The Long Cycles in Markets and Political Order

Estimated Reading Time: 6 minutes

The best class I took in all my economics education was called “Cyclical Fluctuation,” taught by Dr. Susan Schroeder at USYD. It was a broad-scope class in the many heterodox ideas that economists have about what causes business cycles, and what makes the output, employment, and financial prosperity fluctuate so wildly around otherwise steady long-term trends.

One kind of explanation goes by the name of “long waves” – perhaps the most famous of which is Kondratieff waves, developed by the Soviet and Marxian economist Nikolai Kondratieff. Many other theories exist that try to account for fluctuations through long-dated cycles, identifying historical patterns over 50 or 100 years. I see these stories quite a lot: the historian Niall Ferguson had plenty of long-arc thinking in his latest book; and the generational theory by William Strauss and Neil Howe (The Fourth Turning), is all the rage in the crypto world.

Usually, cycle theories or long-wave patterns suffer from problems of overfitting past data – or pushing past events through vague-enough definitions such that almost anything goes. They lack nuance or don’t offer enough evidence. Personally, I always found it absurd that a world so unlike the past from which it came could be governed by motions in that (pre-industrial) past. If “it’s different this time,” there’s no point bothering with elaborate cycles; quite a lot of things are different, but not all. If indeed enough trends echo the past, there might be a future trajectory that an astute eye can detect.

Ray Dalio, the prolific writer and founder of Bridgewater Associates, one of the world’s largest and renowned hedge funds, has if not changed my mind, then at least massively shifted the needle on how I see cycle theories. Released today, his latest 500-page tome, Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail, aims very high: analyzing five centuries of markets, currency collapses, and changes to the world financial and political order.

Dalio avoids most of the traps associated with cycle theories. Changing World Order is jam-packed with charts, showing long-run changes in major countries, often reaching back centuries. Population, real GDP per capita, asset returns (of various portfolios and the main asset classes), mortality from war or famine are all included. At the core of Dalio’s view on markets and politics lies a conviction that underlies all cycle theories (“Knowing how things have changed in the past leads me to consider the possibility that something similar might happen in the future”). But he also improves on that by observing that over the longer horizon, cycles and the rise-and-fall of empires notwithstanding, cycles operate on a trend that for reasons yet unclear continues upward – through pandemics, world wars, inflations, and natural disasters

He shows us the result of the indices of competitiveness, technology, or military strength that he uses to analyze the world and inform his investment decisions. He manages to do what many successful investors writing books about their investment lens fail at delivering something new and interesting without giving away precisely the secret sauce that fueled his success.

What I like the most is the metrics of the rise and fall of reserve currencies. The Dutch guilder, Europe’s dominant reserve currency after a century or more of Dutch economic outperformance, was overtaken by the pound sterling when Britain’s industrialization and military strength later surpassed the Dutch. In turn, it subsequently lost to the US dollar during the first half of the 20th century. A dominant currency observes Dalio, lags heavily the economic punch its economy packed in the past. 

We’ve only had three or four of these global monetary transitions, so it’s hard to assess Dalio’s claim that this is a universal pattern. And if so, what does it say about the renminbi? About currencies like bitcoin, which are unconnected to a nation-state?

To analyze markets, Dalio combines the money-credit focus of Ludwig von Mises with the macro-debt focus of Hyman Minsky: “Unless you understand how money and credit work, you can’t understand why the world changed as it did.” His turning points for the debt cycles are also distinctly Minskyiate: when income isn’t enough to service debt; when people’s excesses and decadence vastly exceed their ability to create tangible value; when fear and greed are rife, jealousy and domestic conflict imminent. To this, Changing World Order expertly adds the big-picture history of people like Ferguson, Deirdre McCloskey, and Jared Diamond. Halfway through, Dalio reveals his main role model: the British historian Paul Kennedy, whose door-stop-sized The Rise and Fall of the Great Powers is on the curriculum of every undergraduate history program.

We get lots of schematic cycles, so many that I quickly lost track. The money-capital markets-debt cycle is the one he’s most known for, to which he adds cycles about internal order (values, institutions, and conflicts within a country) and cycles for external order (military, trade wars, and technology differences between countries). These are all mapped out in a fairly detailed way, with a half-dozen stages and their relative components explicitly marked.

“Most investors,” Dalio writes, don’t look for history, “because they think history and old investment returns are largely irrelevant to them.” He soothes my initial skepticism of cycle theories with plenty of graphs showing smoothed lines that move in discernable wave-like fashion.

While his long cycles are stuck in a limited history, he offers an outstanding amount of real-world evidence for this thesis: asset returns, currency debasement against gold or consumer baskets, and the expansion of debt and financial markets.

Even if his main pattern of political and economic power is broadly correct – that innovativeness, competitiveness, and education leads to prosperity, which eventually lead to excesses and decadence, decline, and conflict – it’s not clear to me what to do with that. Spain in the 1500s, fueled by Potosí silver, withered away over a hundred years; the Roman decline similarly took centuries; the Russian tzar reign ended abruptly. How do we know which historical echo signals our immediate future?

The reader must overlook the occasional statements where Dalio slips into the mistakes of other cycle theories. Like most of them, Dalio is forced into making vague, trivial, or often meaningless claims – like “most cycles in history happen for basically the same reasons.” “All markets,” he adds “are primarily driven by just four determinants: growth, inflation, risk premiums, and discount rate.”

Or this, about the internal struggles and disorder cycle:

While the length of time spent in each of these stages can vary a lot, the evolution through them generally takes 100 years, give or take a lot and with big undulations within the cycle.

With a main pattern of a century, with “a lot” of fluctuation around the start and end-points, on top of “big undulation within the cycle,” almost anything seems to fit the pattern. And “after self-interest and self-survival, the quest for wealth and power is what most motivates individuals, families, companies, states, and countries.”

At a high enough level of abstraction, these statements are plausible – even undeniable – but it is unclear what they give us. Yes, they’re true; but also very diluted in meaning. History may rhyme, but the ways in which poets can play on words is almost infinite – so what does identifying a vague, broad, or imprecise pattern really give us?

I wasn’t overly fond of the parts dedicated to China – over one-fifth of the book. It makes sense as a case study of a rising power, and is very relevant considering the many brooding U.S-China conflicts over technology, trade, and geopolitics. It pays homage to Dalio’s belief that China is rising in the many indicator curves against the stagnating (and even declining) indicators he reports for Europe and the US. But those chapters are long, detailed, and hard to follow for those without intricate knowledge of China’s past.

To nitpick, I don’t like how he tweaks established terms for no apparent reason: “store of value” became “Storehold of wealth”; “exorbitant privilege” was replaced by “extraordinary privileged.” One unconventional phrasing is useful: describing bonds and other liabilities as debt assets and debt liabilities to emphasize their role in balance sheets for different economic agents.

It is a very rare country in a very rare century that didn’t have at least one boom/harmonious/prosperous period, so we should expect both. Yet, most people throughout history have thought (and still think today) that the future will look like a slightly modified version of the recent past. […] Because the swings between great and terrible times tend to be far apart, the future we encounter is likely to be very different from what most people expect. […]

No system of government, no economic system, no currency, and no empire lasts forever, yet almost everyone is surprised and ruined when they fail.

The big curveballs are the turning points of history – modern tools of finance, the machine age, inclusive societies, or the scientific method. We can’t anticipate them, yet per Dalio’s own cycle theory we should still try to identify them, understand them, and adapt. That conflict runs through Dalio’s impressive book but doesn’t detract much from a thesis that I found much more persuasive than I had anticipated: some historical patterns are real, wave-like, and operate over long horizons. With skill, data, and humility, we can uncover the likely prospects for our own times.

*****

This article was published on November 30, 2021, and is reproduced with permission from AIER, American Institute for Economic Research.

There is a Big Difference Between R’s and D’s

Estimated Reading Time: 3 minutes

Many people will jump in and say that there is no distinct difference between this country’s two political parties. If you take out the extremes of each party, you cannot slip a sheet of paper between the two. Yet there is a big difference in philosophy that divides the two parties that define what each believes and is at the heart of almost all respective actions. That was exemplified by an interaction I had on a matter that you would never guess would be so defining.

Over the past 50 years, I have participated in planning our class reunions. It is an interesting position for me because I came to Los Angeles as a high school sophomore and was not that involved in my high school’s activities. I was more involved in an outside religiously based organization. Over the years I became closer to many of my high school classmates and worked with the principal person who stayed in touch with the class and helped organize the reunions.

Some of my friends were afraid we would not have a real reunion for our 50th and contacted me to make sure it was at a nice place and properly planned. I stayed in touch with the person organizing the event. That person had asked me to take over after our 45th reunion but then decided to take it back a couple of years later.

When I called to make sure the 50th had a proper location, I was told a proper location was being narrowed down. Then I received a call. “You will not be happy to hear this, but we are not going to have a reunion next year (2022 is our 50th year). We will have to postpone it until 2023 because of COVID.” I responded that was nuts because first, that event is fourteen months from now; and second, that is not your decision to make. The class can decide.

Then the battle began between the two of us. The other person asserting the decision was made for everyone and myself asserting that these people are grownups; they can vote for themselves. I stated we have an email tree so let’s get the class’s input.

Finally, the other person acquiesced and offered a version of what we could send to the class. The suggestion: “Hi everyone… Yes, I know it’s been quite a while. Hope everyone is doing as well as possible considering what’s going on in the world these days. We all know that our 50th reunion is upon us…but due to that naughty Covid we will need to rethink things. We certainly can’t have an indoor reunion, and I’m not even sure that an outside event is a good thing either. Do you really want to chat with old friends while wearing a mask?”

“Anyhow… please send me your thoughts and ideas… on anything and everything that’s been on your mind.”

Does anything say your thoughts and ideas are not needed or wanted more than the above statement? When asking for their input this person had no interest in hearing what their thoughts were other than what is “predetermined.”

My reply: “That is so leading why don’t you just tell them what to think. These people are grownups. They don’t need your guidance.” I was asked what I would state. My reply:

As you know, next year will be our 50th reunion time. Please let us know whether you are intending to attend the event.

That is all one needs to say or should say. They will give you their thoughts. If they are concerned about attending because of COVID, they will say so.

Democrats believe they are better at making decisions for people and that the people need to have these decisions made for them. Republicans believe that people are perfectly capable of making decisions for themselves. If they need to seek counsel for deciding, they will do such through trusted advisors whether they be family, friends or professionals.

Over the years in areas where Democrats have been in charge, their strong-arm tactics of top-down decision-making have crippled the ability of many people to make decisions for themselves thus making them wards of the state which appears to be exactly what the Democrats want to accomplish.

Democrats consider themselves smarter than everyone else. They consider themselves enlightened intellectuals. As Thomas Sowell stated, “Intellectuals stay relevant to the decision-making process by convincing nonintellectuals that their own knowledge is inadequate.”

People are better off making their own decisions and taking responsibility for their own lives. There is a major difference between Republicans and Democrats that runs through almost every aspect of government.

*****

This article was published on November 28, 2021, in FlashReport, and is reprinted with permission from the author.

Whose Land Did Native Americans Steal Before Europeans Stole It From Them?

Estimated Reading Time: 2 minutes

We all know that history is not the left’s favorite subject. Many times, it’s just too inconvenient for their political narratives. Often, history has to be erased or submerged in order to achieve the “greater good” of creating a just and moral society.

In truth, it’s not much better on the right, although generally, the conservative take on American history is more nuanced. Christopher Columbus was an ass — a greedy, cruel, ambitious man who didn’t let anyone stand in his way to achieving riches and power, especially native people. But he was courageous enough to cross an unknown ocean in a rickety ship and with a mutinous crew.

Do his sins outweigh the good he’s done? Not our call. And certainly not the call of biased, cretinous leftists who don’t want to understand Columbus and only use his sins as illustrations in their little morality plays to condemn the entire “Age of Exploration.”

American history did not begin in 1492. There have been human beings residing in North America for at least 20,000 years and probably longer. But the people who crossed the Bering Sea land bridge from Asia to North America during the last Ice Age may not have been the first humans to arrive here. Recent DNA evidence shows that there have been several different migrations to North America with Native American tribes only being the most recent.

And that leads to the inescapable conclusion: the Native Americans who were present on the North American continent when Europeans arrived were not the same Native Americans who arrived 20,000 years ago. DNA evidence tracks the migration of one early American civilization — the Clovis people, so-called because the first tools and weapons were found in Clovis, New Mexico — and reveals that they thrived in both North and South America until about 8500 years ago…..

*****

Continue reading this article, published November 26, 2021 at PJ Media.

Arizona Legislation Would Require Schools Teach ‘anti-communist’ Civics Curriculum

Estimated Reading Time: 2 minutes

Editors’ Note: The exchange between two Arizona legislators at the end of the following article encapsulates the major divide in America today. The (Democrat) left’s Marxist socialist ideology currently being forced without a mandate through Congress and the Executive branch, trumpeted by a corrupted and state-acting media and enabled by public school and higher education indoctrination throughout the land is diametrically opposed to our liberty, our natural rights and our history as a Judeo-Christian nation with a Constitution that established the individual citizen as the sovereign and a country governed by consent of the people for the first time in world history. We are now seeing restrictions of liberty everywhere, growth of a police state and an explosion of crime and chaos on American streets. The ingredients for a radical departure toward a statist model of governance with inordinate police power enabled by the pandemic and the highly questionable 2020 election results should concern every informed citizen who values the liberty we have and the America we love. On this Thanksgiving in 2021 let us recommit to the great gift we have been granted over two centuries ago and which must be defended against tyranny and loss by every generation and every American patriot.

 

Two Arizona Republicans whose families fled communist countries want schools in the state to teach about the evils of the political philosophy.

State Rep. Quang Nguyen, R-Prescott, announced Tuesday his plan to file legislation he said would strengthen civics instruction and civics literacy education for Arizona’s K-12 students.

Nguyen’s family fled communist Vietnam.

“This is very personal to me, as someone who has survived a communist war,” Nguyen said. “I have lost very close family members to the evil ideology of communism. I know what it feels to lose a nation to communism and that’s why I do not want my fellow Arizonans to ever go through what I have.”

“It is up to us to ensure that future generations have an honest understanding of what communism truly is and the horrors it has produced for mankind. Otherwise, it is likely to be repeated. The victims and survivors of communism deserve to have their voice heard.”

House Majority Leader Ben Toma’s family fled communist-run Romania. Toma, a Peoria Republican, is co-sponsoring the legislation with Nguyen.

“I believe in America and its cornerstone principles of liberty, freedom, and democracy,” he said. “I also believe that we have a solemn obligation to prepare today’s students to be tomorrow’s leaders.”

Toma said the legislation strengthens a student’s foundation in civic literacy and understanding of what makes America exceptional, and how it stands in stark contrast to communism and totalitarianism.

Nguyen’s bill would require the state academic standards in social studies to be retooled to include discussion of “political ideologies that conflict with the principles of freedom and democracy essential to the founding principles of the United States.”

Similar legislation was debated as the previous legislative session came to a close in June but failed to make it to Gov. Doug Ducey’s desk.

Rep. Daniel Hernandez, D-Tucson, said during previous debate white nationalism is more dangerous of an ideology than communism. Nguyen had a candid response.

“White nationalism didn’t drown 250,000 Vietnamese in the South China Sea,” he said.

*****

This article was published on November 23, 2021, and is reproduced with permission from The Center Square.

A Home Schooled High Schooler Debates the Woke Children

Estimated Reading Time: 5 minutes

Editors’ Note: The following is an essay by a 16-year-old home schooled young lady. The essay speaks for itself but we feel it important to emphasize that when young Americans are taught the foundational principles of our Republic without the leftist, ‘woke’ indoctrination so pervasive in our public school system, a responsible and educated young adult enters society ready to defend truth and reality. The Prickly Pear recently published a study from Harvard University examining the profiles of home schooled students. Ms. Fromm clearly reflects the findings in this study and we hope that many more like her follow into the dialogue of this nation and the battle to combat the woke assault on American society aided by the media, the educational system, our government, and our corporate leaders.

 

I attend a local university in Phoenix, Arizona as a homeschooled, dual enrollment high school student. Two weeks ago, my professor initiated a fiery discussion in Government class. My professor is conservative but encourages debate in the class and does not push his beliefs upon others. My class consists of 90 students if everyone is there, but usually there are only about 60. On that day we were discussing how certain demographics of people tend to vote. I say ‘tend’ because not every person in a certain demographic votes the same way.

I was the first person called upon. I was asked to explain why I thought Black/Latino Americans tend to vote liberal. However, I mostly focused on black Americans, explaining “I think black Americans tend to vote liberal because, statistically, over 70% of black children grow up in homes without a father present and as we just discussed, you tend to vote as your father does. Because fathers are frequently not present in the black home, mothers are working extremely long hours and are often out of the home. Therefore, many of these children are mostly raised by the education system and their programs. Because the education system is liberal, they tend to grow up and then vote liberal”. Nothing radical, just a 16-year old’s ideas expressed for discussion.

Apparently, many of the students thought what I said was radical. Two young black women and a young white woman disagreed with me and became extremely frustrated because I was not going along with their ideologies. One of the young black women claimed that I had a better chance of getting into college and getting a job solely because I am white. However, when I brought up Affirmative Action, she had nothing to say about it. Also, keep in mind she says I have a better chance of getting into college while we are sitting in the same class at the same university. Another claim she made was that “they” were oppressing black people and the black community needs “something”. When I asked her who “they” were or what the “something” is, she had no idea and could not answer my questions. With each question I asked she became more frustrated. I was calm and respectful throughout this heated exchange.

After my questions, which received no adequate responses, the young white woman said that until recently black people had been discriminated against through redlining and such. My professor then stopped her, asking her if, by saying recently, she meant about 60 years ago. She said “of course” – as if she hadn’t been trying to trick me. The word recently implies within 2-3 years ago, not 60! To her point, I said I understood and acknowledged that there was racism. I was about to go on when about 20-25 of the students in the class yelled at me, saying “THERE STILL IS!”.

This is the same type of thinking currently happening in university administrations country-wide. Over 75% of universities have already implemented black-only dorms and over 75 universities offer black-only graduation ceremonies. Excuse me? This is segregation! Yet, students at these schools think this is perfectly normal. They think this is good. These social justice warriors are missing the racism and segregation in front of their own eyes! In fact, they’re embracing it! Also, on many streaming services they have black power sections filled with movies featuring black actors. For some reason, promoting certain movies based upon the color of the leading actor’s skin, instead of the content of the movie itself, is great. This is racism, but it must be okay because it is for black people, not against them. Remember, racism can go both for and against white people. Sesame Street explicitly announced in one of their episodes that your skin tone defines you and makes you who you are. This is completely and utterly wrong. As an eloquent African-American father stated in August at a Colorado Springs school board meeting rejecting the teaching of Critical Race Theory, “Let racism die the death it deserves.”

White people and the American nation are not inherently racist. I do not care what color your skin is, I care whether you are a good person. The amount of melanin someone has in their skin means absolutely nothing to the vast majority of Americans. Yet, today’s media is purposely trying to paint white Americans as evil. The issues of race and racism are centerstage in the media, but look around. America is a melting pot of people from all corners of the world looking past their differences to celebrate liberty and make better lives for themselves and their families. The media and elite want people to think white people are evil as a way to divide the nation. If they have us aiming at each other, we will never notice them taking over our God-given natural rights.

How does one 16-year-old make 25 liberals angry enough to yell at her? Destroy their ideologies. Logical questions to their statements made them angry enough to yell at me. When a simple question is asked the answer is obvious, but they do not want to acknowledge the answer because they do not agree with it. They had absolutely no examples of racist white people and the so-called oppressive system. Yet, examples such as Affirmative Action highlight a system that promotes minorities. Not knowing who “they” are or what “something” is challenges liberal ideologies. Remember, precise language is extremely important when writing and debating if you want to get your point across.

As I was leaving class one of my classmates, a young black woman, stopped to talk to me. She informed me she agreed with my statements and thanked me for standing up for her community. Although I had left class frustrated as to how the discussion had ended, this young woman encouraged me. She helped show me that, even though I was frustrated, these types of discussions are not a lost cause.

The moral of the story is that liberals cannot handle someone simply asking why they believe a certain way. White people are not inherently racist. Yes, I’m sure there are racist people, but they come from all different races and are a minority. And for those who say white people are racist, what race freed the slaves over 150 years ago, and what nation was one of the earliest in the world to abolish slavery? White American men fought, were drafted, and put their lives on the line to free men and women of another race because they knew slavery was inherently evil. They had never met the people they were fighting for, yet 360,000 union soldiers died to free them. These men and their families paid the ultimate price to free their brothers and sisters of another race. We are equal.

New Harvard Study: Homeschoolers Turn Out Happy, Well-Adjusted, and Engaged

Estimated Reading Time: 3 minutes

Homeschooled children fared better than children who attended public schools in many categories.

Researchers at Harvard University just released findings from their new study showing positive outcomes for homeschooled students. Writing in The Wall Street Journal  last week, Brendan Case and Ying Chen of the Harvard Human Flourishing Program concluded that public school students “were less forgiving and less apt to volunteer or attend religious services than their home-schooled peers.”

The scholars analyzed data of over 12,000 children of nurses who participated in surveys between 1999 and 2010 and found that homeschooled children were about one-third more likely to engage in volunteerism and have higher levels of forgiveness in early adulthood than those children who attended public schools. Homeschooled children were also more likely to attend religious services in adulthood than children educated in public schools, which the researchers noted is correlated with “lower risks of alcohol and drug abuse, depression and suicide.

The new findings offer a stark contrast to the portrayal of homeschoolers by Harvard Law School professor Elizabeth Bartholet, who notoriously called for a “presumptive ban” on homeschooling last year—just before the US homeschool population ballooned to more than 11 percent of the overall school-age population, or more than five million students, in the wake of the coronavirus response.

In their Journal Op-Ed, Case and Chen challenged their colleague.

“The picture of the home-schooled student that emerges from the data doesn’t resemble the socially awkward and ignorant stereotype to which Ms. Bartholet and others appeal. Rather, home-schooled children generally develop into well-adjusted, responsible and socially engaged young adults,” they wrote.

The Harvard researchers also discovered that homeschooled students were less likely to attend college than their public school peers. Some media outlets latched onto this finding in their headlines, while ignoring the Harvard scholars’ speculation that this could be due to a variety of factors. Homeschoolers could be choosing alternatives to college as a pathway to adulthood, and college admissions practices may create barriers for homeschooled students.

I reached out to Case and Chen for additional comments on their study’s findings, including how they think the homeschooling data and outcomes might have changed since 2010, when their data set ended.

“We are also glad to see that some colleges, including some top-tier colleges, have become more flexible in their admission policies for homeschoolers over the past years,” Chen responded.

Indeed, more colleges and universities have implemented clearer guidelines and policies for homeschooled students in recent years, and many are now eager to attract homeschooled applicants. In 2015, Business Insider noted that homeschooling is the “new path to Harvard,” and in 2018 the university profiled several of its homeschooled students.

The researchers also suspect that the well-being gap between homeschoolers and public school students has widened over the past decade, with homeschoolers faring even better.

“For instance, social media apps have come to smartphones over the past few years, leading to their widespread adoption by teenagers and even younger children,” Chen told me this week. “Some prior studies suggested that such increasing smartphone use may have contributed to the recent huge spikes in adolescent depression, anxiety, and school loneliness. Cyberbullying, sexting and ‘phubbing’ have also become more common in children’s daily lives, especially in school settings. We might expect that these issues may be less common among homeschoolers than their public school peers.”

As more families experimented with homeschooling last year, and many of them decided to continue this fall, the new Harvard data should help them to feel confident about their education choice. In terms of human flourishing, homeschoolers are doing well—perhaps even better than their schooled peers.

“Many parents opted to try homeschooling during the COVID pandemic,” said Chen. “Hopefully, the public awareness about homeschooling and the related practices and support for homeschoolers will be improved in the long run.

*****

This article was published on November 17, 2021, and is reproduced with permission from FEE, Foundation for Economic Education.

Study: Arizona School-Choice Measures Saved Taxpayers $1.2B

Estimated Reading Time: 2 minutes

Arizona’s Empowerment Scholarship Account program has saved taxpayers more than $1 billion and as much as $3.2 billion, according to a national study on school-choice programs.

EdChoice, a nonprofit that advocates for parental choice in where they send their kids to be students, estimated in its new study that educational choice programs have generated between $12.4 billion and $27.7 billion in taxpayer savings from 2011 up to the fiscal year 2018. That averages to $7,500 for each student who participated in such a program.

Arizona is a pioneer of school-choice programs. It is home to the nation’s first educational savings account, a program allowing parents to redirect a portion of funding meant for a public school district and use it to send their child to a school of their preference. Originally passed in 2011, Arizona’s Empowerment Scholarship Account initially was directed toward students with special needs but was expanded to make nearly a quarter of the state’s K-12 students eligible.

“Arizona’s school choice programs have provided taxpayers with at least $1.2 billion in cumulative net fiscal benefits, likely more. These fiscal benefits are bonus, however. Bottom line is that they have helped countless families and children make their lives better by enabling them to find and access the best educational setting that works for them.”

Critics of Arizona’s ESA program and others like it say they siphon taxpayer funds from public school systems by not only removing parental contributions to the districts but state and federal disbursements that are often calculated by total enrollment.

Nationally, EdChoice estimates similar programs have saved taxpayers up to $7,500 for each student that participated. The report estimates school choice programs enroll 2% of the nation’s K-12 students but receive only 1% of public K-12 funding.

*****

This article was published on November 17, 2021, and is reproduced with permission from The Center Square.

Why a Red Star Is Just as Offensive as a Swastika

Estimated Reading Time: 8 minutes

The reasons can be found in the book Gulag and in the book Tunnel 29. 

Gulag, by Anne Applebaum, Anchor Books, New York, paperback edition, 2004, 677 pages

Tunnel 29, by Helena Merriman, Public Affairs, New York, hardback edition, 2021, 318 pages

Reviews by Craig J. Cantoni

Bernie Sanders is an avowed socialist and is alleged to have communist sympathies. Yet when he speaks on college campuses, he isn’t vilified, shunned, canceled, and called a dangerous extremist. No doubt, that would be true even if he were to wear a communist red star or a hammer and sickle. But if he were to wear a swastika, he’d be booed off the stage or worse.

The author of Gulag, a Pulitzer Prize-winning book, mentions in the Introduction about experiencing a similar double standard in the treatment of the evils of communism and the evils of Nazism. Hardly a fascist or supremacist, she is a graduate of Yale and, at the time of the book’s publication, was a columnist and member of the editorial board of the Washington Post.

She had walked along a bridge in Prague where vendors were selling Soviet and communist memorabilia. People were eagerly examining and buying the items, like faithful Catholics treasuring artifacts from the early Church. Fascist memorabilia were not on display, evidently because of a prevailing belief that Nazism was evil but communism was not.

The book continues from that point to explain the reasons for the double standard and to detail the atrocities committed in the name of communism in the Soviet Gulag.

I recently reread the book because of the madness occurring on American college campuses and throughout society in the name of social justice—a madness that has led to an affection for socialism among American youth and to leftist apologists once again rewriting history about communism. My review of the book follows in the next section.

A more recent book on the evils of communism is Tunnel 29. If you prefer a history that reads like a suspense novel, it doesn’t get more thrilling than the book’s harrowing non-fiction account of East Germans risking their lives to escape to West Germany by climbing over or tunneling under the Berlin Wall. The author lives in England and has been a producer and reporter for the BBC.

The Berlin Wall could be a metaphor for the growing ideological divide in America. On the east side of the wall was everything that today’s progressive left-wing wants: free medical care, free child care, free education, subsidized housing, economic security, no class distinctions, and no income inequality. On the west side of the wall was a classical liberal democracy and a free-market economy, where there was hard work, economic insecurity, and unequal outcomes.

The wall was built by East Germany to keep its citizens from fleeing their progressive paradise for West Germany. There’s a lesson in this for America, but it’s not a lesson that is taught in K-16 classrooms.

Let’s take a closer look at Gulag and then Tunnel 29.

Gulag

Surveys say that about 36% of millennials have favorable views of socialism. This is from a generation that can’t do without a Peloton, iPhone, Starbucks, Subaru, Grub Hub, Trader Joe’s, and Nike shoes.

The survey results show how easy it is to convince people, including college-educated ones—or especially college-educated ones—to embrace injustice if the injustice is framed as social justice, equality, and equity. The Introduction of Gulag says that such framing is one of the reasons why the repression, terror, mass murder, and mass starvation of communism are seen as lesser evils than the evils of fascism.

Another reason is the culpability of past and present leftist intellectuals, academics, and reporters in ignoring the evils of communism, due to being in sync with the underlying tenets of Marxism. Their feeble excuse for looking the other way was, and continues to be, that Stalinism was an aberration and not a reflection of the true nature of communism. Actually, from the very start of the Bolshevik Revolution, before Stalin came to power, Lenin was a proponent of concentration camps. Also, of course, Stalin was not the dictator of other communist countries where mass incarceration and murder also took place, such as China under Mao, Cambodia under Pol Pot, and North Korea under the Kim dynasty.

Still, another reason for communism being seen as less evil than the National Socialism of the Third Reich is the belief that communism’s travesties were committed for reasons of class and economics, not for reasons of race or ethnicity—as if being imprisoned, tortured, and killed for the former reasons is somehow better than being imprisoned, tortured and killed for the latter reasons. In any event, it’s a myth that disfavored races/ethnicities weren’t subjected to mass arrests in the Soviet Union. In fact, Poles, Balts, Chechens, Tartars, and eventually Jews were targeted for arrest.

It’s true that Soviet concentration camps were different from Nazi concentration camps because they were not established as death camps per se. But regardless, widespread and gruesome deaths were the outcome in the Soviet camps, as detailed in Gulag. You need a strong stomach to read about the ways in which inmates were tortured and killed.

Fascism deserves to be hated. But in their hatred of fascism, today’s socialists conveniently forget that National Socialism was a mix of nationalism and socialism, not a mix of nationalism and capitalism. The Third Reich didn’t own the means of production, but as Hitler explained, it didn’t need to, because he controlled the industrialists. A debate for another day is whether the United States has free-market capitalism, or crony capitalism, or mercantilism, or fascism, or some combination of these.

A common thread weaves through fascism, communism, slavery, colonialism, and other forms of subjugation throughout history and the world: The victims were dehumanized, categorized, stereotyped, and blamed for socioeconomic problems that weren’t their doing. Such rhetoric in the Soviet Union was a precursor to the evils that followed. To quote from Gulag:

From the late 1930s, as the wave of arrests began to expand, Stalin took this rhetoric to greater extremes, denouncing the “enemies of the people” as vermin, like pollution, as “poisonous weeds.” He also spoke of his opponents as “filth” which had to be “subjected to ongoing purification—just as Nazi propaganda would associate Jews with images of vermin, of parasites, of infectious disease.

The “woke” movement in the United States has shades of such demonization. Those placed in the ill-defined and elastic category of “white” are seen as the product of privilege and the beneficiaries of institutional racism. They’re also seen as stumbling blocks to the woke utopia of social justice, diversity, and inclusion—just as aristocrats, industrialists and the bourgeoisie were seen as stumbling blocks to the attainment of a proletariat paradise of Bolshevism. Likewise, wokes see themselves as morally superior to non-wokes.

Perceived enemies of wokes aren’t sent to concentration camps, as were enemies of the state under communism; but they can be canceled, vilified, ostracized, and have their careers ended for not adhering to the party line. Also, they and their children often have to endure reeducation in the form of critical race theory, which is taught in corporate and government seminars and in K-12 classrooms.

Such humiliation was common but much more severe in the Soviet Union. To quote again from the book:   “Before their actual arrest in Stalin’s Soviet Union, ‘enemies’ were also routinely humiliated in public meetings, fired from their jobs, expelled from the Communist Party, divorced by their disgusted spouses, and denounced by their angry children.”

China’s Cultural Revolution employed the same tactics.

Communists also “ate” their own, which should serve as a warning to today’s wokes. After the Bolshevik Revolution, the winning faction of Marxists proceeded to exile, imprison or shoot their former comrades in the losing faction for having a different interpretation of Marxism. A similar dogmatic mindset can be seen in the way that Bernie Sanders and Alexandria Ocasio-Cortez attack their fellow progressives for not being radical enough.

Incidentally, speaking of AOC, she recently said that a woman of color like herself can’t depend on being protected by her peers in Congress. This was in reaction to Arizona Congressman Paul Gosar’s juvenile and unacceptable animation of himself as a cartoon character using a sword to attack a cartoon image of her.

Woman of color? AOC is whiter than this Italian writer and has immensely greater political power and privilege. She and others of her ilk want Americans to see themselves through their actual or imagined epidermis and then are surprised by the backlash.

As another warning to wokes, George Orwell experienced firsthand how communists turn on each other. His book, Homage to Catalonia, describes his disillusionment in fighting with the communists against fascist Franco in the Spanish Civil War. The communists had split into two opposing factions:  those dedicated to the Soviet Union’s worldwide communism movement and those just interested in defeating Franco. The Communist International undermined the locals. 

Gulag concludes with estimates of the number of prisoners and deaths in the Soviet Union. There were an estimated 28 million prisoners between 1930 and 1948, in a country that had a population of 170 million in 1939. Some historians have tried to calculate how many of them died, but archival data are not reliable. It’s also difficult to calculate how many Russians died in total as a result of the Red Terror, the Civil War, the famines stemming from collectivization, the mass deportations, the mass executions, the concentration camps and mass murders of Stalin’s reign, the camps of the 1920s, and the camps of the 1960s through the 1980s. The Black Book of Communism gives a figure of 20 million.

Whatever the number, communism, like fascism, is not something to be celebrated or endorsed, especially by those who espouse social justice.

Tunnel 91

This book is a much easier read than Gulag but is also an indictment of communism. It is largely based on interviews with an 80-year-old German who ended up East Berlin as a kid after his family became refugees at the end of World War II. He would go on to escape to West Berlin, where in 1961, he would watch the construction of the Berlin Wall, which would separate him from his family in East Berlin. Later, he would lead two efforts to dig a tunnel from West Berlin to East Berlin so that his family and friends, as well as the family and friends of the other diggers, could escape to the West.

It is a thrilling story of grit, determination, and courage.

Not only was it dangerous work, but if the diggers were discovered by the East German police, they could be imprisoned, tortured, or shot. The same for their families in East Germany. There was a high probability of being discovered, because the East German Stasi had thousands of spies in both East and West Berlin, including in government agencies in West Berlin.

In fact, hundreds of East Germans were caught trying to escape over the wall, under the wall, or, using forged papers, through checkpoints between the East and West. It speaks to their desire for freedom that they were willing to risk being shot or spending years in solitary confinement in a dreadful East German prison.

Stasi files, which were opened after the fall of the Soviet Union, document the surveillance, repression, and brutalities employed to keep East Germans from attempting to escape. There was a thick file on virtually every family. 

A takeaway from the book is the same as the takeaway from Gulag: Communism, like fascism, is not something to be celebrated or endorsed, especially by those who espouse social justice.

A Concluding Personal Note

Many decades ago, when I was in eighth grade, the nuns at my parochial school showed a film of the Nazi death camps being liberated, complete with footage of the stacks of bodies, the piles of hair and eyeglasses, the half-burned corpses in the ovens, and the emaciated prisoners with blank stares who had somehow stayed alive.

Wondering how humans could be so cruel to other humans, I bought the 900-page book, The Rise and Fall of the Third Reich, when it came out in paperwork. That led me to a lifetime of reading history, literature, and moral philosophy in trying to find the answer.

For the first two decades of my intellectual journey, I almost never ran across a book (or movie) that told the story of the evils of communism. That’s because popular books and movies on the Third Reich and the Final Solution far outnumbered those on communism’s mass murders and concentration camps. Among the first books that I read on the subject was Alexander Solzhenitsyn’s The Gulag Archipelago.

Books and movies on Joe McCarthy alone seemed to outnumber books like Solzhenitsyn’s. McCarthy has been so vilified by history for his witch hunts for communists in the State Department and Hollywood that “McCarthyism” has become a pejorative to denote right-wing extremism. But it took me a long time to realize that if the bullying drunkard had gone after Nazis instead of communists with the same zeal and unethical methods, he’d probably be lionized by history and Hollywood.

The double standard continues today, not only with the likes of Bernie Sanders being cheered on college campuses but in the difference in usage of the adjectives “right-wing” and “left-wing.” The former, which conjures images of jackboots and stiff-armed salutes, is used by reporters, commentators, academics, and authors as a pejorative about eight times more than the latter.

It’s no wonder that 36% of millennials have favorable views of socialism.

National School Board Association’s Contempt for Parents Divides Organization

Estimated Reading Time: 3 minutes

26 state school board associations distance themselves from national group

More than half of state school board associations have distanced themselves from the national association after it sent a letter to President Joe Biden asking for federal intervention to investigate parents who protest at local meetings.

Of the 26 that have repudiated the letter, 11 have discontinued their membership with the National School Boards Association (NSBA) after Kentucky did so Wednesday.

In the Sept 29 letter, the NSBA likened parents protesting the teaching of critical race theory, mask mandates and other local school decisions to domestic terrorists and sought federal help.

The NSBA is a national association that state school board associations are members of and pay dues to.

In response to NSBA’s letter, the U.S. Justice Department and Merrick Garland instructed the FBI to monitor and investigate parents protesting at local school board meetings.

Parents Defending Education emailed 47 state school board associations for comment on the NSBA’s Sept. 29 letter. Hawaii and Washington, D.C. associations are not NSBA members and Virginia and Louisiana had already made public statements by the time PDE sent the letter.

PDE asked the associations to confirm or deny if they were in agreement with the NSBA’s position, to state how they define “intimidation,” “harassment,” and “threat,” and if they planned on reporting individuals in their states to the U.S. Department of Justice. It also published their responses online.

As of Wednesday, 26 states have distanced themselves from the NSBA’s letter: Alabama, Arkansas, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Mississippi, Missouri, Montana, New Hampshire, New Jersey, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, Wisconsin and Wyoming.

Among them, 11 states have taken action by withdrawing their membership, participation, or dues from NSBA: Alabama, Florida, Louisiana, Kentucky, Missouri, Montana, New Hampshire, Ohio, Pennsylvania, South Carolina, and Wisconsin.

Several states did not respond to PDE’s letter at all: Alaska, Arizona, Colorado, Connecticut, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nebraska, Nevada, New Mexico, New York, Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Vermont, Washington, and West Virginia. California replied by stating that it declined to respond to the questions.

“We believe the letter from NSBA leadership demonstrated how out of touch the national association is with the concerns of local school boards and the principle of local control,” Ohio’s association said. “Because of that, OSBA no longer sees the value of continued NSBA membership.”

Pennsylvania’s association said NSBA’s letter saying comparing upset parents to domestic terrorists “was the final straw” after the organization had already been questioning the value of keeping its NSBA membership. It added that NSBA had “fomented more disputes and cast partisanship on our work on behalf of school directors, when we seek to find common ground and support all school directors in their work, no matter their politics.”

The New Hampshire School Boards Association said it plans on withdrawing its membership but has not yet done so officially.

The Montana School Board Association will formally leave the NSBA in July 2022, as it already renewed its membership in July of this year.

Alabama withheld its dues to NSBA and plans to vote on whether to leave in December. Florida did not submit dues to NSBA and expressed its opposition to the NSBA’s position. Kentucky’s association leadership is currently evaluating the benefits of continued membership in NSBA. Mississippi says it doesn’t support NSBA’s action and will be meeting to address the situation.

Many of the associations that responded to Parents Defending Education said they had not been asked or informed by NSBA before it sent the letter. In fact, the letter was sent without their knowledge or input from the state associations it is supposed to represent, they added.

Delaware’s association said NSBA’s letter “was a clear overreach” and “violates the fundamental principle of local authority, upon which the Delaware public education system is founded and structured.”

Idaho’s association said, “Had we been asked, we would have readily pointed out the mischaracterization of parents and patrons in our communities as domestic terrorists who merited federal investigation. We want parents and patrons engaged in our public schools – we have sought that for years.

Illinois’ association said, “This is not the first disagreement that IASB has had with NSBA. Prior to this incident, the IASB Board of Directors was evaluating its relationship with NSBA. IASB previously expressed concerns to NSBA about problems related to governance, transparency, and financial oversight. IASB suspended payment of dues to NSBA for 2021-2022 and sought to address these concerns through changes to the governance structure of the national association.

“IASB disagrees with NSBA’s decision to request federal intervention, and the decision by NSBA leadership to tie the request to claims of domestic terrorism and hate crimes.”

New Jersey’s association said it doesn’t endorse the letter, and NSBA’s position doesn’t “reflect the beliefs and policies of NJSBA.” It said it has expressed its disapproval of the letter and “strongly supports the ability of parents and citizens to voice their opinions at board meetings, which is a fundamental principle of our democracy.”

*****

This article was published on November 11, 2021, and is reproduced with permission from The Center Square.

Time for a New University?

Estimated Reading Time: 5 minutes

Higher education in the United States is in dire condition. Priced Out, a report by Neetu Arnold of the National Association of Scholars released earlier this year, describes several problems afflicting colleges and universities: profligate spending, administrative bloat, exorbitant tuition costs, massive student loan debt, mission drift, student radicalism—the list goes on.

What can be done to fix these challenges? Is it time to build parallel schools to rival too-far-gone institutions? Is there room for new colleges and universities predicated on the serious, unbridled pursuit of truth and open inquiry, free from the rigid orthodoxies, anti-intellectualism, and close-mindedness of wokeism and identity politics?

We might find out. This week brings word of the University of Austin, or UATX, a residential, brick-and-mortar, startup liberal arts institution backed by some of the sharpest, most independent voices in the public discourse. Its board of advisors, for instance, includes Arthur Brooks, Ayaan Hirsi Ali (also a founding faculty fellow with Peter Boghossian), Leon Kass, Robert Zimmer, Steven Pinker, Jonathan Haidt, Nadine Strossen, Joshua Katz, John A. Nunes, Vickie Sullivan, Jonathan Rauch, Stacy Hock, E. Gordon Gee, David Mamet, Glenn Loury, Sohrab Ahmari, and Wilfred McClay.

The founding team consists of Pano Kanelos, formerly the president of St. John’s College who will serve as president; Niall Ferguson of The Hoover Institution and Stanford University; Bari Weiss, who made headlines in 2020 after resigning from The New York Times; Heather Heying, an evolutionary biologist; and Joe Lonsdale, a tech entrepreneur in the field of wealth management.

An impressive group. How will they ensure that UATX differs from the typical university, the kind that Arnold decries? For starters, they are steadfastly committed to free speech, robust debate, and unfettered questioning. “Our students,” Kanelos intones, “will be exposed to the deepest wisdom of civilization and learn to encounter works not as dead traditions but as fierce contests of timeless significance that help human beings distinguish between what is true and false, good and bad, beautiful and ugly.” He continues: “Students will come to see such open inquiry as a lifetime activity that demands of them a brave, sometimes discomforting, search for truths.”

Second, Kanelos et al. will distinguish UATX from legacy institutions by devoting their efforts to six principles (open inquiry, freedom of conscience, civil discourse, financial independence, intellectual independence, and political independence) and three pillars (open inquiry, a novel financial model, and an innovative curriculum). The repetition of “open inquiry” as both a principle and a pillar emphasizes the importance of that concept to UATX’s distinct mission. UATX is not about rigid orthodoxy or ideological conformity, but about curiosity, exploration, and self-examination.

Translating these lofty ideals into practice could prove difficult. Ralston College, which generated buzz for its similarly ambitious mission and curriculum, has never taken off. Back in 2010, Stanley Fish heralded Ralston College as “Back to the Future!” for its exciting, innovative approach to traditional learning and classical curriculum. Over a decade later, that prospective college hasn’t enrolled a single student. What will Kanelos and the team do to ensure that UATX does not suffer the same fate?

The foreseeable ranting and naysaying among journalists and scribblers isn’t an impediment to UATX. The chief challenge for UATX, in fact, will be recruiting students.

I learned a few possibilities last month at the fall meeting of the Philadelphia Society, where Kanelos publicly announced the creation of UATX, and then at a three-day “co-creation” summit in Austin hosted by the Universidad Francisco Marroquín and the American Institute for Economic Research. At the latter, I discussed UATX with Kanelos at length, and the whole point of the summit was for inventive leaders in higher education to “crowdsource” or “workshop” pioneering ideas for improving university costs, governance, administration, instructional models, tuition—in short, anything that our large group could come up with. Some measures are simple: outsource or streamline anything extracurricular like athletics or clubs. Others involve partnerships with wealthy investors and businesses keenly interested in UATX’s success. For example, the young and wealthy Joe Lonsdale, an entrepreneur and philanthropist, is helping to fund and develop UATX. The missional obligation to abide by principles of truth-seeking and constructive disagreement guards against undue influence that donors might have on academic freedom.

UATX is in the embryonic stage and, therefore, receptive to unique and imaginative suggestions, such as courses regarding sound money and cryptocurrency, yet it has a plan to ensure that its business model is viable and that its mission remains uncompromised. It aspires to launch a summer program in 2021, a graduate program in Entrepreneurship and Leadership in 2022, and graduate programs in Politics, Applied History, Education, and Public Service in 2023. By 2024, it will have established an undergraduate college with a rigorous liberal arts program that students must complete before choosing between different tracks, each organized under the aegis of a different center of academic excellence. My guess is that, although the ideas for these centers are mapped out, their design remains fluid, not fixed, and their rollout will require some practical flexibility.

Predictably, the media commentariat is apoplectic about UATX. Tom McKay intemperately refers to the university founders as “a sampling of the nation’s most intolerable contrarian columnists, right-wing pundits, and other stuffed shirts.” Without citing evidence for his opinion, Daniel W. Drezner emotes, “If its faculty even remotely resembles the board of advisers, the school would be assembling the most cantankerous, egotistical assortment of individuals since the Trump White House.” Claire Goforth claims that the announcement of UATX “comes from the minds of the nation’s most prominent reactionary bloggers and thinkers, who have become iconoclasts for their desires to break with the ‘woke’ movement they believe is brainwashing elite American academic universities and trickling down to the rest of the country.” Harsh words!

Writing for The Daily Beast, Noah Kirsch says, “Buried in the school’s FAQ section: it does not actually offer degrees, nor is it yet accredited.” Accreditors often require startups to operate for a period, even to grant degrees, as a prerequisite to accreditation. I do not know the policies of the Texas Higher Education Coordinating Board or the Higher Learning Commission—from which UATX will seek accreditation—but the fact that UATX isn’t accredited yet should come as no surprise.

The foreseeable ranting and naysaying among journalists and scribblers isn’t an impediment to UATX. The chief challenge for UATX, in fact, will be recruiting students. How will a UATX admissions office convince high school seniors and their parents that attending there can yield measurable returns on investment, that UATX has the staying power and credibility to endure inevitable criticisms and to flourish amid a rambunctious culture increasingly fractured along political lines. To make recruitment more manageable, UATX is starting backwards: with summer programs and M.A. programs before operationalizing the undergraduate program.

UATX must also be wary of faculty and staff seeking to abandon their posts at legacy institutions to seize on this new opportunity. “Hundreds of college professors pleaded to join [UATX],” reports Fox News. These professors must be carefully vetted lest they attempt to bureaucratize UATX along the lines of other universities, or, worse, sabotage the whole project. Even well-meaning academics have been acculturated to working and business conditions that, by and large, aren’t subject to market pricing mechanisms. UATX should hire in the manner of Hillsdale College, requiring interviews not just with each department but with the provost and the president as well.

UATX is that odd combination of traditional and innovative, pouring old wine into new wineskins. Its success could usher in a new era in educational reform. The stakes, it seems, are high. But my hopes are even higher.

*****

This article was published on November 12, 2021, in Law&Liberty, a project of Liberty Fund.