Kevin Corcoran on Jeffrey Friedman's proposal for "Exitocracy"
Private sphere exit options in a capitalistic system have built-in systemic advantages over technocratic solutions, despite the fact that agents within both systems have the same cognitive limitations:
He goes on to quote Jeffrey Friedman:
The epistemic advantage of economic competition is not that any identifiable capitalist is less fallible than any other, or that capitalists, as a group, are less fallible than technocrats, as a group, but that capitalism allows more than one fallible solution to be tried concurrently, with those affected by the problem using personal experience to judge which of the competing solutions is relatively acceptable…The essential requirement, then, is that there be a diversity in the options available to consumers, based on diversity in various competitors’ fallible ideas about what consumers need and are willing to pay for. The same applies to diversity in the options available to workers, based on diversity in various fallible employers’ ideas about what workers need and the work conditions they are willing to tolerate.
Recall that if I am unhappy with my children’s school, I can either use “voice” to try to persuade the administrators to change or use “exit” to choose a different school. Friedman argues that if only the voice option is available, the process by which schools learn to improve is very inefficient. Technocrats running the school may never absorb correct information. Under the exit option, bad schools go out of business and better schools win out.
But what if only rich people can take advantage of the exit option, and poor people are stuck with bad schools? Friedman offers a radical solution.
In order for exitocracy to effective, Friedman says, it must be accompanied by a program of income redistribution. Friedman says the redistribution would be “far more ambitions than a universal basic income” and would take the form of “redistribution along the lines of Rawls’s Difference Principle”, although the “rationale for exitocratic redistribution” is “not the achievement of social justice” of the sort Rawls envisioned. Instead, Friedman argues that “Exit opportunities will often require economic resources. These can allow one to enter into alternatives to the situation from which one would like to exit. Thus, if the experimentation promised by the exit option is to be possible for more than the rich, economic redistribution is called for.”
But redistribution is technocratic. And it seems that one is putting a very high epistemic burden on the technocrats to know what to do and how to do it.
More generally, I think that operating an “exitocracy” is more difficult than it sounds. Some services require people to exit as a group—local road maintenance, for example. That raises complexities that do not apply when only individual decisions are needed.
Much of government involves bundling, and it can be difficult to exit what you don’t like without also exiting what you like. For example, you might think that one school has the best math program but is weak in foreign languages. You may not be able to exit the language program without losing out on the math program.
“Exitocracy” looks to me like privatization, in which government divests services. I would like to see a lot of privatization, but the process of getting from here to there seems daunting.
If individuals or groups do not want to participate in a particular government program, there has to be a way of adjudicating their exit. In my own book, the widely-unread Unchecked and Unbalanced, I suggested that a court system might be needed to oversee an exitocracy.
The issues raised in this blogpost are (a) access to exit, (b) bundling and unbundling of government programs, and (c) collective-action problems in exit from government public goods (e.g., roads).
Vouchers can address two of these issues; namely, access to exit, and collective-action problems.
Vouchers mimic already-existing "redistribution." They don't require new, additional redistribution.
Voucher-holders might achieve some substantial degree of collective action (to achieve exit from public goods) if entrepreneurs emerge to reduce transactions costs and to develop alternative (private?) supply of roads and the like.
Vouchers can improve exit without exitocracy and major new redistribution.
The third issue -- bundling -- seems the hard case.
Last year I read this interesting bit of news on substack.
According to the article some people in Houston, who believed that the 5 principles that the Harvard economist Dr. Roland Fryer espouses would result in better education, were able to do something about it. Dr. Fryer studied successful charter schools and came up with five tenets of better practice, and got to try them out in a failed Houston school district. Apparently the results were good, though I have problems understanding what 'Assessment scores increased by 0.15 to 0.18 standard deviations in a year' means -- because I don't know what or how students were 'assessed'. I also do not know how long people have been monitoring these students. Due to the Hawthorne Effect https://en.wikipedia.org/wiki/Hawthorne_effect you often get better results in a pilot project than would happen if the new practice was more generally adopted. One thing I like about this study is that the students involved were not self or parent selected. The self-selected set problem is always troublesome when evaluating the success of charter schools. How much of the success is due to the methods? And how much is due to having the sort of parents that would move you do a charter school?
It has relevance to the 'voice' vs 'exit' discussion. According to the article, the problem Houston faced wasn't that the technocrats in the school board 'never absorb[ed] the correct information'. The problem was at a much lower level. From the substack article "19 out of 20 principals were replaced in the Houston experiment. It took over 300 interviews to find 19 principals to replace them. Of the teachers, 46% were replaced. The district spent more than $5 million buying out teacher contracts."
So, if replacing teachers who are still teaching using methods designed to take farm children and turn them into industrial factory line assembly workers is what it takes to improve education, then buying out the teachers who are unable to, or refuse to modernise may be a necessary part of the solution. It seems kinder and likely more effective than waiting for the schools to go out of business when enough people have exited. Indeed, one question is whether the schools will ever be allowed to fail? How did that section of Houston managed to declare failure? There are people today who are saying that various US initiatives to stop selecting students for higher education based on performance on tests is the education system throwing in the towel. If they were a private business they would have gone out of business a very long time ago.
If you had Dr. Fryer do a guest post here about how things are going, and how to measure that, I would be delighted to read it. I suspect the substack Journal of Free Black Thought would be interested as well ... you could do one of these new substack-collaboration things.