The Four Core Beliefs of Enterprise by Lawrence W. Reed & Wayne Olson [+Video]

How to solve complex business problems.

The term tunnel vision carries such a negative connotation that no one ever really wants it, even if they’re traveling through a tunnel. We say we want to be conscious of as much of our surroundings as possible, not simply a narrow sliver. We want to perceive all the relevant factors and remain aware of new things that might improve our situation.

Alas, that’s almost always easier said than done.

Just ask Bartley J. Madden, author of a new, 122-page book, Reconstructing Your Worldview. Better yet, if you’re an aspiring entrepreneur, read the book and visit his website, or watch this insightful video:

Madden has spent decades trying to understand the business world during his career in money management, investment research, and university teaching. His longtime fascination with methods of solving complex business problems led him to realize that the way we say we want to see the world and the way we actually do are two very different things. It takes a conscious, thoughtful effort to open wide our mind’s eye, so to speak. If you learn to do it systematically, the result can be a new worldview that will reshape how you notice opportunities and capitalize on them.

Nearly 40 years ago, we heard Austrian economist Israel Kirzner lecture on his specialty, entrepreneurship. He employed an analogy we’ll never forget. He asked his audience to imagine a free, dynamic economy as a place where a quiet blizzard of 10-dollar bills is raging just overhead. Most people never notice it, but one very special kind of person does: the entrepreneur. He sees the bills and musters the courage to reach up and grab one. In other words, he deploys his “entrepreneurial alertness” to seize an opportunity: to buy low and sell high, to assemble factors of production to make a product or service worth more than its input costs, or to move a good from one place to another where it’s more desired. Perhaps an even more apt analogy would be a blizzard in which most of the flying bills are fake and worthless, and only a few are “winners.” But in any event, it’s the entrepreneur whose powers of observation are great enough to see any of them at all.

Entrepreneurial alertness is essentially what Madden implores us to cultivate. We must start by recognizing what he calls “the four core beliefs” we need to solve problems in business:

  1. Past experiences shape our current assumptions.
  2. Language is perception’s silent partner.
  3. Improving any system’s performance requires that we identify and fix its key constraints.
  4. Human behavior is purposeful; we act not simply in response to stimuli (much as a ball rolls in the direction in which it’s pushed) but in a conscious, living fashion. We compare our actual experiences to our preferred experiences and then act to create new experiences that come as close to the preferred ones as possible.

These four core beliefs are more profound than Madden believes we commonly assume.

Each teaches a vital lesson. On a whole, their underlying message for economics concerns how innovation develops when the market is open to new entrants. Established businesses get caught up in the same old ways of looking at the world and the opportunities for value creation. So do government bureaucracies, but the difference is that government bureaucracies tend to institutionalize the conventional ways of looking at the world and create barriers to anyone trying to change them; private industries who fail to change will be swept away.

The book is thoroughly researched and rich with citations that allow the reader to pursue the subject in depth. Madden even delves into how people form beliefs and act on them, using the latest findings.

He beautifully illustrates the first two of the four core beliefs with a Kmart-versus-Walmart example. Kmart’s management had in their minds the word “store” and defined it in ways they’d always seen a “store” behaving and delivering profitable results for them: freestanding and run independently by its own manager. So they stuck to that business model, namely: put a big box in a big town and assume that is necessary for generating the desired economies of scale. In contrast, as Madden explains, “in Sam Walton’s worldview, each store was an integrated part of a networked system” that could create value in the wide-open small-town markets.

A “worldview” is not about one innovative idea that turns out well, but about openness to experimentation and knowledge building. Madden continues, “Walmart’s networked system of stores and distribution centers resulted in fast-paced learning and high efficiencies.… Over time, Walmart greatly expanded and improved its business processes at a far more rapid pace than did Kmart,” eventually leaving Kmart in the dust, even in the larger towns.

The third core belief is that in order to make a complex process create more value, it’s not enough to pick individual components and improve them; you have to identify where the constraints are in the process. If the bottleneck is at process B in the production line, improving the efficiency of process A will merely increase the size of the problem at process B. The problem is that the managers of process A in centralized operation have every incentive to propose “improvements” that actually create no value.

Madden follows this thought to an in-depth discussion of the merits of distributed systems over centrally planned systems, including “lean thinking” concepts, where he makes this key point: “A lean culture has a horizontal orientation in order to better coordinate work and reduce waste along the entire value streams that end with the customers.… In contrast, a command-and-control orientation is composed of vertical silos with incentives to improve local efficiencies.”

Placing this belief in a much broader context, he observes that “nature has a propensity for distributed solutions” and, echoing Hayek, “when a society’s institutions evolve through a naturally “evolutionary” process, rather than one of an imposed human design, the result tends to reflect decentralization and a selection of whatever works best.”

The fourth core belief should appeal to all those who have read Ludwig von Mises’s magnum opus, Human Action or are even moderately familiar with the central insights of the Austrian school that Mises represents. When you’re dealing with people, you’re dealing with independent actors who will respond to stimuli according to their own “control systems,” which Madden likens to a thermostat. Their reaction to something depends on whether it will move them closer to a desired state that represents their goals. So you can’t ignore the incentives — you can’t move people around like pieces on a chessboard, as Adam Smith’s central-planning “man of system” tries to do.

This is where government programs almost always fall down, but Madden makes it clear that private businesses can easily fall into the same trap if they’re not mindful — in which case, the market gives them the feedback that they’ve made a mistake, something that rarely if ever happens to the people running government programs.

In the summary video above, Madden offers an example in Michelin run-flat tires. Company managers got trapped in their historical line of thinking and their accustomed vocabulary: engineering breakthrough in tire technology leads to enormous profits. They fell in love with the run-flat technology, and so, apparently, did a bunch of industry observers. You could dispense with spare tires forever! How cool is that? Michelin failed, however, to see the total value stream ending with the customer; in particular, the company failed to take into account how the customer was supposed to get a tire repaired once he experienced a flat. Repair shops have their own control systems around whether they want to invest in the physical and human capital that would be required to handle this new product. And in the end, repair shops decided not to, so the product was dead on arrival.

One outstanding example of a dysfunctional interruption in the value stream from manufacturers to customers is the approvals process for new pharmaceuticals at the Food and Drug Administration (FDA). Madden has fully discussed this problem and a practical means to overcome some of the worst effects in his earlier book (see Reed’s review of Free to Choose Medicine). And in the final chapter of his current book, he demonstrates that the situation at the FDA is an excellent case study in the violation of the principles underlying the four core beliefs.

If you take Madden’s advice and reconstruct your worldview through the prism of his four core beliefs, you’re likely to think and behave more like a seasoned entrepreneur. Success becomes more probable, though never assured in an uncertain world. In an age in which changes happen fast, labor and capital are more mobile than ever, and technology opens doors widest to those who grasp it first, every little bit helps.

larry reed new thumbABOUT LAWRENCE W. REED

Lawrence W. (“Larry”) Reed became president of FEE in 2008 after serving as chairman of its board of trustees in the 1990s and both writing and speaking for FEE since the late 1970s. Prior to becoming FEE’s president, he served for 20 years as president of the Mackinac Center for Public Policy in Midland, Michigan. He also taught economics full-time from 1977 to 1984 at Northwood University in Michigan and chaired its department of economics from 1982 to 1984.


Wayne is FEE’s Executive Director.

EDITORS NOTE: The featured image is courtesy of FEE and Shutterstock.

CLICHÉS OF PROGRESSIVISM #31 – “Labor Unions Raise Wages and the Standard of Living” by Hans F. Sennholz

To believe that labor unions actually improve the lot of working people is to suggest that the capitalist economy fails to provide fair wages and decent working conditions. It is to imply that a free economy does not work satisfactorily unless it is “fortified” by union activity and government intervention.

The truth is that the unhampered market society allocates to every member the undiminished fruits of his labor. It does so in all ages and societies where individual freedom and private property are safeguarded. (The process works faster and more efficiently in our high-tech, information age with a labor force more mobile than ever before but it worked in previous times too, so long as individuals were free to accept or reject the offers of employers, or to leave one employer and work either for another or for himself–Editor.)

The reason your great-grandfather earned $5 a week for 60 hours of labor must be sought in his low productivity, not in the absence of labor unions. The $5 he earned constituted full and fair payment for his productive efforts—a voluntary contract he likely entered into because it represented his best opportunity. The economic principles of the free market, the competition among employers, a man’s mobility and freedom of choice, assured him full wages under the given production conditions.

Wages were low and working conditions primitive because labor productivity was low, machines and tools were relatively primitive, technology and production methods were crude when compared with today’s. If, for any reason, our productivity were to sink back to that of our forebears, our wages, too, would decline to their levels and our work week would lengthen again no matter what the activities of labor unions or the decrees of government.

In a free market economy, labor productivity determines wage rates. As it is the undeniable policy of labor unions to reduce this productivity (as measured per man-hour) by forcing compensation up or spreading out the work with restrictive work rules, they have in fact reduced the wages of the masses of people although some privileged members have benefited temporarily at the expense of others. This is true especially today when the unions enjoy many legal immunities and considerable political powers. And it also was true during the nineteenth century when our ancestors labored from dawn to dusk for low wages.

Through a variety of coercive measures, labor unions merely impose higher labor costs on employers. The higher costs reduce the returns on capital and curtail production, which curbs the opportunities for employment. This is why our centers of unionism are also our centers of highest unemployment; they are also the industries that have seen the most dramatic declines in numbers of existing jobs, because like anything else, the higher the price, the less will be purchased. (It’s also why compulsory unionism states for years have shown lower rates of both employment growth and wage rates than so-called “right-to-work” states. See  – Editor.)

True enough, the senior union members who happen to keep their jobs do enjoy higher wages. But those who can no longer find jobs in unionized industries then seek employment in nonunionized activity. This influx and absorption of excess labor tends to reduce their wages. The resulting difference between union and nonunion wages rates gives rise to the notion that labor unions must indeed benefit workers. In reality, the presence of the nonunionized sectors of the labor market hides the disastrous consequences of union policy by preventing mass unemployment. (Nonetheless, with 94% of today’s private sector workers being completely non-union, and many of them enjoying very high wage rates, it’s increasingly difficult for unions to argue that workers without unions are exploited and unprotected. – Editor.)


  • Wages can only be paid out of what is produced (no production, no wages), therefore greater productivity is the key to higher wages.
  • Unions typically hamper production. Union activity may result in some people getting more but without an increase in productivity, that simply means that some other people must get less. Either you bake a bigger pie for everybody or you just slice the pie up differently.
  • It looks sometimes like unions have actually forced wages higher because of the lower wages in non-unionized businesses. But the latter are caused in part by the outflow of labor from unionized sectors to non-unionized ones. Unionized auto-workers today, for example, may make a little more per hour than their nonunionized counterparts but there are a lot fewer of them too!

For further information, see:

“Why Wages Rise—Part I” by F. A. Harper

“Why Wages Rise—Part II” by F. A. Harper

“Can Labor Unions Really Raise Wages?” by Henry Hazlitt


Editor’s Note: This essay, with minor updates, was first published in the 1962 book, “Cliches of Socialism.” Prior to serving as president of the Foundation for Economic Education from 1992 to 1997, the late Hans F. Sennholz was chairman of the department of economics at Grove City College in Pennsylvania from 1956 to 1992. A noted economist and teacher of the “Austrian” school, he earned his PhD under the tutelage of Ludwig von Mises. Read more about him here. The featured image is courtesy of FEE and Shutterstock. 

FL, GA Education Ethics Differ on Sexual Harassment?

Based on primary source documents and information from the Education Practices Commission of the State of Florida and the Georgia Professional Standards Commission, the penalty for a specific sexual harassment case seems to vary greatly with a wide range of extremes between the two states.

Former Miami-Dade County Public Schools assistant principal at Miami Central Senior High School and current principal/director with Clayton County (GA) County Public Schools Melvin K. Blocker received two vastly different outcomes stemming from a case of alleged sexual harassment from the 2007-2008 and 2008-2009 school years.

According to the Florida EPC’s Final Order:

During the 2007-2008 and 2008-2009 school years, Respondent served as a principal of a public school in the state of Georgia. During this time, Respondent sexually harassed a teacher. Respondent’s conduct included, but was not limited to, stating that the teacher “was the kind of girl [he] and [his] friends would have run a train on in college,” or words to that effect.

Respondent retaliated against the teacher for seeking conciliation of her grievances. Respondent stated, “teachers who went to [Georgia Association of Educators] about issues no longer work at [Respondent’s] school,” or words to that effect.

As a result of this conduct, Case PSC 09-7-11 was opened, and the Georgia Professional Standards Commission found probable cause against Respondent.

The Georgia Professional Standards Commission and Respondent entered into an agreement with respect to Case PSC 09-7-11. On or about June 30,2010, the Georgia Professional Standards Commission issued a Consent Order suspending Respondent’s educator’s certificate for five days, from June 8, 2009 through June 12, 2009.”

The Georgia Professional Standards Commission did indeed suspend his certificate for five days, which seems to many like a slap on the wrist.

To Florida’s credit, the Education Practices Commission permanently revoked his Florida Educator’s Certificate on October 15, 2014.

Why the stark difference?

According to the Georgia Professional Standards Commission, Mr. Blocker may indeed be in trouble given the teacher certification rules, which state:

The Clearance certificate is issued at the request of a the employing Georgia local unit of administration (LUA) to educators who satisfactorily complete fingerprint and background check requirements and do not have a certificate that is currently revoked or suspended in Georgia or any other state. All educators employed by a Georgia LUA must hold a Clearance certificate. There are no academic requirements necessary to qualify for this certificate. All holders of this certificate are subject to the Georgia Code of Ethics for Educators.”

Strangely enough, the Florida EPC Final Order states copies were furnished to other related Florida Department of Education entities but not to the Georgia Professional Standards Commission- unless a separate communiqué was sent and not mentioned.

It will be interesting to see what course of action the Georgia Professional Standards Commission decides to take.

A reasonable person may conclude that they would not want a female relative or significant other in Mr. Blocker’s employ or purview.

Though these incidents have occurred 5-7 years ago, has Mr. Blocker truly learned the error of his ways or have other incidents occurred and were covered up and/or repressed afterwards?

Time, and a thorough investigation, will tell.

Sarasota School District Scandal: Board members, former superintendent, staff, teachers, union implicated in improper use of email system for political purposes

As a result of information uncovered by Citizens for Sarasota Schools, multiple emails demonstrate the politicization of the Sarasota County School Board, the Administration, and the school district down to lower level employees. Numerous Sarasota County School District employees and administrators ignore the law and have used public property for political purposes to fund raise, recruit volunteers, campaign and promote the candidacy of one of their own bureaucrats, Ken Marsh, during school hours.

The Sarasota County Schools Information Technology Guidelines and Procedures, page 28, under the heading “Appropriate Use of E-mail” states the following:

Sarasota County Schools guidelines prohibit certain types of e-mailThese include mail that may be perceived as harassment, political campaigning, or commercial solicitation. Chain mail is also prohibited. Violators will be subject to loss of computer access privileges, as well as additional disciplinary action as determined by the Sarasota County Schools disciplinary procedures. Certain types of e-mail, including but not limited to harassing e-mail, may also subject the sender to civil or criminal penalties. [Emphasis added]

Copies of emails obtained by Citizens for Sarasota Schools show Sarasota County School Board members Shirley Brown and Caroline Zucker violated school board policy on use of the email system. Also implicated is former district superintendent Wilma Hamilton. District Director Gary Letterman was implicated in violating the policy by drafting and editing a fundraising letter for the Ken Marsh campaign. Multiple employees of the school system, some union representatives, have repeatedly violated school board policy.

The following are some examples of the improper use of the Sarasota County School District resources for political purposes:

September 9, 2014

Gary Leatherman, the Director of Communications and Community Relations for the Sarasota County School District uses the Sarasota County School District Email System to confirm a commitment to submit a political donation to the Ken Marsh Campaign, as well as to assist in the drafting and editing of a fundraising letter for the Ken Marsh Campaign. Email sent during school hours. (Page 294-302)

September 9, 2014

Gary Leatherman, the Director of Communications and Community Relations for the Sarasota County School District uses the Sarasota County School District Email System, during business hours, to work directly with the Ken Marsh for School Board Campaign to draft and edit a fundraising letter and suggest attacks on School Board Member Bridget Ziegler. His official title & government position appears in the email.
(Page 105-108)

September 10, 2014

Gary Leatherman, the Director of Communications and Community Relations for the Sarasota County School District uses the Sarasota County School District Email System to communicate directly with School Board Candidate Ken Marsh, Ann Hankinson (who appears to be a Ken Marsh campaign volunteer & school district employee) & Gabriel Hament (who we believe is acting as Ken Marsh’s campaign manager & has hosted a fundraising for Ken Marsh). Sent during school hours. (Page 131-133)

September 10, 2014

Gary Leatherman, the Director of Communications and Community Relations for the Sarasota County School District uses the Sarasota County School District Email System, during business hours, to work directly with the Ken Marsh Campaign to draft and edit a fundraising letter and suggest attacks on School Board Member Bridget Ziegler. In the email, he states “Good Job”. His official title & government position appears in the email. (Page 136)

September 21, 2014

Gary Leatherman, the Director of Communications and Community Relations for the Sarasota County School District uses the Sarasota County School District Email System to directly receive a campaign update from the Ken Marsh Campaign. Continues to show pattern of coordination between Gary Leatherman, in his official capacity, working with the Ken Marsh Campaign. (Page 172-173).

Additional abuses (there are numerous other examples).

August 13, 2014

Lisa Saul uses the Sarasota County School District Email System to forward endorsements and attacks on the Tea Party and various candidates. Sent during school hours. (Document 1 Page 76-78)

September 11, 2014

Shari Dembinski (looks to be Union Rep) uses the Sarasota County School District Email System to forward an attack on Bridget Ziegler and a list of contributors to Bridget Ziegler’s campaign. Recipients are encouraging to share with non-union members. (We suspect this is what caused an organized effort to threaten the boycott of businesses supporting the Bridget Ziegler for School Board campaign. Numerous businesses reported receiving countless calls threatening a boycott of their establishment if they did not stop donating and/or displaying a Bridget Ziegler campaign sign. (Document 1 Page 81-82)

September 12, 2014

Shannon Wynne, a School District Employee, uses the Sarasota County School District Email System to falsely attack Bridget Ziegler and one of her contributors. Sent during school hours. (Document 1 Page 98-99)

September 12, 2014

Joette Riggs, a school district employee, uses the Sarasota County School District Email System to attack Bridget Ziegler and a contributor to the Bridget Ziegler Campaign. Sent during school hours. (Document 1 Page 112-114)

And why not? The politics and illegal misuse of taxpayer funded public resources starts at the top.

August 27, 2014

Wilma Hamilton, former Superintendent of the Sarasota County District, uses the Sarasota County School District Email System to book a hotel room for Ken Marsh & his wife Tanice Knopp. Why is she booking them a room? Was this disclosed on his campaign finance report? (Page 47-49)

August 21, 2014

Sarasota County School Board Member Shirley Brown uses the Sarasota County School District Email System in her official capacity as a School Board Member to endorse three Sarasota County School Board Candidates. (Page 56-57)

August 23, 2014

Sarasota County School Board Member Shirley Brown uses the Sarasota County School District Email System in her official capacity as a School Board Member to notify Marie Baia, a School District Employee, about political endorsements received by Ken Marsh, School Board Member Jane Goodwin and herself. (Page 248-249)

August 21, 2014

Sarasota County School Board Member Caroline Zucker uses the Sarasota County School District Email System, in her official capacity as a School Board Member, to endorse political candidate for office.

October 3, 2014

SB Member Caroline Zucker sharing who she voted for in the SB race Goodwin-Brown-Marsh when asked for recommendations (Page 297 – Document 3)

The Sarasota School System has far too long gone unexamined and been poorly managed. This has created a culture where the School Administration and School Board believe it is unaccountable.

For example, the Board regularly takes workshop meetings off video recording, decamps to another building, settles into a much smaller conference room, and in this “shade” conducts public meetings.

The Sarasota School Board does not post and stream complete workshops and Board Meetings — which is regularly done by other government bodies. And yet, they self-congratulate themselves even when close to 22% of students fail to graduate. This is only 3% better than the rest of Florida.

Perhaps it is time they stop politicking and start educating.

EDITORS NOTE: To read the full list of emails click here, here and here.

PUBLISHERS NOTE: I, Dr. Rich Swier, regret having used the term “illegal” in this and any other article to describe actions by Ms. Pat Gardner and the SC/TA.

Raise the Minimum Wage? A Socratic Dialogue by Lawrence W. Reed

The ancient sage Socrates, a giant in the foundation of Western philosophy, was known for a teaching style by which he aggressively questioned his students. He employed his Socratic method as a way to stimulate logical, analytical thought in place of emotive or superficial pronouncement. Rather than lecture or pontificate, he would essentially interrogate. The result was to force his Greek pupils to see the full implications of their conclusions or to realize that what they had accepted as solid was nothing more than the intellectual equivalent of crumbled feta.

In his January 28 State of the Union speech, President Obama called upon the U.S. Congress to enact a hike in the hourly minimum wage from $7.25 to $10.10. (The dime may have been added because a nice round number without a decimal would sound unscientific.) Economists have long argued that raising thecost of labor, especially for small and start-up businesses, reduces the demand for labor (as with anything else). But Congress may do it anyway—with the usual, oversized measure of self-righteous breast-beating about helping workers. Maybe what members of Congress need is not another lecture on the minimum wage from an economist, but rather an old-fashioned Socratic inquisition. If the old man himself were with us, here’s how I imagine one such dialogue might go:

Socrates: So you want to raise the minimum wage. Why?

Congressman: Because as President Obama says, minimum wage workers haven’t had a raise in five years.

Socrates: Can you name one single worker who was making $7.25 five years ago who is still making $7.25 today? And if you can’t, then please tell me what caused their wage to rise if Congress didn’t do it. Come on, can you name just one?

Congressman: I don’t happen to have a name on me, but they must be out there somewhere.

Socrates: Well, we’ve just been through a deep recession because successive administrations from both parties, plus you lawmakers and your friends at the Fed, created a massive bubble and jawboned banks to extend easy credit. The bust forced many businesses to cut back or close. Now we have the weakest recovery in decades as ever-higher taxes, regulations, and Obamacare stifle growth. No wonder people are hurting! Do you take any responsibility for that, or do you just issue decrees that salve your guilty conscience?

Congressman: That’s water over the dam. I’m looking to the future.

Socrates: But how can you see even six months into a murky future when you refuse to look into the much clearer and more recent past? You guys think the world starts when a problem arises, as if you’re incapable of analyzing the problem’s origin. Maybe that’s why you rarely solve a problem; you just set everybody up to repeat it. If you really look to the future, then why didn’t you see this situation coming?

Congressman: Look, in any event, $7.25 just isn’t enough for anybody to live on. Workers must have more to meet their basic needs.

Socrates: An employer doesn’t have anything to pay an employee except what he first gets from paying customers. I wonder, whose “needs” do you consider when you decide to buy or not to buy: the workers’ or your own? Have you ever offered to pay more than the asking price just to help out the guy who made the product? And if customers like you won’t do that, where do you expect the employer to get the money?

Congressman: That’s not a fair question. My intent here is purely to help.

Socrates: Sounds to me like the answer is “no,” but let’s move on. Why do you assume your intentions mean more to a worker than those of his employer? It’s the employer who’s taking the risk to offer him a job, not you. You’re only making speeches about it. Don’t you see a little hypocrisy here—you, who are personally offering no one a job, self-righteously criticizing others who are actually creating jobs and paying wages even if they’re not all at a wage you like?

Congressman: Employers are interested only in profits.

Socrates: Are you saying employees are not? Are they more interested in working for companies that lose money, and if so, then why don’t they all line up for government jobs?

Congressman: Well, we lose money here in government every year and there are plenty of people who are happy to work for us.

Socrates: You have a printing press. You also have a legal monopoly on force. When you borrow in the capital markets, you shove yourself to the head of the line at everybody else’s expense. Are you saying these are good things and that we’d be better off if the private sector could do these things too? Try to keep up with me here.

Congressman: I repeat, employers are interested only in profits. People before profits, I say! I even have a bumper sticker on my car that says that.

Socrates: So are you saying that employers would be better people if, instead of seeking profits, they tried to break even or run at a loss? How does that add value to the economy or encourage risk-takers to start a business in the first place?

Congressman: You’re trying to belittle me but I went to a state university. All of my sociology, political science and gender studies professors told us that raising the minimum wage is good.

Socrates: Were any of those tenured, insulated, and government-funded pontificators actual job-creating, payroll tax-paying entrepreneurs themselves, ever?

Congressman: That’s beside the point.

Socrates(Sigh.) Figures.

Congressman: Look, $10.10 isn’t much. I think you must be mean-spirited and greedy if you don’t want people to be paid at least $10.10.

Socrates: Yeah, like you guys in government check your personal ambitions at the door when you take office. I’d like to know how you arrived at that number. Was it some sophisticated equation, divine revelation or toss of the dice? Why didn’t you choose $20.00, which is not only a nice round number but also a lot more generous?

Congressman: Well, $20.00 would be too high, for sure. Too much of a jump at once.

Socrates: It sounds like you think the cost of labor might indeed affect the demand for it. Good! That’s progress. You’re not as oblivious about market forces as I thought. What I want to know is why you apparently don’t think higher labor costs matter when you raise the minimum wage from $7.25 to $10.10. Do you think everyone, regardless of skill level or experience, is automatically worth what Congress decrees? Do you believe in magic, too? How about tooth fairies?

Congressman: Now hold on a minute. I’m for the worker here.

Socrates: Then why on earth would you favor a law that says if a worker can’t find a job that pays at least $10.10 per hour, he’s not allowed to work?

Congressman: I’m not saying he can’t work! I’m saying he can’t be paid less than $10.10!

Socrates: I thought we were making progress, but perhaps not. Can you tell me, if your scheme becomes law, what happens to a worker whose labor is worth only, say, $8.10 because of his low skills, lack of education, scant experience, or a low demand for the work itself? Will employers happily employ him anyway and take a $2.00 loss for every hour he’s on the job?

Congressman: Businesses need workers and $2.00 isn’t much, so common sense and decency would suggest that of course they would.

Socrates: So employers who employ people are too greedy to pay $10.10 unless they’re ordered to, but then when Congress acts, they suddenly become generous enough to hire people at a loss. Who was your logic instructor?

Congressman: Can we hurry this up? I’ve got other plans for other people I have to think about.

Socrates: I give up. You congressmen are incorrigible. You’re the only people on whom my teaching method has no discernible impact.

Congressman: You ask too many questions.

At this point, in utter frustration, Socrates drinks the hemlock. The congressman votes to price many of the nation’s most vulnerable employees out of work and gets reelected.

Whoever warned us to beware of Greeks bearing gifts apparently never met a congressman.

larry reed new thumbABOUT LAWRENCE W. REED

Lawrence W. (“Larry”) Reed became president of FEE in 2008 after serving as chairman of its board of trustees in the 1990s and both writing and speaking for FEE since the late 1970s. Prior to becoming FEE’s president, he served for 20 years as president of the Mackinac Center for Public Policy in Midland, Michigan. He also taught economics full-time from 1977 to 1984 at Northwood University in Michigan and chaired its department of economics from 1982 to 1984.

EDITORS NOTE: The featured image is courtesy of FEE and Shutterstock.

Equal Work? Government Has No Idea What That is

“Equal pay for equal work!” the mantra goes. “Women get only 73 cents on a man’s dollar!” These are oft-heard slogans, and we may well hear them again during the fall campaign with the War on Women afoot. Now, going beyond the rhetoric, it’s not widely known but nonetheless true that the intersex pay gap is attributable to different career choices men and women make: women tend to choose less lucrative fields (e.g., soft sciences instead of hard ones), work shorter hours even when “full time,” are more likely to value personal fulfillment and job flexibility over money, are more inclined to take time off, generally have less job tenure and more often decline promotions. But while I’ve examined these factors at length in the past, the topic today is something more fundamental. This is that there would be a problem with even a well-intended equal-pay-for-equal-work scheme:

Hardly anyone knows what equal work is.

And the government hasn’t the foggiest idea.

Recently I mentioned how women tennis players now receive the same prize money as the men at Grand Slam events (Wimbledon; and the US, French and Australian opens) and how this is hailed as a victory for “equality.” Yet since the women still only play best of three sets but the men best of five, this actually means the men must work longer for the same pay. Even this, however, doesn’t truly illuminate the issue: what actually constitutes “equal work” in professional tennis?

I’ll introduce the point with another example. The top 10 female fashion models earned 10 times as much as their male counterparts in 2013. Is this unequal pay for equal work? Not really.

While I don’t know if women models’ job is more labor intensive, I know they don’t get paid because they’re capable of posing, wearing clothing, standing under hot lights or parading down runways. It’s because their “work” helps to satisfy a market — and it satisfies a bigger market than the men’s work does.

Note here that while people today frown upon discrimination based on innate qualities, integral to doing the women models’ work is being female. If the male models were women, they might be able to do the same “work” and satisfy the market equally.

Likewise, does the “work” in tennis directly have to do with number of sets played? As an aspiring 12-year-old tennis nut, I’d sometimes play 10 sets a day under the sweltering summer sun, but no one thought of compensating me and I never felt oppressed. Professional tennis players earn money because they satisfy a market, and the men’s “work” does this more effectively than the women’s. And how would we characterize this more valued work?

It is success on the men’s tour — people want to see the grandest stage in the game.

Thus, the only way a woman in tennis could do work equal to that of Roger Federer or Rafael Nadal is to compete on, and succeed equally on, the ATP Tour. Of course, a woman who could would not only enjoy the same prize money (it’s greater in men’s tennis overall), but would become a sporting sensation and might very well receive endorsements dwarfing the men’s. So her “work” then could actually be greater.

There are endless more mundane examples. A woman gynecologist I know will only hire female assistants because she believes it makes her patients more comfortable. Not only is this an example of why sex discrimination is often justifiable, but what if she was forced to hire a man? If the patients were indeed less comfortable — and, therefore, perhaps less likely to visit her practice — would that man truly be doing “equal work”?

Now consider female police officers. Forget for a moment that standards on forces were long ago lowered to accommodate women based on “disparate impact” theory and that Eric Holder is currently suing the Pennsylvania State Police for treating women equally. Imagine a study found that people in general, and the criminally inclined in particular, found male officers more imposing and therefore were more likely to mind their p’s and q’s around them. Would, then, even a highly competent female officer be able to perform “equal work”? And if not, and reflecting the phenomenon with fashion models, wouldn’t being male (or at least appearing so, to head the “transgender” argument off at the pass) be integral to the “work” of policing?

What of a female reporter in male athletes’ locker rooms? Not only wouldn’t it be allowed if the sexes were reversed, but if those men were less comfortable and less likely to be forthcoming in their comments — or even if they just had to modify their behavior — could her “work” really be equal to that of a male reporter’s?

Next, my local hardware store provides knowledgeable workers, all men, who render valuable advice on products and how to perform various home repairs. If it was determined that people found a female in that role less credible and were then not quite as likely to buy from the establishment, would even a highly competent woman be able to do “equal work” in that capacity?

What about the little West Indian restaurant, with all-black workers, I loved when I spent a few weeks in Tampa? If hiring a white person made the eatery seem less authentic and negatively affected its appeal, would that individual be able to do “equal work”? The same, of course, could be asked about a black person working in a German restaurant. In these cases race would be integral to the “work.”

And what of a homosexual Boy Scout troop leader? If his presence made parents less likely to enroll their boys in the organization, could he be capable of “equal work”?

Of course, one knee-jerk reaction here is to say that people “shouldn’t” view female cops or hardware specialists, or homosexuals differently than anyone else. But this is a moral argument of questionable morality, as it applies a bias in selectively objecting to market biases. People take little issue with gynecologists or day-care centers that won’t hire men, with male models being paid less or with ethnic restaurants hiring only non-whites. But try only hiring only male cops or employees; compensating a male hardware specialist more handsomely; or, as with Abercrombie a few years back, valuing employees who don’t wear hijabs over those who do. You may have an experience with the DOJ or EEOC that’ll make a dance with the IRS seem pleasant.

We could also talk about how we “should” value work. If we were deific or at least angelic, we would certainly value a mother-of-four’s labors or Mother Teresa’s loving charity more than Facebook and completely devalue rappers’ vulgarity. And even though I earn less than mainstream-press profferers of pablum, I consider my work infinitely more valuable. But flawed though market determinations may be, they’re still the best guide available.

Even within this worldly context, though, some may say there’s more nuance to the matter of work than my examples express. They may contend, for instance, that female police and hardware specialists might have strengths that counterbalance or even outweigh their weaknesses. And guess what?

I agree.

My examples could possibly be lacking.

And this just buttresses the point: virtually no one — if anyone — can properly assess what constitutes equal work in every situation.

This is yet another reason why the matter of work and pay is none of the government’s business. Are bureaucrats, politicians and judges qualified to determine what equal work might be in the thousands of professions in America? Government isn’t God; it’s not even the market, which can be defined as economic democracy expressed through purchasing decisions. When it intrudes into the economy it’s more like Hitler trumping his generals during WWII and deciding on military strategy: an autocratic agency as incompetent as it is arrogant.

Contact Selwyn Duke, follow him on Twitter or log on to

EDITORS NOTE: The featured image is of students and teachers uniting on the streets to protest for equality. Picture Credit

CLICHÉS OF PROGRESSIVISM #21 – “Capitalism’s Sweatshops and Child Labor Cry Out for Government Intervention” by Paul L. Poirot

Prevalent in the United States and other industrialized countries is the belief that without govern­mental intervention, such as wage and hour legislation, child labor laws, and rules concerning work­ing conditions for women, the long hours and grueling conditions of the “sweatshop” would run rampant.

The implication is that legislators, in the days of Abraham Lin­coln, for instance, were cruel and inconsiderate of the poor—no better than the caricatured fac­tory owners of the times who would employ men and women and children at low wages, long hours, and poor working conditions. Otherwise, had they been humani­tarians, legislators of a century ago and earlier would have prohibited child labor, legislated a 40-hour work week, and passed other laws to improve working condi­tions.

But the simple truth is that legislators of a few generations ago in the United States were powerless, as Mao or Nehru or Chavez or Castro has been powerless in more recent times, to wave a wand of restrictionist legislation and thereby raise the level of living and abolish poverty among the people. If such a miracle were pos­sible, every dictator and every democratically chosen legislator would “push the button” without hesitation. (Editor’s note: See the recommended readings below for abundant historical evidence of this point).

The reason why women and children no longer find it neces­sary to work for low wages under poor conditions from dawn to dusk six days or more a week is the same reason why strong healthy men can avoid such onerous labor in a comparatively free industrialized society: surviving and earning a living are made easier through the use of tools and capital accumu­lated by personal saving and in­vestment.

In fiction, the children of na­ture may dwell in an earthly para­dise; but in the real life of all primitive societies, the men and women and all the children strug­gle constantly against the threat of starvation. Such agrarian econ­omies support all the people they can, but with high infant mortal­ity and short life spans for all survivors.

When savings can be accumu­lated, then tools can be made and life’s struggle somewhat eased—industrialization begins. And with the growth of savings and tools and production and trade, the pop­ulation may increase. As incomes rise and medical practices im­prove, children stand a better chance of survival, and men and women may live longer with less effort. Not that savings are ac­cumulated rapidly or that indus­trialization occurs overnight; it is a long, slow process. And in its early stages, the surviving women and children are likely to be found improving their chances as best they can by working in factories and so-called sweatshops. To pass a law prohibiting such effort at that stage of development of the so­ciety would simply be to condemn to death a portion of the expand­ing population. To prohibit child labor in developing countries today would be to condemn millions to starvation.

Once a people have developed habits of industry and thrift, learned to respect life and prop­erty, discovered how to invest their savings in creative and pro­ductive and profitable enterprise, found the mainspring of human progress—then, and only then, after the fact of industrialization and a prosperous expanding econ­omy, is it possible to enact child labor laws without thereby pass­ing a death sentence.

A wise and honest humanitarian will know that poverty (and worse) lurks behind every minimum wage law that sets a wage higher than some individual is capable of earn­ing; behind every compulsory 40-hour week rule that catches a man with a family he can’t support ex­cept through more than 40 hours of effort; behind every legislated condition of employment that forces some marginal employer into bankruptcy, thus destroying the job opportunities he otherwise afforded; behind every legal ac­tion that virtually compels retire­ment at age 65.

Men will take their children and women out of sweatshops as fast as they can afford it—as fast as better job opportunities develop—as fast as the supply of capital available per worker increases. The only laws necessary for that purpose are those that protect life and private property and thus encourage personal saving and in­vestment.

To believe that labor laws are the cause of improved living and working conditions, rather than an afterthought, leads to harmful laws that burden wealth creation, sap the incentive of the energetic, and close the doors of opportunity to those least able to afford it. And the ultimate effect is not a boon to mankind but a major push back toward barbarism.

Paul L. Poirot


  • Sweatshops and child labor were commonplace in preindustrial, precapitalist days because production and productivity were so low, not because people disliked their wives and children more than they do today.
  • Savings, investment, and economic growth improve working and economic conditions faster and more assuredly than well-intentioned but misguided laws that simply close doors of opportunity.

For further information, see:

“Child Labor and the British Industrial Revolution” by Lawrence W. Reed

“Sweatshop Blues: An Interview with Benjamin Powell”

“Book Review: Child Labor and the Industrial Revolution by Clark Nardinelli” as reviewed by David M. Brown

“Why Economies Grow” by Aaron Schavey

“The Man Behind the Hong Kong Miracle” by Lawrence W. Reed


Paul L. Poirot was a long-time member of the staff of the Foundation for Economic Education and editor of its journal, The Freeman, from 1956 to 1987.

EDITORS NOTE: Paul L. Poirot was a long-time editor of FEE’s journal, The Freeman. This essay is slightly edited from the original, published there in 1963 under the title “To Abolish Sweatshops.”) The featured image is courtesy of FEE and Shutterstock.

Drought Conditions in the U.S. and Immigration

As water resources necessary for survival dwindle the U.S. Senate, in all its’ wisdom, passed legislation last year that would have doubled mass immigration levels to 2 million a year, dramatically increase worker visas and grant amnesty. Democrats are interested in poverty level voters and Republicans cheap labor. Fortunately the House refused to take up a bill which had no benefits but many negatives for the citizens that voted them into office.

In addition, contemplate what could happen if the population continues to soar.

Here is a link to an article about India, second most populated country in the world, and water their shortages. Don’t forget we are the third most populated country in the world and have 20% of all the world’s immigrants already living here.

When is enough enough?

Five Lessons K–12 Can Learn from Higher Ed by Jenna Robinson

Colleges aren’t perfect, but they can be instructive for the public schools.

U.S. colleges and universities don’t get everything right. On the whole, they’re overpriced, operationally hidebound, and ideologically stagnant. Despite those problems, American higher education does some things very well—well enough that students from around the world still choose to come to the United States to get advanced degrees.

Primary and secondary schools could learn a lot by taking a close look at some of the best practices in higher education. The underlying difference is that higher education behaves more like a free market, where individual choices and actions determine the outcome.

Here are five things that universities gets right:

1.  Students learn at their own pace. When a student gets to college or university, she arrives with a cohort of other students. They’re mostly the same age, and they’ll probably all take English 101 within their first year on campus. But that’s where the class structure ends. After English 101, students all go their own ways, taking classes to suit their particular talents and interests. Entrance exams mean that students enroll in the math or foreign language courses commensurate with their skills. And if a student flunks differential equations or organic chemistry, he doesn’t have to be held back a whole year. He moves on with the rest of his courses while he retakes the one problem class. There are even classes like “economics for non-majors” that allow students to explore a subject without taking difficult prerequisites or learning complicated methodology.

In K–12, students advance in lockstep with their peers. Students must learn all subjects at the same speed. Special talent in math or language doesn’t result in early promotion to the next level. Until students reach late middle school or early high school, they are expected to learn at exactly the same rate as their peers. And adherence to social promotion (which is allowed in half of U.S. states) means that all students advance from one grade to the next, regardless of achievement. This practice occurs despite the evidence that retaining students who fail their courses generates better outcomes for those students.

2.  Students and parents have skin in the game. Paying tuition affects parents’ and students’ behavior in two ways. First, they shop around for the best deal—not necessarily the cheapest school, but the school at which they can get the most bang for their buck. Second, paying tuition motivates students to care about their educational success (or lack thereof). No one wants to see their hard-earned dollars go down the drain—and scholars have found that this is true for money spent on higher education, particularly as a student approaches graduation. Loans, savings, and money earned from working are better motivators for students to stay in school than scholarships or grants.

If students fail their elementary school courses, they don’t have any financial stake in that failure—at least, not until very far in the future. And parents can’t easily make comparisons to tell whether they’re getting any bang for their buck. Thus, they don’t have strong incentives to hold schools and teachers accountable. More importantly, parents who send their children to public schools can’t take their education dollars elsewhere. Even if one student leaves, the school district will quickly fill her spot with someone else.

3.  Professors are required to have degrees in their field. Community college and university departments only hire professors and lecturers with degrees in the subjects they teach. Professors teaching Introduction to American Government at State U. can be expected to have a Ph.D. in political science—probably with a concentration in American politics. They also research in that same field, keeping abreast of the latest scholarship on their topic. Professors are experts in their own discipline when they enter a classroom to teach undergraduates.

In K–12 schools, many teachers have degrees in education and have spent more time studying pedagogy than the subject they teach. In many states, teachers are even rewarded with raises for getting advanced degrees—regardless of whether that degree is in their field. But the success of programs like Teach for America makes it clear that an education degree can’t substitute for good subject knowledge.

4.  Students can attend any school for which they’re qualified. College students aren’t “zoned” for particular schools. Even public colleges and universities don’t limit applications to students from certain area codes (although they often cap out-of-state enrollment). This system means that every student who chooses to go to college must weigh the costs and benefits of each option and make a decision about where to apply and attend; they cannot simply rely on a default option. Because students can choose where to attend, colleges compete to offer students what they want: good graduation rates, tuition discounts, face time with professors, and opportunities for extracurricular activities. The importance of U.S. News and World Report’s yearly college rankings is a testament to the power of education consumers’ choices.

In stark contrast, a large majority of students in most public school districts simply attend the school for which they’re zoned, and few students consider charter, private, or home-school options.

5.  Professors are paid as individuals, not as a collective. University professors in demanding fields, with unique or extraordinary talent, or with impressive resumes are paid more. Thus, the mean salary for a professor of engineering is $117,911 annually, while a history professor earns $82,944. Instructors, who do no research, earn less than tenure-track professors, who are expected to publish. Moreover, professors are evaluated on their merits when they are up for tenure. How many journal articles have they published? How good (or bad) are their student evaluations? Have they performed any administrative, advising, or outreach work to the satisfaction of the committee? University teachers receive no credit for simply sticking around for a requisite amount of time.

In K–12 public schools, however, “longevity pay” accrues to all teachers who continue to show up. Schools award tenure, in most cases, simply for teaching for a certain number of years without getting negative reviews. Most tellingly, teacher pay is rarely based on individual merit. Teachers receive raises en masse, sometimes for school performance and sometimes just because it’s a good budget year.

Higher education is by no means perfect. But by allowing some market processes, it has avoided the worst failures of the public school system. Politicians and K–12 educators should take heed.


Jenna Robinson is director of outreach at the Pope Center for Higher Education Policy.

EDITORS NOTE: The featured image is courtesy of FEE and Shutterstock.

TWO REPORTS: Teachers make up only 50% of all Education Jobs

Parents, concerned citizens and taxpayers have long been concerned about the growing number of non-teaching jobs in public schools. Taxpayers want their property tax dollars to go primarily to the classroom. Two recent studies show that, overtime, education funding is increasingly going to non-teaching jobs.

Visual Editor at The Daily Signal and digital media associate at The Heritage Foundation, Kelsey Harris reports, “Even though the Obama Administration proposes spending $25 billion specifically to ‘provide support for hundreds of thousands of education jobs’ in order to ‘keep teachers in the classroom,’ research by both Heritage and The Fordham Institute reveal alarming numbers: only half of education jobs belong to teachers.”

The Fordham Institutes Matt Richmond writes, “The number of non-teaching staff in the United States (those employed by school systems but not serving as classroom teachers) has grown by 130 percent since 1970. Non-teachers—more than three million strong—now comprise half of the public school workforce. Their salaries and benefits absorb one-quarter of current education expenditures. ”

To show how teachers are no longer the majority The Fordham Institute and Heritage provide the following four charts and map (NOTE: For a larger view click on the chart/map):

Chart 1 & 2: Only half of education jobs are teachers:

Hidden-Half-Report chart 1

chart2-1 (1)

Chart 3: How education staffing has outpaced student enrollment:


Chart 4: The farther a school is from a city, the more non-teaching staff it has:

Hidden half report chart 2

Map showing the number of teachers aides per 1,000 students by state:



EDITORS NOTE: Click on the chart/map for a larger view.

CLICHES OF PROGRESSIVISM #19 – “Big Government Is a Check on Big Business”

A myth runs through most of America today, and it goes like this: Big business hates government and yearns for an unregulated market. But the reality is the opposite: Big government can be highly profitable for big business.

Many regulations restrict competition that would otherwise challenge existing firms. At the same time, government institutions—many created during the New Deal—funnel money to the largest corporations.

When government regulates X industry, it imposes high costs that hurt smaller firms and reduce competition. Imagine that the Department of Energy imposes a new rule that dishwashers must be more energy efficient. Coming up with designs, retrofitting factories to produce these energy-efficient models, and navigating the forms and licenses around this rule might cost a dishwasher-producing firm thousands of dollars. An industry giant, with more revenue and sizeable profit margins, can absorb this cost. A small dishwasher factory that’s only a year or two old, with little revenue and less profit, cannot. The latter would have to shut down. That means less competition for the industry giant, enabling it to grow even bigger and seize even more market share.

Barriers to entry, such as expensive licenses, also cripple start-ups and reduce competition. The Progressive New Republic speaks favorably of how Dwolla, an Iowa-based start-up that processes payments and competes with credit card agencies, had to pay $200,000 for a license to operate. Rather than hire employees or build a better product to compete with its entrenched competition, Dwolla was forced to spend its first $200,000 on a permission slip. Dwolla could afford it; but how many less-well-funded competitors were forced from the market? How many were deterred from even starting a payment-processing business by this six-figure barrier to entry?

For big businesses, which often sacrifice agility for size, smaller competitors are a major threat. By limiting smaller competition, government helps the industry giants at the expense of everyone else. Barriers to entry can kill the next innovative firm before it can become a threat to its giant competition. When this happens, we don’t even know it: The killed-before-it-can-live company is a classic example of the “unseen” costs of regulation.

While regulations minimize competition, government entities subsidize big business. The Export-Import Bank, established in 1934 as part of the New Deal, exists to subsidize exports by U.S.-based firms. The primary beneficiaries? Large corporations. From 2009 to 2014, for instance, the Ex-Im Bank financed over one-quarter of Boeing’s planes. Farm bills, a key element of the New Deal that still exists today, subsidize huge farms at the expense of smaller ones. The program uses a variety of methods, from crop insurance to direct payments, to subsidize farmers. The program is ostensibly designed to protect small farmers. But 75 percent of total subsidies—$126 billion from 2004 to 2013—go to the biggest 10 percent of farming companies. The program taxes consumers to funnel money to large farms.

Nor are these programs unique. National Journalism Center graduate Tim Carney argues, “The history of big business is one of cooperation with big government.” In the time of Teddy Roosevelt, big meat packers lobbied for federal meat inspection, knowing that the costs around compliance would crush their smaller competitors. New Deal legislation was only passed with help from the national Chamber of Commerce and the American Bankers Association. The Marshall Plan, which subsidized the sale of billions of dollars of goods to Europe, was implemented by a committee of businessmen. President Johnson created the Transportation Department in 1966, overcoming resistance from shipping interests by agreeing to exempt them from the new rules. Costly regulations for thee, but not for me.

If Progressives want to see what free enterprise looks like, they need only look at the Internet. For the past 20 years, it’s been largely unregulated. The result? Start-ups erupt and die every year. New competitors like Facebook bring down existing giants like MySpace and are in turn challenged by a wealth of social media competitors. Yahoo was the Internet search king until two college kids founded Google. Google has been recently accused of monopoly status, but competitors like DuckDuckGo spring up every day.

Let’s imagine if the Internet—a playground of creative destruction—had been as subject to big government as brick and mortar businesses have been. Yahoo would have been subsidized. Facebook would have had to pay six figures to get a licensing fee, crushing college-kid Zuckerberg before he got started and preserving MySpace’s market dominance. Businesses that learned to play the lobbying game would have been allowed to write regulations to crush their competitors.

For those who doubt, the proof of business’s collusion with big government is in the pudding. In 2014, a surprising number of libertarian-leaning men and women are in Congress. How has big business responded? K Street has spent millions of dollars working to replace laissez-faire advocates with those who are establishment-friendly. Sadly, cronyist businesses are fighting to keep free market advocates out of power.

A final note: I have criticized Progressives here, but the institution of big government, which enables businesses to hire lobbyists to write regulations or give themselves a subsidy, is the primary problem. The bigger government grows, the more powerful a tool it becomes for businesses prone to use it for private advantage. That’s not capitalism; it’s what one economist properly labeled “crapitalism.”

Julian Adorney
Economic Historian, Entrepreneur, Fiction Writer


  • Big Government and Big Business often play well together, at the expense of start-ups, little guys, and consumers.
  • Artificial, politically instigated barriers to entry make markets less competitive and dynamic, and make established firms more monopolistic.
  • A free market (true capitalism, not its adulterated “crapitalism” version) maximizes competition and, therefore, service to the consumer.

For further information, see:

“Of Meat and Myth” by Lawrence W. Reed
“Atlas Shrugged and the Corporate State” by Sheldon Richman
“Ending Corporate Welfare As We Know It” by Lawrence W. Reed
“The Rise of Big Business and the Growth of Government” by Robert Higgs
“Theodore Roosevelt: Big Government Man” by Jim Powell


Julian Adorney is an economic historian, entrepreneur, and fiction writer. He writes for the Ludwig von Mises Institute and other websites. You can find his collected work at

EDITORS NOTE: The featured image is courtesy of FEE and Shutterstock.

INFOGRAPHIC: How Unions Are Chewing Through Taxpayer Dollars

Nicole Rusenko and Kelsey Harris write and graphically display on The Daily Signal:

Did you know your tax dollars are financing unions?

Thanks to what the federal government calls “official time,” government workers spent 2.4 million hours on union work in 2010. In fact, the Internal Revenue Service alone has 286 full-time employees who work exclusively for the National Treasury Employees Union.

Check out the infographic below for more details on whose special interests (and pockets) your money is going.

WARNING: This infographic may upset your stomach and shrink your wallet.



Portrait of Nicole Rusenko Nicole Rusenko@ncrusen20

Nicole Rusenko is a senior designer at The Heritage Foundation.


Portrait of Kelsey Harris

Kelsey Harris
Kelsey Harris is the visual editor at The Daily Signal and digital media associate at The Heritage Foundation.

Did you know all of the Sarasota County School Board/Union salary and benefit negotiations are open to the public?

I didn’t think so.

If you go to the Sarasota County School District website in the lower right is a section titled “Upcoming Events”. If you click on the small print “Click for Monthly Calendars” you will learn that the School Board has since June 11th, 2014 been negotiating salaries and benefits with the Sarasota County Classified/Teachers Association (SC/TA). These negotiations are normally scheduled each Wednesday from 3:00 – 5:00 p.m. The next scheduled School Board and SC/TA meeting will be on Wednesday, July 30, 2014. All negotiations are held at the SC/TA offices located at 4675 South Tamiami Trail, Sarasota, FL.

What you can’t find on the website is that all of these negotiations are open to the public. 

According to Scott Ferguson, Communications Specialist Sarasota County Schools, “The meeting location and dates/times are posted to our website for public notification; members of the public may attend if they wish.”

You would think the Sarasota County School Board members would want the public to know about these negotiations since salaries and benefits make up such a large portion of the district budget. According to the 2013-2014 Final Budget General Fund Executive Summary salaries and benefits make up approximately 78% of the total budget.

Why should taxpayers care about the Sarasota County School Board Budget? Because 76% of the money comes directly from local property taxes. About 23% comes from the state and less than 5% comes from the federal government.

Another reason these negotiation are important is because President Obama’s Race to the Top for Student Success, codified in Florida Senate Bill 736, requires all teachers be evaluated and paid based on performance measures.

According to the White House website on Race To The Top (RTTT):

Race to the Top marks a historic moment in American education. This initiative offers bold incentives to states willing to spur systemic reform to improve teaching and learning in America’s schools. Race to the Top has ushered in significant change in our education system, particularly in raising standards and aligning policies and structures to the goal of college and career readiness. Race to the Top has helped drive states nationwide to pursue higher standards, improve teacher effectiveness, use data effectively in the classroom, and adopt new strategies to help struggling schools.

Improve teacher effectiveness means performance pay for teachers. Specifically Florida’s RTTT for Student Success: Reforms teacher evaluations; Ends Professional Service Contracts for new teachers hired after July 1, 2011; Creates 2 pay schedules after July 1, 2014: “Performance” and “Grandfathered” Pay Schedules; Eliminates pay supplements for advanced degrees out of certification area; and Ends “last-in-first-out” for reduction in force decisions.

The Florida Education Association describes President Obama’s Race to the Top for Student Success (SB 736) thusly:

Despite all the talk about local control and less government, this bill reduces a school district’s flexibility and authority over teacher evaluations, pay schedules and working conditions. This bill gives new power and authority to the Department of Education and the Florida Legislature.

RTTT for Student Success is a component of Common Core State Standards, renamed Florida Standards.

According to the June 11, 2014 Bargaining Negotiation Notes, “Some conversation ref. highly effective teachers, summer school and performance pay – parties tabled the discussion for later.” To see a sample of the new PRIDE Teacher Evaluation Form click here or the PRIDE Document Checklist click here. Ferguson states, “Topics/proposals to be discussed at future meetings have not yet been determined.”

Taxpayers and interested citizens may want to sit in on these negotiations that will define “effective teachers” and lay out teacher “performance pay” and evaluation standards. Don’t you think?

Question from our readers: Why doesn’t the Sarasota County School Board hold all of these negotiations in the District chambers and televise them?

AGENDA: Grinding America Down

All American citizens who hold their FREEDOM dear, and support family values should watch the below listed video entitled “AGENDA: Grinding America Down.”   We’ve received thousands of E-mails each week for 5 years; “AGENDA: Grinding America Down” is one of the most significant presentations we’ve viewed over these past 5 years.

Before you watch “AGENDA: Grinding America Down”, please watch this 19 second video:

The video is about the values you want to ensure your children & your extended family members benefit from, it supports the different religious faiths that provide the foundation upon which human values are based, it’s about supporting the members of the US Armed Forces—many of whom gave their last full measure of devotion in order to defend the Republic—it is mainly about the FREEDOMS accorded to all American citizens in the US Constitution by the Founding Fathers.

AGENDA: Grinding America Down

Using Obama’s own words, when he said that he fully intends to “fundamentally transform” our 238 year old Republic; we now have witnessed his true goal to create a Socialist State by any means necessary.  By repealing President Clinton’s requirement that welfare recipients must work for financial aid from the government, over the past 6 years, Obama has managed to enroll a record number of Americans and illegal immigrants in government welfare program with 40 million on food stamps, and millions of new recipients on the disability rolls.

Obama has been framing traditional US work ethics as the foolish belief that President Ronald Reagan once supported, with President Reagan’s thesis that anyone can lift themselves up by their bootstraps being the promise that always has been America and the success that comes about from hard work.  In order to “fundamentally transform America”,  Obama in his speeches and his bloated bureaucracy has been working to replace President Reagan’s well held belief  in American’s work ethic, that contributed to the most successful economy in the history of mankind with something that has never worked in any country in history.  Obama wants to replace American work ethic with the Marxist principal that government must distribute the wealth created by hard working Americans to those who have little interest in working.  Obama wants to more heavily tax the top 10% of successful American earners who already pay 68% of all the taxes in the nation each year (the bottom 50% of earners in America pay 3% of all the taxes).

Obama’s unrelenting attack on the Second Amendment and the right of American citizen’s to bear arms, and the protections accorded all American citizens by provisions of  the Second Amendment that is under relentless assault by the Obama administration.  Obama’s use of the IRS to suppress the rights of conservative Americans who were trying to exercise their right to participate in a national presidential elections should have a special Prosecutor assigned, but Holder refuses to appoint one.   Obama is also using Holder’s Justice Department to prevent states from issuing voter IDs to endure American citizens only vote once, in the last presidential election 7 million voters voted in two states; voter fraud was not controlled; the fear of rampant voter fraud looms large in the November election.

AGENDA Grinding America Down graph

For a larger view click on the chart

The Obama administration will eventually meet with serious and widespread “unorganized” opposition from American citizens because of his violation of Federal Laws, Immigration Laws, and provisions of the US Constitution.   The  Obama administration has been preparing for possible citizen’s unrest, by creating heavily arming federal police force swat teams in the Capital Police Force, Park Police, DHS, the Wildlife Service, the Marshal Service, in the IRS, the Postal Police, the Department of Defense Police, the Federal Protective Service, the Secret Service, and Obama ‘s National Police Force authorized & funded by the Obamacare Law, while providing DHS with armored vehicles, and purchasing excessive amounts of ammunition (more than the US Army and the US Marine Corps uses each year in training their personnel).

The most important Congressional election in 238 years will be held in about 3 months, we encourage you to support the endorsed Combat Veterans For Congress listed in the attachment.  They have the courage to stand up to bureaucratic excesses, will work to rein in the out of control spending by irresponsible members of Congress & the Obama administration, and will protect and defend the US Constitution.

Florida Sheriff would refuse any request from Dept. of Homeland Security to house illegals in his jail

Sherry Smart, a resident of Sarasota County, FL, sent an email to all of her County Commissioners. Smart wrote, “As all of you are aware we have a crisis at our borders and now it is spreading it’s tentacles across the US. Murietta, California learned about their invasion at the last moment with the assistance of their Mayor who was outraged with this Federal overreach. Next came the people of Virginia who learned about the Fed’s plan for an abandoned building and those people prevailed.  Today I read an article where Pasco County is taking in illegals and requesting more beds. I’d like to know if there are any plans in place for North Port and Sarasota County.” See the map below on the three know relocation areas for illegals in Florida.

Christine Robinson, Sarasota County Commissioner responded stating, “Excuse me for the delay in my response, I was traveling this weekend.  Thank you for writing. I am copying our Sheriff who is a separately elected constitutional officer who is solely in charge of law enforcement responsibilities with your concern.” Robinson did not say if the County would agree to house illegals.

However, Sarasota County Sheriff Thomas M. Knight (pictured above) did respond to Smart stating, “My office has a working relationship with the Department of Homeland Security/Immigration and Customs Enforcement.  I have not received any information from that group of intentions to request assistance from the Sheriff’s Office to house illegals in the Sarasota County Jail.  In fact, I would refuse the request if that should come.  I think it would be also important for you to know that since I took office in 2009, the Sheriff’s Office has recognized over 435 criminal illegal aliens who have been booked at the Sarasota County Jail – having them removed and sent to Miami – Dade County for deportation proceedings. Thank you for staying engaged.” [Emphasis mine]

numbers usa map of illegal relocations

Map of relocation areas (in red) by state. Map courtesy of Numbers USA. For a larger view click on the map.


Congressman Steve Southerland, II, FL District 2.

Voicing similar concerns, Neil Rice from Perry, Florida sent an email to Congressman Steve Southerland, II, FL District 2. Rice stated, “House republicans stand your ground or lose your seat. No money for illegal immigrants, with out money they can not stay. Close the borders first and completely. Send back All the illegals. DHS IS A UNCONSTITUTIONAL AGENCY AND NEEDS TO BE ABOLISHED. They are corrupt beyond words, doing what ever they wish. and committing EXTORTION against the American taxpayer.”

“This is an election year, and we are forming groups to campaign against any representative that does not abide by the U.S. Constitution, protects our country and it’s people, (no matter who gets it). We have nothing to lose anymore,” notes Rice.

Melissa Thompson, Deputy District Director for Rep. Steve Southerland, II replied, “Steve and the Republican Conference have no plans to give the President more money for the illegals.”

According to Numbers USA Florida has been targeted by the federal government to take illegals. George Fuller, from Sarasota notes, “Kansas Southern owns subsidiary FERROSUR which has two trains that leave southern Mexico every 8 to 10 days headed for the U.S. Border. This has been the most used form of transportation by illegal aliens to get through Mexico. The trains are known as La Beastia.”

There is a growing backlash across Florida and the United States against this illegal alien invasion. Many argue that America’s sovereignty is being violated as well as standing laws ignored. Is lawlessness coming to Florida?

RELATED VIDEO: Zack Interview-Security on the border between USA and Mexico. NAFBPO’s mission is “to contribute to the security and stability of the United States.”




Brooks County, Texas: Ranchers Round Up Illegals Who Skirt Checkpoint
First Five Steps to Solving Southern Border Crisis
On the Border, Activist’s Arrest Rattles the ‘Dreamers’