Packaging Liberty

The idea and principles of liberty never change.  The times always do.  How we express and defend the message of liberty should change as needed. 

The first lines of F.A. Hayek's The Constitution of Liberty:

"If old truths are to retain their hold on men's minds, they much be restated in the language and concepts of successive generations...The underlying ideas many be as valid as ever, but the words, even when they refer to problems that are still with us, no longer convey the same conviction."

There are everyday opportunities to engage people through personal relationships and social media outlets, connecting with people on a real life basis.  Like any substantial social movement, for change to be substantive and lasting it has to start from the grassroots, in the minds of We the People.  How we engage those around us (physically and on the social media web) on the terms of real life situations is important.

An honest, enthusiastic, and optimistic explanation of freedom on an individual basis is the best way to "market" freedom.  In the end, you are the packaging liberty needs. In the New Year let's do our homework and stay enthusiastically engaged.

Happy New Year

Think of Freedom of Religion and Speech, Then Keep Going

"Hence the familiar fact that the more the state 'plans,' the more difficult planning becomes for the individual."~~~F.A. Hayek  The Road to Serfdom
 
Most Americans dearly hold to their rights articulated in and protected by the First Amendment.  Put another way, few Americans would quietly abide the unwarranted government violation of the following:

• Not having a state-mandated religion
• Their right to freely worship or not worship God as they see fit without government intervention
• Speaking freely, with no state prevention or persecution thereof
• A free press, neither controlled nor manipulated by government
• The right to peacefully assemble
• The right to petition government for correction of government abuses

When it comes to our First Amendment "rights" we have little toleration for government meddling; this is a very good thing.  Our dogged adherence to these limitations on the power of government is almost like a political and cultural religion.  Here we are and there is government, and we correctly cry Thou Shall Not! at the appropriate times.

So why, then, don't we get all wrapped around the axle when government intrudes upon other very personal and private matters?  If we've so jealously fenced off our religion, speech, and press from the meddling of the state on the one hand, why are we so indifferent to state interference of our private, peaceful interactions on the other hand?

Every time government intervenes in "the market" it interferes and adversely affects you in an intimate way.  Why?  Because you are the market!  What else is "the market" but 300 million plus people making millions of decisions on a minute-by-minute basis and acting freely and cooperatively upon those decisions in pursuit of their respective self-interests?  This amazing process occurs successfully when people are free enough to make it all happen; conversely, every time government takes it upon itself to plan, manipulate, order, and coerce the market into prosperity the opposite of prosperity occurs---I give you the Soviet Union, Cuba, North Korea, and the United States during the Great Depression.

When government intervenes and places top-down decrees as to how goods are to be made, at what price transactions occur (like minimum wage laws), subsidies one producer and places other producers at a competitive disadvantage, bails out failing companies, and artificially affects the market forces and prices (which always go up--think of college tuition, health care services, and housing), the prices of goods and services have to match up to the actual costs involved and those costs go up.

And who pays for the increase in costs?  You, the consumer who is always on the receiving end of unnecessarily high costs reflected in prices and you, the taxpayer who has to fund the regulatory regime that continues to expand with the ever-expanding size of the federal government. 

If we were limited to the churches we could attend due to some government mandates would e sit by in quite acquiescence?  If government limited what we could say and when we could say it would we not be openly outraged?  If only we held all our liberties as dearly as we hold our right to free speech and freedom of religion. 

The federal government has the constitutional authority and responsibility to regulate interstate commerce but no authority, neither constitutional nor moral, to directly interfere with the workings of that commerce, that is, our free assembling cooperatively and freely in pursuit of our respective self-interests and---gasp!---profits.  Perhaps if such a restriction were included in the First Amendment and not Article 1 we'd jealously keep government out of our market affairs, too.

As they say in New Jersey, I'm not sayin,'  I'm just sayin'...

So What's So Wrong About Scrooge? A Free Market Perspective on "A Christmas Carol"

"The much decried 'mechanism' of the free market leaves only one way open to the acquisition of wealth, viz., to succeed in serving the consumers in the best possible and cheapest way."~~~Ludwig von Mises Liberalism: The Classical Tradition

You've probably watched it and you'll probably watch it again.  A Christmas Carol is looping on cable along with the other classic Christmas movies.  

Over the years I've watched the George C. Scott version several times.  Something always unsettled me about the story, and I just now can put my finger on it: the entire premise that Scrooge and his dead partner, Marley, did not provide good for their fellow creatures is just wrong.   The underlying theme is economically unsound and historically inaccurate.  It all adds to our general misunderstanding of free market capitalism. 

That theme?  Whenever we focus too much on our own material welfare we cause harm to or deprive others of good.

To this we can assuredly reply, Bah-Humbug!

The scene with the apparition of Marley, Scrooge's erstwhile business partner, sets this errant premise upon which the entire transformation of Scrooge takes place. 

Here is a clip of the scene:


Leaving aside the complete lack of Biblical evidence of Marley's quasi-purgatorial punishment (introduced, in all places, in a literary work constructed around the celebratory season of Christ's incarnation), think about what Marley conveys to Scrooge about his time on earth as a successful businessman of market enterprise:

"Business?!  Mankind was my business!  The common welfare was my business...The dealings of my trade were but a drop of water in the comprehensive ocean of my business!"

We are being told Marley's life of pursuing a profit and focusing his energies primarily therein neglected mankind. 


Bah-Humbug!  As Walter E. Williams says, if you want to help your fellow man go earn a profit providing them what they want and need.

Dickens' A Christmas Carol has been viewed as a rebuke of the industrial capitalism of the 1800s.  Marley's ill-founded remarks could easily be the reason for this view. 

Given that Marley and Scrooge's efforts took place during a relatively free period in English history wherein countless hordes of people were further removed from the hand-to-mouth existence that had plagued society for, well, ever, their business activities contributed a great deal of good to society, even if that good was not directly observed.  Dickens' novel takes place in Victorian England, a time when a burgeoning population had its material welfare provided by the workings of industrial capitalism.  That "comprehensive ocean" of business involved many thousands of unseen affects; a market, after all, involves more people, decisions, actions, and ripple effects than immediately meets the eye. 

Marley seems to believe his efforts and time were compartmentalized and not part of a larger whole out of which many thousands of positive economic activities took place.  In short, he focused on himself and thereby did not help mankind.  Since no one earns a profit in a bubble,  Marley and Scrooge got "rich" by devoting their time to facilitating one part of the larger mechanism of the market of satisfying the wants and needs of the consumers. 

And who were the consumers in Victorian England after which businessmen scurried to satisfy in their respective pursuit of individual wealth?  The masses of people who in the pre-capitalist times were doomed to life sentences of serfdom and beggary.  And the first thing the masses wanted were to no longer be masses of poor, wretched serfs.  (Indoor plumbing, leisure time, electricity, and cheese-filled hot dogs all came along later.)

In 2010 we consumers want new apps for our Apple I Phones; back then they wanted apples to keep from starving.  What's the difference between then and now?  Capitalism has continued to allow some of us to provide the rest of us what we want, resulting in unbelievable standards of living, in spite of all the government intervention.   

Mises reminds us:

"The greatness of the period between the Napoleonic Wars and the first World War consisted precisely in the fact that the social ideal after the realization of which the most eminent men were striving was free trade in a peaceful world of free nations.  It was an age of unprecedented improvement in the standard of living for a rapidly increasing population.  It was the age of [classical] liberalism." 

The movie ends with Scrooge merrily contributing to philanthropic ventures.  The narrator comments that Scrooge went on to be society's foremost benefactor and so on and so on.  That's all good but what is left open-ended is whether or not he resumed his business enterprises and continued to provide for a common good not immediately seen and tangible.  If he quit cold turkey under the assumption he could do more good by dissipating his accumulated wealth for philanthropic good before his eyes, much unseen good would have been withheld from society at large.

And if that were the case, Scrooge well deserves our hearty Bah-Humbug!

Video: Whose Property Is It, Anway?

"Side by side with the word 'property' in the program of [classical] liberalism one may quite appropriately place the words 'freedom' and 'peace.' "~~~Ludwig von Mises  Liberalism: The Classical Tradition

Have you ever wondered if your property is, well, actually your property?  Silly question, right?  By definition, if something belongs to you that something is your "property"; the word, "property" denotes ownership by someone somewhere.  So the phrase "your property" is somewhat redundant, a bit like "wet fish."

All fish are wet so why, then, are you being asked to doubt ownership of your property?  

Because pundits and politicians are talking about income and estate taxes!  I've found people generally do not think of their income and their estates---the products and fruits of their labor, time, and talents---as their property.  Your income is your property; it is the monetary compensation of your time and efforts.

Our vote-fishing representatives in Congress never refer to your income as property.  If they were to refer to property as "property," they would have a terribly difficult time explaining why you are being permitted to keep x% of your property versus y% for blah, blah, blah reasons.  Chances are their reasons would come across as thinly-veiled demagoguery. 

More difficult still would be the job of justifying the noxious and logically flawed premise that underpins the income and estate tax. That premise?  If government has a moral right to 1% of your property it has a moral right to 100% of our property.  All the public wrangling is simply about numbers and details.

Consider all the political claptrap that orbs around the income tax debates as you view this commentary by Brit Hume.  And this holiday season, please don't thank your government for the gift of your own property, whatever the tax schedule for 2011.

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It's The Market, Not a "Sector"

"Human society is an association of persons for cooperative action."~~~Ludwig von Mises,  Liberalism: The Classical Tradition  

Talk of the "private sector" is just irksome.  When I hear it tossed around I wince, much when the phrases a whole nother, suposebly, or anywho crops up within earshot.  Fingernails down a chalkboard would be an euphonious melody if said fingernails were raking and slashing these phrases on the chalkboard, starting with "private sector." 

There is no such thing as a "private sector" of the economy.  The phrase implies the economy has parts and that private free enterprise is just one part of the overall economy.  Further implied is that the economy would be incomplete or unbalanced if "the private sector" was responsible for all economic activity.

Private enterprise and the market---you, me, and every other individual voluntarily participating as producers, consumers, and savers---is the economy.  The market is the sum total of the free actions of individuals who participate and contribute to its existence and movement.  Without individuals seeking their self interests there would be no market.  This is no mere sector of the economy. 

(Did one day, deep in the past, government authorities somewhere declare, "Let an economy come forth from nothingness, and we shall determine which sector will be private"?  Or did individuals, respectively seeking their own self interests and making mutually beneficial transactions voluntarily cooperate themselves, and thus their societies, out of hand-to-mouth existences?) 

Furthermore, when individuals voluntarily participate in the market, of which they are by definition a part, they can only contribute to the the economy.  By contrast, when government "participates" in the economy, it, by definition of being outside the market that is had nothing to do in creating, can only interfere with the operations and voluntary interactions of individuals, that is, the market.  And when it interferes, it does so using the force of law and regulative coercion, something individuals in the market cannot do, minus the legislative assistance of the government.  (Think of GE lobbyists stealthily working for Cap and Trade legislation.)

Basically, individuals create wealth, therefore economic activity.  Government confiscates, retards, and interferes with wealth creation, therefore creating uncertainty and instability in the economy.  These two mutually opposed entities cannot therefore constitute two sectors of the same enterprise.  There is the market and there is the government. 

Yes, government has a role in the economy, but that role is always from outside, hence its role is interference. How much interference is desirable, just, counterproductive, etc. is a matter for another time.  One might even say it is a matter for a whole nother Chalk Talk.

Video: Signs, Signs, Everywhere Signs (of Unconstitutional Government and Government-Mandated Monopolies)

The Federal Highway Administration is ordering, with the coercive arm of the federal government, all local governments to buy new street signs.   What's so important that the federal government had to force itself into local affairs?  Street signs should have mixed lettering, not just all CAPS.

Whew!  At least we can rest assured this coercive, unconstitutional, bureaucratic fiat is for high and good purposes.  (What's that old authoritarian maxim about the means and ends...)

Let's repeat this situation in different terms:  Local governments, funded by local taxpayers, have been ordered by an unelected bureaucratic wing of the central government to use local tax dollars to remove all existing street signs and replace said signs with new street signs.  (The term "federal government" will hereby be changed, by fiat of the author, to "central government" for the remainder of this post, for reasons that will be easily inferred by the reader.)   

Are local and city governments incapable of deciding for themselves which signs best suit their traffic conditions?  Put another way, is a categorical, one-size-fits-all federal government central government  edict going to work out best for every single local municipality across the country?

And what about that whole federalism thingy set up in the Constitution?  The federal government central government is allotted specific tasks it is constitutionally empowered to pursue.  Everything else, by default, falls to the state and local governments.  Skipping right over the state government and ordering local municipalities what to do and how to do it is an even broader, bolder slap to federalism than, say, arm-twisting state governments with federal highway funding. 

But wait!  It gets even worse.  Pick up at the 0:55 mark of the Fox News video below to hear about the private company that helped to fund the so-called research that went into this very important task of the central government that had to take place during a recession:


The 3M company that just happens to make the new-and-improved reflective material now mandated by the central government contributed to the research that revealed that every local government in the country just had to purchase and install new signs.  3M could deserve the good citizen award, one could suppose, for being so concerned about traffic safety they cut into their profit margin to help fund such research.  One big problem: 3M happens to make the reflective material that will be used in the manufacturing of all those signs that local governments are required by law to purchase.

As Dana Carvey's beloved Church Lady used to say, "Well isn't that conveeeeeenient?"

Side-stepping honest competition in an openly competitive market and using the force of government to corner the market and regulate out of business pesky little competitors is nothing new.  Ever since the federal government central government began interfering in the otherwise free and cooperative interactions of free individuals--the market--corporations have parlayed the regulative apparatus of the federal government central government to legally leverage for profits.  In other words, some corporations find it more convenient to use the coercive power of the federal government central government to make competition illegal and/or force the purchase of their products than compete openly by persuading consumers to freely purchase their goods.

As Tim Carney makes abundantly clear in his invaluable book, The Big Ripoff, the history of big government is the history of big business, and consumers and taxpayers have been paying a higher and higher price for the unholy alliance.

Who suffers in this anti-free market game?  We the People suffer, once as consumers paying artificially high prices for goods and a second time as taxpayers burdened with funding the bureaucracies and regulations that is at the heart of this mess.  And the bigger the federal government central government gets, the worse that problem.

If you have not read Carney's book, please buy a copy and do so.  There will soon be bright new street signs that show you the way to your local bookstore!

Going In For A Root Canal

I'm having a root canal done this morning, in the chair at 7 a.m.  What a way to start the day!

If some thoughts concerning free society crop ups while under or recovering from sedation, I'll report forthwith.  (Or at least when the drooling ceases long enough to type.)





Fun!:

High Income Does Not Equal Being Wealthy

Leaving aside the impropriety of taxing rich Americans at a higher percentage, we should recall an important fact that is buried in all the claptrap going back and forth about the current tax rates.

That fact?: Income is not wealth.

Everyone who earns in one year more than whatever arbitrary demarcation line divides the "rich" from the proles is assumed to be wealthy.  (What is that number this week?  Last I heard it was inching up to $1 million a year.) This assumption leads to the next step of wanting to categorically tax these individuals' incomes as if they themselves are rich.

Yes, many "rich" people have high incomes, and many high income earners are "rich."  But many is never all.  High income earners and "the rich" is no exception.

The wealthiest safe-made people in America were not "rich" the first year they brought home $x or more.  Many people earning high incomes this year are not yet "rich" or are on their way down from being "rich" onto their way to being in the middle class. We just do not live in an economic caste system, all the bellicose class warfare bilge notwithstanding.

As Thomas Sowell points out in Intellectuals and Society, the Treasury Department (that bastion of people interested in abolishing the progressive income tax system) reported that among the highest income earners of 1996--the top 1/100 of 1%--a mere 25% remained "rich" by 2005.

This underlying assumption of this assumption holds that everyone getting hit with higher taxes has sooooo much loot lying around they can use their riches to buy, invest, and promote economic growth.  So tax, tax, tax away.  Wrong.  Tax high income earners who are not "rich" and you're confiscating out of their hands and the economy that much more possibility for real capital investment and growth.   

Again, we're leaving aside the debate over the propriety of progressively taxing some people more than others.  The above assumption is simply incorrect.  Moving along tax policy based on this assumption is simply not justifiable.  Using demagogue verbiage like "...the richest Americans" to push such tax policy is either a poorly thought out effort or just thinly veiled partisan chicanery.

The assumption articulated in the caption below is better grounded and more thought out than this high-income-equals-being-rich assumption.  And both are hilarious.

Video: Beware the Omnipotent Government

Below is a brief and worthwhile video of F.A. Hayek. Democratic forms of government require constitutional limitations of power.  The fact such governments are in some way democratically chosen does not do away with the need to limit their power.  Believing democracies need not be limited in their powers relegates voters to a a choice of masters, not a participation in their government.  

In The Constitution of Liberty Hayek deals extensively with the indespinsable need for democratic governments to observe the rule of law, not be the a law unto themselves.

Germ-o-Phobia and Liberty

"[E]veryone is a 'progressive' by their own lights."  Thomas Sowell, Intellectuals and Society

I'm a germ-o-phobe.   I also love liberty.  Enjoy the confluence.

Progress and the status quo are primarily antithetical of one another.  Primarily because the goal at which one wishes to inch along society might well be something worth preserving or, put another way, not progressing away from.

Example: C.S. Lewis reminds us that washing the bacteria from our hands is a way of maintaining a very important status quo, the status quo of clean hands that predate dirty hands.  Every time we wash our hands we are retarding the progress of bacterial growth, hoping to regress toward the clean hands we had at one point in time before we had to interact with all those other germ-toting agents of disease we call other people in the petri dish we call society.

But regressing bacteria on one's hands and, consequently, one's community is a very progressive thing to do to.  Only a regenerate, uncouth, backwards-looking reprobate would knowingly build up and spread around bacteria in society.   Taken to an extreme, such a person could be considered a purveyor of biological warfare.

That would definitely be regressive.

(Side note: For the love of Pete please wash your hands after using the restroom,  blowing your nose, or touching anything you would not put directly into your own mouth.  If you think it is none of my business to request so much, think how many other people will have to touch the same door knobs and dollar bills that you grace with your disgusting fingers.  Come on, it's not 1802 anymore.  Don't let Louis Pasteur's life's work be in vain...) 

As Thomas Sowell points out in Intellectuals and Society, everyone believes they are progressive.  We all have an ideal for society we think best.  For self-described "progressives" that ideal is a society whose organization is primarily controlled--that is, regulated--by the decisions and planning of an elite few.

The crescendo of such command-and-control of society in the United States occurred during the New Deal of the 1930s.  The extent to which elites in government controlled everything from the price of pressing suits to how many hogs would be slaughtered while millions wallowed in hunger is what was new about the New Deal.  These drastic power grabs were certainly a break from the status quo of a primarily free market and concomitantly American free society.  And we have never washed our hands of the overreaching legacies of the New Deal.

Taking the long (and sad) view of freedom in world history, however, we need to ask: Just how progressive was the New Deal?  In this light, is such government control of society ever really a step forward?  

"Progressive" for liberty-minded conservatives, libertarians, and constitutionalists is a progressing away from the New Deal center of politics whereby state-control of the direction of the economy and society is the default setting for government policy.  Free and responsible people cooperating peacefully is the best way to organize society.  It's work every time it has been tried.  As Milton Friendman remarked, distrust of the "private sector" or "the market" is nothing less than a distrust of freedom itself, and a distrust of people to be trusted with freedom.  That's terribly patronizing and elitist, in addition to being regressive.  

Considering how America has always been the world's freest society (the New Deal notwithstanding) diminishing liberty was a terribly regressive policy, then and now.  And since the redistributive, bureaucratic model has had its tentacles in D.C. for over seventy years, at this point in time it would be very progressive to move beyond its premises and (re)embrace freedom.

To return to Lewis' analogy, if we are going to wash our cultural and political hands we have a great deal of government bacteria to wash off.  Ever since the New Deal, such infringement of liberty has been caking up like so many layers of germs eating away at liberty.  Clean hands would be nice, but at this point I'd be happy with cleaner hands.

Now go was your hands, America, both literally and figuratively.

On Pilgrims, the New Deal, and The Stimulus.

Thanksgiving is a uniquely American experience.  It is grounded in our early history, has been made an official national holiday, and is supposed to encourage us to be grateful for our blessings.

The history of why the Pilgrims had reason to be thankful to God, however, has become grossly inaccurate and reflexively been made to serve the worldview of the redistributive, collectivist Left.  It is not the proper season--yet--to crank out some Bah! Humbug! so consider the following a premature but no less appropriate Bah! Humbug! to this revisionist whitewashing of a great American tradition.

My wife and I were attempting to enjoy a History Channel presentation on the (presumable) history of Thanksgiving.  Right out of the gate we were instructed that the first harsh winter nearly wiped out the entire population of Pilgrims and that were it not for their communal living all probably would have perished. 

So the lack of private property rights and profit incentive saved the Pilgrims?  Interesting history, on the History Channel, the week of Thanksgiving.

In his excellent book, How Capitalism Saved America, in a chapter devoted to the Pilgrims, Thomas DiLorenzo notes,

"The first American settlers arrived in Jamestown in May of 1607.  There...they found incredibly fertile soil and a cornucopia of seafood, wild game...and turkey, and fruits of all kind.  Nevertheless, within six months, all but 38 of the original 104 Jamestown settlers were dead, most having succumbed to famine."

Hmmm.  Sounds like the lack of that whole private property, lack of a profit incentive, and having all things in common thing they had going caused the famine and destitution of 1607.

But wait, let's not jump to historical conclusions and use one measly man-made famine that nearly wiped out 104 otherwise industrious and adventurous people to conclude that collectivism does not work and freedom among cooperating adults is the better way to organize society, or have society organize itself, rather.  The severity of that first winter could have been the sole reason their socialist paradise did not come to fruition.

Two years later the Virginia Company sent 500 more settlers to give it another go at socialism.  Within six months 440 were dead.

After private property and profit incentive were introduced, Jamestown went from destitution and famine to sustained plenty and agricultural surpluses.  The natives began coming to the settlers to buy and trade for staples and even non essential.  Peaceful exchange wrought from division of labor, property rights, and a profit incentive made famines a thing of the past.

But all this collectivist destitution turned free market plenty predates the Pilgrims of 1620, and occurred in what would become Virginia, not Massachusetts Bay where the Pilgrims landed.   That could be why the History Channel really did not think all this worthy of mentioning when they stated collectivism and the lack of property rights saved the Pilgrims.

Well, as DiLorenzo points out, roughly half of the 101 Cape Cod settlers of 1620 were dead in a few months.  William Bradford went on to lament the cause of misery was their policy of collectivism.  The real moment of honest reflection was Bradford's admission that believing they could design a community against human nature was akin to believing they were "wiser than God."

If the Pilgrims had reason to be grateful, it would have been for throwing off of the presumptuous and disastrous belief that a utopia could be designed and implemented by forcing common ownership of the means of production and property.  Being free to produce and exchange in pursuit of their own self interests created bounty for the entire colony, and that was worth celebrating.  But, hey, I'm just shooting from the historical hip here.  I did not get any of this from the channel presumably devoted to an accurate portrayal and preservation of "History," so draw your own conclusions.

The reflexive belief that well-intended designs kept Pilgrims from suffering even worse, rather than being the actual cause of their misery, is similar to the historical framing of the Great Depression and the New Deal.   Think of how bad things would have been if FDR did not assume nearly dictatorial control of the economy is the default premise for explaining away the only depression in our history that has been remembered as "Great." The very possibility that nine years of prolonged misery, high unemployment, and perpetual economic uncertainty were actually caused or compounded by New Deal central planning does not even make it onto the table.  Like the early settlers, if Americans were left to their own devices with freedom, free markets, and property rights during the 1930s,  matters would have been even worse!

Bah! Humbug!

More recently, we are called upon to believe that had the wildly wasteful and counter-productive "stimulus" package had not been implemented, things would be even worse today.  Actual economic history and common sense matters not; we are supposed to be grateful for our 21st century planners, much like how those Pilgrims were thankful for their communal designers?  

See a pattern forming here?

Bah! Humbug!

This Thanksgiving I'll be grateful that America has always been the most peculiarly free, and therefore prosperous, society in the world, despite the efforts to paint its history otherwise.  And I'll be watching the Ohio State Michigan game and fling leftover turkey gravy at the History Channel, if anyone dares flip to it during commercials.
  
(And remember this, the first Bah! Humbug! of the season...There will be more.)

John Stossell on Friedman's Free To Choose

Here is a very good introduction of an excellent book, Friedmans' Free to Choose:

"The Options Destroyers"

"The Options Destroyers" by Thomas Sowell originally appeared as a newspaper article; it is narrated in this video:


This piece dovetails with what I recently read in Sowell's Intellectuals and Society, as well as a recent video post by the folks at Reason.

Top-down regulations, by their very nature, reduce the number of options for consumers in the market.  That's what they are designed to do: reduce the number of perceived bad options that otherwise free people might act upon.  (Soon we will no longer have the option--freedom, that is--to purchase incandescent light bulbs.)  Real life choices become fewer as a result of the near-sighted effects of reform crusaders and their vote-catching politician allies in legislatures.  What's a recent and real world example?  Oregon's state wide ban on payday loan interests rates above 36%, mentioned in a recent Freedom Lessons post.  Poor and options-strapped folks in Oregon now are even more options-strapped.

Worse still, excessive regulations introduce a third set of terms between consumers and the purveyors of goods and services.  When left free to cooperate and interact freely, consumers and businesses make mutually beneficial transactions.  That's mutual consent between two parties.  Intrusive and short-sighted regulations introduce a third party--the options destroyer--and force a third set of acceptable terms into the transaction, thus providing disincentives for economic activity.

Rent control is a good example.  Landlords are forced to satisfy both their tenants' demands and the demands of local governments.  With less profit to make there is less incentive to upkeep buildings, let alone provide new living quarters to the public.  An artificially high number of people want to rent due to an artificially low rent, and an artificially low number of apartments are available to rent.  Real shortages occur, existing buildings deteriorate, slums crop up, and commuters are forced to travel great distances past empty and boarded up buildings.

In a free market unhampered by well-intentioned busy-body do-gooders pushing intrusive interventionalist policies upon us, we self-interested people who know best about what is best for ourselves would find a way to get by just fine.

Just think about all the options we would enjoy!

If I Had To Recommend One Book...(Video)

Repeat, had to.  My one recommendation for anyone interested in freedom, and both its friendly and hostile forces, would be Henry Hazlitt's Economics in One Lesson.  Hazlitt's conversation masterpiece is oncise, grounded in fundamental economic principles, illuminated with historical examples, void of arcane economist-speak and pointy-headed graphs (Sorry, economists.  You know it's true.), and crisply written.

Line one, chapter one: "Economics is haunted by more fallacies than any other study known to man."

Here is a good introduction to the book, Hazlitt, and the enduring impact of this brief book, compliments of the Ludwig von Mises Institute:

Control Freaks

Does anyone enjoy being called a "control freak"?  Put another way, who does not shrink from thought of being one?  The mere hint of the accusation causes most socially sensitive people to tone down the I-know-better-than-you, paternalistic, patronizing attitude toward other adults that precludes their acting according to their own judgment.

Most would say, "Oh, I'm sorry about that.  Please, I beg your pardon for being a nosy nanny.  Go on about your business."

That is, of course, if you are a bureaucrat institutionally vested in the regulatory state, a vote-catching demagogue politician, or a preening intellectual desirous of imposing through the coercive power of the government your vision of reality onto the rest of us poor unenlightened proles.  In any of these circumstances deciding for individuals what one believes individuals are incapable of deciding for themselves is lauded as "progressive" and mindful of some nebulous notion of "social justice" and the common good.

The more government takes it upon itself---and we as a society ask it to take it upon itself---making decisions we individuals are best suited to make ourselves, the less free we become as a market economy, and society.  From price controls to excessive regulation to protective tariffs,  every choice that is removed from individuals acting freely and cooperatively interacting within a free market is a choice made on our behalf using coercion.

In a free society the consumer controls 100% of the market through free exchange; in a socialist state central planners control the market through the use of force.  One is voluntary and the antithesis of everything a control freak would abide; the other is arbitrary and made to order for a control freak holding the regulatory reigns of power.

From Thomas Sowell's Intellectuals and Society: 
"The fundamental difference between decision-makers in the market and decision-makers in government is that the former are subject to continuous and consequential feedback which can force them to adjust to what others prefer and are willing to pay for, while those who make decisions in the political arenas face no such inescapable feedback to fore them to adjust to the reality of other people's desires and preferences."

If only we could make those control freaks in government feel ashamed at being, well, control freaks over our otherwise free lives.

Who Said That?

 Who said this:

"The only way America succeeds is if businesses are succeeding.  The reason we've got a[n] unparalleled standard of living in the history of the world is because we've got a free market that is dynamic and entrepreneurial...That free market has to be nurtured and cultivated."

Speaker-elect John Boehner?  No.  Milton Friedman?  Nope.  Thomas Sowell?  Strike three.

President Obama said it.  The day after the the midterm election, in his televised news conference,  he said it.  And, much to my surprise and delight, he did not appear to throw up a little in his mouth right after the words, free market.  (Although, there was a significant pause there somewhere.  Could be a slight case of acid reflux...)

Begin at the 46 minute mark.  Comments follow the video:


Explanations for such a public statement from a president who gives every indication of a deep hostility to an unplanned free market can abound.  Let's entertain just three:

1. Timing.  It was said the day after the midterms.  The Tea Party influence on the results was significant, what, with all this talk and rally signage about socialism and free markets.  With all this talk of compromise and working together, it makes sense to pretend you've just read the dust cover to one of von Mises' tracts.  (It was Mises who said, "The people of the United States are more prosperous than the inhabitants of all other countries because their government embarked later than the government in other parts of the world upon the policy of obstructing business.") So It could just be prudent political posturing, or at least reflexive lip service.
2. Politics.  Surprise!  Related to #1, and probably interchangeable with it, he felt the calculating urge to drop a little homage to free marketeers on the Hill.  (All four were probably listening.)
3.  He actually believes it or at least acknowledges the historical fact that our prosperity and standard of living are the result of the level of freedom we've always enjoyed.   The progressive Left can indeed acknowledge so much and still embrace a radically different vision for the future of American society.  After all, who should be running the fate of the country, hordes of unorganized and uncoordinated free people pursuing their own self interests or the wiser-than-thous with Ivy League degrees?  That's a no-brainer, depending on who you're talking to, of course.

Actually, after considering all three possibilities I really don't care what the motivation for saying was.  Yes, forget all that conjecturing.

The important matter is that he said it.  Just as importantly is the fact that only the most strident outspoken socialists publicly denounce capitalism, individual freedom, and constitutional limitations on government that protect so much.  In America one still has to at least pay lip service to that whole freedom thing, and most times pay lip service to that whole Constitution thing, too.  As has been stressed here and will be stressed again and again, we have much reason for---dare I use the term---hope that politicians still feel the political urgency to give a public tip-of-the-hat to freedom.  This belies what their advisers and pollsters and focus groups tell them: "Americans are still hung up on being the freest people in the world.  Demagogue over it, prevaricate around it, bulldoze your way  over it, but you have to deal with it."

This is still the home field for freedom.  If we want to be the visiting team we can move to Europe and slug away there.

I wanted to discuss what follows these words, comments about the financial crises, health care, and BP but am running long.  Just remember to ask: How free is the market in health care, the financial markets, and petroleum?   But that's for another Chalk Talk.

Video: Economics In One Lesson

I'm working my way through Thomas Sowell's book, Intellectuals and Society.  Many of the points he articulates reminds me of the importance of acquainting and reacquainting ourselves with the first principles of freedom and freedom in the market.

Freedom makes sense; convoluted policies that suppress freedom do not make sense.  Society is broadly trained to accept bad policy.  Hence, we instinctively want to be free but reflexively reject free market capitalism.

Below is a very good video to explain why.  Here is a book to counter the trend: Economics In One Lesson

Voting With Your Feet

We would never tolerate paying $16 for a gallon of milk.  We would simply go elsewhere.  I'll take my wallet and use my feet to go elsewhere, thank you very little.

Way too many Americans have the opposite view of government and laws.  We tend to look past local and state governments and expect problems to get addressed inside the Beltway.   Besides local potholes and school taxes, no problem seems too small (local) for Congress.  This attitude reduces our opportunity to vote with our feet and wallet, leaving us with only one lonely ballot and a set of crossed fingers every two years.

We are simply less free when every political issue becomes federalized: we can no longer move elsewhere to escape the (over)reach of bad laws.  If, for example, enough people in Maine want single payer state-run health care, they can have it at the state level.  People can leave and people can move there.  Businesses will come and go.  An economic force is created, equal and opposite forces will react within the state of Maine.  But once the same titans of finance that brought us Social Security, Medicare, and the Post Office grasp control of health care, where can we move?

Likewise, federal bailouts of profligate state legislatures punish individuals who live in fiscally responsible states by confiscating their property and transferring said property to irresponsible states.  What's the point in living in Texas if you are going to be taxed twice, once for your own state budget and a second time for California's?  And what's the incentive for California legislatures to get things right?

The Tea Party certainly does it part to encourage Congress to step back into its constitutional role.  Expecting government to control itself from the inside, however, has its obvious limits, no matter how many Tea Party candidates breech the Beltway mote.  Like any good reform, change has to begin with the public opinion of us benighted proles.  This process begins by no longer expecting Congress to tackle every single issue, then encouraging fellow proles to see the light.  With enough public opinion and time, the holier-than-thous in D.C. will play along.

I hope you voted today.  You vote every day many times a day just by existing in a market economy.  If you enjoy the options that allow you such a high and affordable standard of living, expect similar options politically.  Our political standard of living really should not be any lower than economic one.

Video: Now and The New Deal

 "Underlying a lack of faith in free markets is an underlying lack of faith in freedom itself."~~~Milton Friedman

Are there similarities between the current recession and the FDR New Deal era?  The folks at Reason put this video together arguing so much.

Statists and enthusiasts of excessive control of the market enthusiastically liken Obama to FDR, the premise of their enthusiasm being FDR's hyper intervention saved the country from a crushing depression.

The comparison of Obama with FDR, however, is not be a flattering one.  As Jim Powell amply illustrates in his book FDR's Folly, government control and manipulation of nearly all aspects of the economy--and therefore society--turned a not uncommon to American history depression into a deep and abiding depression, lasting over a decade.  If President Obama is the new FDR, we have worse economic times ahead, and for a long time.

Hence, the great depression.

Put another way, why was this one depression bad enough to be remembered our only great depression?

A market economy runs primarily on freedom: cooperation among individuals, contractual agreements, entrepreneurship, pursuit of respective self interest, and marginal business growth require free society.  In order to create wealth, employment, and standard of living for a diverse population of millions, capital and limited resources with alternative uses must be efficiently allocated and utilized.  Controlled and over regulated markets have never been up to this task and create the uncertainty in market condition-- lack of freedom, that is--that stagnates growth.  Government destruction of the freedom required by the market and regulation beyond its proper role (and there is a good role for government) inevitably brings about economic stagnation and high unemployment.

Remember to ask, what and who is "the free market," or what is more commonly tossed around, "the private sector"?  It is nothing less than you, me, and other individuals freely and responsibly pursuing our respective self interest.  Demand more regulation of "the private sector" and you're demanding more control of your own lives! 

Of course, it's never ourselves and our own liberty we don't trust; it is always the other guy.

Big Government Begets Big Business, and Vice Versa

"The myth is widespread and deeply rooted that big business and big government are rivals--that big business wants small government." 
--Timothy Carney

I'm working my way through a very instructive book, The Big Ripoff: How Big Business and Big Government Steal Your Money, written by Timothy Carney.

There is a standard public perception about big business, the everyday consumer, and government regulation, and it goes like this:  Government regulations and bureaucracies protect consumers from the predatory actions of big businesses, actions they will undoubtedly take if left to themselves in an unregulated, laissez-faire market.

Carney does a good job of picking this fantasy apart, one documented, historical case at at time.  The truth of the matter is that large, well funded and connected businesses benefit from government's over-involvement and regulation of the market.  Onerous regulations, a complicated tax code, and government subsidies (corporate welfare) make it very difficult for those pesky upstart competitors to cut into market share.  What's more, deregulation (smaller government) increases the chances that larger corporations will have to face up to the natural market forces of competition and free enterprise.

Some interesting instances Carney has the reader consider:

• Enron energetically lobbied government to sign onto the Kyoto Protocol, which would have heaped piles of new regulations on their operations.
• Philip Morris lobbied for passage of tougher regulations on the tobacco industry.
• Representative Ron Paul, a true advocate of free enterprise, smaller government, and less regulation in the market, receives far less contributions from corporations than Representative Barbara Lee, an outspoken advocate of socialist ideals and legislation.
• Upton Sinclair, author of the muckraking book about the meat packing industry, The Jungle, himself acknowledged federal inspection of the industry resulted from the request of the industry itself.
• Supposed champion of unrestrained capitalism Andrew Carnegie wrote in the New York Times he favored "government control" of the steel industry. (This, of course, after he sat atop the industry after decades of operating in a free market.)
• Elbert Gary, president of U.S. Steel, testified before Congress it was his belief government should control steel prices. 

The last point on Gary provides a valuable lesson.  Gary was unable to maintain a private trust of steel producers wherein they colluded to set prices on the market promising to not lower their prices below a certain level.  With no government involved, trusts and cartels must persuade their cohorts to play along in manipulating the market and providing consumers with higher-than-need-be prices.

Gary, however, ran into problems: the steel companies in his trust kept breaking away and selling steel at a cheaper price.  That whole competition things works, until government makes it illegal.  He could not keep his trust in order, and the basic economic function of competition drove down steel prices and eroded his trust--both good things for the consumers, the larger market, and free market enterprise.

So what did Mr. Gary do?  He turned to the federal government and asked it to do what he could not do in the free market: control and regulate his competitors.  He succeeded. The government, through regulation, made competition illegal, something that cannot happen in the free market.

So much for that whole notion that all business is interested in small government.

Yard Sale Lessons, Part 1

"Historically, [classical] liberalism was the first political movement that aimed at promoting the welfare of all, not that of special groups."  Ludwig von Mises, Liberalism, The Classical Tradition

Yesterday's yard sale produced three notable conversations, every one instructive and thought-provoiking in its own respect.

The first exchange was with a man I'd guess to be in his mid thirties.  He was wearing a golf shirt with the logo of a servicing/maintenance company I recognized.  This company does a lot of work for the local large corporation as well as smaller-sized clients.  When I asked him about his company, he immediately gazed past me in a reflectively somber way. 

He has been with the company many years and is ready for a career change.  He said the company is no longer what it used to be.  I asked in what manner had it changed. 

"It used to be a company.  Now it is just concerned with making money."

My mental knee-jerk reaction was to think, "Of course it is concerned with making money.  How else could it operate and hire employees?  Any company that is not first concerned with creating a margin--profit, that is--will not be able to employ people."

He left out the details of his disaffection, paid for his item, and went on his way.  Consequently, he gave me lots of room for conjecture.  And, after speaking with my thoughtful and judicious wife with business experience galore, here's the lesson I learned:

Yes, companies by their very nature have to be concerned with making profits.  They make profits primarily by providing the needs and wants of the great majority of everyday people, consumers that is.  As Walter E. Williams poignantly points out: Who made more money, Henry Ford or the founder of Rolls Royce?  In the process of pursuing margins (profits) companies of necessity have to utilize all possible capital, the productive capabilities of people (labor) being one.  Enter employment.

Put in cold, calculating, capitalist terms, companies require humans to make profits.

Before anyone gets emotionally wrapped around the axle here, give it a minute.  There is a very good, humane upshot to such cold calculation on the part of companies.  Simply, if companies make their employees unhappy, then said companies are ill-affecting the productive capabilities of their capital.  When productive capabilities are not maximized, let alone lessened, margins shrink and profits are lost. 

It is just bad business to not provide an environment in which employees are happy and wish to stay on.  (Hiring and training new employees is a costly capital investment).  Further, the right environment will attract talented and motivated employees from other employers, creating a competitive labor environment in which other companies will feel compelled to provide attractive employment lest they lose their best employees.

Long sentence to wrap up the lesson learned: In a free and competitive market without government regulations and bailouts that unfavorably and artificially give advantage to some companies over others, and without excessive union contracts that give immunity to the lazy and incompetent and artificially drive wages above their market value, companies have to treat their employees right out of their cold, calculating, pursuit of profit.  Rational obsession with profits, in a free market, makes for favorable working conditions.  Funny, that.

It's just bad business to do otherwise.  If my yard sale customer's company is engaged in such bad business practices, it needs to be driven under by a superior competitor or so threatened.  This fellow's talents and time would be better utilized and he would be better compensated, by said competitor or his current employer.   Free people voluntarily and respectively cooperating to pursue their self interests in a free and competitive market works.  He's interested in gainful and rewarding employment, companies in profits.

Cold, calculating capitalism works, so much so it makes me feel all warm and fuzzy inside.

Conversations At A Yard Sale

Our neighborhood is having an advertised yard sale.  I'd like to clean out the storage room and garage a bit so I littered our driveway with our life's disposable memory-makers.

I cannot post everything now as I have to attend the driveway; I've already had two interesting interactions with buyers.  (Most yard-salers are tire-kickers and insufferable deal-seekers--"How much for that?"  "A buck."  "Would you take 50 cents for it?"  Jeesh.  These folks, however, actually bought something.)

That will be the Weekend Post, my day at the yard sale.  It is always interesting to have other bundles of experience, a.k.a. people's life perspective, invade upon your own way of seeing the world.  It is doubly fun when it happens while they are buying the things you no longer want around.  In addition for the exchange of money for goods, I'm getting flesh-and-blood lessons in life perspective.

That's worth losing 50 cents on a dollar scented candle.

Be back later with a Weekend post.

Not Playing By The Rules

I've continued reading Planning for Freedom: A Collection of Essays and Addresses.  Glancing down the table of contents one particular essay caught my attention: "Trends Can Change."  Written in 1951, I suspected the essay would have much to teach us about the current state of freedom in America.

It certainly does.

In the essay Mises quickly goes at one of the most tightly-held underlying dogmas of socialism and central planning devotees: "Man must submit to the irresistible power of historical destiny," so it is argued. 

And what, exactly, is that historical destiny, according to socialist apologists?  Societal organization is progressing toward being centrally planned through government coercion; no more chaotic, uncontrolled, profit-driven capitalism based on individual freedom.  (In The Road to Serfdom, Hayek makes a terrific point on this matter: "It is a revealing fact that few planners are content to say that central planning is desirable." [Emphasis added.])
 
That's the rule by which western society is supposed to obey.

Europe played by the rules and fell into socialism due to this fatalistic capitulation: "It is this mentality of passively accepting defeat that has made socialism triumph in many European countries and very soon may make it conquer in this country too."

But hold on a minute there, professor.  Some matters in America present difficult roadblocks to socialism.   For starters, a lot of Americans have an inherent distrust of "big government."  This does not spring up irrationally, contrary to reflexive progressive fantasies about gun and Bible-clinging.  Americans live in the world's most unique political experiment, a nation founded on ideas, the foremost being liberty and equality.  We have an entirely unique history built into our political genes.  Consequently, most Americans distrust government controlling anything, let alone everything.  We're still hung up on that whole freedom and Constitution thing.

We're not so eager to play by the rules.

Consider the Tea Party movement and the wide resistance to nationalized health care.  We've been taking to the streets to protest excessive government spending, debt, unreasonable entitlement programs, and government encroachment on liberty.  We don't play so nice: we protest against excessive government in our lives.

Now consider the recent protests in Europe.  They've taken to the streets to protest cuts in government spending and entitlement programs.  They play by the rules and protest in favor of excessive government in their lives.

To the chagrin of progressives, yesteryear and today, politically we're just not like Europe, nor do we want to be.

Mises closes his address with this admonishment: "The prevailing trend toward what Hilaire Belloc called the servile state will certainly not be reversed if nobody has the courage to attack its underlying dogmas." The "servile state" lies somewhere between outright socialism and capitalism, what Mises calls the third way of interventionism; it is no less hostile to freedom than socialism.  There is an entire liberty movement  attacking these dogmas, and that movement is not carrying pitchforks and torches.  We're carrying--and reading!--the Constitution, The Road to Serfdom, the Declaration, and a treasure trove of beacons of freedom. 

As Jonah Goldberg rightly put it, the rules have changed and something is afoot.  Either someone changed the rules or we are cheating by not playing by them.

Either case befits Americans.  We like our freedom too much to play by the rules.  We'll keep reading and keep cheating, thank you very much.