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Summary of The No Child Left Behind Act of 2001

June 28th, 2010 Comments off

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Although education is traditionally a state and local responsibility, the federal government first became involved with its policies in the mid-1960’s and remains an active component even today, thus giving way to a presidential proposal entitled “No Child Left Behind” in 2001. Up until this bill proposal, Washington had spent nearly $130 billion since 1965 and more than $80 billion in the past decade alone in an unsuccessful effort to close the achievement gap between disadvantaged students and their more affluent peers (see “Issue Summary: H. R. 1 Enhances Accountability”). A recent study by the American Legislative Exchange Council demonstrated that while per pupil expenditures had increased nationwide by 22. 8% over the past twenty years, little improvement has been made towards equity of education. From this data, it becomes clear that money is alone will not increase achievement, programs must be held accountable to obtain the desired results (“Issue Summary: H. R. 1 Enhances Accountability”). The No Child Left Behind Act of 2001 as proposed by President George W. Bush was designed to reduce bureaucracy, provide additional flexibility to states and school districts to “tailor spending to programs that meet the unique needs of students and eliminate programs that divert resources from school. ” (“Issue Summary: H. R. 1 Helps Close the Achievement Gap”), and to allow local school districts to transfer up to fifty percent of federal education dollars they receive as long as they demonstrate results in an effort to cut “red tape. ” According to a summary issued by the House Education and Workforce Committee, H. R. 1 (the No Child Left Behind Act) was designed to establish a comprehensive accountability system, asking states to build on their existing assessment tests by designing and implementing annual math and reading tests for students in grades three through eight with an amount of federal money designated to redesign tests already in place. Additionally, this act requires that school districts annually report to the public on academic performance as measured by these assessment tests in each school of their jurisdiction, providing information on how students are doing in comparison to those in other schools in the district and across the state, graduate raters, and teacher qualifications to assist parents in judging how their local school stacks up against others statewide. If a low performing school as defined by the state does not make adequate yearly progress after three years of poor testing, students in the failing school are eligible to receive a scholarship for outside private tutoring to transfer to another public school (“H. R. 1, Questions and Answers. ”). States that also fail to show adequate yearly progress will additionally be subject to losing a portion of their administrative funds. Thus, according to the issue summary “By establishing a system of rewards and sanctions for states and school districts to hold them accountable for increasing student achievement, H. R. 1 would, for the first time, demand real from public schools that receive federal education resources,” (“Issue Summary: H. R. 1 Helps Close the Achievement Gap”).

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The conception of and pathways utilized by implementing major legislation, one may assume, are labored over desktops in an intellectual public spectacle of a congress chamber; however, one may have never guessed that in reality the key principals of H. R. 1 were first discussed hundreds of miles outside of Washington in an Austin, Texas meeting room, when the President-elect, George W. Bush, invited members of both parties to discuss education reform, a prominent item at the top of his agenda (Lara). Moving away from traditional lawmaking and into a new era of “unorthodox lawmaking” as coined by Barbara Sinclair, the United States government is increasingly establishing foundations for, and resolving disputes on legislation in less formal settings. A statement given to the House floor by John Boehner, further affirms the existence of these surreptitious actions in stating “This process began last December – before President Bush was technically even “President Bush,” (Lara). Although this December 2000 meeting laid the groundwork for the President’s “No Child Left Behind” legislation, two key congressmen, George Miller, senior Democrat on the House Education Committee, and Senator Edward M. Kennedy (Austin) were left out of the proceedings, both of whom would later become significant components in the passage of this bill.

The results from this initial furtive meeting and many others materialized in the House of Representatives on Thursday, March 22, 2001 when Representative John A. Boehner of Ohio introduced H. R. 1, the No Child Left Behind Act of 2001 by simply dropping the bill into the “hopper” (Austin). Opening with a broad statement of purpose for this legislation, Mr. Boehner articulated a comprehensive legislation which served to reauthorize the Elementary and Secondary Education Act of 1965 under the terms specified by President George W. Bush. Also a noteworthy element of his opening speech included ensuring a definitive goal designed by the legislation to, “In short: H. R. 1 will give students a chance, parents a choice, and schools a charge to be the best in the world,” (Boehner). Following the introduction of this bill sponsored by House Education and Workforce Committee Chairman John Boehner and seventy original co-sponsors (Feehery) to the House of Representatives, House rules require that the piece of legislation be assigned a number and referred to a committee with appropriate jurisdiction. As announced on March 22, 2001, the date of legislative introduction, House Speaker J. Dennis Hastert stated, “I reserve H. R. 1 for the President’s education proposal because I believe that improving our schools should be a top priority for this Congress. ” (Feehery 1). The following day, as described by Sinclair, the parliamentarian determined a referral for the newly named H. R. 1 to committee under the supervision of the Speaker. In most instances, these bipartisan committees which take on a particular bill act as the primary “shapers” of the assigned legislation, thus placing a relatively high degree of importance on which committee(s) receives the bill upon its final legislative outcome. Rather than being sent to one committee in each chamber, many measures in the House, including H. R. 1 of the 107th Congress was considered by several committees sequentially.

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Summary of The No Child Left Behind Act of 2001 (Part 2)

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In 1975 the House implemented a policy which permitted referral of legislation to more than one committee, either to be examined by two or more committees at once or in a sequential manner, as a result of increasingly complex legislation being proposed which no longer fit neatly into a single committee’s jurisdiction. However, as portrayed in Sinclair’s examination of the legislative process, sequential referrals are no longer common following a 1995 rule, providing an example where H. R. 1 reverted back to a traditional process against the new legislative process featured in Sinclair’s Unorthodox Lawmaking. The first committee in which H. R. 1 received an assignment to was the House Committee on Education and the Workforce, and it consequently, had the largest legislative role over other committees of referral. Once assignment has been received, a full committee will most often hold hearings, inviting interested people to testify in person about the issue and proposals to deal with it, as did the House Committee on Education and Workforce with the consideration of H. R. 1 on March 29, 2001 entitled “Transforming the Federal Role in Education for the 21st Century” with a witness list including Mr. Keith E. Bailey, Chair, President, and CEO of Business Coalition for Excellence in Education among others (“Transforming Federal Role in Education for the 21st Century”). Once such hearings have concluded and a subcommittee decides to act on the bill at hand, this legislative body marks it up, drafting it line by line, and reports this to the full committee, which then can accept, reject, or amend the bill. H. R. 1 as approved by voice vote on May 8th as the markup opened May 2nd by subcommittee, created a division among party lines. While Republican conservatives complained of alterations in the legislation departing from the President’s original proposition, Committee Chairman and Sponsor of the legislation, John Boehner agreed to a dramatic increase in authorizing funding for education and toned down a GOP “Straight A’s” proposal that would have let states spend federal funds for nearly any educational purpose as long as these measures achieved better academic results. Frequently in the new legislative process, Sinclair suggests, that after a bill has been reported out but before it reaches the floor, major changes have been worked out through informal procedures, such as was the case of the “Straight A’s” provision in which President Bush assured DeMint, supporter of the provision, that he was “looking at a different strategy to accomplish this,” after its specifications had been removed from subcommittee markup (Austin). Subsequent to surviving markup, one of the few remaining conservative proposals which involved private school vouchers had been stripped from the measure by a 27-2 vote as sponsored by Rep. George Miller within just a few hours of approval. The full committee of House Education and Workforce accepted these modifications and others on May 9th by a reported vote of 41-7 in a delicate compromise worked out by Boehner and Miller (Austin 8-5) with major provisions including an authorization of $400 million to help states design and administer annual tests (“House Approves Landmark Education Reforms”). From here, the adapted H. R. 1 was referred sequentially to the House Committee on Judiciary on May 14, 2001 under specification that the committee must report within one day’s time or face automatic discharge, which is exactly what happened on May 15, 2001 at 4:43pm as the No Child Left Behind Act of 2001 was placed on the Union Calendar No. 38.

As per the basic structure of lawmaking in the House, majority party leadership schedules legislation for floor debate at the bottom of the Union calendar in the instance of major legislation. Sinclair argues however that the House has developed alternate methods of getting legislation to the floor to provide needed flexibility. “The primary ways of bringing legislation to the floor are through suspension of the rules and through special rules from the Rules Committee, both procedures that the majority party leadership controls,”(Sinclair 20), an action which allowed H. R. 1 to be brought to the forefront of House legislative activity during the spring of 2001. The Rules Committee in this instance allowed the measure to be taken out of order as cited in a statement known as a House Resolution, which also set the terms for the floor’s consideration, including how much time was designated for general debate, two hours, issued May 16, 2001 at 11:33pm. Additionally the rule may restrict amendments, waive points of order against what would otherwise be violations of House rules in legislation, and outline other special provisions to govern floor consideration. A restriction on amendments in H. R. 1 in the form of a modified closed rule as implemented in the House Resolution permits only amendments enumerated in the Rules Committee report to be offered (“House Rpt. 107-069: Providing for the Consideration of H. R. 1 The No Child Left Behind Act of 2001”) and falls in line with contemporary House measures which typically are somewhat restrictive to save time, prevent obstructionism, and eliminate uncertainty.

On May 17th, a majority of the full membership of the House approved the resolution specified by the Rules Committee and, thereby, resolved itself into the Committee of the Whole, a legislative body made up of every House member, but with more streamlined rules and quorum of one hundred where debate and amendment of the legislation takes place.

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Summary of The No Child Left Behind Act of 2001 (Part 3)

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In this setting, a member was recognized to speak for only five minutes with debate equally divided between the proponents and opponents of the bill and controlled by a presiding officer chosen by the Speaker. On May 17, 2001 the Speaker designated the Honorable Doc Hastings as this such presiding officer, and the majority floor manager, John A. Boehner, opened with a prepared statement detailing the purpose of the legislation. Overall throughout these proceedings, twenty-seven amendments were introduced off of the Rules Committee report, five of which failed by record vote, twelve passed by voice vote, and ten passed by record vote. Voice votes in this legislative process most often occur when a floor manager has no objections to the amendment, while a controversial vote will be conducted under recorded vote to obtain a precise ruling. The amendments as introduced to the floor were relatively narrow, contradicting the statement that more often in modern politics to obtain a particular outcome “[A] rule gives members a choice among comprehensive substitutes but bars votes on narrow amendments, to focus the debate on alternative approaches, on the big choices rather than the picky details,” (Sinclair 24). The most difficult challenge presented to the legislation occurred when Republican Rep. Peter Hoekstra attempted to expunge annual testing from the bill, and although receiving heavy support from conservative Republicans and liberal Democrats, the amendment was ultimately rejected as defeat was blamed on intense lobbying by White House officials in another behind-the-scenes maneuver similar to those mentioned prior (Austin). After general debate and amending have been resolved, the Committee of the Whole rises and reports back to the house, where amendments must again be voted on and approved by the House. At this stage, on May 23, 2001, Representative Owens moved to recommit the amended bill with instructions to the Education and Labor Committee in an effort to add money to renovate schools and reduce class size by hiring more teachers, but this proposal was rejected (Austin). The final version of H. R. 1 was passed by a recorded vote of 384-45 on May 23, 2001 with a total of thirty-four Republicans, ten Democrats, and one Independent voting against the package. Once the legislation was passed, a motion to reconsider was made and laid upon the table on May 23rd at 7:24pm to ensure that the issue could not be reopened, and from here, the legislation was then sent to the Senate.

On May 25, 2001 the No Child Left Behind Act of 2001 was received in Senate, read twice, and placed on the Senate Legislation Calendar under General Orders. The Majority leader, by motion as specified by Sinclair, removed the legislation to be considered from the calendar, and the measure was laid before the Senate floor on June 14, 2001. In this instance, legislation reported by the Senate committee on Health, Education, Labor and Pensions had already approved a seven year reauthorization bill (S1-S. Rept. 107-7) in committee which had included Bush’s provisions to test students in grades three through eight in reading and math, a companion to the House-passed bill H. R. 1 and thus allowed for bypass of committee referral, a frequent method of bringing legislation forward more quickly according to Sinclair’s description of the new legislative process. However, the modified measures essential to S. 1 as reported out of committee were not exactly congruent to H. R. 1 as sent out by the House, and therefore, many provisions were made to the House-born bill before full Senate approval could be accomplished. According to Austin, “despite bipartisan spirit, sharp differences emerged between Democrats and Republicans over how much leeway to give states in spending federal money and how many federal education programs should be consolidated,” (8 -3) both important discrepancies that surfaced between the Senate and House version of this bill. During the period in which the bill was being debated on the Senate floor, Senator James Vermont, Chairman of the Health, Education, Labor and Pensions Committee and the measure’s flood manager, quit the Republican party and thus shift control in the Senate to the Democrats and making Senator Edward Kennedy the new chairman (Austin). As a result of anticipation by Bush and congressional Republicans of a hard fought series of negotiations following this transition in majority leadership, the administration “opened a back channel” and ranking Republican Senators began meeting with centrist Democrats including Joseph Lieberman and Evan Bayh, yet another example of secretive negotiations that have increased in frequency in recent congresses (Austin). After approximately six weeks of floor debate, the Senate passed the No Child Left Behind legislation on June 14, 2001 by a vote of 91-8 after submitting the amended version for its own bill. Five days later, the measure was amended by the Senate by unanimous consent based on the principle that the Senate is not a majority-rule chamber like the House after passage. No holds as an obstacle frequently utilized by a more modern political process as described by Sinclair were enacted, and thus, the Senate was able to do this act of business as with many others by unanimous consent, “both an acknowledgement and an augmentation of the power of senators as individuals” as determined by Sinclair (45). As in this case, unanimous consent agreements have become increasingly individualized pertaining to a specific bill to accommodate individual senator’s demands in the modernized legislative process. Also according to Sinclair, major legislation is particularly likely to encounter an extended debate-related problem, such as a hold or filibuster, in recent decades; however, this did not occur with the No Child Left Behind Act of 2001. Additionally, it is proposed in Unorthodox Lawmaking that in major legislation, a high number of amendments are introduced and voted on by the recorded method, although such actions did not occur in this bill.

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Summary of The No Child Left Behind Act of 2001 (Part 4)

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After the bill had been drafted and approved, a conference was requested with appointments of conferees Kennedy, Dodd, Harkin, Mikulski, Jeffords, Bingaman, Wellstone, Murray, Reed, Edwards, Clinton, Lieberman, Bayhn, Gregg, Frist, Enzi, Hutchison, Warner, Bond, Roberts, Collins, Sessions, DeWine, Allard and Ensign, and this message on Senate action was sent to the House on July 11, 2001.

On July 18, 2001, Sponsor and Chairman of the Education and Workforce Committee, moved and was later approved 424-5 that the House disagree to the amendment placed on H. R. 1 and thus, a conference was organized. The Speaker of the House appointed conferees for consideration of the house bill and Senate amendment, and modifications committed to conference who included Boehner, Petri, Roukema, McKeon, Castle, Graham, Hilleary, Isakson, Miller, George, Kildee, Owens, Mink, Andrews, and Roemer on the afternoon of July 18th. Between July 19 and December 11, a series of conference meetings were held to reconcile the different bills produced in each chamber. Neither version of the bill as passed would have worked in the current political and education situation, as according to the Congressional Research Service, the Senate passed version would have deemed every school in both North Carolina and Texas a failure and subject to reorganization (Austin). As a result of this complication and based on the fact that while the Senate had voted to significantly increase the overall number of ESEA programs from fifty-five to eighty-none, the House passed version would have streamlined the overall number to forty-seven (“House-Senate Education Conference Approves President’s Reading Initiatives”), instead of melding the two agreements, the conferees were given the task of devising a new one. This particular conference worked in subconferences consisting of a small group of both House and Senate Republican and Democrat members, as specified in Sinclair’s description, due to the unwieldingness of such a large overall conference. By November 30, both houses had worked out all the major issues in dealing with testing, accountability, and financing, but had been encumbered with a small point. Conducted behind the scenes deep within the Capitol building as means of avoiding regulations specified by the Sunshine rules, enigmatic negotiations took place between conference leaders as does often occur when a stalemate often requires leadership intervention in modern politics described by Sinclair. On December 11, 2001, the conferees finally agreed to file the conference report, and two days later, the House passed agreed with the modified bill by a recorded vote of 381-41. The conference report was next considered in the Senate by Unanimous Consent on December 17, 2001 and was agreed to by a Yea-Nay vote of 87-10 the following day.

On January 8, 2002 H. R. 1, the No Child Left Behind Act of 2001 was signed into Public Law No. 107-110 by President George W. Bush in a ceremony in Hamilton, Ohio, the home district of Sponsor Rep. Boehner with the four principal negotiators Boehner, Miller, Gregg, and Kennedy on hand. “I decided to sign this bill in one of the most important places in America – a public school,” stated President Bush, pen in hand, “Today beings a new era, a new time for public education in our country. Our schools will have higher expectations – we believe every child can learn. From this day forward, all students will have a better chance to learn, to excel, and to live out their dreams,” (President Bush Signs Landmark Education Reforms into Law”).

Many of the modern lawmaking principles described in Barbara Sinclair’s Unorthodox Lawmaking were evident in the amendment and passage of H. R. 1; however, I feel that my case is a poor example of the new legislative process. Because the Senate is considerably smaller in membership, its less hierarchical and less formal nature, lending individuals great power was evident in this piece of legislation, but there were no threats of hold or filibuster, common obstacles in modern congresses. A sequential committee referral in the House rather than a simple designation of primary committee also diverged from Sinclair’s explanation of current politics. In the Senate, very few amendments were made to their version of the bill, and I did not encounter any queen or king of the hill provisions, and I found no instance of self-executing rule in the House.

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Summary of The No Child Left Behind Act of 2001 (Part 5)

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These elements of lawmaking in addition to others previously mentioned provide evidence that although the procedure implemented in the passage of H. R. 1 was that of a modern Congress, it did not fit much of the specific criteria outlined by Barbara Sinclair for her new legislative process.

Works Cited

Austin, Jan, ed. Congressional Quarterly Almanac Plus. Vol. LVII 2001. Washington, D. C. Congressional Quarterly,

Inc. 2002

Boehner, John “Is School Choice the Best Solution to Our K-12 Education Problems? We Must Close Achievement

Gap. ” Roll Call. 26 Feb. 2001. Academic Universe. Lexis-Nexis. University of North Carolina Lib. Chapel Hill. 20

Nov. 2004 <http://www. lexis-nexis. com>

Broder, David S. “Long Road to Reform; Negotiators Forge Education Legislation. ” The Washington Post 17 Dec. 2001,

(Washington, D. C. A-1. Academic Universe. Lexis-Nexis. University of North Carolina Lib. Chapel Hill. 20 Nov.

2004 <http://www. lexis-nexis. com>

Feehery, John and Pete Jeffries, “House Speaker J. Dennis Hastert (R-IL) Endorses President’s Education Proposal. ”

Speaker’s Press Office. 2001. 22 Nov. 2004 <http://edworkforce. house. gov/press/press107/first032201. htm>

“House-Senate Education Conference Approves President’s Reading Initiatives, Other Aggreements. ” News from the

Committee on Education and the Workforce. 2001. 22 Nov. 2004

<http://edworkforce. house. gov/press/press107th/hr1agreements92501. htm>

“H. R. 1, No Child Left Behind: Questions and Answers. ” House Education and the Workforce Committee. 22 Nov. 2004.

<http://edworkforce. house. gov>

“Issue Summary: H. R. 1 Enhances Accountability. ” House Education and the Workforce Committee. 22 Nov. 2004.

<http://edworkforce. house. gov>

“Issue Summary: H. R. 1 Helps Close the Achievement Gap. ” House Education and the Workforce Committee. 22 Nov.

2004. <http://edworkforce. house. gov>

Lara, Dan and Dave Schnittger. “Boehner Praises Education Reforms in H. R. 1 as Education Debate Begins on House

Floor. ” News from the Committee on Education and the Workforce. 2001. 22 Nov. 2004

<edworkforce. house. gov/press/press107/hr1boehnerfloor51701. htm>

Schnittger, Dave and Heather Valentine. “House Approves Landmark Education Reforms: No Child Left Behind

Measure ready for Senate Passage, Then President’s Signature. ” News from the Committee on Education and the

Workforce. 2001. 22 Nov. 2004 <http://edworkforce. house. gov/press/press107/confrepthousepass121301. htm>

Schnittger, Dave and Heather Valentine. “President Bush Signs Landmark Education Reforms into Law. ” News from the

Committee on Education and the Workforce. 2002. 22 Nov. 2004

<http://edworkforce. house. gov/press/press107/hr1signing10802. htm>

Sinclair, Barbara. Unorthodox Lawmaking: New Legislative Process in the U. S. Congress. Washington, D. C. CQ Press.

“Transforming Federal Role in Education for the 21st Century: Hearing on H. R. 1, H. R. 340, and H. R. 345. ” News from

the Committee on Education and the Workforce. 2001. 22 Nov. 2004

<http://edworkforce. house. gov/hearings/107th/fc/hr132901/w132901. htm>

United States. Cong. House of Representatives. House Rpt. 107-069: Providing for the Consideration of H. R. 1 The No

Child Left Behind Act of 2001. 16 May 2001. 107th Cong. House Bill 1. 26 Nov. 2004 <http://thomas. loc. gov/cgi-

bin/cpquery/? &db_id=cp107&r_n=hr069. 107&sel=TOC_0&>

United States. Cong. House of Representatives. To Close the Achievement Gap with Accountability, Flexibility, and

Choice, So That No Child is Left Behind. 2002. 107th Cong. House Bill 1. 22 Nov. 2004 <http://thomas. loc. gov/cgi-

bin/cpquery/? &db_id=cp107&r_n=hr069. 107&sel=TOC_0&>

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The Contingency of Socialist Utopias: Some Problems of Central Planning and Rationalist Design   [Part 1]

June 30th, 2008 Comments off

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From time to time an author or thinker will create a work, often in the Utopian genre, which lays out a detailed design of an ideal society. Fourier’s phalanestères are one example: they are described as the structure of a social unit, all the way down to the number of inhabitants and to the shape of the actual buildings that house them.

The general problem with these plans is that they lack generality over time and space. They fail the test of universality. The following will be my random walk through some of the problems with rationalist institutional construction and the subsequent problems of central planning. –more–>Most people would recognize that a particular building design or architecture can become obsolete. Many would laugh if there were an actual plan to actually construct Campanella’s City of the Sun or Fourier’s phalanxes in the present day. Their reasoning would be obvious: those things were designed in an entirely different time, under different circumstances. This is not to say that those authors and many like them put forth their ideas as timeless and never requiring change (some occasionally have had the delusion of technological growth simply stopping at one point), but a large degree of universality is frequently attached to more abstract kinds of social planning.

Some examples of central design are much more concrete than others, but central planning when it involves a particular kind of physical engineering is not the only instance in which central design encounters severe problems. It can also include institutional design. For a long time, it was thought to be sound business strategy to always have a middle-man for many kinds of transactions. With changes in technology, the middle-man has frequently been cut out, and with good reason: he’s no longer needed. Yet what would happen if, in my ideal construction of a society, there were always a middle man between wholesale and retail? What if I claimed that this middle man led to the greatest well-being of my society’s members? Economics would most certainly stand against me.

Despite that, all kinds of social manifestos, utopias, and even national constitutions establish permanent institutions as a feature of the society. It can be a ruling council of Thirteen, a Guardian class, or a president, a 480-member congress, and a 11-member judiciary. They make the mistake of integrating information available at the current time and creating a set of concrete institutions that are to be held as universal, but are not in fact universal. This is symptomatic of a general problem with leftist thought, which is that it is often too concrete-bound in its approach to society. Those contingent concretes – such as the current distribution of income and power in society – are then used as premises from which “universal principles” are derived, like: there’s always the class of the rich and the class of the poor, and the former always oppress the latter. The problem is that those supposedly universal principles only apply in narrowly contingent cases, which makes them not universal (not even considering whether the derivation of those principles is valid). They ignore changing circumstances and technology (never mind all the other fallacies, like the total fabrication of principles of justice, ignorance of actual factors that cause poverty, etc. )

The general empirical principle underlying this is that no mind or group of minds can ever gather, process, and coordinate all of the information necessary to perfectly govern complex human conduct. Even without any normative principles relating to individual autonomy, the idea of governance – especially economic governance – by few over the many is riddled with problems, in theory and as it has been demonstrated in practice. Every economic agent has a delicately unique and complex set of circumstances and preferences, and has direct access to his own set. Supposing that someone trying to make economic decisions for this person was acting totally altruistically (another very generous premise, again as demonstrated in practice), he would require a means of translating that agent’s changing circumstances and preferences (closely related to subjective experiences of pain, pleasure, etc. into usable information which he then must process to prescribe a course of action which must be then executed correctly. Multiply this process over thousands or millions of people, and there is quite a huge problem. It is wishful thinking already that one person can make decisions for another effectively (people already have enough problems making decisions for themselves), so it must be even more wishful to think that some people can do it for many others, even suspending for a moment the selfish interests of those decision makers.

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The Contingency of Socialist Utopias: Some Problems of Central Planning and Rationalist Design   [Part 2]

June 30th, 2008 Comments off

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Only the free market (which is run by, precisely, nobody) is capable of coordinating the largely diffuse information spread among economic agents into forming an optimum output. This is not just an optimum regarding maximal manufacturing output for the lowest possible cost, a common straw man constructed against the free market to paint it as a cutthroat institution of total efficiency. That notion is just a Platonic hangover as if goods are produced for the goods’ sake which ignores why those goods are created in the first place: to enhance an individual’s well-being. The free market forms an optimum output with respect to the amount of resources available, and, more importantly, to the totality of the individual preferences of all market participants.

Very closely related to the information problem of central planning is pricing or, more broadly, valuation of goods, services, or virtually everything whose control and consumption can be transferred from one individual to another. Valuation by demand is self-defining: what someone is willing to pay for something is what it’s worth. No Platonism necessary, no intrinsicism, just pure empirical fact. In a centrally planned system that prohibits free association, value must be decided; otherwise, there is no meaningful way of allocating produced goods among the members of society. Again, suspending the selfish interests of the appraisers, this leads to bizarre information problems and to the humorous possibility of the “value” contributed by producers exceeding the amount of goods and services available in an economy, resulting in people deserving more than is possible to provide.

Another problem with central planning is, in brief, the actual presence of human beings. Markets can’t be avoided; the free market is all about incentives. Proof in practice of markets is the responsiveness to incentives embedded in human nature, no matter what system prevails. Black markets develop in response to government prohibitions; defying the law becomes a business, where risks are taken but large profits are reaped. In totalitarian systems (especially those with distributive wealth patterns, like in communism) individuals use their positions as or connections with bureaucrats and politicians in order to gain a bigger share of the pie. Even in our purportedly “free” economy in which the government intervenes to harness the “dangers” of the free market, interest groups spend billions of dollars yearly lobbying federal, state, and local governments getting laws passed in their favor to the detriment of others and electing politicians and bureaucrats who use the force of the law to increase business profits.

(Incidentally, the few errant cases in which people’s preferences are static and minimized do not undermine this universality of the human condition, for the reason that incentives can be structured to shun accumulation of material possessions or other conventional measures of well-being. Some tribes have a social value of personal prestige over wealth, and thus individual members will often spend all of their wealth on extravagant feasts for the tribe or on constructing large memorial edifices. )

Up to this point I’ve freely switched back and forth between central institutional design and central planning. Though there is a distinction between the two, they ultimately suffer from the same problems. First, even in a static environment, central design and planning simply lack the coordination of information necessary to achieve anything close to efficiency. Gathering the information is either next to impossible or is so costly to achieve that it defeats the purpose of establishing any institutions in the first place. Then, not only must the institution measure up to the circumstances of the time, it must be resilient and adaptable to the rapidly changing and non-ergodic world. The environment changes. Technology changes. People change. If the institution itself entails an active form of intervention (such as value arbitration, as in Marxism), the central planners constantly face the problem of incomplete and changing information.

Any societal plans that establish hard-and-fixed institutions and that rely on constant governance are prone to disaster, especially when abuse of power is considered. Up to this point, I’ve neglected to address that fact, which is the most important of all: much of the preceding discussion generously takes for granted that those involved in the central planning have no interest but doing their job the best they can. For the most part, that means that I’ve ignored an even more fundamental flaw in central planning. Yet even with that, it still had problems, didn’t it?

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