Some people nowadays say that education is a right and that it should be free. But I disagree with this point of view. First of all, statements like "education is extremely important" is too general and is effectively meaningless. A more meaningful statement would be something like "everyone should have free access to education up to grade 10" or whatever.
The next problem is: who pays. The primary beneficiary from an education is the educated person. So they should pay the bulk or all of the cost. This is only logical. Yes, interacting with someone with a certain level of education may also indirectly benefit me or society at large, but primarly education benefits the recipient of it.
Just because something is beneficial doesn't give "society" a carte-blanche to steal money and redistribute it for this cause. Many things have indirect benefit to society such as better nutrition or mobility. Does that mean the government should also take money to pay for cars and food for everyone?
The fact of the matter is that education has a cost. There is NO SUCH THING as free education. But when something is offered free, there is often misuse of it. If I could have any car and government would subsidize it by 80 or 90%, obviously I would pick a very expensive one because I am only paying for 10 or 20% of it. Underpricing any product or service causes exaggerated demand. I know so many people who have gone parts of degrees or done completely useless ones which they will not use. Is it even possible that instead of stealing money from citizens to pay for these misused classes, the citizens themselves could have used their own money to improve their lives? Perhaps buy better clothing, or better quality food.
There are always tradeoffs and as Milton Friedman says, no free lunch.
When it comes to accessibility, this is another interesting subject. Apparently 50% of students come from the top 25% wealthiest families while only 5% come from the bottom quarter. In provinces where tuition is higher, attendances, relative to population, is actually HIGHER than in places where tuition is lower.
The main proponents and backers of free education are people in the education system, and the unions. They are the ones who do all the promotion of low or no tuition. But the government is not Santa Claus that can grant every wish.
Let's stop making everyone else poorer to pay for people to either earn more themselves or to just fool around.
Sunday, June 10, 2012
Wednesday, March 28, 2012
Friday, March 16, 2012
The NL Fishery
I can't say I'm an expert in the fishery, but I see a lot of problems. Most are based on economic fallacies. First of all, there are all kinds of government regulation. One regulation ensures that the only people catching fish are so-called owner-operators. The logic is that this allows everyone to have a piece of the action and doesn't allow a large corporation to come in and get a "bigger piece of the pie". Problem is individual fishermen may not be as efficient as a large organization. Everyone pays for inefficiency, as prices go way up because of it. In a free market, what should happen is the more efficient processes ought to be used. This will increase profit, which will attract new investment. The new investment will attempt to undercut the price to share in the profit. This battle to offer the lowest price in order to gain more market share results in lower prices to consumers.
One of the big fallacies is to believe that if someone loses a job, they are permanently unemployed. But what ought to happen is that some people are laid off, but they move into other areas of the economy. So before it might have taken 1000 fisherman to meet the quotas, but now it takes only 500. Instead of seeing this as 500 people becoming unemployed, it's better to see them as transitioning into other areas of the economy. But where will they go?
Back to the consumer. Because the price of fish has dropped, consumers are saving money. Imagine it used to cost $9 a pound for fish, but now it costs $5 per pound and imagine the average Newfoundlander buys 20 pounds a year. That's a savings of $80 per year per Newfoundlander. They can now spend this money on other things. Maybe more visits to the restaurant, or on hockey games, or downtown, etc. The unemployed people will move in to fill those roles.
Why is this better? Quite simply, in the first example, with government regulation, there are 1000 people working in the fishery, and the average Newfoundlander's money has a certain value. By increasing the efficiency of the fishery, the average Newfoundlander's life improves because he can afford things he couldn't before, with the money he saves on buying fish. If nothing changes, the Newfoundlander remains the same, but if the free market is allowed to operate, the average Newfoundlander has more money in his pocket to spend and his quality of life increases.
The free market would work like this for every area. So many things we commonly buy are subject to tariffs, taxes, subsidies, price control, and quotas. This makes everyone poorer while helping out a few people here or there. Some countries dropped their heavy regulation of milk output. This resulted in milk that cost half as much for the same quality. If a person buys a carton of milk each week and the price goes from $4 to $2, that person will save $100 per year. I'm just giving individual products, but if this happened for all products and services, prices would continue to drop and people could use their productive output for better purposes.
One of the big fallacies is to believe that if someone loses a job, they are permanently unemployed. But what ought to happen is that some people are laid off, but they move into other areas of the economy. So before it might have taken 1000 fisherman to meet the quotas, but now it takes only 500. Instead of seeing this as 500 people becoming unemployed, it's better to see them as transitioning into other areas of the economy. But where will they go?
Back to the consumer. Because the price of fish has dropped, consumers are saving money. Imagine it used to cost $9 a pound for fish, but now it costs $5 per pound and imagine the average Newfoundlander buys 20 pounds a year. That's a savings of $80 per year per Newfoundlander. They can now spend this money on other things. Maybe more visits to the restaurant, or on hockey games, or downtown, etc. The unemployed people will move in to fill those roles.
Why is this better? Quite simply, in the first example, with government regulation, there are 1000 people working in the fishery, and the average Newfoundlander's money has a certain value. By increasing the efficiency of the fishery, the average Newfoundlander's life improves because he can afford things he couldn't before, with the money he saves on buying fish. If nothing changes, the Newfoundlander remains the same, but if the free market is allowed to operate, the average Newfoundlander has more money in his pocket to spend and his quality of life increases.
The free market would work like this for every area. So many things we commonly buy are subject to tariffs, taxes, subsidies, price control, and quotas. This makes everyone poorer while helping out a few people here or there. Some countries dropped their heavy regulation of milk output. This resulted in milk that cost half as much for the same quality. If a person buys a carton of milk each week and the price goes from $4 to $2, that person will save $100 per year. I'm just giving individual products, but if this happened for all products and services, prices would continue to drop and people could use their productive output for better purposes.
Friday, February 24, 2012
$10,000 for a comedy dvd?
I just found out the NL Gov gave wonderful grand band $10,000 to compile a DVD of their work. Who authorized this? If I want a DVD, I'll buy it, and WGB can make their money like everyone else. I didn't authorize my money to be spent this way!
Wednesday, January 18, 2012
Tories poised to slash regulatory red tape
We need to see more of this type of thing in Newfoundland.
Tories poised to slash regulatory red tape:
'via Blog this'
Tories poised to slash regulatory red tape:
'via Blog this'
Saturday, January 7, 2012
OCI denied permanent exemptions by province - Nfld. & Labrador - CBC News
Hmm, so the government is meddling again. Well, they have been from the start. I don't think the government should be trying to make business decisions for a private company. If they allow a company to fish, the province shouldn't then try to step in and control everything. They should let a private company with private investments make its own decisions. OCI has lost $10 million over three years. Soon they'll probably just quit altogether. Then where will the fish processing sector be? I'd say it's about time the government step aside and let business take over.
OCI denied permanent exemptions by province - Nfld. & Labrador - CBC News:
OCI denied permanent exemptions by province - Nfld. & Labrador - CBC News:
Wednesday, January 4, 2012
Canada Post Monopoly must End
The Canada Post Union is afraid that the corporation's decision to set up large community mail boxes with 20 or 30 addresses is just the beginning of cuts which will eventually affect employees. The Union does not want these large boxes, but would rather Canada Post pay more in overtime, wages, and any compensation because of injuries due to weather. Canada Post claims these large mail boxes are being set up for the safety of mail carriers.
The best solution to this problem is to end Canada Post's monopoly on mail delivery. Right now, it is illegal for someone other than Canada Post to deliver mail. They even challenged a court decision which would have allowed other organizations to handle international mail delivery.
The idea that no one could ever successfully compete against such a large organization cannot be sustained. First of all, a company would not have to start nation-wide. They could start locally in large areas. Small airlines for example, compete with Air Canada, even if these small ones don't offer nationwide service. Eventually they would grow. Other organizations should be allowed to provide mail delivery service, such as Fedex. There could be Fedex mailboxes, etc.
Competition improves everything. Imagine if there was only one grocery store. You'd get the same nonsense as you currently do with Canada Post.
Added:
There is a great article on this topic on Canada Business's website. It gives a good list of reasons why Canada Post should be privatized.
Here are some:
Germany, Netherlands, Sweden, and Austria have privatized their post offices or opened their postal systems to competition—and studies say the changes led to lower costs, higher productivity and better service.
A recent study by the Montreal Economics Institute found that stamp prices declined in countries after de-regulating or privatizing mail delivery.
A 2007 study by professor Edward Iacobucci and colleagues concluded that monopoly status and the interests of unions prevented Canada Post from responding adequately to the: i) rise of new communication technologies such as electronic mail and ii) need to upgrade process technology in the areas of sorting, logistics, and information systems (and privatization was needed).
Thanks to the enhanced bargaining position enjoyed by a union in a monopoly industry, Canada Post’s unions has been able to marshal considerable resources for lobbying campaigns and other actions that disproportionately influence public debate and policy makers.
Government calls for public comments on postal service, as occurred during the federal government’s review of Canada Post in 2009, are likely to show lopsided support for public monopoly status given the unions’ ability to organize and orchestrate a response.
The benefits of privatization are well established in the academic, peer-reviewed literature; a 2001 review in the Journal of Economic Literature concluded that taxpayers gained through revenues from the sale of government assets and longer-term, privatization improved firm performance and increased economic growth.
The best solution to this problem is to end Canada Post's monopoly on mail delivery. Right now, it is illegal for someone other than Canada Post to deliver mail. They even challenged a court decision which would have allowed other organizations to handle international mail delivery.
The idea that no one could ever successfully compete against such a large organization cannot be sustained. First of all, a company would not have to start nation-wide. They could start locally in large areas. Small airlines for example, compete with Air Canada, even if these small ones don't offer nationwide service. Eventually they would grow. Other organizations should be allowed to provide mail delivery service, such as Fedex. There could be Fedex mailboxes, etc.
Competition improves everything. Imagine if there was only one grocery store. You'd get the same nonsense as you currently do with Canada Post.
Added:
There is a great article on this topic on Canada Business's website. It gives a good list of reasons why Canada Post should be privatized.
Here are some:
Germany, Netherlands, Sweden, and Austria have privatized their post offices or opened their postal systems to competition—and studies say the changes led to lower costs, higher productivity and better service.
A recent study by the Montreal Economics Institute found that stamp prices declined in countries after de-regulating or privatizing mail delivery.
A 2007 study by professor Edward Iacobucci and colleagues concluded that monopoly status and the interests of unions prevented Canada Post from responding adequately to the: i) rise of new communication technologies such as electronic mail and ii) need to upgrade process technology in the areas of sorting, logistics, and information systems (and privatization was needed).
Thanks to the enhanced bargaining position enjoyed by a union in a monopoly industry, Canada Post’s unions has been able to marshal considerable resources for lobbying campaigns and other actions that disproportionately influence public debate and policy makers.
Government calls for public comments on postal service, as occurred during the federal government’s review of Canada Post in 2009, are likely to show lopsided support for public monopoly status given the unions’ ability to organize and orchestrate a response.
The benefits of privatization are well established in the academic, peer-reviewed literature; a 2001 review in the Journal of Economic Literature concluded that taxpayers gained through revenues from the sale of government assets and longer-term, privatization improved firm performance and increased economic growth.
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