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July 24, 2015

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Posted: 24 Jul 2015 12:06 AM PDT

'Socialism, American-Style'

Posted: 23 Jul 2015 10:58 AM PDT

Conservative states like socialism?:

Socialism, American-Style, by Gar Alperovitz and Thomas M. Hanna, Commentary, NY Times: The great 20th-century conservative economist Joseph Schumpeter thought the left had overlooked a major selling point in pressing the case for public — i.e., government — control over productive capital. "One of the most significant titles to superiority," he suggested, was that public ownership produced profits, which means not having to depend on taxes to raise money.
The bulk of the left never took up Schumpeter's argument. But in an oddly fitting twist, these days the mantra of public control in exchange for lower taxes has been embraced by a surprising quarter of the American political leadership: conservatives.
The most well-known case is Alaska. The Alaska Permanent Fund ... combines not one, but two socialist principles: public ownership and the provision of a basic income for all residents. The fund collects and invests proceeds from the extraction of oil and minerals in the state. Dividends are paid out annually to all state residents. ...

The authors go on to cite many more examples, e.g. the Texas Permanent School Fund and the Texas Permanent University Fund, The Permanent Wyoming Mineral Trust Fund, which "is almost a direct expression of Schumpeter's doctrine: Socialized ownership has helped to eliminate income taxes in the state," the Tennessee Valley Authority, electricity generation in Nebraska, where "Partly as a result, Nebraskans pay one of the lowest rates for electricity in the nation." They conclude with:

The list goes on. More than 450 communities have also built partial or full public Internet systems, some after significant political battles. Roughly one-fifth of all hospitals are also currently publicly owned. Many cities own hotels, including Dallas...
Moreover, contrary to conventional opinion, studies of the comparative efficiency of modern public enterprise show rough equivalency to private firms in many cases. ...
With skepticism about capitalism growing among minorities and young voters, will we see more such endeavors in the future? Pendulums have a way of swinging, sometimes very sharply, when big economic tsunamis hit. It is possible that in the next big crisis, both sides might see the wisdom and practical benefits of public ownership, and embrace Joseph Schumpeter's point even more boldly than they do today.

I think this would benefit from separating natural monopolies -- where it is not surprising in the least that costs/prices are lower with public ownership (or strict regulation of prices if privately owned) -- from the other examples. When *significant* market failures justify it, I fully support public ownership. But in most cases I'd prefer private sector ownership with regulatory oversight.

'Postsecondary Institutions Appear to have Surprisingly Similar Net Impacts on Student Growth'

Posted: 23 Jul 2015 10:30 AM PDT

Kevin Carey:

...The Bible of academic research on how colleges affect students is a book titled, plainly enough, "How College Affects Students." It's an 848-page synthesis of many thousands of independent research studies over the decades. ...
The sections devoted to how colleges differ from one another are notable for how little they find. As Mr. Pascarella and Mr. Terenzini carefully document, studies have found that some colleges are indeed better than others in certain ways. Students tend to learn more in colleges where they have closer relationships with faculty and peers, for example, and earn a little more after graduating from more selective institutions.
But these findings are overwhelmed in both size and degree by the many instances in which researchers trying to detect differences between colleges found nothing.
"The great majority of postsecondary institutions appear to have surprisingly similar net impacts on student growth," the authors write. "...in the most internally valid studies, even the statistically significant effects tend to be quite small and often trivial in magnitude." ...
People can learn a lot in college, and many do. But which college matters much less than everyone assumes. As Mr. Pascarella and Mr. Terenzini explain, the real differences exist at the departmental level, or within the classrooms of individual professors, who teach with a great deal of autonomy under the principles of academic freedom. ... The problem for students is that it is all but impossible to know ahead of time which part of the disunified university is which. ...
The whole apparatus of selective college admissions is designed to deliberately confuse things that exist with things that don't. Many of the most prestigious colleges are an order of magnitude wealthier and more selective than the typical university. These are the primary factors driving their annual rankings at or near the top of the U.S. News list of "best" colleges. The implication is that the differences in the quality of education they provide are of a similar size. There is no evidence to suggest that this is remotely true. ...

Not sure this captures all the benefits of going to, say, Harvard in terms of social connections that can be valuable later on.

Does Rising Wealth Buy Greater Happiness?

Posted: 23 Jul 2015 09:12 AM PDT

At MoneyWatch:

Does rising wealth buy greater happiness?: How much does an increase in wealth increase happiness? If you win the lottery, receive a large unexpected inheritance or some other good fortune comes your way, will it permanently make you happier? ...

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