A Word from London

Herbert London

      Herbert London is John M. Olin Professor of Humanities at N.Y.U., President of the Hudson Institute, and author of Decade of Denial, published recently by Lexington Books. He can be reached at: www.herblondon.org.

The Triumph of Leviathan

      Communism is dead; long live Capitalism. Surely there is some truth to this claim since even diehard advocates of Communism are now in retreat. The second part of this claim is questionable.

      If by Capitalism one means the application of free markets and limited government in which public spending is a relatively small portion of private assets, then something is askew.

      For well over half a century Americans have been seduced into believing that government can solve problems the private sector either cannot or will not address. In many instances this is, of course, the case as the conduct of war will attest. However, we have gone so far in the direction of government growth that this nation has lost sight of its original purpose and dedication to limited government.

      In fact, I would argue Communism is dead; long live Leviathan. The state has filled every corner of communitarian life and both parties have embraced government activity as the first resort when problems arise.

      It is instructive that President George W. Bush, who campaigned as a limited government Republican, has translated compassionate conservatism into big spending and big government programs. Some Republicans argue that the president is merely engaged in “triangulation” in order to assure his reelection. Whatever the motive, the result is the antithesis of what Republicans normally say, as well as Bush’s campaign pledge. His administration is fully on the way to expanding the size, scope and influence of government.

      Let me be specific. Steel tariffs imposed government relief on an industry unable to compete on its own. A new proposed prescription drug bill will dramatically increase Medicare expenditures to the tune of $400 billion over the next decade. Spending on highways has gone up 16 percent since Bush took office. Community and regional development allocations have increased 32 percent. General government expenses have gone up by 29 percent. To top it off, the president has yet to veto a single spending bill.

      I sometimes have the impression that President Bush has conceded on arguments for spending limits as long as his foreign policy and national security consensus remain intact. Yet the net effect is large programs, big government and a strain on the private sector, the very conditions Republicans railed against for decades.

      I am an admirer of this president for his dedication to the war on terrorism, but I have to admit he is no supporter of limited government, no friend of free markets or fiscal restraint. The question I often ask is, who is? Where have the acolytes of limited government gone?

      At the state level, Republican governors are at least as culpable as their Democratic counterparts in promoting new programs with big price tags. Politicians realize there’s a prospective program for everyone—what pundits of yesteryear once called “buying votes.”

      Whether liberal or conservative, government has a program for you. I can recall the generally favorable response to a campaign slogan I employed when running for public office: “It’s not theirs to spend.” What I tried to convey is the belief that government does not have a right to confiscate the fruits of hard-earned income beyond some reasonable level.

      While the response to this generalization was favorable, any effort at flushing out the specifics led to resistance. “What do you mean by saying Medicaid should be cut? My mother is supported in a state subsidized nursing home.” Or, “I don’t think privatizing public colleges is a good idea. My daughter derives the benefit of a heavily subsidized community college.”

      There is scarcely an idea related to retrenchment that doesn’t adversely affect some constituency. The government chessboard has a piece at every space and there is little, if any, room for new moves.

      As a consequence, politicians of every ideological stripe are advocates of big and bigger government. Where it will end is anyone’s guess. One thing is certain; we are in the era of Leviathan. Big government is here to stay and it hardly matters whether the president is a Republican or a Democrat. It is curious that New Deal legislation and Compassionate Conservatism have very similar results.

Degraded Grades

      A new study released by the American Council of Trustees and Alumni (ACTA) and the Institute for Effective Governance (IEG) confirms what most of us laboring in the vineyards of higher education have known for some time. Grade inflation is a national epidemic undermining high performance and hard work in colleges and universities across the country.

      The study appropriately entitled, Degraded Currency: The Problem of Grade Inflation, argues for an end to inflation and a genuine reward for achievement. On its face, this conclusion is incontrovertible. But against a backdrop of lax standards and radical egalitarianism, this sensible conclusion seems revolutionary.

      In any review of grades over the last two decades, it is apparent that As are on the rise and Cs are increasingly moribund; Ds are dead and Fs don’t exist.

      At Harvard, for example, the percentage of students receiving As or A minuses rose from 33.2 percent in 1985 to 48.5 in 2000. At Princeton, the percentage of As increased from 30.7 percent in 1973 to 42.5 in the late 90s. At Dartmouth, the average Grade Point Average (GPA) rose from 2.2 in 1958 to 3.33 in 2001. At Duke, the GPA went from 2.79 in 1969 to 3.37 in 2001.

      Studies cited at Alabama, Arizona, Georgia Tech, Indiana, North Carolina-Chapel Hill, Purdue, Rutgers and Carleton confirm the pattern.

      The report suggests that part of the reason for grade inflation is the pressure to keep students happy. In this era all students are products of the Lake Woebegone effect: They are all above average. There is, of course, the fear factor. Now that students evaluate professors, low grades—even average grades—are reason enough for condemnation of instructors.

      Perhaps the most obvious reason for grade inflation is that many professors, who were weaned on the mother’s milk of ’60s radical ideas, simply reject hierarchical standards. They are the vanguard of radical egalitarianism vigorously opposed to grades as a way to evaluate student worthiness.

      ACTA president Anne Neal, however, effectively captures the effect of grade inflation when she says, “Inflated grades are degraded currency, not worth the paper they are printed on.”

      Alas, too many institutions do not distinguish between real and fake achievement. Graduate school admissions officers cannot rely on GPA to make class decisions and, as a consequence, put a premium on the results of the Graduate Record Exam. Employers are left without a realistic picture of student attainment that leads them to rely on the overused and much abused “networking.”

      Perhaps the most effective way to control the practice is to point it out. Parents invariably assume good grades mean their children are doing well. They either don’t know or refuse to acknowledge that many students are trained in incapacity (to quote Thorstein Veblen) and grades are often a meaningless feel-good device foisted on the unwary.

      Harvard University professor Harvey Manefield stirred up a hornets’ nest when he challenged the grading system by offering two sets of grades for his students: a realistic assessment unaffected by the zeitgeist and the inflated grade that has become customary on campus. Professor Mansfield welcomed the study’s findings by noting: “Grade inflation devalues the currency of the academic realm and calls into question whether today’s grades are anything but worthless tokens of self-esteem.”

      That summarizes the issue very nicely. In an age that has melded Marx and Freud, qualitative distinctions are invariably criticized as elitism and feelings of unworthiness are psychological weapons imposed by those in positions of power. A grade is a symbol of the power structure radicals want to undermine. And to a remarkable degree professors have been successful in doing so.

      It is my hope that when the ACTA-IEG study is read, people will finally awaken to the tragic consequences inflation has had on the nation. Of course, that is a hope, not a truism. But after all, hope is the harbinger of change so I will continue to embrace it.

Where Do I Live?

      Where do I live? Until the Supreme Court decisions in Grutter and Gratz and the Lawrence case, I thought my home was the United States. After all, I pledge my allegiance to America, sing the Star Spangled Banner with brio and read the Declaration of Independence and the Constitution to remind myself of the nation’s founding.

      Now I believe I might be living in Malaysia or perhaps a South American country like Brazil. I’m confused. The principles I associated with the United States have been discarded by the Supreme Court in so cavalier a manner that this nation I love seems to have been transformed into a banana republic.

       Take two fundamental ideas—ideas that served as a foundation stone for the national edifice: equal protection under the law and the precepts of a Judeo-Christian society. With the Supreme Court decisions in question these principles have been shredded into confetti.

      “Equal protection” once suggested, as the Fourteenth Amendment noted and the Civil Rights act of 1964 reaffirmed, that no one should be handicapped nor advantaged by virtue of his race. This was the idea behind the integration of races and what civil rights advocates fought for from the Civil War through the 1960s.

      Notwithstanding all the claims to the contrary, from the 1970s on “equal opportunity” became confused with “equal results.” A nation that often saw its principles honored in the breach, decided to overturn the principle and employ race as a proxy for “disadvantaged.”

      Thus was born the era of affirmative action. In this new age, diversity meant only racial diversity. As a consequence, admissions officers in universities counted by race, denying along the way that this wasn’t a quota system.

      While the Supreme Court’s Bakke decision in the late ’70s said race could be used as one criterion for admission, state courts argued that race was an inappropriate criterion unless there was prior evidence of overt discrimination. In Grutter and Gratz race is officially valorized; it is the criterion for admission even though a weighted numerical standard for race was found unacceptable.

      In the majority opinion written by Sandra Day O’ Connor, the equal protection clause is officially negated, ascriptive standards of the kind reproved by the nation’s founders are embraced and America—instead of the beacon of fair play—has been Latin Americanized through designated privilege.

      The Lawrence decision may have even more insidious characteristics than Gratz and Gutter. In this decision state sodomy laws were reversed—a position with which I’m in accord. But the Court didn’t stop there. It permanently ensconced “the privacy notion” mentioned in the Griswold decision and Roe v. Wade, but certainly not found in the Constitution. This is law by invention.

      Moreover, the law now created reverses two thousand years of Judeo-Christian tradition since a majority of the Court contends what is done in the privacy of one’s bedroom is no one’s business except the participants. In other words incest, prostitution, adultery, or any other perversion the mind can conjure, cannot be regulated. Morality is now officially an individual concern unrelated to social responsibility or biblical prescription.

      The liberal idea has been transmogrified into the libertine ideal. “Go where you want to go, do what you want to do,” the refrain of the Woodstock generation, is the decisive position of the Supreme Court. It is remarkable that in a scant three decades two thousand years of tradition have been discarded. Sodom and Gomorrah are no longer an object lesson; they are sanctified in official fabricated legal theory.

      I am indeed confused about where I live. Never did I think that principles as fundamental as “equal protection” and regulation against taboos could be so easily rejected. This is not the America I signed on to, nor is it the America our founders created.

      In my judgment the Supreme Court has lost its way and it is taking the nation with it. Down the rabbit’s hole goes legal precedent and common sense. All someone with my view can hope for is that someday—hopefully before the 25 years Sandra Day O’ Connor indicated affirmative action should end—the nation will reclaim its heritage and recall what made America an exceptional nation and the hope for people in every corner of the globe.

London’s Traffic Tax

      For free marketers it is axiomatic that you reward behavior you want to encourage and tax behavior you want to discourage. Remarkably, most urban leaders in the United States don’t seem to understand the principle.

      In New York, for example, entrepreneurial activity is depressed by taxes, such as the commercial rent tax, that militate against business development. Conversely, traffic in New York leads to gridlock because drivers aren’t taxed. In a series of perverse incentives and disincentives, the good is discouraged and the bad is encouraged.

      At long last, a mayor has used his authority to incentivize sensible outcomes. The mayor of London, England, Ken Livingstone, has imposed a tax on vehicles in order to reduce inner city traffic congestion. Although I am not surprised, the arrangement works.

      The latest results published in June 2003 indicate that after three months of operation the scheme has exceeded expectations. According to the first report “reduced traffic levels have stabilized in central London remarkably quickly after the introduction of congestion charging.”

      Even skeptics appear to be on board. In the 8 square miles of inner city roadway (the charging zone) average traffic speed has increased by 37 percent. This change has been accompanied by a 40 percent reduction in congestion during the rush hour commute or what the British call “prime-time charging hours.”

      An average of 98,000 individual drivers and 12,000 fleet vehicles pay the charge each day. As projected, the majority of drivers changing their travel patterns due to the charge have transferred to public transport, with many choosing to travel by bus. Others have switched to using their cars at different times and to different locations.

      An added benefit is that bus journey times are improving with the reduction in delays. Those who try to beat the system or mistakenly enter the charging zone receive a PCN (penalty charge notice). By June about 275,000 PCNs had been issued.

      While some payment channels are clogged and the London public is still engaged in adapting to the arrangement, it is by any measure a grand success. People invariably find a way to avoid paying the tax and bus service has picked up in an effort to accommodate additional passengers.

      With one million commuters poring into central London each day congesting the roads and virtually crippling the city, something had to be done. Mayor Livingstone did it with the largest congestion charging scheme the world has seen.

      It should be obvious, but often isn’t, that free market solutions are to be preferred to allocational arrangements or “public commons notions.”  People do respond to costs and benefits and individual pain aggregated can reduce unfavorable conditions.

      Some mayors, such as Steve Goldsmith, former mayor of Indianapolis, appreciate the power of the market. By creating competition for city contracts and incentivizing certain behavior Goldsmith literally transformed the city of Indianapolis.

      There is nothing magical about this formulation. When former Mayor Giuliani eliminated the sales tax on clothing, retail sales soared. When his successor restored the tax, in fact increased it, sales declined.

      Feeling the pressure to raise revenue when deficits are spiraling, mayors invariably believe higher taxes or new taxes will increase revenue. At some point, however, some portion of the population would prefer to move rather than pay.

      Conversely, as the London example attests, if the tax is high enough behavioral patterns will change. Many of London’s current bus riders never assumed they would be riding on public transportation.

      Would Los Angeles residents infatuated with their cars alter their behavior? Some wouldn’t until the tax on the freeways was extortionate.

      It isn’t the idea that’s at issue, but the political will to implement it. Since Michael Bloomberg of New York is likely to be a one-term mayor, I wonder if Ken Livingstone would consider running for mayor of New York. That would be a most welcome development.     Ω