Wednesday, May 31, 2006

A poignant Mises.org Daily Article

How the Welfare State Corrupted Sweden
by Per Bylund

[Posted on Wednesday, May 31, 2006]


Old people in Sweden say that to be Swedish means to supply for your own, to take care of your self, and never be a burden on anyone else's shoulders. Independence and hard work was the common perception of a decent life, and the common perception of morality. That was less than one hundred years ago.

My late grandmother used to say something had gone wrong with the world. She was proud to never have asked for help, to have always been able to rely on herself and her husband, proud that they could throughout their lives care for their family. I'm happy that when she passed away at the respectable age of 85, she did so with that dignity still intact. She was never a burden.

My grandmother, born in 1920, was of the last generation to have that special personal pride, of having a firm and deeply rooted morality, of being a sovereign in life no matter what — to be the sole master of one's fate. The people of her generation experienced and endured one or two world wars (though Sweden never took part) and were raised by poor Swedish farmers and industrial workers. They witnessed and were the driving force behind the Swedish "wonder."

Their morality assured they could survive any condition. If they found themselves not being able to live off their wages, they would only work harder and longer. They were the architects and construction workers in building their own lives, even though it often meant hard work and enduring seemingly hopeless situations.

Read more ...

Game Theory -- Interesting, but of little use

From Mises.org blog:

Game Theory? Oh sure, many people use it all the time
Jeffrey Tucker


And yet no one can seem to point to a single example of its use. (Thanks Digg.com, where many bloggers said Game Theory is descriptive, not prescriptive.)

Thursday, May 25, 2006

Recycling Old Blog Posts

Mise.org article: http://www.mises.org/story/1911

Recycling: What a Waste!

by Jim Fedako
[Posted on Thursday, September 22, 2005] [Subscribe at email services and tell others]

This Fall, school kids across the country will again be taught a chief doctrine in the civic religion: recycle, not only because you fear the police but also because you love the planet. They come home well prepared to be the enforcers of the creed against parents who might inadvertently let a foil ball into the glass bin or overlook a plastic wrapper in the aluminum bin.

Oh, I used to believe in recycling, and I still believe in the other two Rs: reducing and reusing. But recycling? It's a waste of time, money, and ever scarce resources. What John Tierney wrote in the New York Times nearly 10 years ago is still true: "Recycling may be the most wasteful activity in modern America."

Reduce and reuse makes sense. With no investment in resources I can place the plastic grocery bag in the bathroom garbage can and save a penny or so for some more pressing need. Reducing and reusing are free market activities that are an absolute profitable investment of time and labor.

Any astute entrepreneur will see the benefit of conserving factors of production. Houses are built today with much, much less wood than homes built just 20 years ago; and they are built sturdier, for the most part anyway. The decision to reduce wood in houses was not prompted by a green's love for trees; it was a reaction to the increasing cost for wood products.

Using less wood makes financial sense and any entrepreneur worth his profit will change his recipe to conserve wood through better design or by substituting less dear materials for wood products.

A recent Mises article, Ethanol and the Calculation Issue, discussed the inability to calculate the true cost of producing Ethanol. No one can calculate the cost of all the factors of production in the direction from the highest order labor and land down to the lowest order. Ethanol at the pump, though the Chicago School, Keynesians, etc., would certainly give the calculation the old college try. Absent government supports, the cost of Ethanol at the pump reveals the true economic cost of producing that fuel.

The same applies to recycling. What is the true cost of all factors involved in the recycling activity? I haven't a clue. Though using Misesian logic I know that the costs of recycling exceed the benefits. This is the simple result of the observation that recycling doesn't return a financial profit.

I used to recycle. It paid. As a child living in the Pittsburgh area, I would clean used glass containers. After collecting a sufficient amount of glass, my father would drive the three or so miles to the local glass factory where the owner gladly exchanged cleaned waste glass for dollars. It this instance I was an entrepreneur investing factors of production in order to turn dirty waste glass into capital. The value of the exchange exceeded my preference for time, elbow grease, and my parents' soap, water, and auto fuel. (Of course all of my exchanges against my parents' resources were high on my preference list, but that's another issue altogether).

What's wrong with recycling? The answer is simple; it doesn't pay. And since it doesn't pay it is an inefficient use of the time, money, and scarce resources. That's right, as Mises would have argued: let prices be your guide. Prices are essential to evaluate actions ex post. If the accounting of a near past event reveals a financial loss, the activity was a waste of both the entrepreneur's and society's scarce resources.

I'm supposed to believe that I need to invest resources into cleaning and sorting all sorts of recyclable materials for no compensation. And this is considered economically efficient? In some local communities--many thousands of which have recycling progreams--residents have to pay extra so that a company will recycle their paper, plastic, and glass. The recycling bins come with a per-month fee.

In other areas, such as my township, the garbage company profits at the mercy of the political class. The trustees in my township specified that in order to win the waste removal contract, the winning company has to provide recycling bins. Further, they have to send a special truck around to empty those neatly packed bins and deliver them to companies that have no pressing need for these unraw materials. The recycling bins are ostensibly free, but in reality their cost is bundled into my monthly waste removal bill.

Since there is no market for recyclable materials, at least no market sufficient to at least return my investment in soap and water, not to mention time and labor, I conclude that there is no pressing need for recycling. If landfills were truly in short supply then the cost of dumping waste would quickly rise. I would then see the financial benefit to reducing my waste volume, and since the recycling bin does not count toward waste volume, the more in the recycling bin, the less in the increasingly expensive garbage cans. Prices drive entrepreneurial calculations and, hence, human action. Recycling is no different.

Come on now, there can't be any benefit to even the neoclassical society if you actually have to pay someone to remove recyclables.

That recycling doesn't pay signifies that resources devoted to recycling activities would be better utilized in other modes of production. Instead of wasting resources on recycling, it would be more prudent to invest that money so that new recipes could be created to better conserve scarce materials in the production process.

Human action guides resources toward the activities that meet the most pressing needs. This movement of resources means that those activities that don't meet pressing needs are relatively expensive. Why? Those activities have to bid for factors of production along with the profitable activities — activities that are meeting the most pressing needs. The profitable activities will drive the cost of those scarce factors upward leading to financial ruin for those activities that don't satisfy the most pressing needs. Forced recycling is such a failed activity.

The concept of lost materials is fraught with errors. Glass headed to the landfills will sit quietly awaiting someone to desire its value. The glass is not going anywhere, and should glass become as dear as gold or even something less dear, you can bet that entrepreneurs would begin mining landfills for all those junked glass bottles, not to mention plastic, aluminum, etc.

The only caveat to this train of thought is what Rothbard wrote about when he discussed psychic profit: the perceived benefit one gets from performing an action, even if that action leads to an economic loss.

Who reaps the real psychic reward from recycling? The statist do-gooder and the obsessed conservationist. Since recycling is now a statist goal, the do-gooders and greens force the cost of recycling on the unsuspecting masses by selling recycling as a pseudo-spiritual activity. In addition to these beneficiaries, there are those who have not considered the full costs of recycling, but their psychic benefit is more ephemeral than real. The other winners are the companies that do the collecting and process the materials, an industry that is sustained by mandates at the local level.


If recycling at a financial loss leads you to greater psychic profit, then recycle, recycle, recycle. Let your personal preferences guide your actions, but don't force your preference schedule on others who have a different preference rank for their own actions. And, do not delude yourself into thinking that you are economizing anything; you are simply increasing your psychic profit at the expense of a more rational investment. But, hey, your actions are your business; just don't force your preferences to be my business.

Oh, and don't tell my children half the recycling story. Remember Hazlitt and turn over the second and third stone before drawing an economic conclusion.

____________
Jim Fedako is a former professional cyclist who lives in Lewis Center, OH. jfedako@aol.com. Comment on the blog.
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Wednesday, May 24, 2006

Books You Must Read: A Book List

Looking for a reading list (see below)? Here is a great one from David Gordon of Mises.org that addresses the concepts of property rights and liberty.

A Listserve Post Regarding How Schools Should Be Controlled

John,

That's actually a misnomer. Under a free market system of choice, it would be a free country. Absent free choice, it's a country run by whomever controls the political power; whether at the local, state or federal level. An advocate for a free country would have to believe that parents have the ability to make the correct choices based on their personal preferences.

To claim that you want a free country at the same time as you advocate for a mandated system that meets with your specifications is disingenuous to say the least. We have seen an increasing encroachment on our freedoms from those who claim that "it's a free country" while advocating for government to intervene on their part.

There a many people who like to end a discussion with "let's agree to disagree" and then turn around and use whatever energy and influence they have to capture political control. We can agree to disagree and accept that this a free country when you quit attempting to garner support for ideas that will encroach on the freedoms of others.

By way of example: Teachers in my district think that they are in the right when they mandate a reading list that contains nothing but popular trash, not one recognizable classic to be found. These are books that have no merit other than being more profane and disgusting than the worst trash-talking radio show. These teachers believe that they are doing what is best for children and have no qualms telling parents that they know best.

District staff indoctrinated 6th grade students in the ways of perverse sexual behaviors without any parental notification using clips from MTV and other media sources. Why did they not inform parents? The staff members stated that they were certain the children whose parents would have said "No" were the ones most in need of hearing this talk. You see, these staff member knew better than the parents, and it was their job -- their right in essence -- to usurp the family.

Karl Marx and the other socialists/communists saw little need for the family and other institutions, They believed, and believe, that they knew better.

So much for freedoms. And, so much for respect of parental rights and decision-making skills.

Jim Fedako

Monday, May 22, 2006

High School Reading List

It doesn't take much effort to find a recommended reading list for high school students. Many learned minds have taken the challenge of creating a list and deciding which books make their list and which do not. There are many great books to choose from, and only four years of high school to read them. Time is the only limiting factor for facilitating maximum learning.

Just like any top 10 or top 100 list, we all can argue over which books deserve to be mentioned, and which books do not. Half the fun of reading such lists is debating which books were left out, and which ones should have been. Again, time forces the list to be limited, with many excellent books always left out.

So what does the Olentangy School District do when confronted with the challenge of creating a reading list from the many great classics? It assigns some of its college prep students to read Mark Hadden's The Curious Incident of the Dog in the Night-Time. I found this book on no list of classic must-reads. In fact, this book published in 2003 is as profane as it is vacuous. The question is what teacher in his or her right mind would assign this book to students? And what administrator would back up the teacher's selection of this book?

The beauty of the internet is that anyone with web access can go to Amazon.com and search books for various words. This allows parents and community members to see what students are reading without having to purchase or borrow the book. Want to search the content of The Curious Incident? Just click over to Amazon and enter profane words in the search box. You'll be shocked, as are many parents in this district.

With so little time between 8th grade and freshman year of college, the Olentangy District has chosen a peculiar approach to its mission of facilitating maximum learning for every student.

This all leaves me wondering what the staff and administration consider classics? And what they consider maximum learning? And I'm a board member.

Jim Fedako
Member, Olentangy Board of Education

Wednesday, May 17, 2006

The Rust Belt v. Taxes

Latest Mises.org blog:http://blog.mises.org/archives/005059.asp

by Jim Fedako

The Rust Belt state of Ohio is hemorrhaging job. On one hand state officials claim that the state's tax rate is not a hindrance to attracting companies to invest in the state, while on the other hand these very same officials cut taxes to entice DaimlerChrysler AG to build a plant near Toledo. The state's tax system cannot be "neutral" when it is obviously too high for additional capital investment. It appears that the state officials realize this since they must provide special tax breaks to stem the flow of jobs out of the state. When will state governments speak the truth and admit that all forms and rates of taxation are a drag on the economy? Probably not until the citizens realize that the dollar lifted from their wallets is not the personal savings of state officials to "invest" as they please.

Tuesday, May 16, 2006

Kindergarten Economics

A cute saying is, “Everything I know, I learned in Kindergarten.” That may indeed be the case for some, but learning doesn't always imply useful knowledge. Sometimes the item learned becomes an axiom of errant logic and false conclusions. These conclusions then drive economic policy toward the -isms of socialism, egalitarianism, utilitarianism, environmentalism, etc., the often-prized third way. But in actuality, Ludwig von Mises showed that the direction provide by these conclusions leads down the one-way street to the socialist cul-de-sac.

The classroom poster reads, “There are no wrong ideas here.” Is this apodictically true? If it is not, where does this false statement lead? What conclusions and actions result from a saying so apparently innocuous? You might be surprised.

Future educators are being indoctrinated by college professors adhering to progressive and socialist educational utopian ideals – just as current educators were indoctrinated during their college years. Mises in Human Action noted that Charles Fourier, the French utopian socialist, believed that man could create a world where the seas are made from lemonade. Mises also quotes Trotsky’s belief that the world in the 1920’s was about to witness the birth of the ideal super human as “the average human type will rise to the heights of an Aristotle, a Goethe, or a Marx. And above this ridge new peaks will rise.”

These Utopian ideals are certainly powerful statements, but they are a too outrageous for the typical education major. Keep the utopian ideal, but spin the rhetoric into the less offensive Kindergarten concept that no ideas can be wrong and you've hooked the teachers, parents and school board. And, more importantly, you've inculcated a new generation. Gramsci was right, why fight in the streets when patience and time will bring about socialism through lectures and textbooks as each subsequent generation is taught party-line thoughts and ideas at state-run schools.

There are many in my generation who believe that all ideas are good. Failure is not the product of a bad idea; failure is instead the product of market flaws and the sign that government intervention is required.

In reality most ideas are not worthy of consideration; they're inefficient, wasteful and just plain wrong. In Kindergarten and throughout the public K-12 system that statement is politically incorrect.

A little history is in order. Otto von Bismarck’s dream of state socialism was given birth decades before his rise to power when the calls for compulsory public education were heard soon after Napoleon defeated the Prussian army at Jena. The Prussian system supposedly began producing the best and the brightest, at least that’s what Horace Mann, the father of public education in the US, believed. Later, John Dewey, the father of the current pedagogy, was enthralled by what he saw during a 1928 visit to the Soviet Union. Trotsky’s Utopian man was envisioned by the Progressives as the product of public education.

This has left us with a free and compulsory school system that is convinced that five 7th graders sitting around a table can construct the concepts that required the brightest intellects hundreds of years to conceive. It took the likes of Carl Menger and the passage of a century to overthrow Adam Smith’s Classical School and institute the Marginalist Revolution. The discovery of marginal utility, considered the mark of a genius, is now supposed to be replicated by less-than-eager adolescents within a 40-minute class period. The utopian man has arrived.

“No wrong ideas here.” Every thought uttered by any child or adult has to be given equal standing. Consensus, an ideal adhered to by the education monopoly, is the blending of these ideas into an Hegelian synthesis [1] that becomes truth. Synthesis can then be tested using the latest tools of the econometrician. That this new truth stands outside a priori logic is of no consequence. Without a system built on a priori logic to test ideas, anything can be deemed possible. Polylogism is certainly alive and well.

The empiricist’s test of the statement, “No wrong ideas here,” is a view of two snapshots of a local strip mall taken one year apart. Most of the stores open in year one are gone in year two; bad ideas.

Weren't these ideas entrepreneurial dreams? Certainly, but not all dreams lead to viable concerns. Mises considered the consumer a heartless taskmaster. The statement in the Kindergarten classroom fails the empirical test and thus must be concluded as false.

Not so fast. Wasn't the test the result of a flawed system? Didn't the statistical noise from the market cause a false reading of the results? Aren’t we confounding correlation with causation since the market caused the failures? Such ideas are hard to refute since they spin faster than anyone can apply logic to them.

Unlike the Kindergarten teachers who may truly believe that all ideas – dreams – should be allowed to germinate and bloom, the consumer does not see the dream, only the product. We see Wal Mart but we don't see the thousand other stores that opened in the 1950’s that, while being the dreams of entrepreneurs, did not provide for the most urgent wants of the customers. These businesses failed. Their business model was incorrect and inefficient.

But, wait. Failure means that an idea was wrong. We have been taught that ideas are correct; it is the market that fails. Your snapshots from above shows different store fronts because the free market suffers the inherent flaw that the passing fancies of consumers trump the dreams of the child, now entrepreneur. This conclusion is what we were taught in Kindergarten as impressionable and malleable children. It’s the evils of the market that steal the dreams of the Utopian man.

The market didn't steal the dreams, the dreams still exist. But consumers – you and I – shouldn't have to pay for another man’s dream. The dream must simply remain one man’s dream. Under a system of interventionism, the dreams of the entrepreneur are exchanged for the dreams of the elected official or bureaucrat. The entrepreneur that dreamed of building a store on the premise of “always high prices” is now sitting behind an agency desk commanding the economy. Instead of fully stocked Wal Marts carrying fresh foods from all around the globe, the consumer is stuck with the drab, dirty Soviet-quality stores stocked with Vodka, cookies and little else.

Saying an idea is wrong does not mean that ideas shouldn't be tested. IBM thought Gates was off the mark trying to peddle computers for home use. Other examples abound where ideas considered crazy brought innovation to the market and eased the urgent wants of the consumers.

Unlike a lab where all conditions must be controlled for an experiment to work, the market allows someone with an idea, enthusiasm and some financial backing to test that idea at the local strip mall. Should the concept align with the needs of the consumer, the next Subway-style success will begin opening franchises in strip malls throughout the US.

Better the foot-long turkey on wheat served with a smile than the slice of salami on stale bread coming from the scowling apparachik wearing a faded Babushka. The more productive an idea, the more efficient the economy will run. We all benefit when ideas that are wrong are allowed to be discarded in the waste pile.

I will contend that all truths I know about the market I learned through studying Human Action and Murray Rothbard’s classic, Man, Economy and State. Since these books reconstruct economics around solid a priori logic, they are irrefutable. These books deliver conclusions will challenge all that was learned in Kindergarten and beyond, but those very conclusions must be understood as the guiding lights to a brighter future for all.


Jim Fedako

[1] The common usage is Hegelian while this usage is more along the lines of Fichte's system, the predecessor of Hegel. Though even this fits the common usage of Hegelian.

Monday, May 15, 2006

Gary North Book

"Marx's Religion of Revolution: Regeneration Through Chaos
This 275-page book by Dr. Gary North exposes the true nature of Marxism in the light of biblical truth and past history. Readers learn why the fundamental nature of communism is inevitably prone to violence and chaos."
Available at Christian Liberty Press

Great book by Gary North that exposes both historical Marxism and its current flavors.

Jim Fedako

Question

Assume Katrina just hit and you own a delivery truck, and you want to help hurricane victims by trucking the most desperately needed item down to New Orleans. What do you fill your truck with: aspirin, diapers, water, etc? Tough question. How could you discern the correct answer?

One more datum is required: Has government declared so-called price-gouging illegal?

If the answer is, "No," then the solution is to fill your truck with the item that will reap the highest profit. See, the victims know what they need and express that need through their willingness to pay higher-than-normal prices. That is simple economics.

If the answer is, "Yes," then you have no knowledge to solve the delivery problem, and more importantly, you have no way of satisfying the true need of the victims. You may select aspirin when the real need is diapers. Or, you may truck water when aspirin is desired.

Oh, you say that government officials on-site can quickly telegraph the need of the victims and direct you in how to satisfy it. Empirical evaluation shows that this statement is false since FEMA sent needed items to the wrong spots; even wrong states for that matter. And, they directed individuals to deliver items that were not desperately needed.

What about the logical evaluation of the statement. A priori, since the government price-level dictates have created lines for every item, the officials can only attempt to gauge the real need by the size of the line or some other equally invalid method. Maybe an official substitutes his own valuation; since he believes that he would desire aspirin, aspirin is the item in need. Regardless of the method, the government official will be wrong most of the time. When he is right, he is right by pure chance only. A review of the government response to Katrina validates this evaluation.

Funny thing about the unhampered market, it solves the scarcity problem correctly and rapidly. Remember your decision to go for the profit absent price-gouging legislation. Well, you aren't the only profit-seeking individual. Others will also be trucking the most needed item so that scarcity will fall quickly as entrepreneurs bring that item to the victims. The $10 gallon of water will fall rapidly over the next few days as water deliveries throughout the US are redirected to the devastated areas. Profit levels will fall as quickly as the satisfaction of the hurricane victims rises.

Remember the government response to Katrina where no one was satisfied and many went wanting for weeks. Remember this the next time an elected officials tries to "nail the gougers." The officials will solve nothing. Let the entrepreneur and the free market play their role and quickly correct the situation.

In the meantime, read the writings of Ludwig von Mises and the other Austrian Economists at Mises.org in order to understand how the freemarket works for the betterment of man.


Jim Fedako

Friday, May 12, 2006

A Fair Wage

Latest Mises.org blog:http://blog.mises.org/archives/005041.asp

by Jim Fedako

You hear it from them all the time; teachers just want a fair wage. Oh, well who doesn't? This line of thought begs two questions: How are wage rates established in a free market? And, are market wage rates fair?

How are wage rates established in a free market? The insights from the Austrian School of Economics show that workers earn their discounted marginal value product. In simple terms, workers earn now the current value of what they add to the production of future goods. That explanation easily fits those who produce consumer goods or factors of production, but what about those in the service sector? How, for example, is the wage rate of barbers established?

In order to understand the service sector we have to consider the alternate cost of employment. The marginal worker, one who can either work in the factory or cut hair, decides which employment to pursue based on relative wages. The cost for working in one field is the wage of the best alternate form of employment in another field. If the cost of working exceeds the benefit, it behooves the worker to seek the alternate field of employment.

If the factory offers better wages, the worker takes the factory job. If cutting hair offers better wages, the worker becomes a barber. If the relative wage rate of barbers begins exceeding the relative wage rate of factory workers, the marginal factory worker switches professions and enters the barber market. By doing this, the wages of barbers would fall as the wages of factory workers rise.

Had the worker stayed in the factory, he would have lost potential earnings. It is the alternate cost of employment, the foregone potential earnings, which guides acting man into the most remunerative employment. And it is this voluntary movement, the change of professions, which tends to guide the labor market toward equilibrium. [1]

This simplistic example shows that service sector employee wages are tied to the discounted marginal value product of labor in general.

Are market wage rates fair? As detailed above, workers earn either their discounted marginal value product or the equivalent wage of their best alternate employment. To say that one wage rate is unfair is to say that the worker earning that rate deserves a premium wage over a similarly productive worker in another sector of the economy. To say that a math teacher is underpaid in a free market is to say that the math teacher deserves to be paid more than the value product of teaching requires.

In a free market, wages cannot be unfair as they are set by the direction of the consumer. When the alternate cost of employment rises above the wage rate, workers shift sectors and set the labor market back toward equilibrium. [2]

In order to gain a wage premium, government interventions must occur. These interventions can take the form of field or general minimum wages, granting unions legal right to control sectors of the economy, government wage supports, or the creation of a government monopoly or quasi-monopoly in a sector of the economy – the school system for example.

In a free market teachers would also earn the equivalent of their discounted wage in the productive sector of the economy. A math teacher would earn the equivalent wage of a similarly productive worker in, say, the software industry – who earns the equivalent wage of a similarly productive worker in the engineering industry, and so on. If the math teacher was underpaid relative to his best alternate employment, this would be a signal there is an excess of math teachers, and that math teachers are being underutilized in their current employment.

The teacher market is not free; it is a quasi-monopoly where the vast majority of employees are unionized under a government-run system. Unlike the Soviet Union, which used the free markets of the world to establish some sort of price level, public schools do not look to private schools for wage guidance. Private schools pay their workers a much lower wage, but as above, they must pay a wage that exceeds the alternate costs of employment. [3]

Are public school teachers overpaid? Since there is no way to discern the true alternate cost of employment for all public school teachers in a free market – because no free market for teachers exists – we must rely on the available market data provided by private schools. This shows that teachers, in general, are absolutely overpaid.

In addition, and more importantly, we know a priori that governments are inefficient and over-pay and over-employ factors of production. Also, government teaching licensure rules create barriers to entry for those wishing to seek out a teaching career thus driving wage rates higher. Then, of course, there are the government-backed unions who rule the roost through strikes and threats of strikes. [4]

Are public teacher salaries unfair? Certainly. They are unfair to the taxpayer who is forced to pay the tax bill that supports the premium wage of public school teachers. In a free labor market a teacher's real salary can only increase with the marginal value product of employees in the next best alternate employment. In the quasi-monopoly that currently exists, teachers have realized salary increases that are not tied to the labor market; the salary increases are simply the result of political pressure.

The next time you hear teachers claim that they need a fair wage, tell them to drop the union banners and open education to the free market; the one market where everyone earns their fair wage.



[1] Of course the opposite holds if the factory worker made relatively more than the barber. Professions would switch and wages would tend toward equilibrium.

[2] Equilibrium is the direction of the movement, not reality. Equilibrium is the infinite endpoint on the continuum that is never reached though the actions of individuals tend to keep the economy moving in that direction. As consumer preferences change, the economy is rocked away from the direction of equilibrium, but the vast numbers of astute entrepreneurs act quickly to satisfy the new preferences and bring the economy back on course – well, in an unhampered market anyway since government likes to damage the rudder in such a manner that even the most astute entrepreneur cannot set a new course.

[3] Certainly there is an additional psychic income earned due to the rewards of teaching, but the psychic income exists in both the private and public school market. In fact, every job has its own form of psychic income that is based purely on the subjective valuation of the employee.

[4] Everyone has a study that shows teachers are either overpaid or underpaid based on salary and benefits per number of hours worked in a given year. Conflicting studies are the product of the current empiricist/positivist paradigm. The only way to read through the data and understand economics and the impact of policies is to use the a priori approach to understanding of the Austrian School.

Jim Fedako, a former professional cyclist who lives in Lewis Center, OH, is a member of the Olentangy Local School District and maintains a blog: Anti-Positivist.

Thursday, May 11, 2006

The Big Ideas in Education

"Amidst the relentless warnings that America's schools are only graduating two-thirds of eighteen-year-olds, are failing to produce the scientists and engineers we need, and must address stubborn racial achievement gaps, more than 14,000 of the nation's education researchers are gathered in San Francisco for the annual meeting of the American Educational Research Association (AERA)." Frederick M. Hess, director of education policy studies at the American Enterprise Institute, and Laura LoGerfo, researcher with a Ph.D. in educational psychology from the University of Michigan.

Here's the research you supported with your tax dollars:

"Fostering a Distributed Community of Practice Among Tribal Environmental Professionals During Professional Development Courses" and "Vygotskian Semiotic Conception and Representational Dialogue in Mathematics Education."

Read more from the recent EducationNews.org article (warning, some of the topics contain offensive language of a sexual nature) ...

Wednesday, May 10, 2006

The Epistemology of John Dewey - The Father of Progressive Education

What is the epistemological basis for our current education system? What are the driving concepts that form the pedagogy in vogue today?

A couple terms need to be defined: epistemology is the theory of human knowledge; while pedagogy is the art or science of education.

A passage that details the history of education knowledge and science:

"I have never seen anywhere in the world such a large proportion of intelligent, happy, and intelligently occupied children." Impressions of Soviet Russia, John Dewey

John Dewey's Impressions of Soviet Russia is a quick primer on the ideas that formed the genesis of the Progressive Education Movement. Dewey, who thought that Soviet Russia was a vision of a utopian future, is considered the father of the movement. In addition, fifty years after his death, Dewey is still idolized at education schools such as Columbia University's Teachers College, where he taught future educators and future educators of future educators.

Progressive education is alive and well as noted by the glowing references to Dewey throughout current education literature, including multiple awards given in his name. It's the ideas of Dewey that form the current educational belief system; ideas formed out of the collectivist movement that runs from Bismarck's Prussia through Lenin's and Stalin's Soviet Russia and onward.

Note Dewey's praise above for the "intelligently occupied children" of Soviet Russia.

It's the ideas of Dewey that are driving the so-called education reforms coming out of universities and being implemented in your local schools.

Jim Fedako

Monday, May 08, 2006

Do not despair, the market is here!

AOL News (AP) reports on a market solution to rising gas prices: buy gas now and store it for later. That's right; create your own strategic oil reserve!

One lucky prospector is tapping the 99 cents a gallon gas that he has stored in his private reserve. What a deal! What a solution!

The market always creates solutions for economic issues. Saving gas is the perfect hedge investment for those looking to offset rising fuel prices.

That said: It's only a matter of time before Government clamps done on this solution. Why? In an interventionist society such as ours, Government cannot allow individuals to act autonomously; Government must always direct the process.

Until the bureaucrats finally catch on, invest in your own personal oil reserve.

Something else to consider: Those who prophesy the imminent end to the world's oil reserves should be investing all their money into storing gas for later years. Though the Henny Penny's of the green guild continue to scream that the sky is falling, they never put their money where there mouth is. Could it be that they do not believe their own gaseous vapors?

Jim Fedako

Sunday, May 07, 2006

Stories from the Eastern PA Coal Mines

Read stories about my father's life growing up in the coal regions of eastern PA.

Saturday, May 06, 2006

Misesian on the School Board

Latest Mises.org article:http://mises.org/story/2126
A Misesian on the School Board
by Jim Fedako


The vanity of pride hides the true reflected man. But every now and again an event will occur that straightens out the distortions and exposes one's real identity. One such event happened to me at a meeting between officials of a local city and the school district I serve as a board member. Before the call to the table, as members of both governments were milling about, the city manager spotted me from across the room and loudly congratulated me on my reference to Hayek in my then-recent letter to the editor. The city manager hastened over to me and excitedly talked about reading Road to Serfdom while in college. He loved the book and appreciated my reference. I, in turn, mentioned similar books from Mises that I had just read.

Then it hit me. There I stood looking at my reflection; a Hayekian and a Misesian talking shop just before we were to be seated at an intergovernment planning meeting. It was as if the meeting existed in another dimension, but there was the table, and here we stood, two hypocrites seeing ourselves as fighters for freedom while living lives of statists. Vanity could hide the truth for only so long, and when the veil is finally lifted, the true image is humbling.

It is moments like these that expose supposed achievements and actions, and allows one to take stock of where they are and where they want to be. These moments bring reality back into focus; they provide clarity to the distorted images.

Read more ...

Wednesday, May 03, 2006

Tired of Time and Newsweek, try a Christian weekly news magazine

Read World magazine for a Christian perspective of the news. And since there are no "R" or near "X" rated photos and stories, you don't have to be embarrassed leaving a copy around for kids and guests to review; the magazine contains nothing other than the national and world news centered on the Bible. Refreshing, indeed.