Podcast interview with James Tooley on private schools meeting the needs of the poor

Recently I discovered the EconTalk podcast series, run by Russell Roberts of the Hoover Institution at Stanford University. Was delighted to see an hour long interview with James Tooley, author of A Beautiful Tree,  A Personal Journey into how the World’s Poorest People are Educating Themselves, which I’ve been reading. Great stuff here – most of us in the United States and Europe know private schools as almost exclusively for the wealthy.  His research provides ample evidence that this is not always true AT ALL.

EconTalk Podcast Series

EconTalk Podcast Series

Here is a quote from Mr. Tooley (thanks EconTalk for the transcript) to start you off:

I was in Hyderabad in South Central India. I was there doing consultancy work for the International Finance Corporation, the private arm of the World Bank. I was looking at elite private education, private education for the middle classes and the rich, because I’d become an expert in private education–that was my area of research. I was dissatisfied with this because for whatever reason, I was drawn to serving the poor. That’s what I felt my life should be about. And here I was looking at private education for the rich.

So, on a day off from my consultancy, I wandered down into the slums of the Old City; and sure enough–I had a hunch about what I might find, and I found a private school. A school, charging in those days what would be the equivalent of $1 U.S. dollar per month, serving a hundred children. I met these people; and then I wandered down another alleyway and found another school. And soon I was in contact with a federation of 500 of these low-cost private schools in these poor, largely Muslim areas of the old city of Hyderabad.

It was an amazing finding for me, because suddenly the two parts of my life came together. I could work concerning the poor, low income families and I could be exploring private education, too. But more than that, this seemed very exciting. Poor people were using private schools. Why? Why has no one told me about this? What’s going on here. And so I began a really exciting time in my life.

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Social Enterprise – such a fabulous creation coming out of the free market

Social Enterprise – such a fabulous creation coming out of the free market

Why not solve social problems with for profit businesses?

Better than government options – private organizations can adapt, change and improve much more easily. If your organization messes up or is wasteful, someone else can compete with you and do it better. for government organizations – if you are wasteful or mess up, odds are there will be an investigation and then you’ll get MORE money and influence (think FEMA, think HHS, think Education, list goes on and on).

Better than non profits, perhaps? A for profit model gives you a sustainable income stream (often better than doing grant proposals, competing for donors in tough times). The modern publicly listed company is an artificial construct and most folks have forgotten the free market is capable of infinite other models. The social enterprise movement is a fantastic new approach. The idea that ‘for profit’ companies means your somehow compromised and unable to change the world is antiquated and false.  And the idea that maximizing shareholder value = money, well, why? Social Enterprises are voluntary associations – no one’s forcing people to buy shares, the profit goals are written into bylaws… More power to them. 

Bye Mom, off to school!

Bye Mom, off to school!

Here’s one I like: Kunskapsskolan – a private school “social” enterprise – aim for 10% profit each year, give 90% of revenues to school principals to manage. They have only gone into blue collar areas because, as the CEO says, they’re not catering to the rich. They want to improve school for the average child since public schooling is failing. Sweden overall isn’t a perfect model for education, but this social enterprise looks very promising.

http://cato.ramp.com/m/video/37049597/february-14-2011-featuring-peje-emilsson.htm

http://kunskapsskolan.edu.in/faqs/

Compassion and Minimum Wage – a silver lining?

Compassion and Minimum Wage

I ran across this column by Thomas Sowell today – pointing out that it isn’t true compassion to raise the minimum wage.  Those who are lucky enough to keep their jobs will get paid more yes, but jobs will disappear overall.  There will be a reduction in jobs available, increased unemployment as marginally valuable jobs are cut. It will put people out of work, and we should care about these people, too.

(A business owner, whether he runs a restaurant, a non-profit, a laundromat, an accountant’s office, a corporation has to respond if costs change. Increasing the hourly wage = increase in expenses. People responsible for their organization have to either bring in more money to keep the same people employed, but that’s not always possible.  They’ll need to find a way to get expenses below income so they don’t go out of business.  We know that many will cut out jobs to make up for the higher costs.) The biggest groups affected are of course the poorest and the youngest.

Unemployed young people lose not only the pay they could have earned but, at least equally important, the work experience that would enable them to earn higher rates of pay later on.

When I was growing up and in high school, you could get a job and earn pocket money with a paper route, part time service job, lawn mowing… I see very few options for my own children to earn money outside of us or their grandmother creating jobs for them to do around the house. I tell them there are 3 ways to earn money: 1. labor, 2. producing a product/service someone is willing to buy, or 3. selling/exchanging their assets (toys, bike, etc.)

New kind of role model: Nick D’Aloisio built an app when he was 15 and sold his startup to Yahoo at 17.

Since working for someone else (1.) is no longer an option and since (3.) is usually a dead end, my kids are looking at (2) and seeing examples of young people (like Nick D’Aloisio) who created an app or set up a YouTube channel and made their fortune or at least their future.  We’re cultivating them as entrepreneurs.  This is a good thing! Innovation can help counter the economic malaise, can challenge the crony capitalists…

I’m hoping that the lack of jobs and employment for our youth has a silver lining and will cause more folks to take charge of their own economic lives, and create new opportunities.

Libertarians Lack Compassion?

Aha. I ran across this interview with Penn Jillette (Penn & Teller) and loved what he said about Libertarians and compassion.  He has some great points here, especially about no one, Liberal, Libertarian or Conservative, being evil, simply being groups that disagree about how to solve the same problems. I’ve written it out here, but watching it is really worth it.

 

 

Here is the Penn Jillette transcript starting at 3 minute 40 secs:

…But I think the biggest misconception I find about Libertarians is that there’s a lack of compassion. And I think that…there is as much compassion among libertarians as there is among liberals. It’s not what the problems are, it’s how to solve them.

EVERYBODY wants clean, safe energy. Some people think nuclear’s the way to go; some people think coal’s the way to go, some people think wind’s the way to go, and there’s always balances on that:

Libertarians tend to put freedom as a goal in itself and also a way to obtain other goals.

Liberals tend to put security as a goal in itself and a way to obtain other goals.

Ahhh I think the biggest misconception is that libertarians – I guess the cliché would be – don’t care about the crack babies.  I just think you can deal with people in trouble using compassion.

One of the things that bothers me about statism is that they take away my compassion. When you take money from me by force, run it thru the government to help other people, I think there’s less compassion that me being able to do something.

What I say about Libertarians versus Liberals is:

I will gladly help you build the library. I will not use a gun to get someone else to join us in helping to build that library. I want credit, you know, I want credit for helping. I want to feel like I’m helping, and giving money to the government does not seem like the best way to help, and forcing other people to give money to the government seems immoral to me.

I think that if I want to cure cancer, I should work on curing cancer. You can’t force other people to give money to cure cancer – then you’re not really helping, or you’re helping in a way that I don’t think is right.

So the question on healthcare was not if you saw someone lying in the street who needed help, would you run over and bandage them. The question is really if you saw someone suffering in the street, would you run, get a policeman, have that policemen find a doctor, have that doctor forced by everybody around to take a vote and then come in and help.

But I think that it’s forgotten that what everybody’s trying to do is help the people that need it.

Everybody’s trying that.  I will say that about every political group.

And I think that I would love to see the people using the word wrong more, and using the word evil less. Obama is a really good guy, a really smart guy, and every moment, every second of every day is spent trying to do what’s best. I disagree with him. But there’s no sense that he’s evil.

And this is something I’ll say that a lot of people will freak out at:

I think the same is true for George W Bush. I think every second he was trying as hard as he could to do what was best. I disagreed with him very, very intently….

To be able to say “you’re wrong and here are the reasons” is respect. To say “you’re evil” is antihuman.   Cause the people that I‘ve met in my life who are truly bad and truly evil, is such a small number. I mean, if you take the 6 billion people on the planet and round off the numbers, about 6 billion are good. 

The Myth of Liberal Compassion (David Limbaugh) – sort of gets to the point

I ran across a column by David Limbaugh from August called: The Myth of Liberal Compassion which was of course interesting to me, as that’s a big part of what sparked my blog here!

Once you wade through all the ‘Obama this, Obama that, I blame Obama’ noise and B.S., I think David Limbaugh has a point.  He basically says that Liberals are seen as compassionate, but when you look at the results of their policies, they are not helping the people they say they do.  I agree. 

David Limbaugh writes in his article: 

At some point, Obama and his fellow liberals need to be judged for the effects of their policies, not the grandiosity of their self-congratulatory rhetoric.

I’d say ALL politicians ‘need to be judged for the effects of their policies, not the grandiosity of their self-congratulatory rhetoric,’ not just liberals and Obama.

Intent matters more than outcomes in politics…It’s unfortunate that they can all use rhetoric and dress up bad results and government failures in big words…and get away with it and not have any significant consequences.

Aside: Sort of the heart of the problem – reading this book LeaderShift which suggests the 3 branches of government only work if a fourth branch exists – informed, actively engaged citizens holding the branches of government to account!

Anyway, It seems clear to me that routing charity and efforts to help those less fortunate through the government is misguided and not the best solution. Once we bureaucratize helping others and create government entities to manage it, private and local charity and efforts are starved out.

Private alternatives are more efficient, more innovative, able to adapt to particular societal changes, able to address individual situations, able to look at whether poverty is caused by misfortune or through consistent bad choices (situations that require different solutions and aid)…Private alternatives require less money/resources and are more effective.

I suggest that we wake up and stop this craziness of thinking that government is a nobler alternative, somehow not prone to human conditions of self interest, greed, bad incentives. I vote for a patchwork of voluntary, private sector organizations who can innovate, require much less in terms of funds compared to government alternatives which invariably become inefficient (you can’t kill anything off, end any programs, so it becomes costlier and costlier, and they stick around even if they stop working well)

This is a topic I’m very interested in – the paradigm says government is good, liberals are compassionate. Private sector is brutal, conservatives are selfish. This leaves no room at all for real solutions to helping people get out of poverty traps and thrive. Calling them lazy and dumb and dependent won’t get you very far either, if you want to change the default mindset and implement alternatives. Right now, any reform or voluntary alternatives that don’t fit the paradigm are ignored/dismissed/overlooked.

https://freemarketcompassion.com/2013/08/01/where-are-the-truly-compassionate-solutions-for-helping-others/

Note to David Limbaugh: aren’t you tired of blaming Obama for all problems… Obama this, Obama that. It’s a much bigger problem than one man and started ages ago, before he was born. Right now our paradigm is flawed and needs fixin.’

Compassion in the early 1800’s United States – responsibility on both sides

I’m still going on Marvin Olasky’s book and get this – in the early 1800s, compassion and helping others was very much seen as an individual responsibility and everyone’s responsibility! Imagine that.  And those in need also had to take action to help themselves.

“It was important for the better-off to know the poor individually, and to understand their distinct characters.”

It’s worth noting that in these days, communities were smaller, and people KNEW each other.  He also talks about how the sermon at church was the primary means of mass communication, and “the need to offer personal help and hospitality became a frequent subject of sermons” in colonial days.

“Congregationalist and Presbyterian sermons regularly noted that faith without works of compassion was dead. (p.7, Ch 1)”

So it was a societal expectation, back then given that most everyone practiced religion, that you had to help others if you could.

Here’s what he says:

1. If someone got sick or had a tragedy happen to their family, other people in the community would look after them completely. They’d give their time doing chores or cooking meals. They’d take in orphaned children and help women who were widowed.

2. “Decent Living” was a prerequisite to being helped!  This meant that a) you had to be a moral person (not a drunk, abuser, thief, etc.) AND that b) you had to work if you could. If someone was seen as lazy and not willing to help themselves, they wouldn’t keep giving them aid.

“The able-bodied could readily find jobs in a growing agricultural economy; when they chose not to, it was considered perfectly appropriate to pressure them to change their minds.”

Aha. Makes sense. We don’t really differentiate at ALL nowadays between a) people who are poor or struggling due to tragedies or due to being born into bad circumstances and b) people who are poor due to their own inaction and/or consistent bad choices, or due to not wanting to work.

Wow, it’s probably heresy to even write down that the second category exists. Funny isn’t it?

I’ve done a fair amount of self-development courses over my lifetime: did Landmark Education, have been to Byron Katie’s workshops, listened to Anthony Robbins, even in my teens went to SuperCamp down in LA., as my parents wanted to help me see the possibilities for my life…ALL of these different approaches remind you that YOU and no one else is responsible for your life.  You can’t control external circumstances all the time (i.e. whether your husband has a subarachnoid hemorrhage when your son is 11 months old and won’t be able to work for the rest of his life). They tell you to focus on what you CAN do, what you can control -your own goals, motivations, actions, outlook.

So when I see non-profits with a goal ‘to end poverty in the world’…my first thought is always you can’t rid of all poverty!  You can’t stop or prevent the poverty that comes from being able to sit on the couch all day, watching TV or surfing the web and not taking any action.  I could choose to stop going to work, just watch movies and play with my kids all day.  I’d eventually get fired, lose my job…I could make our family poor in about 6 months; probably less, if I bought a lot of stuff online, took out some credit cards…Individual choice of course impacts whether someone is poor or not.

Most of the dialogue around fighting poverty doesn’t ever mention this, does it?  But labeling people as lazy or irresponsible and writing them off is judgmental, self-righteous, and unproductive.  I can imagine that in the 1800’s, you could get labeled as a ‘good-for-nothing’ and then be in big doo doo. We COULD, however, ensure that people are active participants in turning their lives around, that they build a growth/empowered mindset, and that there are consequences for their choices. That sounds like a good idea.

One recent example where the charity organization DOES require people to show individual responsibility:  Homeboy Industries, led by Father Boyle, in Los Angeles.  I’ve read his book, Tattoos on the Heart: the Power of Boundless Compassion.  If former gang members want to turn their lives around, Homeboy Industries requires them to make commitments in exchange.  If they are late or don’t show up to work X times (I can’t remember the exact number) they will be let go. And they have to attend life skills classes too.  Homeboy Industries requires that they are active contributors in turning their situations around. (I think I’ve recalled the details correctly; apologies if it’s not 100 accurate, though.) I was lucky enough to hear Father Boyle talk a few years ago at an IABC Los Angeles event.)Father Boyle is a Jesuit priest, by the way, for those of you who now distrust and dismiss Christianity as a force for good.

Thoughts? What other orgs are out there where they have recipients actively participate?  Habitat for Humanity, certainly.

Where are the truly compassionate solutions for helping others.

I’m reading Marvin Olasky’s book called The Tragedy of American Compassion, which Steve Forbes’ and Elizabeth Ames’ new book referenced! I’d never heard of it, since in 1992 I was graduating from university and busy with so many things. I’ve been asking and asking (everyone who’ll listen) my ‘compassion and the free market’ questions, but never heard about it. And here’s a book that’s exactly what I wanted to find!

So my next few posts will be related to what I’m learning and reading.

The first idea I see in the introduction:

“Americans in urban areas a century ago faced many of the problems we faced today, and they came up with truly compassionate solutions. We may not realize this, because only two kinds of books on the overall history of poverty-fighting in America are now available (emphasis added).  A few of the books argue that the free market itself solves all problems of poverty. The more conventional approach stresses government intervention to restructure economic relations. But neither kind emphasizes the crucial role of truly compassionate individuals and groups in the long fight against poverty.”

Aha! Already getting somewhere…

This is what I’ve been asking anyone who’ll listen to my spiel!  Why do we have this unspoken assumption nowadays that government is the place for compassion and helping others when it does it so badly and wastes an unbelievable amount of resources running a bad system? Why do we do this when we know codifying welfare kills innovation, other solutions, and inevitably the system will not be able to adapt an change as society and technology advances?

And why do the free-marketers not lay claim to all the voluntary compassionate activities and showcase them as alternatives to the welfare state? Why do they dismiss individual and voluntary groups working to help others – these are activities happening in the FREE market, whether for profit, non profit. Tom’s Shoes? The Salvation Army? United Way? Santa Barbara FoodBank? Jodi House? Millions of others? They certainly are not mandated, coerced governmental activities.  They are freely done and are organizations and people coming together to assist others. Yes, they’re being choked and starved out as government takes over, but clearly there is compassion and the will to help others showing in communities, still.

I went to FreedomFest this year (which was fantastic) and asked as many people as I could why Free Marketers don’t ever address the voluntary ways people and communities help one another and talk about the free market as providing better solutions to ending poverty. Well the answer: they ignore it as the best way to cure poverty is free markets where people can voluntarily exchange – this creates  value and more prosperity by far than other other system, and far more value than wealth transfers and charity…

Yes, true…I agree! But this doesn’t matter when you’re looking at suffering in the face. We need to talk about how one person who sees homeless people sleeping on the streets should/could help them. Saying ‘more prosperity and freer markets will cure this’, is not going to work. (I’m thinking of Arthur Brooks here – read his bit about how reason and the theoretical will never win an emotional argument).

So it’s time for someone to look a bit harder at to whether the possibilities that exist in the free market might work better than the centrally planned, blanket, non-compassionate, well-intentioned-but-with-massive-unintended-consequences, easily abused programs we have now…