Last week, the Institute for Justice scored a resounding victory for the right to earn an honest living in an unlikely case that pitted woodworking monks against the Louisiana State Board of Embalmers and Funeral Directors. The New Orleans-based U.S. Court of Appeals for the Fifth Circuit — where I clerked — ruled in a final, unanimous decision (including one Obama-appointed judge) that Louisiana violated the St. Joseph Abbey monks’ economic liberty when it forbade them from selling the caskets they make to support their religious order.

Significantly, the court ruled that the Constitution doesn’t allow the government to enact laws simply to shield industry cartels from honest competition. Although IJ was already assured of victory, given that Fifth Circuit had issued a divided preliminary opinion in October, that ruling left open some tricky questions that this latest decision definitively settled. 

Last Wednesday’s ruling makes clear that laws having no purpose but to enrich certain protected interests are unconstitutional, using reasoning that should be a model for courts across the country. 

Louisiana now has 90 days to seek review in the U.S. Supreme Court — which supporters of economic liberty should welcome because IJ’s previous litigation created a split in the federal lower courts that can only be resolved, for the nation as a whole, by the Supreme Court. 

For more on St. Joseph Abbey v. Castille, see IJ’s case page and this Wall Street Journal op-ed by IJ’s Chip Mellor and Jeff Rowes. And if you’re a law student interested in using your legal skills to promote liberty this summer, you should apply to IJ’s epic public interest boot camp (of which I’m a graduate, though in my day there wasn’t any skydiving or aikido).

Unauthorized and low skilled immigrants are attracted to America’s labor markets, not the size of welfare benefits. From 2003 through 2012, many unauthorized immigrants were attracted to work in the housing market. Housing starts demanded a large number of workers fill those jobs. As many as 27 percent of them were unauthorized immigrants in some states. Additionally, jobs that indirectly supported the construction of new houses also attracted many lower skilled immigrant workers.

Apprehensions of illegal crossers on the Southwest border (SWB) is a good indication of the size of the unauthorized immigrant flow into the United States. The chart below shows apprehensions on the SWB and housing starts in each quarter:

Fewer housing starts create fewer construction jobs that attract fewer crossings and, therefore, fewer SWB apprehensions. The correlation holds before and after the mid-2006 housing collapse. 

What about welfare? 

Here is a chart of the national real average TANF benefit level per family of three from 2003 to 2011 (2012 data is unavailable) and SWB apprehensions:

Prior to mid-2006, TANF benefit levels fell while unauthorized immigration rose. During the housing construction boom, unauthorized immigrants were attracted by jobs and not declining TANF benefits. After mid-2006, when housing starts began falling dramatically, real TANF benefit levels and unauthorized immigration both fell at the same time. If unauthorized immigration was primarily incentivized by the real value of welfare benefits, it would have fallen continuously since 2003. 

The above chart does not capture the full size of welfare benefits or how rapidly other welfare programs increased beginning in 2008. As economist Casey Mulligan explained in his book The Redistribution Recession, unemployment insurance, food stamps (SNAP), and Medicaid benefits increased in value and duration beginning in mid-2008. Including those would skew welfare benefits upward in 2008 and beyond, but unauthorized immigration inflows still fell during that time.

In conclusion, housing starts incentivize unauthorized immigration while TANF does not. 

It’s easy to understand why several prominent GOP Senators, including Sens. Lamar Alexander, Mitch McConnell, Rand Paul, and Marco Rubio, are sponsoring federal school voucher legislation. State-level voucher programs have raised student achievement, increased high school graduation rates, and boosted college matriculation. School choice programs are also market-based initiatives that aid and appeal to low-income voters. As Senator Paul argued:

“School choice for low-income parents and students across America is a way out of the poverty cycle,” Mr. Paul said in a statement. “Allowing Title 1 funds to follow the student creates an opportunity for students to get the most out of their education in the best environment possible.”

Moreover, a recent survey from Harvard University’s Program on Education and Governance found a high level of support for expanded school choice programs. All that said, the GOP should resist the temptation of a federal voucher system.

Even setting aside the question of constitutionality (education is not listed in the Constitution as one of the federal government’s enumerated powers), there are practical reasons for being skeptical about increased federal involvement in America’s education system. It is very likely that a federal voucher program will lead to increased federal regulation of private schools over time. While there’s no law of the cosmos that states that federal dollars must come with strings attached, they most often do. And while the GOP legislators proposing the vouchers will likely keep regulations light at the outset, when the political pendulum swings—as it inevitably will—opponents of vouchers might find that it’s politically easier to add regulations to the program than to kill it outright. Once private schools become dependent on the federal money that their students bring with them, the vast majority will accept the new regulations rather than forgo the funding.

Instead of playing with federal fire, the GOP should embrace federalism. As David Boaz wrote in the Cato Handbook for Congress a decade ago, the case against federal involvement in education:

is not based simply on a commitment to the original Constitution, as important as that is. It also reflects an understanding of why the Founders were right to reserve most subjects to state, local, or private endeavor. The Founders feared the concentration of power. They believed that the best way to protect individual freedom and civil society was to limit and divide power. Thus it was much better to have decisions made independently by 13–or 50–states, each able to innovate and to observe and copy successful innovations in other states, than to have one decision made for the entire country. As the country gets bigger and more complex, and especially as government amasses more power, the advantages of decentralization and divided power become even greater.

School choice programs have been expanding rapidly among the states in recent years (albeit not as rapidly as I would like). Supporters of school choice should be encouraging that trend, working hard at the state level to expand educational opportunities. Expanding choice all across the fruited plain in one swoop may be tempting in its immediacy, but it’s not worth the price.

In today’s New York Times, philosopher Sarah Conly gives “Three Cheers for the Nanny State,” specifically, NYC’s famed big soda ban. Invoking aspects of the theory of “nudge,” made popular in a book by Richard H. Thaler and Cass R. Sunstein, Conly argues that, sometimes, the government can rightfully save us from ourselves.

The popularity of “nudge theory” is closely tied to the recent spate of popular science books on the foibles of the human brain. Books such as Predictably Irrational and A Mind of Its Own are part of a new self-help fad: the idea that scientists studying the error-prone human brain can help us understand why we are unable to quit smoking, lose weight, and many other common problems.

It was only a matter of time until government regulators and their champions embraced this new science in order to put a fresh spin on an old impulse—their never-ending desire to save us from ourselves. But despite the valid insights of cognitive neuroscience, both nudge theory and Conly’s editorial are no more defensible than any other paternalism. We should not be deceived into believing that there is any new wine in those old wineskins.

The error at the heart of nudge theory is that scientists and regulators can discover what our true preferences are absent a choice that reveals those preferences. Traditional economics relies on the theory of “revealed preferences”—the idea that our choices reveal what, at that moment, we really want. This is not to say that we might later regret those choices or that some of those choices may be bad for us. Instead, it merely says that, given the information and desires you had at the time, your choice revealed your preference.

Nudge theory holds that “true preferences” can be discovered in a different way: by mapping the conditions under which we are prone to error and then divining our true preferences by asking what our choices would have been but-for those systematic biases. What results is not the traditional type of paternalism that imposes the preferences of regulators upon the citizens; instead it is new type of paternalism that imposes your “true” preferences upon yourself.

Do you constantly say you want to lose weight but never can find the time to exercise, or perhaps today was just a day when you really wanted a cheeseburger? Well, then regulators can help you achieve your true preferences. Do you wish you could quit smoking but the pressures of each day are made easier by cigarettes? Well, they can help you with that too.

The fundamental problem: Is there any reason the “you” who says he needs to lose weight is more “true” than the “you” who has a cheeseburger? Do you even know which preference is your “true” one? Does that question even make sense? The secondary problem: Is there any way for regulators to discover which is the true “you” and any reason for us to believe they have the incentives to do so? Moreover, can we trust them to not succumb to their own cognitive biases as they help nudge you onto the path towards your “true” self?

In Conly’s words, “the crucial point is that in some situations it’s just difficult for us to take in the relevant information and choose accordingly,” therefore “we need help.” And although she admits that it is not “always a mistake when someone does something imprudent,” the “needs of the majority” must be taken into account.

Although it is not explicitly stated, Conly is discussing costs imposed on “the majority” via the medical system, at least in the context of the big soda ban. Without these shared costs, Conly’s argument is much more difficult to make. With these shared costs, however, there is no personal lifestyle choice that cannot, on principle, be regulated under the theory that the “needs of the many outweigh the needs of the few.” And the Affordable Care Act is only increasing the collectivization of our health-care costs.

Conly hopes to avoid this slippery slope problem by invoking the rationality of regulators, which is a particularly odd thing to do in an opinion piece mostly dedicated to the irrationality of human beings. We need not worry, she says, because “successful paternalistic laws are done on the basis of a cost-benefit analysis: if it’s too painful, it’s not a good law.” Yet the painfulness here is, of course, subjective—for example, the pain of not being able to purchase a big soda or a pack of cigarettes. Yet these are exactly the sort of subjective pains that Conly and other proponents of nudge theory are prone to explain away by saying they aren’t “true” preferences.

And even if the slippery slope were true, argues Conly, “Banning a law on the grounds that it might lead to worse laws would mean we could have no laws whatsoever.” Here, again, she misses the point. We can ban laws that have no conceivable limiting principle, are based on faulty assumptions about human nature, and infantilize adults into wards of the state without worrying about undercutting all laws. 

Finally, Conly does not touch upon the broader consequences of having the government treat adults like children who do not know what is best for themselves. There is immense value in having decisional autonomy. John Stuart Mill, who Conly strangely invokes to justify her vein of paternalism, would have found her program abominable. In On Liberty, Mill wrote:

If a person possesses any tolerable amount of common sense and experience, his own mode of laying out his existence is the best, not because it is the best in itself, but because it is his own mode. Human beings are not like sheep; and even sheep are not undistinguishably alike.… If it were only that people have diversities of taste that is reason enough for not attempting to shape them all after one model. But different persons also require different conditions for their spiritual development … 

In other words, free choice is also valuable because it is your choice. But it is not surprising that Conly disagrees, seeing as she is the author of Against Autonomy: Justifying Coercive Paternalism.

The new paternalists are no different than the old paternalists. By invoking new scientific studies new paternalists hope to make their programs both easier to swallow and harder to see. While we sometimes might need to be saved from ourselves, that’s what family, friends, churches, and community are for. If the new paternalists takeover, however, who will save us from them? 

The Washington Examiner’s Paul Bedard writes:

The 61-page online Obamacare draft application for health care includes asking if the applicant wants to register to vote, raising the specter that pro-Obama groups being tapped to help Americans sign up for the program will also steer them to register with the Democratic Party.

That may strike some as unseemly. After all, people go to jail for buying votes. But the real problem here is that ObamaCare is paying too much.

According to the Congressional Budget Office, the average subsidy ObamaCare offers for private health insurance will rise from $5,500 next year to more than $8,000 in 2023. But according to the Washington Post:

The price of one bona fide, registered American vote varies from place to place. But it is rarely more than a tank of gas.

Indeed, as a rising furor over voter fraud has prodded some states to mount extensive efforts against illegal voters, election-fraud cases more often involve citizens who sell their votes, usually remarkably cheaply. In West Virginia over the past decade, the cost was as low as $10. Last year in West Memphis, Ark., a statehouse candidate used $2 half-pints of vodka.

At the high end, corrupt candidates in Clay County, Ky., once paid $100. But that was probably too much: It attracted one woman who already had sold her vote. The man who bought it first was outraged, and he beat up the man who bought it second.

ObamaCare overpays for everything.

Nobelist Paul Krugman has a propensity to spin and conceal. This allows for deception – the type of thing that hoodwinks some readers of his New York Times column. While deception doesn’t qualify as lying, it also fails to qualify as truth-telling.

Prof. Krugman’s New York Times column, “Hot Money Blues” (25 March 2013) is a case in point. Prof. Krugman sprinkles holy water on the capital controls that will be imposed in Cyprus. He further praises to the sky the post-1980 capital controls that were introduced in a number of other countries.

Prof. Krugman then takes a characteristic whack at all those “ideologues” who might dare to question the desirability of capital controls:

But the truth, hard as it may be for ideologues to accept, is that unrestricted movement of capital is looking more and more like a failed experiment.

Fine. But, not once did Prof. Krugman mention that there just might be a significant cost associated with the imposition of capital controls – a cost with which Prof. Krugman is surely familiar.

Before more politicians fall under the spell of capital controls, they should take note of what another Nobelist, Friedrich Hayek, had to say in his 1944 classic, The Road to Serfdom:

The extent of the control over all life that economic control confers is nowhere better illustrated than in the field of foreign exchanges. Nothing would at first seem to affect private life less than a state control of the dealings in foreign exchange, and most people will regard its introduction with complete indifference. Yet the experience of most Continental countries has taught thoughtful people to regard this step as the decisive advance on the path to totalitarianism and the suppression of individual liberty. It is, in fact, the complete delivery of the individual to the tyranny of the state, the final suppression of all means of escape—not merely for the rich but for everybody.

When it comes to capital controls, I think the Cypriots – even the non-ideologues – might be inclined to agree with Hayek over Krugman.

As Georgia’s legislature considers a bill to expand the state’s scholarship tax credit (STC) program and increase transparency, some are calling for additional regulations. Writing in yesterday’s Atlanta Journal-Constitution, Adam Emerson of the Thomas B. Fordham Institute argued that the Peach State should require private schools that accept scholarship students to administer standardized tests. That would be a mistake.

Emerson argues that parents, educators, and policymakers “deserve to compare the gains that students make in different school environments.” Test scores can be a useful, albeit limited and incomplete, method of comparing the academic effectiveness of different schools. Under the current system, parents are free to choose private schools that administer standardized tests and avoid those that do not or vice-versa. Likewise, donors are free to direct their money to scholarship organizations that only fund schools that do or do not administer standardized tests.

By contrast, a testing mandate would severely limit or even eliminate these choices. Parents who are concerned about the “teach to the test” phenomenon or whose child reacts negatively to testing, and educators who believe that standardized testing gets in the way of real learning will have little to no choice but to participate in the standardized testing regime, as even Emerson agrees.

Emerson argues that the vast majority of private schools would still participate in the STC program even with a standardized testing mandate. He cites a recent Fordham study of the impact of regulation in school choice programs showing that “only 3 percent of non-participating schools cited governmental regulations as the most important reason to opt out.” That’s exactly the problem. The mandate would force private schools to choose between eschewing both the tests and all the students who need school choice scholarships to attend their school, or accepting both. Unsurprisingly, the vast majority of schools succumb to the financial pressure.

Researchers tend to support testing mandates because they allow them to evaluate the effectiveness of certain reforms, at least to an extent. But the very act of measurement itself can distort the very thing they are trying to measure. Even aside from the cheating scandals, the tests create strong incentives for teachers to teach differently in order that their students perform well on the test.

Of course, some will argue, “that’s not a bug, that’s a feature!” They support standardized tests as a means of increasing accountability. “If you want to move something, you have to measure it,” they argue, and they have a point. But standardized tests are not the only way to measure learning. Supporters of standardized testing know that, but they want a uniform measures so that they can compare apples to apples. The problem is that uniform measures create a powerful incentive to move toward uniform behavior. As James Shuls of the Show-Me Institute wrote recently:

The fact is that curriculum standards don’t tell teachers how to teach in the same way that a high jump bar doesn’t tell a jumper how to jump. You could theoretically jump over a high jump bar in whatever way you would like; but because of how the jump is structured there is a clear advantage to doing the old Fosbury Flop.

While standardized tests are not as imposing as curriculum standards, what’s on the test can drive what is taught in the classroom, when it is taught, and how it is taught. Professor Jay P. Greene argued along similar lines regarding national standards:

Such uniformity would only make sense if: 1) there was a single best way for all students to learn; 2) we knew what it was; 3) we could be sure the people running this nationalized education system would adopt that correct approach; and 4) they would remain in charge far into the future. But that isn’t how things are. There is no consensus on what all students need to know. Different students can best be taught and assessed in different ways.

Standardized tests create an incentive for uniformity when we should be fostering a diversity of traditional and innovative pedagogical methods. To the extent that researchers, policymakers and some educators believe that standardized tests are useful, they should make their case in the free marketplace of ideas and encourage parents to choose the schools that administer them. What they shouldn’t do is use the coercive power of government to fashion a top-down system of testing that could squelch diversity and innovation.