Peter Schiff and Diana Carew had a spat over student loans on US TV to my bemusement. They both go at it in typical talking heads fashion, though Schiff clearly has reality on his side. Stuff money in a subsidy scheme and the recipients at the end – universities – will increase their fees. Why? Because it’s more profitable and they can. There’s nothing terribly arcane about this. So why bemusement? Because, from the delightful comments we get pearls of unsubstantiated wisdom like;

the overarching problem is that for profit education does not work.
and no some people cannot even afford 1/10th of that.

While this might make the liberty lover’s blood boil, it is really the beginning of something much larger. We are in for some aggressive Socialist apologetics here, my brothers and sisters. Maybe I’m naive in my willingness to return to these discussions over and over again. But these people are not yelling. They’re not calling me names or threatening me. So I feel that as long as I don’t get too rude myself I can keep going. I couldn’t help responding thus;

homeschool – then job – then university…

sorted

Admittedly that is terse to the point of being disingenuous. There are big reasons to misunderstand what I said here. I was trying to sum up the healthiest way to get through things like university, but my terseness washed it all away, leading to some unhappy campers taking me to task and saying it’s unaffordable and free markets lead to ghettos. I responded to the ghetto point by saying that;

In the year 1500 that would be even more the case, but that’s scarcity folks. Scarcity is the basis on which humans engage in economics or strategy.

Scarcity has been slowly retreating out of everyday life as we get richer century by century, after all subsistence decreased fastest from 1850 to 1914 than ever before then or after…

That happens to be the period of freest market capitalism in all of human history… but wishing that all of those poor people in 1850 could just, overnight, have present day upper middle class levels of wealth is absurd.

The facts are difficult to reconcile with the anti-capitalist case. . I am confused because;

really? you want to compare back to 5 centuries ago?
also there would be no scarcity if it weren’t for the system. we can actually live in opulence if the system were efficient. the problem is the current system does operate on the basis of scarcity and infinite growth. thus it is doomed to booms and busts as we have seen and an ultimate collapse that will bring down our civilization.
the only reason we grow richer from 1850 to 1914 is because of the exploitation of oil and coal and the cheap transportation it ushered. has nothing to do with it being “free capitalism” or anything of the sort. that being said the growth of the economy did require a freer system of capitalism. however, there was a dark side to that as well that Theodore Roosevelt had to contend with.
anyway, this growth due to the newly found cheap source of energy is well behind us now. we are entering the other side of the curve of industrial civilization – of increasing energy costs.
actually if you look at the past 40 odd  years our standard of living has been decreasing in the US. we work longer hours for less. women didn’t even generally work before the 70s. now to support a family both parents need to work and the average american household credit card debt at 15k and average net worth in negative. there are immense improvements in productivity. the benefits of this go to the less than 1% while the middle class is steadily eroding and joining the working poor.
no it’s not getting better.

How interesting. This critique would be entirely convincing but for the conclusions the commenter is drawing. Nobody with a sound understanding of economics argues that everything has become better since 1971, though cars, electronics, retail, media and telecoms are vastly cheaper and better now than 40 years ago, while housing, utilities, , education, healthcare, defence, policing and courts have become dearer. The former basket of industries are very lightly regulated and don’t really partake in big government production plans or subsidy schemes. The latter are a different story entirely; the government almost completely controls education ( and healthcare in the UK ) and enjoys a near total monopoly on defence, policing and courts.

 

Finally, in despair, I decided to try to establish once and for all what is means by terms like optimal use, scarcity

OPTIMAL USE

“Capital is being allocated without regard to its optimal use…”

I gotta ask… according to whom and for what reason? There are also questions as to who is allocating this capital and what their reasons are. Usually it’s return on investment. Since investment, entrepreneurship and lending together ARE capitalism and since they result in ever-increasing division of labour and labour productivity, and thus lower and lower prices, they are the cause of all improvements in the welfare of the overwhelming majority of humans ever. At least, that’s true of places which have done it.

If Peter Joseph or Noam Chomsky or Diana Carew say that people non-violently exchanging with each other is bad does that make it bad? I would say peaceful association is good because it offers an orderly life in which one can safely plan ahead and make investments for one’s future. You’ll find the confiscationary state / commune is corrosive of this basic human instinct and, in the long term, corrosive of your welfare, unless you’re a politically connected businessman or union boss.

But those of us who love capitalism hate fat cat cronyism just as much as you do. Big business, big labour and big government are the real triple-threat.

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SCARCITY

In economics, scarcity is as above, and is the universal and inescapable condition of living in a physical body with limited dimensions in a physical world extending beyond the body’s dimensions. I mean, this is pretty elemental stuff. I won’t say it’s elementary – I was a socialist throughout my teens and early 20s – and you are not being somehow dumb. I will make no claim as such.

You say scarcity is manufactured, which is basically the fallacy I described in my previous post – that of saying that beds, nurses, teachers, and ores are non-scarce, which is so self-evidently ridiculous considering the limited capacity of the mining industry to get stuff off the ground each year, the limited capacity of the car industry to actually build cars each year, and the limited number of patient consultations a doctor undertakes each year…

You are denying reality itself. You’re doing it very well, and very intelligently, and so I commend you for that, but if you really think industrial / service provision capacity is unlimited then I have to wonder what these elected paragons

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ELECTIONS

In a way you’re completely right – we do get the leaders we deserve. Though only an Ayn Rand devotee would conclude that that makes it your fault and mine that we don’t already live in an ansoc or ancap society. For the record I have no sympathy for Ayn Rand at all. I base my libertarianism entirely on the analysis of the Austrian School.

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EDUCATION

You can’t say we have rights to things like education or healthcare because, unlike liberty, they are subject to economics. Economics is human choice and action in response to scarcity, or the study thereof. If we have a universal right to education then we have always had it. So why was there no universal healthcare in 2800BC? Or 1500AD? Or any year one cares to mention until the 1880’s (UK)?

The means were not there. Saying that increasing means introduce new rights is absurd; they simply introduce new choices and actions. This is what happens as prices fall. Again, free markets = falling prices. Government control = rising prices. Government controls education, healthcare, the military, courts and police, and they all get ever more expensive. It also massively regulates finance and housing, making those gradually more and more expensive.

If you want an affordable education in a taxless world, it’s actually quite easy to see families getting together into homeschool co-ops and/or using cheap online services to offer class contents and challenges, tests and certifications.

Seriously, it’ll be OK.

Perhaps a link to an exemplar of free education like Cuba would be great, or pointing out that Singapore does not have free education, but does have universal literacy. In any case, the discussion goes on, and life continues to prove us right and our opponents wrong.