Responding to the latest AMA

sz253I got asked a few questions in the latest “ask me anything“, including some via email. “You have questions, I have answers” is my motto 🙂

I will address the emailed questions later.

Q: Can you please share your thoughts on the Second Amendment? Is the horriffic gun violence in the US directly attributable to the law? Is it an anachronism that should be repealed?

A: I answered that at some length in here, “Guns are instruments, not sentient beings with volition.

Q: Do you have any reasons against education-voucher system?

A: Just to be sure that we are talking about the same beast, let me state what I understand to be “education vouchers.” The matter is related to public support for education.

We all pay for private goods out of our own pockets. Food, clothing, shelter, gadgets and gizmos, etc, are private goods. Depending on your means and your preferences, you choose how much of what to buy.

There is some justification for believing that education (as a service) is not a private good. We will not go into that here. But the upshot is that a case can be made for financially supporting primary and secondary education for those who are unable to pay for it. One way is to fund some schools out of public funds (taken from taxpayers). In this scheme, there are private schools that charge a tuition and there are free public schools.

An alternative to allocate the public funds into vouchers and distribute them to all students. That is, there are no free schools at all. All schools are private, fee-charging schools. Under this scheme, people choose the school and pay with the vouchers (either in full or in part.) This scheme funds students instead of funding schools. Students (or usually their guardians) choose the school much as they would choose which store to buy their groceries from. This has the advantage of inducing market competition and therefore greater efficiency and accountability. I would support a voucher system over a public school system.

Q: What are your thoughts on Universal Basic Income in lieu of the Welfare State?

A: False dichotomy alert. A welfare state is what provides a “universal basic income” (UBI). Perhaps the questioner refers to this choice: (a) Have a whole bunch of subsidy schemes for food, education, housing, etc etc, or (b) Dismantle the whole complex mechanism for subsidies and replace it with a cash-transfer to everyone regardless of economic status and let them choose how they spend the cash.

Naturally, I prefer the unconditional cash-transfer scheme over a rat’s nest of complex subsidy schemes. The latter are prone to massive leakage and corruption; the former less so. However, a cash transfer scheme has major pitfalls too in the case of a poor economy. I define a poor economy as one in which not sufficient amount of stuff gets produced. If the economy produces so little that there’s not enough to go around, the cash transfer scheme will not do much at all.

But overall it is better to simply transfer the cash directly to every person (which means Mukeshbhai would get it too) instead of the current system. A more detailed analysis will have to wait.

Q: A list of suggested readings for youth here in India?

A: This is hard to answer since it is too open-ended. “Youth in India” is a very, large, heterogeneous group. The age group would range from five to 25 years. Areas of interest would be diverse too: art, social sciences, hard sciences, etc.

If I were to narrow it down to just undergraduates who are familiar with English, I would recommend books that are consistent with what some label “a 21st century liberal education”. The Association of American Colleges & Universities defines it thus:

Liberal Education is an approach to learning that empowers individuals and prepares them to deal with complexity, diversity, and change. It provides students with broad knowledge of the wider world (e.g. science, culture, and society) as well as in-depth study in a specific area of interest. A liberal education helps students develop a sense of social responsibility, as well as strong and transferable intellectual and practical skills such as communication, analytical and problem-solving skills, and a demonstrated ability to apply knowledge and skills in real-world settings.

As I am more familiar with English-language authors (primarily American) than with Indian authors, my recommendations will be biased. But this is an important topic that requires more time. So stay tuned.

Q: Do you really think that 1st amendment protects free speech in USA?H . . . How can a constitution guarantee anything that the people themselves don’t believe in?

A: I replied to this over in the comments section. Here it is.

Constitutions are not engraved in stone. When the popular sentiment changes, then constitutions can also change. If most Americans don’t like a certain provision, it will (eventually) be reflected in the constitution.

As it happens, the constitution provides guarantees against the restriction of free speech. But there are mechanisms for changing the constitution. It could well be that if the population wants the freedom of speech to be restricted, then the 1st Amendment can be repealed, just as the 18th amendment was repealed.

The constitution is not an unalterable law of nature. It is just an artifact of human understanding and will.

~ ~ ~ ~ ~

That’s it until the next AMA. Thanks.

5 thoughts on “Responding to the latest AMA

  1. Thanks for your reply Atanu. Yes, I confirm that I meant exactly the same when I mentioned education-voucher-system.

    Theoretically I could not find any fault in education-voucher-system. However, I do not know of any nation which could replace public-schools with education-voucher. At least not yet. Hence I was curious about the other side of the argument.

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    1. What other side of the argument?

      Either vouchers work or they don’t. It appears to work better than the alternatives wherever they have been tried.

      Like

  2. I believe that at least until sometime in the junior-senior years in the university, education is more a public good than a private good.

    I am kind of torn between having free public schools vs. having private schools with fees subsidized by vouchers.

    What happens if every private school (motivated by profit) starts charging more than the voucher value?

    Assuming that not all kids can pay the difference, either some kids will not get formal education or some new entrepreneurs will start schools. If profile maximization is their motive, then they will dilute quality. The government could have legislation for minimum standards but then will end up creating shortages.

    If it were any other good (e.g. a car @ Rs. 100,000) , we could come to the conclusion that the society doesn’t need the good at this floor price as there is no market for it.

    Can we do the same for education, esp. the primary and secondary?

    I think the government is indeed creating a market by running their own schools. So, for private schools the minimum standard is provide more value than the government schools. Unfortunately, in India, the bar is so low that even a person charging bare minimum as fees with no infrastructure provides better value.

    I really like the voucher system (I currently pay unsubsidized fees for my kids using my post tax income) but not fully convinced if it will benefit all.

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    1. Education is always a private good. But it does have some positive spillover effects (positive externalities.) I have written about that in some detail on this blog.

      For example, see https://deeshaa.org/2009/05/28/on-massive-education-interventions/

      You wrote, “What happens if every private school (motivated by profit) starts charging more than the voucher value?”

      That concern arises out of a basic flaw in an understanding of how markets work, and how the profit and loss system is superior to any other for allocating resources efficiently.

      The ignorance of how and why markets works is widespread and not at all surprising. After all, we are not born with intuitions on specialized topics. Our intuition is a reliable guide only in those contexts that are similar to the ones in which our species evolved. Evolution equipped us to have the right intuitions in only those scenarios.

      For tens of thousands of generations, humans lived in hunter-gatherer bands of about 100 or so individuals. Humans cooperated within the group, and people were not strangers to each other. They hunted and gathered together. Defection was swiftly and certainly guaranteed to be punished.

      The world has changed since those times.

      We live in a massively connected world. Every action of every group influences every other group. These groups range from small communities (a village of 100 people) to mega-regions of tens of millions of individual. The dynamics of this kind of agglomeration is absolutely different. And therefore our raw or naive intuition is totally unprepared to understand how the world works.

      The fact is that economics is a specialized discipline and is reasonably hard to learn. One should not be expected to intuitively understand the principles of economics any more than one should be expected to know the principles of fluid dynamics or plate tectonics.

      There is one difference between economics and other areas of study that are equally hard: we all imagine that our intuition about economics to be reasonably accurate, but we don’t entertain any such illusions about high energy physics or complex algebra. That is because we are all participants in some economy and have to interact with other economic agents.

      The good news is that with a little bit of effort, anyone can learn the basic principles of economics. Once you do that, your intuition becomes accurate and therefore reliable.

      Let me give you a trivial analogy. If you don’t know any arithmetic — that is you cannot count or do basic arithmetic operations — your intuition about magnitudes is largely false, and you are liable to speak nonsense.

      The late, great John McCarthy used to say, “Those who refuse to do arithmetic are doomed to speak nonsense.”

      Likewise, learning the basic principles of economics (they are not hard at all) helps one avoid speaking nonsense.

      What are they?

      Like

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