Category Archives: Libertarians

The Self-Employed as a Political Constituency

Will 3-D printers swell the ranks of self-employed manufacturers?

Will 3-D printers swell the ranks of self-employed manufacturers? Image credit: CNN

The maker movement is transforming the American economic landscape. The number of people who make a self-employed living making stuff is still small — almost imperceptible in a U.S. labor market of 160 million — but it is growing.

In 2014 more than 350,000 manufacturing establishments in the U.S. had no employee other than the owner, up almost 17% over ten years, according to Commerce Department data reported by the Wall Street Journal. By comparison, the 293,000 establishments with employees had experienced a 12% decline in number over the same period. Overall, there are roughly 12 million manufacturing jobs in the U.S.

The boom in self-employed manufacturing is most pronounced in the “food” category, but also notable in chemicals (including soaps and perfumes), transportation, leather, and beverages & tobacco.

I expect the movement to gain momentum as the revolt against mass, industrial-era standardization gives way to mass customization. Technologies such as Computer Aided Design and 3-D printers continue to gain in capability and come down in price, making them available to almost anyone. Many colleges have 3-D printers on campuses, and students are learning how to use them. Meanwhile, just as the Miller-Budweiser beer duopoly has given way to the craft beer revolution — the biggest advertising budgets in the country could not halt that consumer trend — we are seeing the revival of artisinal foods, beverages, and craft products.

The proliferation of self-employed, small-scale manufacturers is part of a larger trend toward the so-called “gig” economy. So far, the needs and aspirations of makers, hackers, craftsmen and free-lancers have gone mostly unrecognized by the political establishment. These self-employed workers are even more politically invisible than small business. They are unorganized politically. They don’t have trade associations, they don’t hire lobbyists, and they don’t donate money to politicians. Indeed, the only politician I can think of who takes them seriously is Sen. Mark Warner, D-Virginia. While the senator has performed a valuable service in highlighting the group and its unique needs, his interest in the topic does not appear to be widely shared, and he can cite few tangible accomplishments yet.

Making a living as a free-lance writer and blog publisher for the past 14 years, I feel a strong affinity for this group. In Virginia, there are hundreds of thousands of us. And as consumer tastes continue to shift from standardized products and services to personalized products and services — our numbers will grow.

We are the petite bourgeoisie. We are noted for our stubborn independence and our ornery attitude toward our “betters” who would tell us what to do. In my view (which, I concede, may not be universally shared), we don’t seek special treatment. We don’t want subsidies, tax breaks or special privileges. We just want a level playing field.

The most important legislative priority for self-employed workers is to gain more control over our health care insurance and retirement plans. Our health insurance should enjoy the same tax status as health plans provided by corporations and other major employers. Our pension vehicles should be portable as we move back and forth between conventional employment and self employment. Oh, and it wouldn’t hurt to keep a lid on taxes.

As I scan the political economy of Virginia, I don’t see anyone (other than Warner) representing the interests of the self-employed. Neither Democrats nor Republicans, beholden as they are to established corporate and bureaucratic interests, provide a natural home for us.

The Libertarian Party could become that home if it moved beyond articulating abstract principles to applying those principles to real-world problems. Indeed, if the Libertarian Party has a natural constituency, it would be the free-lancers and small businesses whose interests are routinely subordinated to those of better organized, more vocal groups who turn to the government for everything. As Libertarians run for office, they would do well to cultivate the large and growing ranks of the self-employed.

Who Will Champion Mobility as a Service?

Uber was just the first step. The App-algorithm-transportation revolution will evolve into Mobility as a Service.

Uber was just the first step. The App-algorithm-transportation revolution will evolve into Mobility as a Service. Virginia Virginians lead the way or fall behind?

Around the world, companies and muncipalities are experimenting with Mobility as a Service (MaaS). Fast Company describes how a new company, MaaS Global, is changing the thinking about transportation, in Helsinki, Finland:

If you need to go somewhere, you pull up a new app, which calculates the best way to get there—public transit, a bike-share bike, taxi, a rental car, or a combination. Instead of buying individual tickets, you pay a monthly fee of €249. …

Users can choose to link their calendars with the app, so routes will be planned in advance. With each trip, it’s possible to make a choice of transport mode based on what’s cheapest or greenest or most convenient—or mood….

MaaS Global is “in talks” with several cities in North America, Fast Company says. The company may or may not have devised a viable economic model — a fixed monthly prescription that doesn’t vary by usage seems problematic to me. But the company is only one of many experimenting in this space. Sooner or later, someone will figure out how to make it work.

Bacon’s bottom line: I’ve often referred to the integration of smart phones, algorithms and transportation as the Uber revolution because the ride-scheduling company Uber developed it first. But Mobility as a Service (MaaS) is much bigger than Uber, and its potential ramifications are even more far reaching. First and most important, it can save people money and expand their transportation options, thus improving their quality of life. Second,  MaaS could reverse the decades-long decline in shared ridership, meaning that we can get much more mileage (so to speak) out of our existing infrastructure.

Virginia can continue approaching transportation as it always has — by building new stuff, at a cost of billions of dollars a year — or it can foster the growth of Mobility as a Service. We Virginians need to ask ourselves, how can we encourage innovative transportation companies to set up shop in Virginia? We reached the right solution with Uber and Lyft, enabling them to compete in the transportation marketplace. That was a good start,  but what else can the public sector do to create a welcoming environment for entrepreneurs to expand beyond what is essentially a taxicab service?

The idea is just hanging out there, waiting for a champion. We probably can’t expect much from Republicans and Democrats, who are beholden to entrenched special interests. (The “transportation” sector has contributed roughly $35 million over the past decade to Virginia political candidates, according to the Virginia Public Access Project.) Republicans are the party of roads, and Democrats the party of mass transit. Both transportation modes are more than a century old, and both have much to fear from the MaaS revolution.

Only one party, the Libertarian Party, is the natural home for entrepreneurs and innovators who seek to disrupt the status quo. If Libertarians want to broaden their popular appeal by creating community-based, private-sector solutions for real-world challenges, then they should lead the charge for Mobility as a Service.

How to Give Virginians Real School Choice

Vouchers could make school choice a reality for thousands of Virginians.

Students at Immanuel Christian School in Northern Virginia. Tuition ranges from $7,500 to $10,000 a year. Four thousand-dollar vouchers would make school choice a reality for hundreds of thousands more Virginians.

Virginians enjoy a wide range of school choice… providing that they are affluent enough. If they can’t afford to pay private school tuition or buy a house in neighborhoods served by the best public schools, however, their options are limited.

The Old Dominion has among the smallest number of charter schools in the country — nine. The state does provide a tax credit to encourage donations to approved educational foundations, of which there are 34. But in fiscal 2016 those foundations provided only 2,882 scholarships — no more than a rounding error in the Commonwealth’s nearly 1.3 million school-age population. Virginia does allow parents to home-school their children, but the number of families in a position to pursue that option also is modest — the Virginia Department of Education counted only 33,400 home-schooled students in fiscal 2016.

In sum, Virginia’s educational system does a fine job of serving the state’s more affluent citizens but restricts opportunities for those who are less better-off. The poorest households are stuck in failing inner-city and rural school districts with no way of getting out. And the quality of education in Virginia’s worst schools is abysmal. Of the state’s 1,825 public schools, 22% were either denied accreditation or received only partial accreditation under the state’s minimalist standards.

The traditional solution espoused by the teacher’s lobby is mo’ money. There is nothing about Virginia’s educational system that can’t be improved by dumping extra dollars into it! But let’s face it: Given impending budget shortfalls, the big question facing the General Assembly in January is which programs get cut and by how much. Virginia’s K-12 school system won’t be getting any more state funding next year, and chronic budget pressures over the next decade suggest that there won’t be much more forthcoming in the decade ahead.

Tinkering with the system won’t accomplish anything meaningful. The inability of the political establishment to alter the educational status quo creates a tremendous opportunity for an insurgent movement such as the Libertarian Party to advance a bold proposal.

It’s time to think big.

Broadly speaking, there are three main sources of revenue for K-12 education in Virginia: local revenue, state revenue and federal revenue. The state component, referred to in the General Fund budget as “Direct Aid to Public Education,” is budgeted to receive $5.8 billion this fiscal year, although that sum might be trimmed during the upcoming General Assembly session in anticipation of a revenue shortfall.

That $5.8 billion is distributed to local governments according to a complicated formula, but it averages about $4,500 per student.

I propose transforming K-12 education by using the state aid to empower parents and promote school choice. Parents could continue sending their children to public school if they desired, and the school district would continue receiving state aid as it always had. But anyone choosing to send a child to a private school (or home school) would receive a $4,000 voucher reflecting the state’s cost in providing that education.

Admittedly, $4,000 is not enough by itself to cover a private school tuition. But it’s enough to cover a significant portion of the tuition, making private school more affordable for middle-class families than it is today. Families that couldn’t afford to pay, say, $8,000 a year in tuition perhaps could afford to pay $4,000. For poor families, the $4,000 would supplement scholarship dollars, enabling scholarship foundations to stretch their resources over more students. For home schoolers, the sum would be a boon to distance learning, teaching collaboratives and free-lance teachers, spurring innovation in how education is organized and delivered.

The beauty of the arrangement is that it benefits public schools, too. While public districts would lose some state money, they would have fewer students to educate. Fewer students would translate into more local dollars per student. Everybody wins — everybody, that is, but the ideologues who oppose private education.

This idea is a broad framework only, and there could be many wrinkles to iron out. The most obvious is the need to hold private schools accountable. Perhaps any school accepting voucher funds would be required to meet the same Standards of Learning criteria as public schools do. Not all private schools are created equal. There needs to be a mechanism for weeding out the bad schools, and the SOLs might do the trick.

Another problem is that state aid is not distributed to school districts equally. Wealthier school districts get fewer state dollars; poorer school districts get more. Handing out vouchers would create winners and losers, and losers would oppose any change to the status quo. But that’s a small price to pay to give financially strapped families genuine school choice and to foster innovation by entrepreneurs and educators.

Natural Libertarians, a Virginia Majority

Natural Libertarians -- leaving other Virginians alone since 1776.

Natural Libertarians — leaving other Virginians alone since 1776.

It’s the holiday season, the news is slow, and I’ve been thinking about things that I probably shouldn’t be thinking about.  One is how to convert the latent “small L” libertarian potential of Virginia’s electorate into a meaningful political force.

A large percentage of the Virginia population, I firmly believe, is what writer Lee Harris has termed “natural libertarians” — libertarians by inclination, not ideology. In 2011 he wrote prophetically:

The natural libertarian, whenever he feels that his self-image as a free and independent individual is under assault, will turn to a defense mechanism that is not listed in the classic Freudian inventory: he will become ornery. … Orneriness is often a highly effective defense mechanism against bossy people and bullies. …

One of the most striking characteristics of ornery people is that they don’t want to boss other people around any more than they want to be bossed around themselves. … The ornery man’s idea of liberty is the liberty to be left in peace, to tend to his own affairs, to pursue his business, make his home, raise his kids, without being told what to do or how to do it by other people.

Without question, orneriness fueled Donald Trump’s electoral victory — although I am not sure how natural libertarians will feel about their new president after he has governed a couple of years. Be that as it may, the live-and-let-live, leave-me-alone-and-I’ll-leave-you-alone impulse is a strong one in Virginia.  Natural libertarians skew toward Republicans and conservatives on issues relating to fiscal responsibility, lower taxes, less regulation but they lean toward Democrats and liberals on cultural issues such as gay rights and abortion. The Republican-Democratic duopoly offers no haven for natural libertarians.

A February 2016 Wason Center poll indicates how much of the population is up for grabs. Here’s how the Virginia electorate broke down by party loyalty:

Republican — 21%
Independent, leaning Republican — 20%
Independent — 16%
Independent, leaning Democrat — 14%
Democrat — 24%

More than half the electorate describes itself as independent to greater or lesser degree.  The Wason poll also provided this breakdown by liberal/conservative ideology:

Strong liberal — 5%
Liberal — 13%
Moderate, leaning liberal — 15%
Moderate, leaning conservative — 25%
Conservative — 23%
Strong conservative — 10%

Moderates outnumber both liberals and conservatives (although by a smaller plurality than independents outnumber Rs and Ds.) I would bet that if you queried most moderates and independents, you would find them to be natural libertarians. If the natural libertarians had a party that fully represented their priorities, it would dominate state politics.

Given the make-up of the electorate, I cannot help but wonder why the “Big L” Libertarian Party hasn’t made bigger gains in the Old Dominion. Robert Sarvis won about 6.5% of the vote in the 2013 gubernatorial election, a record, but he was running against duopoly-party candidates with high negatives: Terry McAuliffe and Ken Cuccinelli. It’s far from clear that a Libertarian candidate would fare as well in 2017.

One reason for Libertarians’ limited electoral success might be be that the party duopolists have stacked the rules of the game against third-party upstarts. Strict balloting rules compelling third-party candidates to gather 10,000 signatures to run for statewide office is one example. Gerrymandering safe districts for Republicans and Democrats is another.

A third explanation for limited Libertarian Party success in Virginia is the widespread perception that Libertarians are a fringe group of crackpots and dope smokers preoccupied with nutty ideas such as legalizing drugs, abolishing the Federal Reserve Bank, or eliminating the military. Many voters regard Libertarians as dreamy utopians with little inclination to engage in the nitty-gritty work of governing. I believe that view is unfair, but without question the view must be overcome.

To achieve electoral success in Virginia, Libertarians must identify issues that will gain traction with the huge number of “natural libertarians” out there and build a broad coalition of like-minded constituencies. They also must advocate a politics of the possible. Repealing the income tax, a fiscal impossibility in Virginia, is not an option. Libertarians have a lot of thinking to do. While news is slow during the holiday season, I will sketch out some ideas.