirchliche Belange einzumischen, und das Ansinnen der Päpste und Bischöfe, sich die weltlichen Herrscher zu ihren Untertanen zu machen, haben eine Machtbalance hervorgebracht, deren Ergebnis die tatsächliche Trennung der beiden Bereiche war. Anders als etwa in den meisten islamischen Staaten, die keine Trennung zwischen Religion und Staat kennen. Ein entscheidender Unterschied ist, dass in unseren Breitengraden das kirchliche Recht nicht über dem staatlichen Recht steht, sondern ihm untergeordnet ist. Zwar entstammt die europäische Rechtstradition auch dem kanonischen, also kirchlichem Recht, aber auch dies entstammt letztlich griechisch-römischer Rechtstradition.

WACHSENDE KLUFT ZWISCHEN WERTEN
UND INSTITUTIONEN

Die Marktwirtschaft und der Kapitalismus haben ihre Verankerung im Privateigentum und im Individualismus. Beides verdanken wir der schottischen Aufklärung des 18. Jahrhunderts, dessen prominentester Vertreter Adam Smith war. Einige wesentliche Erkenntnisse über deren Funktionieren haben sogar bereits die scholastischen Philosophen im 13. Jahrhundert und die Gelehrten der Schule von Salamanca im 16. Jahrhundert gewonnen und formuliert.

Die individuelle Freiheit folgt der Erkenntnis, dass nicht das Streben nach gemeinsamen Zielen eine freie und offene Gesellschaft ermöglicht, sondern dass die größtmögliche Verwirklichung individueller Freiheit am Ende auch die Freiheit einer ganzen Gesellschaft mehrt.

Der Rechtsstaat sichert in der Tradition eines Immanuel Kant die Gleichheit vor dem Gesetz. Sein kategorischer Imperativ: “handle nur nach derjenigen Maxime, durch die du zugleich wollen kannst, dass sie ein allgemeines Gesetz werde” hat nicht nur die europäische Verfassungsgeschichte seit dem 18. Jahrhundert maßgeblich beeinflusst, sondern auch die amerikanische.

Das Aufbegehren gegenüber den Königen und Fürsten durch das Volk brachte letztlich auch die Demokratie hervor, deren Wurzeln wir in der Schweiz verorten können wie in Großbritannien, in den Niederlanden wie in Polen. Bald erkannte man, dass es nicht genügt, nur dem reinen Mehrheitsprinzip zu folgen, sondern dass man Demokratie einhegen muss in einen Grundrechtskatalog, der das Individuum vor der Despotie der Mehrheit schützt. Heute wissen wir, dass Fortschritt darin besteht, dass die Wenigen die Vielen überzeugen. Neue Ideen treten zuerst bei Einzelnen auf, bevor sie zur Mehrheitsmeinung werden können.

Diese Institutionen entstammen einer europäischen Werte-Tradition, die längst vergessen scheint, weil Werte und Institutionen immer wieder auseinanderklaffen. Sie wieder ans Tageslicht zu bringen, würde Europa helfen, seine Krise zu überwinden, und der europäischen Wertegemeinschaft wieder einen Sinn zu geben.

"Mit freundlicher Genehmigung des Autors: Frank Schäffler (Prometheus Institut, Berlin). Der Artikel erschien ursprünglich am Dec. 11, 2015 in den "Orientierungen" der Ludwig Erhard Stiftung."

Fallacies of State Education

austrian-in-argentina

FALLACIES OF STATE EDUCATION

by Alberto Benegas-Lynch, Jr.


European Center of Austrian Economics Foundation, Liechtenstein University, Vaduz, May 29, 2015


The first thing that should be said is that the expression “public education” is completely misleading, it hides the real nature of what it means to say, that is state education since, on the one hand, private education is also for the public, and on the other, the disguise is used because state education is such a horrible expression as state literature, state press, state art and the like, these are grotesque contradictions in terms. Force does not teach, in the last analysis, it is impossible to teach freedom and independence of thought based on compulsion.

In most countries today private education is not really private since secretaries and ministries of education must approve curricula. The private sector, with some limits, take care of such things as buildings and uniforms, but the essence of what they are offering to the public is managed or influenced by bureaucratic departments. This is a central characteristic of the hypocrisy of fascism: private property is registered by privates but government uses and disposes of it, in contrast with communism that in a direct way abolishes property. Both operate in the same direction, one in an indirect way and the other directly, but both distort accounting or block it all together because relative prices are falsified or eliminated, which means misallocation of scarce resources that necessarily increases poverty.

In a civilized country ministries and secretaries of education should disappear and accreditation, as it was originally, would be done by academies and private institutions that in the process audit each other and take responsibility of the quality of school and university programs.

Politics should not interfere with such an important and delicate matter as education. Since we are all different in most respects, specially from the psychological perspective, programs must be different to fit different potentialities given that we all are unique and in a multidimensional fashion, which requires not only competition of very different approaches but must be dynamic. Also it must be stressed that each one of us is not the same today in relation of what we were yesterday. To impose educational programs or guides vertically from political power, although they might be decentralized in the context of politicization, is not to understand what education is about.

It must be understood that we all pay taxes, specially those poor people that never have seen a form to pay direct taxes. This is so because those who are de jure tax payers reduce investment which, in its turn, reduces wages and income in real terms, a process that occurs since capitalization is the only explanation to rise standards of living.

Moreover, if we take on account the marginal utility concept it will be clear that a unit of money in general -although it is not possible to compare intersubjective values nor refer to them in cardinal numbers- is not the same for a poor person than it is for a rich one, as a consequence the negative effect is higher in the first case, so we conclude that the poor is in a worse situation since, in practice, they are responsible of a huge proportion of the payment. In other words, the consequence for relative poor people is deeper and more severe that what investment contraction and simple numbers indicate.

Imagine a very poor family that is not in condition to afford de opportunity costs to send their children to school. In that case, trough taxes that family is paying schooling for richer persons to attend. And if a family with great effort can send their boys and girls to study -if they incorporate a reasonable tax analysis- they will send them to a state school so to avoid paying double costs: one for the private school and another for the state school.

From another perspective, the costs per student in state education centers are in general higher than in private institutions for the same reason the so called “state enterprises” are inefficient. The constitution of these corporations necessary mean malinvestment because resources are allocated in a different way that the market would of done (and if it were in the same direction, there is no reason for state intervention). The way people drink coffee and the way they use lights is not the same in a private place than in a state building. Incentives and the “tragedy of the commons” operate in a inefficient way.

The voucher system has been suggested several times. It is true that this system shows the non sequitur: this means that from the premise that people should be forced to finance other peoples education it does not follow that there should be state institutions, since vouchers (demand subsidies) allow people to choose between all the existing private educational institutions.

In any case, vouchers also mean that poor people are principally financing more affluent students and, although IQ standard measurements are irrelevant (we are all intelligent but for different matters), those who do not qualify for the existing academic proposals must pay for those with better conditions and are more qualified, which is of course also an unacceptable injustice.

This does not mean that private vouchers should be eliminated, on the contrary, these provide very good incentives just the same as scholarships that are financed voluntarily in sight of positive externalities that good education means. The problem arises in the case of state vouchers.

It has been said that education is a public good, but this does not resist a technical analysis given that it does not meet the non-rival and the non-exclusion principles.

It has also been said time and again that state education must be incorporated because it gives support to the idea of “equal opportunities”.

Equal opportunity, prima facie seems attractive but it is absolutely incompatible with equality before the law. Liberalism and the open society provide that people have more opportunities but not equal. If a mediocre tennis player were to have equal opportunity playing with a professional, there must impose that the latter, for example, should play with one leg and, and that means that his rights have been infringed.

Similar reasoning goes for the alleged “right to education”. There is not such thing. A right implies the counterpart of an obligation. If somebody obtains 100 in the labor market, there is an universal obligation to respect that income, but if the same person demands the “right” to receive 200 which he does not earn, and this is granted by the state, this means that other persons are coerced to pay the difference which will infringe their rights, that is the reason why the “right to education” is a pseudoright.

I am perfectly aware that today state education is the sacred cow of the moment, nevertheless it should be denounced as a dangerous myth.

It is said that those that have the intellectual conditions to apply to the available educational proposals but do not have the sufficient resources, should be helped. This is a very well inspired statement but for this the first person of the singular should be used and not the third of the plural. “Put your money where your mouth is” constitutes a good recipe. In the same token, this is the reason why solidarity and charity can never be provided by the state since they mean voluntary acts with funds that belong to the owner.

In various countries home schooling is used as a defense against the invasion of state education, not to say the explosive revolution of on-line universities teaching. Some time ago, The Economist treated the home schooling issue at length where the opinion of some admission officials of Ivy League Universities in the US appeared in relation with candidates that studied under home schooling. They said that they were impressed not only with the high standard skills and learning of students but by their excellence in language and dressing.

Some object home schooling based on the opinion that the system does not allow to socialize with other students, which is not true because those programs specially concentrate in relations with other youngsters through sports, dancing, chess clubs, Church and other kind of meetings. The extraordinary support of Internet programs does not require that parents know the content of different topics, they just must be near and alert with schedules for their children, directly or via persons hired for that purpose at home.

Where state education exists, at different degrees, sooner or later, indoctrination will take place. If bureaucrats are in charge of education it is a natural consequence that government should influence programs and texts in some way, which affects the so crucial diversity. Just the same as it is so important to separate religion and power, education and political power must be separated if an open society would be the goal.

In some countries historians concentrate in education when state education appeared and do not take note of the previous private schools and institution that existed, most of them disappeared due to the irruption of “free” education, situation that had a negative effect on this field. It is also relevant to stress the indirect influence of politics in education when government finances the so called “private education”, for example, the large proportions of the budget of some of what are considered as high rank US universities, such as Richard Pipes shows in great detail.

It is maintained that children should have a minimum of education such as learning to read and write, but if this is so and people agree it is precisely what they will have through direct payments or through scholarships, there is no need for compulsion. It is true that education is basic, but more basic is to have food and no sensible person will suggest that food production should be in the hands of the state as in Stalin´s era -and his imitators, past and present- because people starve under that conditions. When politics take over education there is a tendency to produce another kind of starvation: the cultural and spiritual one.

May be the most powerful reason for the degradation of education is the corruption of democracy, originally as majorities owe respect to the rights of minorities, but instead have smuggled and installed an infamous system that we can identify as cleptocracy, that is, government of thieves of liberties, properties and legitimate dreams and projects of private lives.

If we pay attention to the writings of historians, we learn that starting with Athens, education was free from government regulation. Anybody could start a school and compete for students at very different prices, which produced the most well educated society of the time, in contrast with Sparta that established a military and totalitarian system that made that society the least literate of that world, only trained in brute force and aggression of dissidents and neighbors with no such thing as private lives.

Rome had basically a free system that included private tutoring during the Republic which changed with the Empire that required teachers to be officially certified and demanded state licenses for schools, and prosecuted and deported teachers whose teachings were disapproved by government.

In the Arab world, education was based on the Athens free system. This was the reason for progress in architecture, medicine, economics, law, geometry, algebra, philosophy, agriculture, literature and music during several centuries, instead of fanatic governments of our time who are inclined to socialize education as a way to indoctrinate people for political and religious purposes, as it was established before in some Christian countries through the criminal Inquisition and other authoritarian methods. In Spain, during the eight centuries of Arab governments, the enormous progress obtained has been stated by historians in the very different fields we have just mentioned, including religious tolerance for Jews and Christians.

Due to the propagation of the control of the state in education and other fields, starting in the sixteen century, the first system of state schools was established in Germany, Switzerland and France. In the eighteen century most of Europe was under the influence of that view (except Belgium that established the system in 1920). In the United States, except New England, education was free but this changed dramatically and in the twentieth century compulsion to attend schools was established and the Secretary of Education was introduced in the seventies. Originally, in the colonies parochial education of different religious denominations had great influence and, later on, in some colonies when state education started it was financed with state lottery so as not to resort to compulsion.

The argument that state schools and state supervision of the so called private education must be controlled by the state to “fabricate good citizens” is a very bad excuse for indoctrination. This is why it is wrong to suppose that if government spends more in state education things will be better: on the contrary, via politicization things will worsen. The revival of the statist ideas of Herder, Fichte, Hegel, Schelling, Schmoller and List in German schools and universities (which, in part, Bismarck started in the political field) is one of the main reasons through which Germany prepared the path for Hitler to assume power. And once the Nazis were in government, the system was endorsed by such intellectuals as Keynes who in the preface of his 1936 German edition of The General Theory wrote that “the theory of output as a whole, which is what the following book purports to provide, is much more easily adapted to the conditions of a totalitarian state, than is the theory of production and distribution of a given output produced under conditions of free competition and a large measure of laissez-faire”.

I would like to end this telegraphic presentation by quoting Ludwig von Mises from his book The Free and Prosperous Commonwealth, where he underlines that “there is, in fact, only one solution: the state, the government, the laws must not in any way concern themselves with schooling or education. Public funds must not be used for such purposes. The rearing and instruction of youth must be left entirely to parents and to private associations and institutions”.

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