Bizarre travel tidbits

In Paris, while walking around directly underneath the Eiffel Tower, I was approached by two utes, say 17-20 years old. It was 10 AM, and they were noticeably drunk. They said something to me and I responded in very broken Fench ("Je ne parle pas français" or anything remotely like it is a very handy phrase for stating the obvious). They immediately switched to broken English and asked if I were American or English. American. "Oh, we love America, the jeans, the shoes," they said, indicating our common attire. I pointed out that our Levis and Nikes were likely made in Singapore or Indonesia or somewhere close thereby. "Yes, but still, America is the best." Okay Francois, moving along now.

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In Cordoba, while sharing a Ute Hostel room with an Aussie and two English kids (again 17-20), the Englishmen made several comments to the effect that, "English travelers are famous for being loud, obnoxious, rude, and assuming that everyone else speaks English if only you speak loudly and slowly enough." That makes me wonder if every culture believes their own countrymen to be the worst. Or perhaps the rumors about the universality of English are true and foreigners really are feigning ignorance?

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Leaving Albuquerque after Thanksgiving one year, I was looking for a station that reputedly sells biodiesel. Since I couldn't find it, I called my wife on the cell, asked her to find the address on biodiesel.org, then take the address and guide me with google maps. How cool is consumer technology? Had I been thinking, I would have gotten the GPS location and homed with my own.

Anyhow, it's in a decayed part of the city, a mix of industrial lots and low rent housing. As I came upon a park, I noticed a black man running. It caught my attention: he wasn't dressed to work out, and he didn't appear to be running away from anything, so ... ? As I continued around the curve in the direction from which he just came, on alert for whatever might have caused his actions, I noted a group of people gathered around ... what is that? ... a body on the ground! I slowed enough to realize it looked like a seizure, so I pulled over, called 911 on the cell, and started walking toward the group.

The 911 operator kept asking me where I was at. Jeez, lady, that's why this thing has GPS; you tell me. "Okay, I'm in the park on 3rd near the Big I. Yes, 3rd. An ambulance. I don't know him, it looks like a seizure. Yes, the park. I don't know the name. Yes, 3rd." About this time, I notice that there is a Fire Station directly across the street, and the door is opening, so I tell the operator, "Nevermind, there's a fire station right here." She wanted to continue arguing about the location (looking it up, now, I think it's Coronado Park).

By this time, I'm standing with what appears to be a very skid-rowey crowd (no shaving, big bushy hair, slept-in clothes, underweight). We're watching the EMTs walk as slow as I have ever seen anyone walk toward us, and one of the men (the black man I originally saw running away?) engages me in conversation. He was surprisingly lucid. "Look at that. That's what we get out here. Look how slow they are, like we don't count. I'll bet if we called from a house, they'd be there already." Then he said something that just about blew my top off: "THAT is why I don't pay my taxes. They want us to pay taxes and THIS is what we get for service? Oh Hell no! This is why I do not pay taxes." Apparently, I ran into a vulgar libertarian, street edition. Perhaps it was a syndicalist commune? They thanked me for stopping and calling, the ambulance operators glared at me, and I split. Happy Thanksgiving, I guess.

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I found that the Prime Meridian in Greenwich is about 80 meters off (as I recall). I stood on the spot with my GPS receiver and it did not read 0.000 longitude. A Japanese man stepped up next to me, held his up to mine, and found the same result. The staff at the Royal Observatory neither took me seriously nor saw the humor in my suggestion to move the marker to the correct location as indicated by our 21st century devices (as if a 19th century device could be more accurate - ha!). I was not impressed by the Harrison clocks, either - jeez, any schoolboy can buy wristwatches more accurate than those monstrosities, and for about 10 millionths of the price.

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Last week, I saw an old man, perhaps late 50s, walking down the street with a new garden hose. It looked to weigh 1/3 of what he weighed, so he was having problems with it in the wind. I had already passed him, so I flipped around and pulled up next to him. He only had another 100 yards to go, but along the way he enthusiastically told me about the electric scooter he used to commute to work, how he could plug it in at either end of the trip so it didn't cost any money to operate (apparently his rent included electricity). He is a dishwasher at a well known cafe here. As he got out, he started hunting through his pockets and offered to give me some money. Let's see, 100 yards, divide by 46 mpg, multiply by $3, adjust for our income differentials ... I should have paid him for the entertainment value, eh?

Salt iodization as market failure - Part II

From my previous post on this subject, the evidence seems overwhelming that the iodization problem is more complex than can be summarized with the term, "market failure":

• Iodized salt is not the only source of iodine: iodine is for sale in underdeveloped areas, but is also underconsumed.
  
• Iodized salt is available in places where there is no government mandate.
  
• Iodine intake is falling in industrial societies despite knowledge and wide availability and even government iodization mandates.
  
• Iodine overdoses are a real problem in places where iodization has been mandated.
  
• There are genuine historical reasons for mistrusting government regulation of salt.

I think by now the generous reader would agree that iodization is not a market failure as generally understood, and/or the particular theory of market failure used here is not sufficiently developed. The specific market failure here seems to be a problem of information perfection, but neither consumers nor regulators have that perfect knowledge in either the developing or the developed countries. The one thing that we have seen is that when a large scale movement creates an increased demand for iodine, consumers will buy it, and demand will wane when the perceived need wanes. That is tautological. But assuming the experts are correct, a society whose consumption is not what the experts think it ought to be needs to be convinced to change. Such widespread change is created by shifting values or reference points. There are both private and public mechanisms for shifting those references, so this is a debate on how to conduct such a debate.

As my wife has suggested to me, sometimes the benefit of judicial activism is to foster discussion of problems in need of solution. You could interpret this as creating a new Schelling Point. So too, regulations. However, I hold that a new problem may be created by the means by which reference points are established: not only do consumers change their attitudes, but society as a whole establishes a new reference point for solving problems. Regulation itself becomes a mechanism for establishing Schelling Points -- a "Schelling Means" as it were. Prior to the regulatory or paternalist state, society relied on such means as association, argument, proselytization. One-on-one discussion and public oration were the primary means to moving Schelling Points; in Tocqueville's terms,

The Americans make associations to give entertainments, to found seminaries, to build inns, to construct churches, to diffuse books, to send missionaries to the antipodes; in this manner they found hospitals, prisons, and schools. If it is proposed to inculcate some truth or to foster some feeling by the encouragement of a great example, they form a society. Wherever at the head of some new undertaking you see the government in France, or a man of rank in England, in the United States you will be sure to find an association.

In the post-Progressive era, we increasingly rely on mass marketing and authoritarian pronouncement.

I think the advantages of the old system over the new are many, though not perfect. The organic system relies on consensus and does not punish nonconformists. Insofar as the nonconformists are occasionally correct to resist the new paradigm, it rewards them. The mass, like the experts, is not always correct. The organic means requires strong argument from smart people to overcome objections to change. This requires the facts to be weighed carefully and weeds out the bad arguments in the process. As might be realized, however, the organic Schelling Means is slow.

The regulatory Schelling Means is fast and inexpensive. In fact, it would be fastest to grant large amounts of power to a vanishingly small number of people in order to drastically reduce the social cost of decision-making. Call them what you will - a council, a cabinet, an executive committee, technical experts (Hayek's term), an executive - decision-making is less costly the fewer people involved. This was the Federalist argument for organizing the United States as a federal system, using representation and a strong executive. It was also the German Romantic argument for getting rid of the parliamentary "debate societies":

"The more the linguistic Babel corroded and disorganized parliament, ..."

"The restrictions of speech imposed on the Kaiser by the Reichstag angered me greatly because they emanated from a source which in my opinion really hadn't a leg to stand on, since in a single session these parliamentarian imbeciles gabbled more nonsense than a whole dynasty of emperors, including its very weakest numbers, could ever have done in centuries."

Those are, of course, the foundation for the Fuhrerprinzip from a book written by the most famous advocate eight years before he came into power. Hitler was by no means the originator of the idea, nor was he the last advocate. Thus, this is no reducto ad Hitlerum, but just as people in North America have forgotten the scourge of goiter, so much of the world has forgotten the problems of concentrated political power. Even Marx and Engels warned against "parliamentary cretinism", the unfortunate conviction that a parliamentary majority was the ticket to utopia, but their intellectual heirs took their warning in the opposite direction and accepted the same German Romantic solution that Herr Hitler did.

This is why I distrust utilitarianism in and rationalism of the public sphere. Yes, government action can be less costly and faster than organic change. More lives may be spared in the short run. But society itself is changed and perhaps not in a good way as the Schelling Means is shifted from one that is more democratic and consensus-oriented to one that is more authority- and action-oriented and therefore more tolerant or even demanding of executive action. De Tocqueville had this pegged, too: "The more [government] stands in the place of associations, the more will individuals, losing the notion of combining together, require its assistance: these are causes and effects that unceasingly create each other." The paradigm is shifted from one of consensus and argument to one of decree and punishment. Advocates of the regulatory model - one generally finds them in the partisan camps of the two main parties - may not favor the police state, but they certainly favor a police state.

Salt iodization as market failure - Part I

There is a viewpoint that the unavailability of iodized salt is a market failure since people would pay for it if only salt producers would iodize. This is supported mainly by this New York Times piece.

The benefits of iodine are unquestioned. Iodine is a preventive treatment for goiter, stunted growth, and cretinism or "low IQ". Some of these uses of iodine have been known for almost 200 years in the developed world (the use of iodine-containing foods such as seaweed has been known for much longer). Salt is an inexpensive means of distributing iodine to a population without access to other sources, so iodized salt is readily available in the developed world. In countries where iodine is available through the food supply -- Japan through seaweed, England through various means -- iodized salt is neither necessary nor mandated.

Sponges, seaweed, and other seafood were noted as cures to goiter thousands of years ago. More recently, in 1819 Jean-Baptiste Dumas showed that iodine is a remedy for goiter. Later research found a link between iodine and cretinism or IQ. Thus, iodine became a popular nutritional supplement, with governments becoming active in it only relatively recently.

Salt, however, has been a subject of intense government interest for much longer. Salt was valued as a germ-killing preservative before wide-scale refrigeration was available, giving us salt-cured ham, bacon, jerky, pickled goods, and so on. The Romans paid their soldiers salarium, salt money, giving us the word "salary". Salt in those days was a source of power and wealth: Salzburg (salt town) was a seat of power in central Europe and Poland's early wealth came as a result of its salt mines, which diminished as Germans developed technology to create salt from brine.

As a source of wealth and power, and a daily necessity, salt of course was the subject of extensive taxation. The Chinese began taxing it 4000 years ago. The British Empire in India paid for its exploits by "the hated salt tax". One of Gandhi's first acts of defiance to the Empire was to march to the sea and make salt, circumventing the tax and declaring that it is every man's right to make salt. Today, Indians still recall that act as they fight against iodine mandates with online petitions. It is currently hotly debated in China again. In Mark Kurlansky's Salt: A World History, he points out that Myanmar (Burma) mandates iodized salt, but people in the highlands can't get it so they trade illegally with China to get it. Sometimes they don't, since unscrupulous black market traders frequently sell untreated salt as iodized.

In the U.S., it is frequently asserted that iodization has been mandated. It is not. Salt companies began voluntarily adding salt in 1924, and Morton began distributing it nationally that year (see this article). Recommended Daily Intake levels are suggested for iodine in 21CFR101.9 (c)(8)(iv) to be 150 micrograms/day.

There has been a recent explosion in noniodized salt availability in the U.S. as an interest in higher quality raw materials for cooking has taken hold. This worries the professional experts, who believe that this will lead to a return of goiter and cretinism. "The National Health and Nutrition Examination Surveys found that from the 1971-1974 to 2001-2002 examinations, iodine excretion in adults dropped from 320 mcg/L to 168 mcg/L -- by nearly half -- and the frequency of iodine deficiencies in pregnant women jumped from 1% to 7%" says this site, emphasis in the original. Note that the fall in adults is from over twice the RDI to slightly above it. Similar trends are reported in this article, which also notes that a similar reduction has occurred in Canada, where iodization is mandated.

Too much iodized salt in a diet is not a good thing, possibly leading to hyperthyroidism or hypertension. The former is typically a problem only in those areas of the world where iodine is a supplement, suggesting that while iodized salt may be a good thing, it is not a perfect solution. "Too much iodine increases the incidence of iodine-induced hyperthyroidism, autoimmune thyroid disease and perhaps thyroid cancer. Too little causes mental retardation, goiter, hypothyroidism, and other features of the so-called iodine deficiency disorders. The global push to eliminate iodine deficiency in the current decades has put both excess and deficiency of iodine in the spotlight. Some countries have already moved rapidly from severe iodine deficiency to iodine excess, while others are only now recognizing iodine deficiency as a problem. Their experience, as well as that in the USA and Canada, emphasizes the need for continued monitoring to assess trends in iodine intake." (from Thyroid Manager Chapter 2 linked above)

Even a cursory reading of the NY Times article would show that this failure in Kazakhstan is not purely the fault of the market:

• It points out that the problem was not solved in the days of the Soviet Union, when there was no market.
• It points out that one of the factors working against iodization was the advertising of the iodine pill industry, proof that there is not market failure but rather an education failure. The desired goal, after all, is the intake of adequate quantities of iodine, not the production of iodized salt. A market need only make it available at affordable prices, which was the case.
  
• The article begins by stating that a public relations program led by a charity organization was the primary contributor to turning the situation around. Yes, the charities received aid (the PR campaign was paid for by the US AID program and UNICEF paid for the original salt sprayer and potassium iodate used by the main manufacturer), but the program would not have worked without the involvement of the organizations because of the massive distrust of the government. The author writes, "Also, Ms. Sivryukova's network of local charity women stepped in. As in all ex-Soviet states, government advice is regarded with suspicion, while civic organizations have credibility." No wonder nobody believed in iodized salt - and it wasn't the market's fault.
• That problem is underlined when the article points out that the problem was completely solved in neighboring Turkmenistan, where maximum leader Saparmurat Niyazof has mandated the giveaway of iodated salt. As I will argue in the next post in this series, I'm not sure I want to live in a country with this level of efficiency, and that isn't even considering that this is the same autocrat who names days of the week after his family and mandates that his own face be present on all clocks.
  
• One company makes 98% of the salt in Kazakhstan. No doubt a former state monopoly, it has access to the salt mountains near the Aral Sea. The article specifically points out that this condition enabled the central mandate to be successful. In other countries with many suppliers, like Pakistan, central mandates are unlikely to work as well.
  

The obvious solution to the final problem is to tighten government control of the salt industry, made easier by eliminating those competitors without the means to add the spraying equipment, and perhaps by restricting the competition by granting a monopoly. Given the history of government intervention in salt markets (still fresh in the minds of societies that don't have a refrigerator in every house), it is easy to understand how people in those areas might get the idea that iodization may be both newspeak for "government monopoly" and a new way to tax the poor. It's easy to dismiss such people if you lack such historical perspective, you believe that the poor are foolish, you easily entrust the government with large amounts of power, or you stand to gain from such grants.

One final point: many people fail to notice that a market failure does not always mean a 100% lack of the desired article. Private roads exist (and were much more common before the government started supporting railroads). Despite Akerlof's paper on the market in lemons and the supposed impossibility of a used car market, used cars are successfully sold every day. In this USAID report, we find that iodized salt was available in Azerbaijan in 2000, 3 years before the intervention started in 2003:

"Consumption of iodised salt by households significantly increased by years: in 2000 was 41.3% adequately iodized salt; 44% in 2002 increased to 70 % in 2003 and selling of iodized salt at the market increased from 30% (2002) to 68% in 2003; In 2004 consumption of iodized salt at households increased to 84%4. However, a WFP survey conducted in rural areas shows consumption of iodized salt to be around 66%."

Likewise in Ghana, Unilever increased iodized salt production in order to increase market share. A market failure is the underproduction or overproduction (and/or underconsumption or overconsumption) of a product, not the complete absence of it. Optimal consumption is that point at which the marginal social cost equals marginal social benefit. I doubt that we know the marginal social costs or benefits with any precision for anything. We could go on arguing about that for any number of products endlessly, and we will finally conclude that it seems likely that all products are under- or overproduced to some degree.

[UPDATE: A concerned reader fears that paragraph eight ("Too much iodized salt...") will leave readers with the impression that I think iodine is dangerous and should be avoided because the quoted material begins, "Too much iodine increases the incidence of iodine-induced hyperthyroidism, autoimmune thyroid disease and perhaps thyroid cancer. " I will point such readers back to paragraph two ("The benefits of iodine are unquestioned...") and also point out that I can't find much evidence linking excessive iodine to cancer. Iodine-induced hyperthroidism (IIH), the Wolff-Chaikoff effect, and Hashimoto disease, however, seem to be real, but probably not for you if you are reading this online.]

Giving you your opinion

Reading The Oil Drum, I noticed an ad for billionaires John and Teresa Heinz Kerry, billed as "Today's new environmentalists and their vision for the future."

"Whenever we've had systemic and sustainable change in this country, it's because the grassroots has been ready... Top-down activity from the government cannot take root unless there's bottom-up acceptance. ... I think we're at that moment right now."

-- Teresa Heinz Kerry

Hmm, where have I heard that before?

"The popular will cannot be taken for granted, it must be created."

-- Herbert Croly

"When I want your opinion, I will give it to you!"

-- Stereotypical drill instructor

Stand by to have your opinion force fed to you. Reminds me of something Kevin Carson put up a while back: whenever someone says, "Did you know ...?", you should immediately note that you still don't.

VT Ramblings

For some deep reflections on the Virginia Tech incident, I'll refer you to my wife's post.

I can say that my own thoughts as bits of the story were revealed to me took a turn down a strange alley. I heard that the kid had written some rather disturbing plays that indicated psychological problems. So my initial thought was, "Why didn't someone intervene?" I immediately realized that this is easier said after the fact. Before the fact, you have a problem distinguishing "dangerous" from "bizarre", "freaky", "outlandish", "peculiar", "quaint", and so on.

I vaguely remember an outcry 20+ years ago when Reagan was supposed to have closed all state mental hospitals, kicking all the patients out into the streets and the treatment of choice became jail. As usual, this was a myth of partisans who put far too much stock in the power and prestige of the executive, people who want a benevolent king to take charge and solve the world's problems*. It seemed to matter little to them that there is little practical difference between being locked up in a mental hospital and being locked up in a prison when these people are really a prisoner of their own minds. Such partisans usually forget (as was the case at that time) that the opposition controls much of the power and that there are larger currents at work in society**; Reagan, after all, was not Congress, which is who decides what programs to fund, and Reagan also had no authority to direct states to close anything***, insofar as anyone still genuflects at the whole "federalism" idea. But we would benefit from a reading of Foucault on the subject: how many ways do we try to correct atypical behavior, and how are we justified in doing so? At what point did Andy Kaufman's schtick cross the line from strange performance comedy to sick behavior when he began "wrestling" and even faked a neck injury? Was it deranged or brilliant? In smaller societies, such behavior was likely to get you the shaman's job. Do you want to live in a society where such people are tolerated, re-educated, sequestered, locked up, or simply liquidated?

There is far too much attention being paid to whether or not gun laws or video games are worth reviewing here. Those are puerile arguments made by partisans on both sides of the aisle looking to score political points off a tragedy, much as the identical people did after 9/11. The problem isn't guns: there are millions of guns not being used for crimes and far more people are killed by cars each year. The problem isn't video games: teenage violence declined during the entire video game expansion period. The real tragedy here is the mental illness. It crossed the line from idiosyncratic to dangerous when he pulled the trigger while pointing the weapon at other people. Let's try a thought experiment: what kind of life was he likely to have in the complete absence of guns? Does anyone believe that his life would have been enjoyable? This was a serious signal of distress, but it seems to be getting lost in the other noise. What was this guy's problem, what could have been done, and how many other people are suffering, undiagnosed, from it? I want to live in a society where we place some emphasis on the root cause of Cho's problem. What causes such anomie, how do we detect the dangerous variety of deviance, and how can we re-orient that back to something positive?

*The world selected a passel of such leaders in the 1920s and 1930s, and it didn't end well.
**As I have written before, partisans are largely animated by their opposition, not principles.
***Note in this timeline, which I found referenced as a proof of Reagan's responsibility, that the Act was passed in 1980: it would therefore have been President Carter who failed to sign it since a new Congress starts after the election and the president elected in 1980 takes office in 1981. Also note in this much more detailed timeline that the act in question, the National Mental Health Systems Act "asserted that the federal government would continue to shape mental health policy but assume less of the burden of paying for treatment." The Act was written by No Child Left Behind author Ted Kennedy. In other words, Reagan was blamed for cutting funding in this bizarre manner: despite the fact that that is what the bill contains, by vetoing it in 1980, before he took office, he was responsible for what would have happened if he had signed it. The timeline then goes on to point out that funding was cut in the 1981 Omnibus Reconciliation Act passed by C-O-N-G-R-E-S-S, and that throughout the 1980s, spending for mental health was increased via block grants. Yet for those years, Reagan typically takes hits for spending too much (which is actually correct insofar as by not vetoing the spending bills he is in part responsible, but it puts Democrats in a bind of accusing Reagan of spending what the Democratic Congress passed). So the game is: take money out of communities, send it to Washington, send some of it back, and dictate how it is used. Great.

P.S. I didn't intend to get off onto a political rant, but there is something else on my mind that I'll get to in a post or two which was set off by the emphasis on the executive. I therefore apologize for and admit to having done exactly what disgusted me about the reactions to this incident. To the families of the victims and the perpetrator, I am deeply sorry for your loss.

Really? That's all you can come up with?!

James Kunstler has this to say about flying to Maui (which he apparently did before his latest jaunt to Chicago):

For all of you out there disposed to twang on me for riding a jet airplane all the way to Maui, please consider that United flight 35 would have flown from San Francisco to Maui with or without me on it. Here's the deal: I had to go to San Fran to give a talk at the Commonwealth Club. From there, I had a lecture gig on Maui. I stayed three extra days and nights -- since I'd come all that way.

Where have I heard that argument before? Wasn't it Arianna Huffington justifying the use of a private jet because it happened to be going where she was going? All during that period of time that she was lecturing us on the evils of SUVs? Or was it Al Gore, whose prolific use of energy at his house and in his travels is justified by the fact that he has important stuff to do and lots of people to entertain (as opposed to you and I, whose lives are so much less significant)?

It's not that I really care if they do those things. I object to their telling me how to live my life while and insisting that I shouldn't do what they do. And this is such a lame rationale: every passenger just happens to be going to the same place the planes are going. Sometimes they have things slightly more important to do than "give a talk" ... which could have been done on videotape, via satellite, or over this newfangled internet thingy.

Anticipating three arguments against public school tuition

Previously on this subject:
Charging tuition at public schools
More on the Conservatism of the Left
Absent from school: Pigou

My desire is to preserve the best of both public and private schooling and create an environment in which most schooling is privately funded and all schooling is privately administered. The idea is that eventually all people will have choices about where to send their children, with public financing (perhaps, eventually, even private financing by nontraditional means) for the least well-off. The result will be better quality and lower costs of schooling.

The first argument will probably come in the form of the Perversity Thesis, that my proposal will achieve the opposite of what is desired. More specifically, it says that schools will become worse and more expensive, that more rules and regulations will be required, that eventually the state will have to ban private schools. It is hard to anticipate all of the means by which this will happen, but we could speculate.

As public schools start collecting tuition, private schools become a better-looking alternative than they are now, the more so as public school tuition approaches that of private schools. When that happens, parents will exit public schools en masse, moving their children into increasingly balkanized schools. The public schools stuck with very poor children will creak under the weight as they will have lost the strongest advocates for better quality even as the wealthier parents begin tax revolutions to stop the flow of funds to public schools. The students will all be turned out to the private schools, some of which will be shoddy, fly-by-night operations. Poor students will be increasingly victimized by these. A few large corporations will begin buying the facilities up and charging massive tuition. In the end, only the wealthiest will be able to afford education, while the poorest will simply drop out and become burdens to society.

The second argument will be from the Futility Thesis, that my proposal will not achieve what I desire. The reason for this is that there are social, legal, and other institutional foundations for the current system. Any attempt to change one thing will be superficial at best. Thus, my proposal will result in moving students to a new system which provides roughly the same outcomes as the current system.

The final argument will be from the Jeopardy Thesis, that this proposal will jeopardize what we already have. In a story similar to the one above, it says that not only will it not get me where I want to go, but it will cut the supports out from under the existing system so that when my proposal fails, we won't even have the existing system to fall back on.

These theses are, of course, from Albert Hirschman's Rhetoric of Reaction. An essay outlining them can be found here (hattip: Crooked Timber, I think, but I can't find the reference now). These were arguments that Hirschman distilled from the arguments of Reactionaries to the great shifts in political, social, and economic order in the last 300 years. They are now the arguments of (mostly) left-wing, "Progressive" Democrats to any and all attempts to reform an institution which they arguably now control, and which most Americans arguably believe is failing us.

I don't believe the speculation above: I offer it because I am trying to anticipate the counterarguments to this proposal. I think it breaks down at several points:

• Public schools will respond to competitive pressures despite the resistance of teachers unions. They will also be well-funded because there will be resistance to decreasing the supporting tax revenues while the number of students left in them will decrease significantly. Thus, the per-student funds available to them will increase significantly.
  
• Some private schools may indeed be shoddy, fly-by-night operations. Their shoddiness will not be much different from the presently existing public schools. However, parents will share information about them the same way they do about grocery stores or any other institution.
• Maintaining high tuition prices for all students is only possible if there is a monopoly in education. It is interesting that people would be concerned about a private monopoly in education, but not about the existing public monopoly which seems far less responsive to its customers than to its employees. In any case, I deem the creation of a private monopoly extremely unlikely: startup costs are very low, so entry is easy, and there are limits to returns to scale. In countries such as India, private education is an extremely competitive industry. The more likely outcome is that there will be a range of educational institutions that provide choices in cost, quality, structure, content, etc., the same way there is for groceries. The poor will be able to find good quality, no frills, low cost education, and there will be both public and private support to help them pay for it.

Socialism defined

What are the hallmarks of socialism, and specifically, what are the characteristics that separate it from other forms of organization, capitalism for example?

Democracy -- no. Both socialism and capitalism may be achievable independent of democracy. Pre-turnover Hong Kong, run by an appointed governor, is an example of a non-democratic capitalist system, while Saga-period Iceland is offered by David Friedman as a democratic capitalist society that verged on anarchy (a very light but popular government, with mostly local, consensus-based decision-making). Socialists today deny that the Soviet Union, its satellites, China, and other such nations are socialist, but they defended them decades ago and they still defend Cuba.

Racial and religious tolerance -- not necessarily. Capitalist societies may also be tolerant, perhaps even more so. While immigrants come to the US to work and many assimilate here, they go to France and Sweden to escape violence and possibly to benefit from the generous government benefits. But up until recently, few of those countries have been able to demonstrate their tolerance because there wasn't anyone different to tolerate. Now that they have their chance, they aren't looking all that tolerant. France and Germany have had their riots, usually based on the frustration the immigrants have had with their inability to assimilate. Turks can't get jobs or citizenship in Germany, Arabs can't get jobs in France, and so on. The Swedes don't want Lithuanian workers in their country, either. France may have voted down the European Constitution because of a few Polish plumbers. It may also be pointed out that the early eugenics movement had lots of support from George Bernard Shaw and W. E. B. Dubois, famous socialists. If anything, the more capitalist a country is, the more likely it is to be a globalist.

"Marx said" -- Karl Marx wrote a lot of things, but most of his ink was expended on critiquing capitalism and making predictions about it. In many respects, he was wrong. Treating the writings of one man like sacred religious dogma does not differentiate socialism from capitalism or any other system other than the fact that it was Marx. But what makes Marx the authority? He was neither the originator nor the main popularizer of socialism; many people contributed to the creation of what we regard today as socialism, and many since have contributed to popularizing it. So saying that "Marx said socialism is such and such" is an appeal to authority that is no distinction. Marx may have said that socialism is marked by its devotion to democracy, for example, but that does not make it so.

Equality -- Yes, socialists embrace equality, but so do dictators. Lenin, Stalin, Castro, Pol Pot, Mao, Mugabe - all of them play on fears of inequality.

Lack of private property -- Perhaps. Critics of Joshua Muravchik's Heaven on Earth have pointed out that he overlooks the continued existence of the Scandinavian model. If it is fair to use that as an example of "actual existing socialism", then apparently private property is allowed in socialism. Nokia, Ikea, Saab, and Volvo are all private corporations, the owner of Ikea (Ingvar Kamprad) is now among the top 5 wealthiest people on earth, and in the late 1990s the Wallenberg family owned 40% of the value of companies listed on the Swedish stock exchange.

I don't intend to create an exhaustive list, but I would argue that the one thing that makes socialism unique is that no matters are purely private under socialism: everything is subject to some degree of public control, while under liberalism (as the term meant originally and still means in various contexts outside the US) some rights are reserved for individuals. That the socialist public has not exercised that control is an irrelevant detail; should speech or private property or anything else be determined to work against the state's people's interest, it may be prohibited. In socialist countries, everything is subject to public opinion, which in practice is a circular exercise in which the governors create opinion and then confirm it. Unfortunately, that doesn't make socialism very much different from authoritarianism. And socialists frequently use "democratic control" as a euphemism for public control regardless of whether the public voted on it, the bureaucracy (or technical experts in Hayek's terminology) decided to expand their authority to it unilaterally, or the judiciary made extra-constitutional declarations about it.

So perhaps the answer is that the mix of traits is what makes socialism unique. If so, then socialism exists nowhere. Perhaps there was no private property in the Soviet Union, but then neither was there democracy. Perhaps there is democracy, tolerance (doubtful), and equality in Scandinavia, but there isn't much evidence of Marxism (capitalism, final throes, withering of government, abolition of property, workers in paradise) either.

But the same can be said for capitalism (it doesn't exist anywhere), so even non-existence is not a unique attribute. Still, I would say that "subjecting all decisions to public scrutiny and reserving nothing for private decision-making" is the best definition of socialism that can be mustered.

GM v. Toyota again

I had a bizarre conversation at a conference this week. We were talking about gas prices around the country and I asked what GM, Ford, and Chrysler were planning to sell if this keeps up. My wife had just told me that she got a Wall Street Journal alert that they were all down and Toyota was up, again.

Someone walked in and told me that GM wasn't down, it was showing record profits. I told him that I thought that was wrong (I haven't been near a network connection the whole week), but in any case, what could they be selling. He said they just showed several new cars at a car show last week (here's an article); I told him that those could not possibly have been what they were selling last quarter. He then explained that he lives in Detroit and knows about these kinds of things. I started to explain that Toyota is a manufacturer that makes a profit by manufacturing things, while GM thinks of manufacturing as a secondary source of income; he said that the record profits are proof that they are manufacturing and that the problem with their cars is that each car has $X of pension fund in it. I pointed out that they could have made those record profits by selling off a plant or two (or three); I did not address the fact that Toyota's pension funds are also embedded in their prices (even if those are accomplished through the public sector by means of punitive taxation). He walked away, convinced that I, a non-Detroit dweller, could not possible know what I am talking about.

I completely forgot to point out that the GM is a conglomerate whose main stream of profit comes from their lending arm, GMAC.

Yet, here it is:

• GM, Ford, Chrysler's U.S. Sales Fall; Toyota's Rise
• Toyota's sales jump while GM, Ford fall
• Big Three Get March U.S. Sales Beating, Toyota Cheers
• General Motors March US adjusted sales fall 7.7 pct to 349,867 units
• GM Sees Softer Q2 Sales; Plans Summer Incentives

Why is this so hard to understand or accept? They keep making bad cars that are only desired either by people who keep buying "'cuz thissiz wut daddy bought", or by those who can't pass up the financial incentives (don't overlook how important this is to people for whom the immediate entry cost is more significant that the future operation and upkeep). Meanwhile, Toyota keeps cranking out high quality, low maintenance, low operation cost vehicles. For me, this is a much greater puzzle than this recent design puzzle question posed on Organizations and Markets.