Archive for August, 2013

The Great Degeneration – Ferguson 3

August 13, 2013

Ferguson deals with the weakness and failure of certain institutions in western societies and, amongst other things, makes a case for more choice in education, and increased use of fee paying as opposed to publicly financed schooling. Parents willingly pay for their children to participate in sports, the arts and other activities which can be considered educational. They are often reluctant to pay for basic education, which they see as the role of the state and paid for from taxation. About 7% of school age children attend private schools in Canada (about the samed in the US and UK), often for a cost of $22,000 a year with no government rebate from.

Other funding models are used, such as parents being able to choose the schools their children attend. Parents are given money by the state to pay the fees as opposed to the school being funded directly by the state. In this way, as with private schools, the buyer interacts directly with the supplier, and monitors the quality of the service provided. Note, as fees become a larger share of the cost of university and college attendance, students and their parents become more involved in the quality of the educational experience. How good is that quality?

One example Ferguson gives is that “In New York public schools, 62 per cent of third, fourth and fifth graders passed their maths exams last year. The latest figure at Harlem Success Academy was 99 per cent. For science it was 100 percent. And this is not because charter schools cherry-pick the best students or attract the most motivated parents. Students are admitted to Harlem Success by lottery. They do better because the school is both accountable and autonomous.” (129-130).

At the university level the US has 22 of the top 30 ranked universities in the world according to the Shanghai Jiao Tong University rankings. The point here is that the funding model used for educational institutions suggests that a mix of public and private funding improves the quality of the system as a whole. The same tends to be true for other sectors such as healthcare.

At some point, parents have to evaluate the system available to their children. This is not always easy as the reputations of schools, colleges and universities do not always reflect current conditions. One way to check is to talk to students (and their parents) who are currently enrolled or those who have recently graduated from different institutions.

The Great Degeneration – Ferguson 2

August 10, 2013

The state of politics – is the West in decline?

Those in North America and Europe observe daily the malfunctioning of their political, judicial and military institutions. The inability of members of the US Congress to compromise on policies to address outstanding fiscal and other problems is front and center in the media and online. Public disapproval of Congress is at record levels and yet those elected refuse to respond. Some argue that the checks and balances built into the US constitution are working. Maybe, but the results are harmful.

I find that one of the best sources of commentary on the US political system is Jon Stewart’s Daily Show, which with the aid of a brilliant set of researchers, exposes the malfunctioning of its institutions. A recent report showed an annual number of 26,000 cases of sexual assault and rapes in the US military (of which more than half were cases of abused males) and less than 1% of which were prosecuted. Numerous other examples are exposed by this program.

A question for Canadians is whether similar conditions of political paralysis are evident in Canada. Here, the system is different and while there are problems they seem less severe. With a majority government elected by a first past the post system, the government can do pretty much what it wants until the next election. One issue is whether it can do too much.

Power has flowed increasingly to the Prime Minister and his office where legislation is formulated. Providing the PM has the support of both his cabinet colleagues and party caucus, he or she faces little opposition. The unelected Senate can make minor changes to legislation and the courts can rule in certain cases. Rather than paralysis, this suggests more dictator-like powers, at least until the next election.

The first past the post system means that a majority government can be elected with under 40% of the popular vote. The present Conservative government shows signs of caucus unrest as the next election approaches. In a previous Conservative government (Diefenbaker in the 1960s), it was a divided caucus which upset the government. In contrast, when Mulroney was PM, he kept in close touch with the party caucus – his defeat came for other reasons.

The defeated parties and special interest groups like the Greens argue for changing to a system of proportional representation (PR). If 40% gives a party a majority government opponents argue that 60% voted against the government, say for Liberals, NDP and Greens. That’s a silly comment, since a similar argument could say that if 25% voted for the Liberals, then 75% voted against them. I would support a revised system (preferential balloting) where a candidate had to get 50% of the votes in the riding. Note that when referenda were held in Ontario and BC, the proposal for PR was defeated.

A problematic feature of the Canadian political system is deciding on the location of responsibility at the federal, provincial and municipal levels. Many costly activities are the responsibility of provincial (healthcare and education) and municipal (policing) governments, while the federal government collects a large chunk of tax revenues. Negotiations are often intense, but solutions usually found, sometimes with threats of declaring separation by some provinces.

On the whole, I don’t see the Canadian political system as suffering to the same extent as the US, although it may well be adversely affected by its neighbor, for example over trade and border issues.

Note:

I superficially looked at whether Oswald Spengler’s 1918 “Decline of the West” dealt with similar issues raised by Niall Ferguson in “Degeneration.”Although Spengler deals with a similar general topic, its approach differs, being written by a philosopher as opposed to an historian. I was struck by the Spengler’s emphasis on geographic boundaries to discuss the rise and fall of past civilizations. With Ferguson’s “Degeneration”, one difference to-day is that globalization means the dissolution or weakening of national boundaries for many types of activity, and in some instances a merging of east, west, north and south. One issue is why have particular countries and regions flourished and declined in the past, and are similar or different forces at work today. It would take an historian not an economist to attempt to answer this question.

The Great Degeneration

August 9, 2013

Ferguson 1.

Niall Ferguson’s recent publication, based on his 2012 Reith Lectures, is entitled “The Great Degeneration, How Institutions Decay and Economies Die.” It seems an appropriate topic for comment and discussion relevant to how present and future generations can assess their educational and occupational opportunities. What follows is a short summary of Ferguson’s argument, followed by some reactions to it. Following polite suggestions that my posts are too long, the comments will be posted separately in bite sizes and labeled Ferguson 1, 2 etc. As always, I invite your comments and input.

Summary

A number of more detailed reviews are available online. The essence of Ferguson’s argument is that the west is in decline, and starting about 25 years ago, countries such as China and India are closing the gap in terms of aggregate GDP, although less so in GDP per capita. Factors accounting for this phenomenon are the weakening of existing civil institutions, crony capitalism, inefficient bureaucracy and the rotting state of the legal system. The institutions and their operation which have grown up over the past four centuries have become sclerotic. Present and especially future generations can expect to bear the burden of these forces.

Any existing society is viewed as having what Edmund Burke called a “partnership between generations.” Today we are the recipients of the legacy of those who came before us, while we leave a legacy to future generations. Amongst the things we leave in many western countries is a massive public debt whether a measured in terms of gross or net debt (you can check the figures for specific countries on the web). Added to these published figures are contingent liabilities for things like future expenditure on healthcare and pensions which balloon the debt figures.

It is not a pretty picture for all current age groups, but especially for those under thirty. Niall Ferguson’s topic presents more clearly what I was interested in when initiating this project and soliciting your reactions. At the outset, I was on the defensive when faced with the argument that my generation had left the world in a hell of a mess, underlined by the recent global financial crisis and its likely aftermath. Today, I am less so, as there are many positive developments which have taken place in the post WW2 period, both technologically and with the absence of world wars, although other forms of violence have flourished.

Burke seems to provide the right focus. We inherit a legacy, both the good and the bad parts, and we bequeath a legacy to future generations. How to weigh the ‘goods’ and the ‘bads’ is a problem, but the historian’s approach, of course with the aid of economists (and others), is a useful one to adopt. In future postings, I will provide my reaction to some of these issues and look forward to your views.