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Education, economics and the philosophy of Frederic Bastiat.

INTRODUCTION

Frederic Bastiat (1801-1850) was an economist and journalist. He was also a gentleman farmer and politician who was a justice of the peace in Mugron (Bidet, 1906) and later represented his district in the French Chamber of Deputies (Roche, 1971). In addition to his native French he could speak English, Italian, Spanish and Basque (De Foville, 1889). He was born in Bayonne, France (Bidet, 1906 ; Heilbroner, 1992) in 1801 and died in Rome on Christmas Eve in 1850 of tuberculosis.

For a few of his early years he was also an accountant (Hazlitt, 1964), which gave him a unique perspective on the free trade arguments that were circulating in France at the time. Austrian economists consider him to be one of their own because of his contributions to Austrian economic theory, including the theory of opportunity cost, which was not fully developed until Carl Menger wrote about it a generation after Bastiat (Menger, 1871). He is also credited with refuting the Keynesian multiplier theory (DiLorenzo, 1999: 62-63; Rothbard 1995) nearly 90 years before Keynes (1936) advanced it, which was possible because variations of the Keynesian multiplier theory were circulating in France in the mid-nineteenth century.

Mark Blaug (1986) ranks him as one of the 100 greatest economists before Keynes. Lewis H. Haney (1949) devoted a chapter of his History of Economic Thought to Bastiat. Bidet (1906) stated that Bastiat's writings have had a considerable influence on the French economics literature, especially his Sophismes Economiques (Bastiat, 1873a&b, 1964b). Some of his works have been translated into English (Bastiat, 1964a, b &c, 1968, 2007). His works are available on the internet in French (Bastiat, 1848, 1850a & b, 1861, 1862a&b, 1864, 1870, 1873a, b & c).

Joseph Schumpeter (1954) called him a brilliant economic journalist, although he did not consider Bastiat to be a first-rate economic theorist. Bidet (1906) did not consider Bastiat to be a theoretician on a par with Adam Smith or Jean-Baptiste Say, although he did consider him to be an excellent publicist and polemicist. Bastiat's Economic Harmonies (1870, 1964c) was considered to be a restatement of Physiocratic optimism rather than an original work (Bidet, 1906).

He is best known for his writings on free trade (Bastiat, 1862b, 1864, 1873 b&c, 1964a&b, 2007) and the philosophy of law (Bastiat, 1848, 1850b, 1968) but wrote in a number of other areas as well. He engaged in a debate on the justification of interest with Pierre Proudhon (Bastiat, 1873b; Mulberger, 1896), was a friend of Cobden and Bright (Bastiat, 1864; Russell, 1959) and tried to do for free trade in France what Cobden and Bright did in England (Bastiat, 1864; Roche, 1971). Several biographies have been written about him in both French (Bidet, 1906; De Foville, 1889; Imbert, 1913; de Nouvion, 1905; Ronce, 1905) and English (Garreau, 1926; Hebert, 1987; Roche, 1971, 1993; Russell, 1969). His treatise, The Law (Bastiat, 1850b, 1968), is required reading in some circles of the American Tea Party movement (Zemike, 2010). Some of Bastiat's works have been analyzed in the literature (Cossa, 1893; DiLorenzo, 1999; Gide & Rist, 1948; Haney, 1949; Hendrick, 1987; Mulberger, 1896; Rothbard, 1995a&b; Russell, 1985; Schumpeter, 1954; Screpanti & Zamagni, 1993; Skousen, 2001).

He has written several classic pieces in economics that have withstood the test of time. His Candlemakers' Petition (Bastiat, 1873c, 1964b) has been reprinted many times and is included in some economics textbooks. Heilbroner included it in his classic, The Worldly Philosophers (1992). His essay, What Is Seen and What Is Not Seen (Bastiat, 1850a, 1964a), provides a perspective for analyzing economic and public policy questions that has not been surpassed and has seldom been equaled.

He was a member of the French Liberal School (Cossa, 1893 ; Gide & Rist, 1948; Ingram, 1967) and his writings reflected that persuasion, although he disagreed with some other French liberals from time to time on certain issues. His political philosophy is similar to that of Robert Nozick (Nozick, 1974; Paul, 1981; Wolff, 1991) in some ways, in the sense that they both believed that government should be limited to the defense of life, liberty and property and that individuals should be allowed to keep the fruits of their labor. He was more of an absolutist than Rawls (Kukathas & Pettit, 1990; Rawls, 1971, 2001), who believed individuals are entitled to keep their property only if they also improve the lot of the less fortunate. However, unlike Nozick and Rawls, Bastiat also included utilitarian analyses in his discussion of public policy issues, whereas Nozick and Rawls confined themselves to rights theory.

His philosophy of education is especially relevant for modern times. As this manuscript is being written, university students in California are protesting tuition increases (Chea, 2010) and British university students are rioting in the streets over the same issue (Al Jazeera, 2010). This study will discuss Bastiat's philosophy of education, which until now has been neglected in the literature.

PHILOSOPHY OF LAW

Before one can discuss Bastiat's philosophy of education it is necessary to discuss his philosophy of law, since the principles he espouses in his legal treatise can be applied to the issue of education.

Bastiat believed that individuals have a natural right to defend their person, property and liberty (Bastiat, 1968). His view is contrary to that of Jeremy Bentham (1988), who disparaged natural rights, and with the position of legal positivists, who believe that all laws and all rights come from government (Austin, 1869; Fuller, 1969; Kramer, 2003; Marmor, 2001). Bentham referred to the concept of natural law as "nonsense upon stilts." (Bentham, 1843; Waldron, 1987)

Bastiat believed that governments are formed to protect the natural rights of life, liberty and property and that any government that goes beyond the protection of these basic rights is engaging in plunder. Individuals have a right to protect these rights, either individually or as a group. They have a right to organize a common force, such as government, to protect these rights, but this collective force cannot have any rights that the organizing individuals do not have. This organizing force--government--cannot do anything that the organizing individuals themselves cannot do.

... the common force that protects this collective right cannot logically have any other purpose or any other mission than that for which it acts as a substitute. Thus, since an individual cannot lawfully use force against the person, liberty, or property of another individual, then the common force--for the same reason--cannot lawfully be used to destroy the person, liberty, or property of individuals or groups. (Bastiat, 1968: 6-7)

Force can be used to defend individual rights but it cannot be used to destroy the rights of others. Since individuals cannot use force to destroy the rights of others, it follows logically that the common force also cannot use force to destroy the rights of others. The law is no more than the organization of the natural right of lawful defense. All it does is substitute collective force for individual force. When the law is limited to this purpose, justice reigns. When the law goes beyond this scope, the result is injustice.

When the law places the collective force into the hands of unscrupulous individuals who use that force to exploit the person, liberty, or property of others the law is perverted. It converts plunder into a right in order to protect plunder. It converts lawful defense into a crime.

There are two causes for this perversion of the law: stupid greed and false philanthropy (Bastiat, 1968). Stupid greed results when one person wishes to live at the expense of another. Rather than mixing one's labor with natural resources to create property, one gains property by seizing and consuming the product of the labor of others (Bastiat, 1968). Since individuals are inclined to avoid pain, and since labor is painful, they will resort to plunder whenever doing so is easier than work. The plunder will stop only when it becomes more painful than labor. The purpose of law is to make plunder more painful than labor, to protect property and punish plunder. The law is perverted when it allows individuals to engage in plunder and when it punishes individuals when they attempt to protect their property. The law, rather than checking injustice, becomes a weapon of injustice.

All special interest legislation, what economists refer to as rent-seeking (Rowley, Tollison and Tullock, 1988; Tullock, 1970, 1989, 1993), involves a perversion of the law.

Under the pretense of organization, regulation, protection, or encouragement, the law takes property from one person and gives it to another; the law takes the wealth of all and gives it to a few--whether farmers, manufacturers, shipowners, artists, or comedians (Bastiat, 1968: 17)

Legal Plunder

There are two kinds of plunder, legal and illegal. When a thief steals the property of another, it is illegal plunder. When the law is used to take the property of another without the owner's consent, it is legal plunder. Bastiat identified legal plunder as follows:

But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.

Then abolish this law without delay, for it is not only an evil itself, but also it is a fertile source for further evils because it invites reprisals. If such a law - which may be an isolated case--is not abolished immediately, it will spread, multiply, and develop into a system. (Bastiat, 1968: 21)

Bastiat goes on to state that this perversion of the law is an attempt to enrich everyone at the expense of everyone else, to make plunder universal under the pretense of organizing it. Such plunder can take many forms, including tariffs, protection, granting benefits or subsidies, encouraging certain activities, progressive taxation, public schools, guaranteed jobs, guaranteed profits, minimum wages, the right to relief, free credit, and on and on (Bastiat, 1968). Some people think they are somehow entitled to be supported or have their life subsidized at the expense of the general community. Workers in the steel industry believe they are entitled to protection from foreign competition. Those of retirement age believe that the general public should pay for their pensions. Farmers believe they are entitled to price supports or protection from foreign competition. Workers believe they are entitled to a job even if they provide a product or service that no one wants. Business owners believe they are entitled to a high price for their products even though consumers are unwilling to pay the price they think they are entitled to (Bastiat, 1862b, 1873a, b & c; 1964a&b).

All of these forms of redistribution were present in Bastiat's time and are present in our own time as well. Things have not changed in a century and a half. The management and workers at General Motors believe they are entitled to protection and subsidies even though an insufficient number of individuals want to buy their products. People of retirement age believe the younger generation should be forced to contribute to the Social Security program so that funds will be available for their pensions. The sick and elderly believe that the general public should be forced to contribute to healthcare systems so that they can have their healthcare subsidized.

For Bastiat, as for some other legal theorists and ethicists (Jouvenel, 1951), forcible redistribution is a perversion of the law. Bastiat labels this forcible redistribution socialism. Alfred De Foville summarized Bastiat's analysis of redistribution quite well. Basically, he points out that protectionists and socialists have in common a tendency to artificially reorganize society by using the law to do what they cannot do themselves. Under protectionism, the minority exploits the majority. Under socialism, the majority exploits the minority. In both instances, the effect is to violate justice and go against the public interest (De Foville, 1889).

False Philanthropy

As was mentioned above, there are two causes of this perversion of the law, stupid greed and false philanthropy. The difference between true philanthropy and false philanthropy is quite simple. True philanthropy results when individuals donate their own property to some charitable cause. False philanthropy results when one group of individuals, using the force of law, forces taxpayers to part with a portion of their property so that some other group of individuals can benefit when their cause is deemed to be worthy by the group that is resorting to force.

It is a well recognized principle of philosophy that one can act charitably only when the action is voluntary. An act cannot be moral when one is forced to do it. Thus, false philanthropy cannot be moral. In fact, it is immoral because the property that is transferred is acquired by force. The plunder is legal rather than illegal because the law is being used to forcibly transfer the property from those who own it to those who have no moral claim to it.

Nothing can enter the public treasury for the benefit of one citizen or one class unless other citizens and other classes have been forced to send it in.... The law can be an instrument of equalization only as it takes from some persons and gives to other persons. When the law does this, it is an instrument of plunder. (Bastiat, 1968: 30-31).

PHILOSOPHY OF EDUCATION

Funding Education

Bastiat discusses education in several of his works (Bastiat, 1964a&c, 1968, 2007). He discusses both content and funding. As one might expect from the above discussion, he opposes tax supported education. He considers it a form of legalized plunder (Bastiat, 1968: 22, 31), since the general public is forced to part with some of its property so that others can benefit. If a private individual forced his neighbors to pay for the education of his children at the point of a gun it would be a crime. One might label it theft or armed robbery. However, if he uses the government's guns to obtain the funding it is merely called public education. The plunder is made legal because the law permits or even requires the forcible transfer of property from the taxpayers to those who consume education.

It is a misnomer to say that education is "free." While those who are being educated may not have to pay, someone is forced to pay. Instruction does not merely shine down from the sky and spread to every corner of the land by itself without requiring any effort from anyone.

Teachers do not work for free. They must be paid by someone. Either the state pays them or the individuals who are benefitting from the instruction pay them.

When the state is providing the education, those who do not learn are forced to pay for those who do learn. Those who learn little are forced to pay for those who learn much. The poor are forced to pay for the education of the rich. Those who are preparing to enter the trades are forced to pay for those who will enter the professions. The state cannot give away anything for free. Someone must always pay. Such a payment system is a form of communism. (Bastiat, 1964a).

In Bastiat's time, Catholics were taxed to support Jews and Jews were taxed to support Catholics. That is because Napoleon I established a system of government subsidies for the main religious denominations (Bastiat, 1964c). Bastiat was against these subsidies, some of which went to educate Catholics and Jews, not because he was against religion (he was a devout Catholic--Skousen, 2001: 60) but because he firmly believed that some groups should not be forced to support other groups. He resented the fact that he must pay both for the education of his own children in private schools and also the children of other people who sent their children to government schools (Bastiat, 1964a).

Bastiat argues that socialism confuses the distinction between government and society. If someone argues against government education, socialists would argue that he is against all education. Those who argue against a state religion are accused of being against all religion. Those who argue against state-enforced equality are accused of being against equality (Bastiat, 1968).

The argument may be made that the government must provide education, since the poor are not able to provide for it themselves. Those who make this argument are guilty of a non sequitur. In philosophical terms, one may structure the argument as follows: The poor are not able to pay for their own education; therefore, the government must provide it. Socialists ignore the fact that there are other possibilities. In the case of education, for example, it can be provided through voluntary exchange or by private charity.

Several scholars have shown that government involvement in education is not needed and is not desirable (Friedman, 1962; Tooley and Stanfield, 2003; West, 1965). There are historical examples that show the poor can be educated without government involvement. It has also been shown that privately provided education is both cheaper and better than government education Pirie, 1988; Savas, 1982).

Competition is one reason (Bastiat, 1964c). When competition is injected into the system, there are incentives to reduce costs and improve quality. If consumers (students or their parents) can go elsewhere, there is an incentive to keep them happy by providing a better quality service at a lower price than the competition. In the case of government provided education there is monopoly. Dissatisfied students or parents have nowhere else to go. Thus, there is little incentive to improve the quality of the educational product. He viewed monopoly as paralyzing all that it touches (Bastiat, 1964a).

What Kind of Education

Bastiat is against any kind of forced education. He believes that government should not dictate what may be learned or what must be taught. He would leave that decision to parents and to the students themselves.

That is one reason why he advocated abolishing the state-run monopoly university system, which was a top-down system that dictated what may or may not be taught at the university level. He argued that there were three weaknesses with the university education system. It was uniform, it was terribly administered and it was inflexible. (Bastiat, 1964a).

Education is progressive by nature. It is the transmission of knowledge acquired over centuries from the present generation to the future generation. Ideally, it should be refined and increased every day. However, in France it had remained the same, stationary and immobile since the Middle Ages because it is a state monopoly. Abolishing competition in methods of instruction, as the French law did, was no less a violation of freedom than abolishing competition among men (Bastiat, 1964a).

Latin and Greek--dead languages--were the languages used to transmit education. Aristotle and the other classics were required reading. Any innovations since the time of Aristotle and the Roman Empire were not taught because such knowledge was not available in either Latin or Greek. Reading what the Romans wrote centuries ago cannot tell us much about religion, physics, chemistry, astronomy, physics, history, law, ethics, industrial technology or social science (Bastiat, 1964a).

In his view, genuine education consists of teaching what things are and the effects they produce in the physical and moral order. Those who are best educated are those who have the most exact idea of phenomena and who best understand the relationship between cause and effect. The state's view is different. Those who espouse the official state's position on education view people as being educated if they can read Plautus and cite the opinions of Thales and Pythagoras (Bastiat, 1964a).

He was also against classical education because of its advocacy of the state over the individual. The subversive doctrines of socialism and communism have their roots in classical education. The Roman Empire lived by plunder, which the classic literature viewed in a positive light. He would prefer the study of societies where people lived by honest labor (Bastiat, 1964a). Property was communally owned in Plato's Republic. Plato would punish those who engage in commerce, as if doing so were somehow an evil activity (Bastiat, 1964a).

He challenges the reader to find a single instance in the literature of antiquity that states that "Every man owns himself, and consequently his labor, and, accordingly, the product of his labor." (Bastiat, 1964a: 247). The Romans could not conceive of such an idea. If they did, how would they explain slavery?

Bastiat also cast aspersions on the classical concept of morality. Roman patriotism included the hatred of all foreigners, the destruction of civilization, the stifling of progress and the scourging of the world by fire and sword and the glorification of other atrocities (Bastiat, 1964a). Spartan legislators approved of idleness, promiscuity, infanticide and the mass slaughter of slaves (Bastiat, 1964a).

The Romans also believed that one nation's loss was another nation's gain, a view that is true only in the case of pillage or plunder. But the Romans believed it to also be the situation in the case of trade. To the Romans, trade was a zero-sum game. For Bastiat, trade was obviously a positive-sum game, since both sides benefitted by free trade. Yet those who were trained in the classical literature were taught to believe the incorrect view that trade was a zero-sum game. The result was protectionism and trade wars, which sometimes led to shooting wars.

Bastiat also opposed two other ideas that are taught in the classical literature, the view that society is a condition outside of nature, the result of a contract, and the idea that it is law that creates rights rather than the correct view that men create law to protect pre-existing rights (Bastiat, 1964a).

He points out that nineteenth century writers look upon society as an artificial creation of the legislator's genius, and that the relationship between individuals and the legislature is similar to that of the relationship between clay and the potter. The leaders of the time molded the Cretan, Lacedemonian, Athenian and Roman societies. In The Republic, Plato set the mold for future model societies (Bastiat, 1964a; 1968). The unifying principle in all of these works is that individuals should not be free to choose their own destinies. The state must do it for them. Those who dream of creating an artificial society that involves the manipulation of the family, property, the law and mankind according to their will are socialists. The classical literature espouses socialism.

The French legislators thought they had both the ability and the duty to mold the citizenry as they see fit. If the legislators did not point the citizenry in the right direction, they would go in the direction of their own inclinations, and would arrive at atheism instead of religion, ignorance instead of knowledge and poverty instead of production and exchange (Bastiat, 1968). Legislators, who were classically trained in Bastiat's day, did not see that individuals are capable of making their own choices and that their choices might be better than those of the legislators. Such legislators are not scientists; they are tyrants (Bastiat, 1964).

Education under the Egyptians aimed at hammering patriotism into the minds of their students. The state did not permit anyone to be useless or idle. The state assigned occupations to its subjects and did not allow anyone to change professions. The state dictated where they should work. No one could have more than one job or profession. All were forced to conform to the will of the state. The people were taught to believe that all prosperity, inventions, husbandry and science come from the state and that the only function of the people was to bow to the will of their leaders (Bastiat, 1964a; 1968).

Liberty means competition (Bastiat, 1968). That holds true in the field of education as well as in other fields. While it might be feared that such freedom would result in having parents pay teachers to teach their children immorality, falsehoods, the philosophy of the Turks and Hindus, and would destroy the national nature of education (Bastiat, 1968), Bastiat sees that fear as unfounded. He would prefer that children not be taught the ideas of the Romans. It is not the duty of the state to enlighten the people (Bastiat, 1968).

It is not true that the function of law is to regulate our consciences, our work, our trade, our talents, or our pleasures. The function of law is to protect the free exercise of these rights, and to prevent any person from interfering with the free exercise of these same rights by any other person. (Bastiat, 1968: 67)

Bastiat was opposed to the requirement that people have a bachelor's degree from a government university in order to enter certain careers (Bastiat, 1964a). While one was free to start a private school to compete against the free state schools, the fact that government schools were free made it difficult for entrepreneurs to compete on price. Theoretically, they could compete by offering such a superior education that people would be willing to pay to send their children to such schools. However, if they did not teach the classic curriculum and use the teaching methods approved by the government, they would not be able to enter any of the learned professions upon graduation. One is not free if forced to educate their children in the classical curriculum, which glorifies violence and brigandage. He advocated allowing private schools to choose their own curriculum and teaching methods (Bastiat, 1964a).

He advocated abolishing government education completely. His rationale was quite simple. Those who control education control people. If some political faction controls the educational system, they can impose their views on others and prevent opposing views from being taught. Errors in what is taught can go uncorrected and unchecked because there are no competing schools or ideas. (Bastiat, 1964a 280-281) "Life in society will be forbidden to whoever does not follow my curriculum." (Bastiat, 1964a: 283)

CONCLUDING COMMENTS

Much of what Bastiat said about education has relevance today. In many countries, governments have a monopoly or at least a semi-monopoly on education. In the United States, the federal, state and local governments all have a hand in funding education and in determining what is taught, how it is taught and who teaches. The monopoly exists starting at the kindergarten level and continues through the university.

Public (government) education is provided free of charge, which makes it difficult for private schools to compete. Students are generally assigned to the government school that is closest to their home. There is no choice. Parents may not send their children to another government school that is better or that is in a safer neighborhood. If they want their children to attend a particular government school they must move to the neighborhood where that school is located, which might be cost prohibitive, burdensome, inconvenient or impossible.

Because each local school is a monopoly, there is little incentive for the people in charge of the school to offer a high quality education. There is no penalty for mediocrity. Their "customers" have nowhere else to go. As is true of any monopoly, the costs are higher and the quality is lower than would be the case under competition (Larner & Meehan, 1989; Posner, 1998; Rothbard, 2004; Shughart, 1990).

Curriculum is another potential problem. Many parents care what their children are taught in the schools. The problem is that some parents want one type of curriculum while other parents want something else. But in a one-size must fit all curriculum, there is no choice. Some parents want their children to receive sex education instruction while others do not. Some parents want their children to receive religious education while others do not. Some parents want the cafeteria to comply with certain religious dietary rules whereas other parents do not care about this issue. Some parents want a curriculum that emphasizes math and science while other parents want the curriculum to focus on socialization along the lines of what John Dewey advocated a few generations ago (2011). Some parents want their children to learn about evolution while others do not want their children to be exposed to such ideas.

Many elementary and secondary school curriculums contain elements of indoctrination, either because of the biased textbooks they use or because of the particular teachers who instruct the students. Some texts subtly advocate socialism while others advocate patriotism, individualism and fear of God. Some show homosexuality in a positive light while others refer to it as abnormal behavior.

The point is that it is impossible to satisfy everybody with a one size fits all system. If schools were free to offer whatever curriculum they want, parents who want their children to receive one kind of instruction would be able to send their children to School X and parents who want their children to receive another kind of instruction would be able to send their children to School Y. Everyone would be happier and there would be less need for compromise.

The education monopoly does not end at the secondary school level. If someone wants to study accounting at an accredited university, one must endure a curriculum that consists of two years of liberal arts subjects and one year of business subjects that have nothing to do with accounting in order to take the ten or so accounting courses that are required for a four-year bachelor's degree. In other words, three years out of a four-year undergraduate college education must consist of courses that the students might have no interest in taking. Thus, the time needed to complete the requirements for an accounting degree is expanded by 400 percent, from one year to four years, as is the cost. Any university that does not require two years of liberal arts courses and one year of other business courses as part of its accounting program loses its accreditation and funding.

That is not to say that universities should only offer a curriculum where students are required to take only accounting courses in order to obtain a bachelor's degree in accounting. Universities could be free to offer any curriculum they want without fear of losing funding (because there would no longer be government funding). Some universities might choose to continue offering a four-year program that consists of 50 percent liberal arts, 25 percent business courses and 25 percent accounting courses. Other universities might choose some other mix of courses. If there is a demand for a certain kind of education, some university will seek to fill that demand.

Bastiat's point is that those who receive the education (or their parents) should be free to choose from among several options. The education that is available to them should not be dictated from above. Those who choose to study only accounting should not be precluded from taking the CPA exam just because they do not have a bachelor's degree in accounting from a government-approved university. Furthermore, the CPA exam should test only on accounting topics. There should be no need to know Aristotle or Plato or poetry as a condition of being permitted to take the exam.

Accrediting agencies also have more or less uniform requirements regarding who can teach. At the university level, the faculty must consist of a certain percentage of instructors holding the PhD degree. If the ratio of PhD professors falls below a certain level, the university stands to lose its accreditation. Without accreditation, major funding sources are no longer available.

In the case of accounting education, the PhD requirement arbitrarily excludes more than 99 percent of the otherwise qualified pool of potential instructors. There are perhaps 500,000 certified public accountants (CPA) in the United States. In order to become a CPA it is necessary to pass a rigorous exam and meet certain education and experience requirements. Anyone who is able to pass the CPA exam and who can meet the education and experience requirements is qualified to teach at least half of the undergraduate accounting curriculum. Someone who has had a few years of practical experience or who holds a master's degree is qualified to teach any course in the accounting curriculum. It is illogical to arbitrarily exclude this pool of talent. Yet they are excluded because of the arbitrary PhD requirement.

American universities graduate very few accounting PhDs in any given year. In some years, they graduate less than 100, many of whom are foreign, which means they may not be eligible to stay in the United States after graduation. Yet those who do graduate and stay in the United States are considered to be more highly qualified to teach accounting than a practitioner who speaks English as a first language and who may have more than twenty years experience in the profession.

Bastiat would not approve of such a monopolistic arrangement. He advocated the abolition of the state university system in France precisely because of the stranglehold the government had over credentialing and curriculum. In a free enterprise educational system, schools would have to compete for students and funding. Those who provided a better education would see their enrollments expand and those who required a large number of irrelevant subjects in their curriculum would see their enrollments decline. Those who insisted on hiring only PhDs would increase their salary costs to uncompetitively high levels. Those who hired from the vast pool of CPA practitioners would save large amounts of salary expense, some of which would be passed on to students in the form of lower tuition. Poor and minority students would see their total tuition costs reduced by 75 percent, since they could learn all the accounting they needed by taking 10 accounting courses instead of 10 accounting courses and 30 nonaccounting courses. They would also be able to seek employment three years sooner than would otherwise be the case, which is an opportunity cost that is often overlooked.

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About the Author:

Robert W. McGee is a professor in the School of Business at Florida International University in Miami, USA. He has published more than 50 books and more than 600 articles and other scholarly papers in the fields of accounting, taxation, public finance, economics, law, philosophy, education and ethics. He is a certified public accountant and attorney.

Robert W. McGee

Florida International University
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