The Freedom to Reject the Best

Posted to Mises.org 08/08/2006

A new study suggests that private schools are not inherently better than public schools. Surprised? Enough people were such that the study, funded by the US Department of Education, has created a stir in the education arena, as well as in the national news. But I want to argue that the results are meaningless, and for reasons not having to do with the methodology employed in the study.

The authors of Comparing Private Schools and Public Schools Using Hierarchical Linear Modeling analyzed math and reading scores of nearly 7,000 public schools and more than 500 private schools on the 2003 National Assessment of Educational Progress at the fourth and eighth grades. NAEP was the chosen assessment tool since it is considered to be the national achievement test and is used to assess student academic performance against national standards.

Though the title sounds impressive, the findings simply suggest a conclusion. Nothing has really been proven and no new truths exposed. I could begin by questioning the whole concept of empirical studies that suggest this or suggest that. I could ask, “What truths have been brought to light by any study that is couched in such a vague qualifier?” I could attack all the assumptions that went into the model and then list those that did not. Had I gone that route, I hopefully would have raised enough doubt in the reader that the study would be discarded as worthless.

But the real error here is more philosophical than empirical. Studies such as these simply show that a deeper ill exists, a malaise caused by government interventionism.

Consider Consumer Reports

The popular magazine reviews consumer goods based on a proprietary set of standards. They test, analyze, test, analyze, etc., until they are satisfied as to the quality of the products under review. CR then assigns individual product ratings and notes one product as a best buy. Though most Americans accept CR’s results as being of excellent quality, the noted best buy is not usually the market best-seller. Yes, I will occasionally look at CR prior to purchasing a good, but I almost never buy the best buy. I agree that the CR results are scientifically valid based on their standards, but that doesn’t mean I am in the market for the scientifically valid, CR best-buy product.

Though it may only last six months, I want the new hairdryer complete with the latest features, bathed in the hottest colors. That’s my choice. My preference rank for features and colors is above that for durability. Who is to say that I am wrong? In a free market, anyone. But, they cannot force me to act otherwise.

What would happen if Consumer Reports had legislative and regulatory authority akin to government? We would all be forced to purchase the best buy and we would all spend our lives unsatisfied. On the surface it sounds great to have a leading research organization controlling the market for “the general good and welfare,” but consider your own actions vis-à-vis CR’s best buys.

The same holds for a government-run education system. Even if the federal government mandated a set of standards that were scientifically valid according to the DOE national outcomes, the set of standards and outcomes would not be the standards and outcomes most Americans would choose as acting individuals.

Scientific research can create goods that are bigger, smaller, faster, slower, etc. But just because research can create the good doesn’t mean that there is a market for it. No one wants a hypodermic needle that is rougher, wider, longer, etc. The superlatives associated with improvements and innovations from scientific research are not always desired by consumers.

In education, the best that DOE could be is a truly benevolent authority. It could gather the nation’s greatest thinkers to divine standards of education outcomes and employ the top psychometricians, statisticians, etc., to create assessments that are mapped to those standards. At its hypothetical best, this brain-trust would simply function as CR does in the products market. The assessments would be scientifically valid and could rank achievement and note the educational best buy — based on the arbitrary set of DOE standards. But parents and students, as well as community members, teachers, and radicals, etc., would be unsatisfied; just as the consumer would be unsatisfied having to always purchase the CR best buy.

So, what’s the solution? Simply, let the market reign. [1] A free market system of education would create for those who seek different options a system that encourages the implementation of the spectrum of educational choices — best viewed as experiments, just as each new product, service, store, etc., is a market experiment. The successful experiments become the market standard that new entrepreneurs seek to surpass.

These choices would involve all aspects of education — including pedagogies, methodologies, etc. — which would afford all parents the ability to satisfy their desires for their children’s education. Each idea would be evaluated by the parent, the education consumer, ex ante over the summer according to individual preferences and ultimate goals, and once again ex post at the end of each school year.

Parents would choose their standard of results and they would seek out entrepreneurs who would then hire teachers and administrators that could deliver the parents’ vision. The entrepreneurs would purchase products to implement the vision and the science community would be engaged to improve old products and innovate new ones — all due to the market pressures of the freely acting parents, the consumers. This is the proper direction of improvements and innovations, from the consumer back to the scientist, engineer, researcher, etc.

The standards set by the parent would drive the research that would deliver the product, not the reverse. [2] Currently we have a system where the standards are set by a myriad of governments and agencies — standards no one wants or agrees with — and we have a spectrum of research whose real goal is to drive the standards and grab the tax dollars.

There are scientific winners in the field of the delivery of quality, basic education, such as Direct Instructions, etc., but we know a significant number of parents, teachers, and administrators don’t give a hoot about reading, writing, and arithmetic. They want affective learning — the feel-good, Progressive educationist-babble currently in favor — and long for the ideal child, the product of the latest version of Trotsky’s proletarian paradise .

I disagree with them, but their solutions may actually end up being correct, or they will fail. Only a market can show whether a solution is right or wrong.

That said, we have to keep in mind that Consumer Reports creates valid ratings that we mostly ignore, and we are all better off because we continue to make our own choices. Our individual wants drive improvements and innovations to provide for our greater satisfaction. Why should education be any different?

Notes

[1] The free market is the only economic system where we can disagree yet live peacefully. My wife likes Coke while I prefer Pepsi. In fact, I’d rather drink a glass of baking soda than a glass of Coke (OK, a little hyperbole for effect). Due to the free market in soft drinks, my wife and I can live happily ever after. Under interventionism, or plain socialism, the fight becomes which bland flavor will be served by the scowling apparachik wearing a faded Babushka. Choose freedom every time.

[2] Certainly a scientist could act as an entrepreneur prospector and create a product even though no current desire exists. But if they fail to meet future needs, they will suffer financial loses. The current system does not discipline the scientist since government purchases the product whether the education consumer wants it or not.

Reprinted with kind permission from original source.

Posted to Mises.org 08/08/2006

Endorsement for Thomas for LPO Executive Committee Chair

My fellow Ohio Libertarians, we have found ourselves at a new moment in the history of our state party. For the first time in a long time our foundation of volunteers, members and candidates did not implode or vaporize after a major election.
We did not turn on each other with sharpened knives, bicker over fault or point fingers over mistakes made. We did not disappear into the mist of disappointment or compromise our principles for the promises of opposition rhetoric. We have stayed the course, stayed true to our ideals and shown that our courage is more than convenience.
We have calmly reviewed our lessons learned, assessed our strengths and weaknesses and identified where we need focus.
This may seem a minor accomplishment, however, I can assure you it is a monumental tribute to the momentum we have gained and the confidence we have grown. Both for ourselves and the silent witnesses still on the sidelines.
At the core of this achievement is a quiet and resolute leadership. An unwavering commitment to showing up, working harder and assuring that mundane details are in order.
It is with this accomplishment in mind that I am privileged to endorse my friend and mentor, Harold Thomas, for re-election to the role of Chair for the Libertarian Party of Ohio Executive Committee.
It has been my honor and benefit to learn all I can from Mr. Thomas and pay forward his patience, persistence and perspicacity.
When things were at their darkest, Mr. Thomas provided a clear and simple plan, steps for accomplishing growth and building that allowed even our small group to seem like giants. We were emboldened to keep coming back, keep asking “What’s next?” and take seriously our own big ideas. Without the certainty of Mr. Thomas’ support and sounding board of experience, I do not think our investments would have matured as well, or at all.
Mr. Thomas has demonstrated an unswerving ability to collaborate, coordinate and conduct business in a professional manner with all measure of amateurs, dilettantes and gadflies. (I do not use these terms as rebuke for any missing qualities of fellow colleagues and activists, I found myself having fallen through portions, or the entirety, of their definitions over the past 3 years. We have each grown with honest guidance, and given the space needed to spread our wings.)
Mr. Thomas has diligently laid the groundwork for new initiatives and endeavors that put our principles into action and demonstrate the practical benefits of our philosophy.
I encourage each LPO Central Committee member to seek qualities for the role of Chair that reassure our volunteers, donors and candidates, strengthen our alliances internally and without, and communicate clearly when times are good and times are hard.
We have a new kind of opportunity ahead of us, to keep steady our momentum, double down on our investments and prove to ourselves we are here to stay and working to win.
Safe journey.

Michael Sweeney,
Chair, Executive Committee, Franklin County Libertarian Party Of Ohio

Co-Signed,
Chad Harris, Vice Chair, Executive Committee
Pat Hoffman, Treasurer, Executive Committee
Ken Holpp, Secretary, Executive Committee
John Stewart, At Large, Executive Committee

FCLP Endorses Wichers for LPO Vice-Chair

It is my honor to endorse Kryssi Wichers for the role of Vice Chair for the Libertarian Party of Ohio.

In her ten years of liberty activism Kryssi has been a tireless force for positive change and growth. Mrs. Wichers exemplifies the best attributes of libertarianism: compassion, selflessness, loyalty, thoughtfulness and forthrightness.

Working with Mrs. Wichers professionally I have found her to be an excellent communicator, reliable and persistent.

Franklin County Libertarians have benefited greatly from Mrs. Wichers’ political acumen and insight, working closely and collaborating with other county affiliates and development groups.

Mrs. Wichers’ credentials as an established liberty activist, planning, coordinating and executing marches, rallies, campaigns and clean ups, are well known locally and nationally, providing an unprecedented level of earned media exposure on a regular basis. While many activists that receive media attention find themselves reluctant to share the spotlight, Mrs. Wichers possesses that rare quality combination of honesty, humility and grace under pressure.

Progress requires action. As a political party we can only move forward by putting our principles into action with an unwavering commitment to integrity.

Elections come and go, issues wax and wane, volunteers, candidates and leaders find and lose enthusiasm, but the flame of liberty must be carried on.

I encourage all LPO Central Committee members to look at the public record of action, and not only potential, when deciding their conscience.

Michael Sweeney,
Chair, Executive Committee, Franklin County Libertarian Party Of Ohio

Co-Signed,
Chad Harris, Vice Chair, Executive Committee
Pat Hoffman, Treasurer, Executive Committee
Ken Holpp, Secretary, Executive Committee

Opioid reliance is health matter, not criminal.

Volunteer, Donate and Get Involved.

We cannot continue to treat opioid reliance as a criminal matter.

This is a public health crisis brought on by  decades of reckless pharmaceutical companies, overwhelmed doctors and a trusting public just looking to manage extraordinary and daily pain.

People who are addicted to nicotine are encouraged to quit smoking, but can buy cigarettes, vape, chew gum or get patches at convenience stores and pharmacies on every corner.

People who are addicted to alcohol are encouraged to join Alcoholics Anonymous, but can buy beer or liquor in restaurants,  convenience and grocery stores in every neighborhood.

People who are addicted to caffeine are promoted as hard workers, go-getters, celebrate their addiction in popular media and can buy coffee, soda, chewing gum and even infused soap in every store, everywhere.

People who are addicted to opioids are ostracized, humiliated, and left to manage their addiction through street dealers, violence, uncertain quality, police harassment, crippling fines, jail time, possible overdose and finally, death.

Prior to Mike DeWine’s crackdown on “pill mills” 4 years ago people addicted to opioids could go to a doctor, have a candid conversation about their pain and receive a prescription for medicine they could fill at any corner pharmacy.

Now doctors are terrified of writing opioid prescriptions, threatened by careless, clueless and heartless Ohio bureaucrats who care only for being “hard on crime” and punishing anyone who falls outside their framework of the perfect taxpayer.

Just let people talk to their doctors again, and just let doctors do their jobs again.

This is all we need to pull this crisis back from the horror it has become.

This is what we need to let people live their lives.

Let Doctors be Doctors.

Let people live their lives.

Volunteer, Donate and Get Involved.

Donate just $5 a month to help grow a strong county party, allow volunteers to participate in community events and support liberty minded issue development and candidates. (More is always welcome as well. 🙂 )

Please donate.

Donate today to support Irvine for Ohio and our Libertarian candidates across the state!
Donate today to support Franklin County Libertarian candidates and issues!

The Unknown Future

The election has come and gone and, despite all our efforts, we fell short of 3%.  In fact, the combined total of both the Libertarian and Green Parties fell short of 3%.

What does this bode for the future?

Unknown.

By a strict reading of Ohio Election Law we should still have access until the 2020 Presidential Election, but when has government ever followed the law?

Should they deny us access yet again, what then?  Do we roll over and play dead?  De we surrender to the politics of fear that drive the mainstream Parties?

In a word, NO!

A friend of mine majored in History, with a particular interest in Church History.  One night, several months ago, he spent almost an entire hour explaining in great detail his belief that the worst thing that ever happened to the Christian Church was it being not only legalized by the Emperor Constantine but being made the official religion of the Roman Empire.  Until that time, he argued, believers had to be committed to the cause because their very lives were at stake.  Afterwards, as a legally recognized religion it became fat, lazy and corrupt in just a few generations.  He argued that the loss of religious liberty feared by so many today might be the best thing that could happen to the church because the dead wood would be cut away and only those most committed would remain.

So, if we lose ballot access will that spell our doom?

Again, NO.

Some might be tempted to walk away from the Libertarian Party in frustration, believing we will never have a chance, but those who remain will be those most committed.  And those most committed can work wonders.

Ballot access or no, our core message of liberty will remain the same. Others will say that our votes are doubly wasted and all we’re doing is shouting at brick walls, but walls have been known to crumble.

All the loss of access will mean is our task will be a little bit harder.

But worthwhile causes usually are.

Ken Holpp, Communications Director, FCLP

The Two-Party Lie

In a world where we have an abundance of choices everywhere:
Paper or plastic? Or did you bring your own?
Would you like fries with that? OR salad, soup, apple, yogurt?
Combinations of sugar-free, gluten-free, peanut-free, allergen-free or sugary, wheaty, nutty, irritating selections are available.

Yet we are often told there are only two choices in an election.

There are many parties to choose from. And even before the mainstream options become unpalatable enough, people should be aware of them. In addition to the more colorful, impromptu organizations, there are a number of solid, established parties that struggle for visibility to the public.

The two-party conundrum is a lie propagated by both major parties to avoid a coalition-style government based on compromise. Mind, there’s enough gridlock in legislation with just two parties refusing to compromise. But with more parties, there should be more motivation to make things work. Because when you don’t have the majority unless you work together, you have to work together, not just bitterly wait it out until the next election where the tide may turn on the popular vote. If there’s never a 50% majority, then there’s no excuse for stalling.

Even today I’m told I’m just throwing away my vote and ensuring that [any candidate’s name here] will lose to [that candidate’s opponent’s name here].  My response is always “Voting for what you believe in is never a wasted vote” and that “If I wanted [said candidate] to win I’d vote for [said candidate]”.

The legacy parties still try to keep us Libertarians out of play.  The Republicans kicked us off the ballot in 2014 to ensure the reelection of John Kasich and did everything to keep us off for four years.  The only reason we’re back on the ballot now is because we turned in twice the number of required ballot access petition signatures. The bar for third-party petitions is even set higher then for the legacy parties.  Even with that our candidates are still often excluded from public debates. Just last month and attempt was made to disqualify Kryssi Wichers not only from running for office in Fairfield County but also from voting.  Fortunately the Board of Elections saw through this attempt and unanimously voted in her favor.  Nevertheless the opposition continues.

On November 6 we have a chance to step up and speak out and say we will no longer buy the two-party lie anymore.

Jeanette Holpp, contributor

Ken Holpp, Communications Director, FCLP

Elections Matter

November 6 is fast approaching.

After four years of hard work, thousands of volunteer hours, more than $250,000 in donations and over 102,000 signatures, The Libertarian Party is back on the ballot in Ohio.  Now we have to keep it on the ballot.  If, on November 6, Travis Irvine fails to get 3% of the Ohio vote, all of that will be lost and we will have to start all over again from scratch.

WE MUST NOT LET THAT HAPPEN!

The Democrats and Republicans would love to see that happen and continue to put roadblocks in our way.  Irvine is currently being excluded from all Gubernatorial debates making it that much harder for the voters to hear his message.  Once again, it falls on us to help get that message out.

In Irvine For Ohio (IFO), we have a volunteer campaign team that all works full-time jobs and commits hundreds of hours (cumulative) so far to the campaign.

But we need more.

More volunteers to call and text potential voters.  More volunteers to get out and knock on peoples’ doors.  And more people to attend rallies.

And, of course, we need more donations.  Campaigns cost money, and while the Republicans and Democrats have huge war chests, we do not.

We need donations to run newspaper ads.  We need donations to run radio ads.  We need donations to run TV ads.
We’re down to the last few weeks and we need to finish strong.  While we hope to receive more than 3% of the vote that will only happen with lots of help.

We can’t let the last four years be for nothing.

If you are interested in donating time and money please see our Volunteer and Donation pages.

Ken Holpp, Communications Director, Franklin County Libertarian Party

Liberty and the Opioid Crisis

Elections are fast approaching, and every major party candidate has a plank about the opioid crisis.  With over 4,000 dead of overdose in 2016 alone (over double the number of overdose deaths in 2012, and almost 4 times greater than the number of traffic deaths in 2016), it is an urgent issue that needs to be resolved.  However, Ohio’s current solution isn’t working.  In spite of Ohio “investing about $1 billion each year to help communities battle the scourge of drug abuse and addiction at the local level” (August 30, 2017 ODH News Release), deaths from opioids have skyrocketed.  In spite of increased police funding, resources to bust drug dealers, drug use education, and state sponsored rehabilitation programs, we saw an increase of 1000 overdose deaths in 2016.  A $170 million increase in funding for results so bad that calling them disastrous would be a compliment.

Both major party candidates don’t just have it as the first issue on their campaign websites, but offer nearly identical “solutions” to the crisis.  I would never have guessed that declaring an emergency makes things better, but I am fairly sure that we have been hearing DARE’s drug education since elementary school. I guess all we need is more cops to fix the issue.  Let’s be very clear here: this is more of the same policies that have been used as the crisis has gotten worse. This is forcing people away from prescription drugs and onto the even more dangerous fentanyl.  It is time for a wakeup call, the status quo is not working.

Rather than continuing to double down on the war on drugs that Ohio has decisively lost, we can go out around the world and pick policies with a proven track record to bring back home.  Here are a couple suggestions of the most successful policies for decreasing opioid overdoses.  And rather than costing billions, they actually save the taxpayers money.

Legalize marijuana:
How is this related?  It is well established that states which have legalized marijuana have seen an over 25% reduction in opioid deaths on average relative to similar states that didn’t.  Beyond being a less harmful and addictive pain medication for chronic problems treated with opioids, marijuana is widely known as one of the best cures of withdrawal symptoms.   There are obviously a lot of other reasons to legalize, but this one applies directly to the issue at hand.

Decriminalize all drugs:
This is a much more radical proposal but one with strong evidence, especially in the case of Portugal.  In the 90s, Portugal had over 1% of its population addicted to heroin.   In 2001, they had one of the highest overdose rates in the world, at nearly 80 people per million dying of opioid overdose.  But that year, they decriminalized the use of all drugs and have seen a dramatic change for the better.  As of 2016, there have only been 6 overdose deaths per million, well below the average in Europe (17.3), and far below the 185 overdose deaths per million in the US.  Their 90% improvement is one we can follow.  This policy also frees up law enforcement and courts to focus on real crimes, rather than what consenting adults are putting in their bodies.

While those two solutions will not end all overdoses, and I fear nothing ever will, they have a far better track record than any solution being touted out by major party candidates.  And that is in Ohio, where 1/6 people already use marijuana, the majority supports marijuana legalization, but establishment politicians still will not oven vote about legalizing marijuana or implement the medical licenses that have been promised for years.  But libertarians are the one who are pushing for the solutions that put power back in the hands of the individual.  We favor policies that don’t empty your wallet, and that actually work.

https://www.odh.ohio.gov/-/media/ODH/ASSETS/Files/health/injury-prevention/ODH-News-Release—-2016-Ohio-Drug-Overdose-Report.pdf?la=en

Zoning is Theft

Posted to Mises.org 03/21/2006

Zoning is theft, pure and simple. In his fantastic introduction to the Austrian School, Economics for Real People, Gene Callahan correctly identifies eminent domain as a form of property theft, especially noting the use of government condemnation in order to secure rightfully owned property for commercial development.

It is easy to see government as the crowbar that influence-seekers use to jimmy locks and force private property owners from their land. Here we have the clear picture of Ma and Pa Kettle and clan fighting the law and “progress” armed only with shotguns, corn squeezing, chewing tobacco and shear grit. The flip side to eminent domain, zoning, is not so easily seen. But as Bastiat revealed, the unseen is as important as the seen.

Zoning is typically defined along the lines of a government-regulated system of land-usage imposed in order to ensure orderly development. Zoning is usually a component of the larger conceptual ideal called regional planning. Of course, planned development is really the name of the road toward planned chaos.

Zoning uses all the standard interventionist lines of thought, most notably the concepts of externalities and utility. Those who advocate zoning really believe that acting man does not have the ability to create communities that are functional and prosperous. Without plans and maps drafted and drawn by the local elected elite, developers with knowledge and foresight, and a whole lot of money to gain or lose, would purposively layout communities that are sterile and functionless. Only the marginal vote-getters — those elected — and their appointed allies are omniscient enough to peer into the crystal ball and define the perfect setting for future life and leisure. The rest of us can only marvel at their visions.

Just as the developer can use government to roll over the rights of property owners, property owners — community members — can use government to roll over the rights of developers and fellow property owners.

In Ohio, townships create zoning maps and comprehensive plans that overlay development regulations on top of current properties. Prior to the establishment of zoning regulations, a farmer could simply sell his land to the highest bidder. No one had a voice in the proposed use of the exchanged land. The sale to a new property owner incorporated full development rights, including continued farming, residential and commercial development, or parceling off pieces for home sites. Land was a commodity similar to the crops grown on it. Just as no one had a right to control the final use of the corn and soybeans reaped from the soil, no one had the right to control the next use of the land. Property rights were secure.

Zoning changed everything. The future use of existing farmland will, with the stroke of a pen, be limited in some manner by zoning regulations. The regulations could restrict future land usage to its current use — farming in this instance — or it could restrict land usage to some other form of activity.

The free market has a tool that allows a property owner to align the future use of his property with his vision, the restrictive covenant. A property owner could, for example, create a legacy by selling his land contingent on the development carrying his family name. Should the property owner be too restrictive, the value of his property will fall. He will be exchanging a psychic good, a family legacy, for cash.

Zoning is another matter altogether. Zoning restricts current landowners based on the local power brokers. In the zoning process, someone gets hurt. Had the farmers of a township wanted to keep the area as farmland, they could have signed restrictive covenants guaranteeing crops instead of homes. Property rights, and the laws that purport to protect those rights, allow individuals to act in their own best interest. Zoning, collective decision-making, use the coercive power of government to restrict usage based on the whims of those in power.

The farmer who owns this land now has his potential property rights bounded within a specific range; future use is restricted to residential developments that have no more than one house per acre. The farmer may vote, and may have voted for some of those elected, but he never agreed to the change in proposed land usage. He was robbed, and there is no means for him to restore his rights and land value; they are gone with the stroke of a pen.

I know some of those in the Chicago School will claim that the farmer implicitly agreed to the loss of land-usage rights by being born in the United States, or of naturalized American parents, or by becoming a citizen through oath. By owning property in the United States, the farmer granted majority ownership in his property to those elected and appointed, the omniscient and omnipotent. This is no way to build and run a system of secure property rights, and no way to create a free market. Rothbard is correct when he constructs his political economy on secure rights to property; anything less is the beginning of the Hayek’s Road to Serfdom.

Now we have a developer who is trying to satisfy the urgent wants of consumers, his development could include new homes, new stores, new factories, etc. The developer is a keen entrepreneur who sees a chance to turn a profit by creating a development that will be desired, and therefore profitable to him. The developer settles on a residential development and approaches the farmer from above offering to purchase his land, contingent on final zoning approval of course.

You see, the developer has been here before. He knows the ways of the local officials who approve and disapprove zoning changes on whim and fancy — or even the smallest of political pressure. The developer is not going to consummate the deal with the farmer until he knows that his proposed development is a go.

The farmer, old and worn-out, wants to retire and enjoy, along with his wife, his remaining years in leisure and comfort. This is certainly a reasonable request from someone who has worked the dirt in snow, rain, and blistering heat for decades. Who could reasonably question his desire? Commissioners and board members; those omniscient by vote and omnipotent by law.

Remember that the land was designated to be developed at only one home per acre, but the developer does not think he can make a go of it at that yield. Given the market in the area, there is no way for him to turn a profit due to the myriad of other regulatory hoops he will have to jump through in order to get approval for his development. A host of green-eyed bureaucrats see the proposed development as a tax revenue generator. The developer will have to build off-site roads and sewer improvements, donate a park or school site, and give away money to all those governments with their hands out. In addition, regional officials will balk at the proposal since it does not agree with their vision of the future.

So the developer, a Don Quixote at heart, decides to take on the zoning commission by proposing a variance to the zoning code and comprehensive plan. Mr. Developer needs to build one and a half homes per acre, a change that will require months of hearings where he will be badgered and attacked from the zoning commission and community members alike. The commissioners will request petty changes to the development’s conceptual plan based on vague building standards that they most likely do not understand. Is stucco created from natural and man-made materials a natural or artificial exterior? Does 50 microns of aluminum create a better look than 49 microns? Should sidewalks be required? How high should the entrance sign stand? Is fire-red a natural color? Is a 30-foot setback sufficient for future property values? The answers depend on which commissioner has the mike at the time.

Residents with property adjoining the development will complain loudly of supposed lost property values, traffic, and crime. In addition, they will attack the developer as evil incarnate bent on destroying the community. But those same voices will lose the rhetoric as soon as the developer offers all adjacent homeowners landscaping allowances. A few thousand in new trees planted in their backyard is enough to forgive any supposed loss in value, additional traffic, and hypothetical break-in.

So the developer now agrees to build roads, upgrade sewer lines, donate parks with equipment, set aside a school site, and improve residential landscape. What is gently termed exaction is really extortion by another name. After zoning comes township trustees meetings and the process begins all over again. More exactions and more regulations, but trustee approval can be had if the developer does the dollar-dance long enough. Had the developer simply slid a rumpled paper bag of twenty’s across the table, a law would have been broken. Instead, the process occurs in the sunshine for all to see, and all to agree that more should have been given — or taken.

All agreed, with the exception of the developer and the forgotten farmer. You see, lost in all this is the simple desire of a farmer and his wife to retire and enjoy life, and maybe leave a little for their grandchildren. Every hand looking for a piece of the development pie is not robbing the developer and redistributing supposed unearned profits; those hands are robbing the farmer and his wife of their property value.

The risk of not passing zoning, the exactions, and readily available alternatives for investment are all reductions to the value the farmer could have obtained for his land absent zoning. The loss of value is recognized at the time the developer makes an offer for the land; the theft, on the other hand, occurs in front of the community that the farm family lived in for generations. It shows what damage a little money and power can cause in a community. Zoning is indeed theft.

Reprinted with kind permission from original source.

Posted to Mises.org 03/21/2006

Nowadays, Health Insurance Isn’t Really Insurance

Posted to Mises.org 07/30/2015

Due to Obamacare, my health plan has become something other than insurance. It is now, for the most part, nothing other than a wealth transfer scheme to benefit the politically connected over others.

In order to identify the difference between health insurance and government-mandated health care coverage, we can look to Human Action, in which Ludwig von Mises splits probability into class probability and case probability:

Class probability means: We know or assume to know, with regard to the problem concerned, everything about the behavior of a whole class of events or phenomena; but about the actual singular events or phenomena we know nothing but that they are elements of this class.

Case probability means: We know, with regard to a particular event, some of the factors which determine its outcome; but there are other determining factors about which we know nothing.

David Howden explains that events such as football matches and wars are events that fall under case probability. But those events do not lend themselves to insurance.

Indeed, Mises claims that only risk associated with class probability can be remediated by insurance. This is true because the number of payoffs is relatively predictable within a class, allowing premiums to be set that benefit both the insurer and the insured.

This is the way in which life insurance works, for example, as Howden explains:

Life insurance works because insurance companies can play the averages. Some people who own a life insurance policy will die before the insurance company earns enough money on the premiums to pay the death benefit. In this case the company loses money. It offsets these losses with the gains it makes on those who die long past the point where they have broken even on the premiums they have paid relative to the death benefit they will receive.

Discrimination in the life insurance market is not only a fact of life; it is fair. Every policy holder pays according to his odds of death. People are free to undertake risky activities, but they must pay the price. People who choose to live less risky lives — that is to say, avoiding those activities that increase one’s probability of death such as skydiving or smoking — lose out on the enjoyment these activities may provide, but they gain by paying less for life insurance.

Broken arms and certain diseases would also fall under class probability, and would also lend themselves toward being profitably insured in a functioning market.

But, due to changes resulting from Obamacare (as well as decades of government meddling), distortions in the market have thrown the health insurance market out of whack, and my health plan, and the plans of many others, now have high deductibles for “class probability” events such as broken arms, while providing “free” access to goodies that are only unpredictable in so far as I may or may not choose to use them, such as a “free” annual physical, birth control, and more.

As Mises knew, “insurance” that covers an event such as a voluntary checkup, bears little resemblance to what we would consider to be insurance in the proper sense. Nevertheless, the freebies (i.e., “insured” events) are numerous, not because insurance companies can calculate a way to profitably insure them, but because they are mandated, thanks to interest groups with access to legislators.

The Politics Behind Mandates

Nevertheless, because the distributed costs are minimal and unseen, while the benefits are concentrated and substantial, little opposition arises from voters to fight such transfers of wealth.

As an example, I pay an extra, say, $1 in monthly premiums so that someone else can reap $50 in benefits per month. Stack up those $1 premium increases among all payers and we begin talking real money. However, I have neither the time nor energy to oppose each $1 increase.

This process becomes obvious when, because of my high deductible, the infrequent and unpredictable accident that falls under class probability — my son breaks an arm — costs me thousands out of pocket, without any monetary benefit from my plan, while others celebrate access to goodies they should be purchasing on their own as uninsurable events.

It is as if, because of government interventions, my car insurance pays for upgrades to Sirius Satellite Radio (which I do not have), but, because of high deductibles, only pays a few thousand dollars should I have an accident that totals my car.

Insurance does still exist with regard to life, home, and auto. But it does not exist with regard to health in our present regulated economy. Health plans are wealth transfers that bestow known and predicable benefits on the few while leaving all at risk of the vagaries of life. So, let’s not claim that our system of government-regulated health care system is insurance.

Reprinted with kind permission from original source.

Posted to Mises.org 07/30/2015