For-Profit Teacher Training

By Jeffrey Miron.

"Many public schools face persistent teacher vacancies. Lacking fully certified candidates, they often hire uncertified teachers instead.

Evidence from Texas shows that expanding certification to for-profit teacher training programs

reduced schools’ reliance on uncertified teachers. … [T]he lower-cost training routes [also] brought new types of certified teachers into the profession.

Teachers from for-profit programs

were of lower quality than standard-trained teachers as measured by turnover rates and … the average increase in their students’ standardized test scores … [But] they were significantly better on both metrics than uncertified teachers.

Also,

the main effect of the policy for teachers was to reduce the time and cost of training[,] … [suggesting] that the reduction in teacher training requirements was a net positive for public education in Texas.

Yet again, having fewer government rules facilitates more efficient outcomes."

The Elevator Problem: How Rent-Seeking and Regulation Make Modern Life Unaffordable

By Patrick Carroll of AIER.

"On July 8, 2024, a guest essay by Stephen Smith on elevator policy was published in The New York Times. Though this may seem like a rather dry topic at first glance, Smith’s essay quickly dispelled that notion. The piece immediately went viral and has sparked a considerable amount of commentary from across the political spectrum. 

In the essay, Smith summarized the findings of a lengthy report on elevators that he had authored in May of that year for a think tank, the Center for Building in North America, which he founded in 2022. Prompted by a personal struggle with a lack of elevator access, Smith conducted a comprehensive review of the global elevator industry with the goal of answering a very specific question: Why are there so few elevators in North America compared to the rest of the world? 

“Despite being the birthplace of the modern passenger elevator, the United States has fallen far behind its peers,” he writes in the report. 

While the US has more than 1.03 million elevators — one of the highest totals in the world — it has fewer elevators per capita than any other high-income country for which data can be found, and Canada’s position on a per capita basis is similar. 

“…Part of this absence is due to the dominance of freestanding single-family houses in North America,” Smith acknowledges, “but even apartments in the United States are less likely to have elevators than those in much of Europe and Asia.” He points out, for example, that while New York City and Switzerland have similar populations, and a greater percentage of New Yorkers than Swiss live in apartment buildings, New York only has half the number of passenger elevators. 

“No matter how you slice the numbers,” he says, “America has fallen behind on elevators.” 

Smith’s findings all pointed to cost as the major factor. In Canada and the US, he says, new elevator installations cost at least three times as much as in Western Europe — roughly $150,000 compared to $50,000. What is driving this cost differential? Smith spends the majority of the report outlining three main culprits: mandatory minimum cabin sizes, labor issues with elevator installers, and technical codes and standards, which are harmonized for practically the whole world except the US and Canada. 

He writes: 

The North American approach is one of extremes. American and Canadian elevators have the largest cabins, the strongest doors, the most redundant communication systems, the best paid workers, and the most diversity of codes on the one hand. And in exchange, Americans and Canadians have the highest prices, the most limited access, the most uncompetitive market for parts, and the most restricted labor markets.

‘One of the Most Powerful Construction Unions in North America’ 

Smith’s comments on the labor point have attracted particular attention, because the inefficiencies are so glaring. As he wrote in The New York Times: 

Architects have dreamed of modular construction for decades, where entire rooms are built in factories and then shipped on flatbed trucks to sites, for lower costs and greater precision. But we can’t even put elevators together in factories in America, because the elevator union’s contract forbids even basic forms of preassembly and prefabrication that have become standard in elevators in the rest of the world. The union and manufacturers bicker over which holes can be drilled in a factory and which must be drilled (or redrilled) on site. Manufacturers even let elevator and escalator mechanics take some components apart and put them back together on site to preserve work for union members, since it’s easier than making separate, less-assembled versions just for the US. 

National Review economics editor Dominic Pino has noted, along with City Journal contributor Connor Harris, that this is a textbook example of what’s known as featherbedding, a practice in labor relations where unions obtain “make work” rules so that more union workers can be employed. 

The main elevator union in Canada and the US is the International Union of Elevator Constructors (IUEC), which Smith points out is “one of the most powerful construction unions in North America.” A 2011 comment from its General President, Dana Brigham, is revealing. 

“We can’t afford to sit back and see our trade dumbed down through factory prefabrication and preassembly to a point where all our members will have to do on the job is simply uncrate the elevator, set it, and plug it in,” Brigham said. Responding to this quote, Pino quips: “Heaven forbid elevators be easy to install.” 

It’s no wonder that featherbedding has a bad reputation. As Leonard Read observed in 1960, these practices are “as obviously absurd to the layman as they are disgusting to the economist.” 

In modern jargon, the economist’s disgust is often expressed by characterizing these practices as a kind of rent-seeking. Indeed, Alec Stapp, co-founder of the Institute for Progress, recently cited the elevator union rules that Smith uncovered as a good example of this concept. 

The notion of rent-seeking comes from the public choice school of economics, specifically the work of economists Gordon Tullock and Anne Krueger. Developed in the ‘60s and ‘70s, rent-seeking refers to any practice where you are trying to increase your wealth by changing the rules of the game, as compared to profit-seeking, which is trying to increase your wealth by being more productive. 

Common examples of rent-seeking include lobbying for tariffs or subsidies — or, in this case, union featherbedding. Profit-seeking, on the other hand, would include activities such as research and development aimed at creating new products to sell to customers. 

The word “rent” in this context refers to the old economic definition of rent, which is about the excess returns yielded by a factor of production, and not the colloquial definition of a payment made for the use of property.

Elevators Are Just the Tip of the Iceberg 

The other two factors that Smith discusses — minimum cabin sizes and technical codes and standards — are a classic case of government regulations making things considerably more expensive than they need to be (and regulation, particularly licensing, no doubt contributes to the labor issues as well). 

Now, if the mandated wastefulness that we find in the elevator industry were unique, it would still be cause for alarm, but the absurd truth is that regulations like this are everywhere. 

“When most people go through their daily lives, they don’t think about the ways in which government regulations are making their lives more difficult,” writes economist Scott Sumner, reflecting on Smith’s elevator story. “In almost every case I come across with systematic inefficiency, the root cause is counterproductive regulations.” 

It feels like every few months, a story like this comes along that grips the public’s attention. Calls for reform are heard, a public outcry fills the airwaves, maybe legislation is introduced. But it rarely occurs to people that these stories form a pattern. As such, we’ve fallen into this routine where our news feeds periodically become dominated with the latest absurd regulation story, and then at best we play whack-a-mole with legislation designed to address the Current Thing. 

Perhaps, if we can focus on the bigger picture, we should consider trying a different approach. Maybe there will come a point where we realize that news-driven piecemeal deregulation isn’t particularly effective, and more fundamental changes, such as blanket limits on government intervention in the economy, must be considered."

Adam Smith on markets and their potential to benefit the poorest in society

Ginny Seung Choi & Virgil Henry Storr. From the journal Constitutional Political Economy.

"Abstract

Revisiting Adam Smith can be a useful way to resurface key aspects of how markets work that are underemphasized in current scholarship. This is especially fruitful when Smith’s claims have strong support within the political economy literature. This article focuses on Smith’s various arguments about the impact of markets on the least advantaged, and whether there is support for his claims in the contemporary literature. Despite advances in the last several decades, and indeed since the Industrial Revolution, poverty remains a worrisome problem. Additionally, inequality between countries and inequality within countries remain social challenges. Adam Smith, especially in The Wealth of Nations and The Theory of Moral Sentiments, has highlighted the potential of markets to improve the material conditions of the poorest in society."

Excerpts:

"Thus far, most global efforts to address the problems of poverty and inequality (perhaps unsurprisingly) have tended to be top-down. In 2015, for instance, all the members of the United Nations adopted 17 Sustainable Development Goals. These goals meant to serve as a call to action for member states and drive an agenda aimed at eliminating poverty, reducing inequality, encouraging economic growth, and promote inclusion and sustainability. It is unclear, almost a decade later, that this top-down effort has been successful. And, although the strategies members agreed to adopt called for expanding trade and promoting markets, they instead encouraged aid, and the focus was on countries adopting certain regulations and pursuing interventions that would ensure that the “right” kind of development occurred. Arguably, markets are frequently viewed as the cause rather than the cure for inequality and poverty." 

"In this article, we argue that markets are the best way out of poverty and toward more equal societies. Despite poverty and inequality still being problems, the evidence suggests that markets are not the problem but are part of the solution. Indeed, the potential of markets to reduce poverty and inequality is a lesson that we arguably should have learned from Adam Smith. More importantly, however, Smith encourages us to focus less on inequality and more on the conditions of the poorest."

The warmth of collectivism (illustrated by all the countries that have passed Venezuela in per capita GDP)

Tweet From Eyal Yakoby. 

 

Philadelphia’s Avenue of the Arts 2.0 Is a Risky Revival

A $150 million campaign to restore the run-down street that is host to many of the city’s performing-arts institutions is noble—but could well backfire

By Michael J. Lewis of The WSJ. Excerpts:

"The sad truth is that Philadelphia’s commercial streets have been ailing for some years. Online shopping has ravaged retail in Center City (true Philadelphians do not say “downtown”), and it is not as if there is a surfeit of boutiques searching for fashionable new quarters. One of Jane Jacobs’s other insights is that a city’s most vibrant neighborhoods have a mix of new and old buildings, because it is the low-rent older ones that let the entrepreneur take risks and try something new." 

"A city is an infinitely complex organism, where commerce, urban amenities, street traffic and pedestrian life interact in mysterious ways. Decisions made with the noblest of ideals can have unintended consequences. Philadelphia has been here before. In 1975, on the eve of another national anniversary, the city created the Transitway, a sweeping transformation of Chestnut Street—then the city’s most successful commercial corridor. It would be closed to automobile traffic during working hours, with the exception of buses, turning it into a pedestrian mall by day. After an initial flourish of activity, commercial life declined. Ultimately, it succeeded only in shifting business a block south. A few decades later, the Transitway was abandoned, traffic resumed, and the concrete planters with their shriveled pear trees and ginkgoes were quietly removed." 

In the Western world all forms of pollution, other than greenhouse gases, are in decline

See ‘The Powerful Primate’ Review: An Energetic Evolution: From early on, what has set the human species apart from all others is the ability to direct ever-increasing power toward our ends by Gregg Easterbrook. He reviewed the book "The Powerful Primate: How Controlling Energy Enabled Us to Build Civilization" by Roland Ennos. Excerpts:

"In the Western world all forms of pollution, other than greenhouse gases, are in decline. U.S. emissions of greenhouse gases peaked in 2007 and have declined since, regardless of who’s in the White House. Last year the United Nations’s Intergovernmental Panel on Climate Change projected that total global greenhouse-gas emissions will peak in the next five to 10 years and enter long-term decline as solar, nuclear and natural gas come to dominate power production.

Air pollution in Beijing is down by about half compared to a decade ago. The notoriously smoggy air of Mexico City has gotten much clearer. Hannah Ritchie, the University of Oxford data scientist and author of “Not the End of the World” (2024), notes that China is “deploying clean energy technologies at home far faster than any other country.”"

"Nature is not a fixed permeance that we are, as he says, “damaging.” Nature is dynamic and ever-evolving. Many of its aspects would have changed whether we were here or not."

"already the trends are toward renewable power and less waste, including in mines and factories." 

There was more to the slums than abject poverty. For a large number of immigrants life in the tenements was an improvement over their old lives

See ‘A Slumless America’ Review: Helping the Other Half Live by Howard Husock of AEI. He reviewed the book In “A Slumless America: Mary K. Simkhovitch and the Dream of Affordable Housing” by Betty Boyd Caroli. Excerpts:

"Like other reformers, including Catherine Bauer and Edith Elmer Wood, Simkhovitch saw slums through the narrow prism of their deplorable physical conditions, such as overcrowding. She overlooked what Tom Buk-Swienty, a biographer of Jacob Riis, a 19th-century reformer, has observed: “There was more to the slums than abject poverty. For a large number of immigrants life in the tenements was an improvement over their old lives. They worked, paid rent, fed their children and had hopes and dreams.”

By 1930, Wald noted the large number of “empties” on the Lower East Side; immigrants had moved up and out to Brooklyn. Simkhovitch and her fellow housing activists viewed slums through what can be called a reformer’s gaze, certain they would not want to live in one—but they overlooked the slums’ dynamism, thanks to shops, churches, synagogues and mutual-aid associations, none of which would be found in the public housing soon known as the projects.

It would have been a lot to ask that Simkhovitch, idealistic and self-sacrificing, predict that immigrant poverty and its housing conditions would be ameliorated with time. Or that the public housing she championed would itself deteriorate so badly that, by 1990, the federal government would label much of it as “severely distressed”—and demolish it for having become a latter-day slum."

"But it would seem a serious oversight for Ms. Caroli not to mention that Simkhovitch’s housing triumph was not an unalloyed improvement. By 1957, even Bauer, arguably more influential in promoting public housing, had changed her mind, labeling it “dreary” and unpopular."