Thursday, April 27, 2006

The Carnival of Mises

Mises.org is one my favorite web sites – a must read site that I visit daily. It is the website for the Ludwig von Mises institute, and is dedicated to the advancement of the Austrian school economics, private property, and free markets. It is a decidely libertarian organization, and works to do its work in the “marketplace of ideas”.

Each day, on Mises.org, you can find a new article, written by one of its many contributors. Some articles are scholarly, but many are readable by the intelligent layman. The topics range anything from economics, politics, history, foreign affairs, and culture. Here is my take on the last 10 articles:

In George Mason: Protectionism at its Worst, author T. Norman Van Cott takes a look at one of our most underappreciated Founding Fathers, and finds some startling hypocrisy. While Mr. Mason was instrumental in the the authoring of the Bill of Rights, and the U.S. Constitution, he has seemingly irreconcilable differences on the question of slavery. While he wants to end the international slave trade, he also wanted to strengthen the property rights of slave holders.

What happens when one looks at Mason's two positions through the lens of the economist? The lens uncovers an underlying economic consistency between the positions — however morally repugnant they are when juxtaposed. To wit, both positions would, if enacted, advance Mason's economic interests. Mason becomes, in fact, the public choice economist's prototypical politician. That is, a politician who responds to personal economic incentives just like people in the private sector.

In How Big Is Bush’s Government? , author Mark Brandly discusses what is so painfully obvious: the Bush administration makes the a laughing stock out of the Conservative movement which blindly supports their man. He breaks down the numbers to demonstrate how large the Federal Leviathan has become. And is there any end to the growth in sight? Well, not if we keep electing Republicans to office, there isn't!

Since 1930, in addition to the spending increases, the feds also drove prices up more than 1,100%, according to the Consumer Price Index. Also, we should suspect that these inflation numbers are low since government officials have an incentive to underestimate inflation.

If we adjust the spending numbers to account for this inflation, real federal spending is 65 times larger than it was in 1930. The US population has more than doubled since 1930 and if we take the population changes into account, real per capita spending is 27 times higher than in 1930.

The 19th century political economist Henry George is the subject of Karen DeCoster’s article, Henry George and the Tariff Question . I’ve been interested in the ideas of George lately because he is primarily known for his “land value tax”, which Libertarian Gubernatorial Candidate Bill Peirce would like see implemented as a part of property tax reform. In this article, however, DeCoster looks at George’s position on free trade, and whether it is economically beneficial or harmful.

The problem identified by Henry George, in Protection or Free Trade, is that of poverty, and more specifically, wages and unemployment. What follows from that is George's systematic and all-embracing dissertation of the effects that protectionist and free-trade policies have on the wealth of a nation and its individuals. Naturally, he arrives at a conclusion that is decidedly in favor of free trade — as opposed to protective prescriptions — as a surefire solution to the ills of poverty.

George Reisman asks Where Would General Motors Be Without the United Automobile Workers Union? An important question lately, since there have been an increasing number of well-publicized strikes/lockouts in the news lately. Furthermore, as General Motors is in a heap of financial troubles, which have spilled over to various suppliers, like Delphi, and with unions workers facing some pretty dim prospects, discussing the impact of unions seems to be particularly relevant.

Without the UAW, GM would have been free to produce in the most-efficient, lowest cost way and to introduce improvements in efficiency as rapidly as possible. Sometimes this would have meant simply having one or two workers on the spot do a variety of simple jobs that needed doing, without having to call in half a dozen different workers each belonging to a different union job classification and having to pay that much more to get the job done. At other times, it would have meant just going ahead and introducing an advance, such as the use of robots, without protracted negotiations with the UAW resulting in the need to create phony jobs for workers to do (and to be paid for doing) that were simply not necessary.

(Unbelievably, at its assembly plant in Oklahoma City, GM is actually obliged by its UAW contract to pay 2,300 workers full salary and benefits for doing absolutely nothing.
As
The New York Times
describes it, "Each day, workers report for duty at the plant and pass their time reading, watching television, playing dominoes or chatting. Since G.M. shut down production there last month, these workers have entered the Jobs Bank, industry's best form of job insurance. It pays idled workers a full salary and benefits even when there is no work for them to do.")

Ludwig von Mises once said that if classical liberalism (now more akin to libertarianism) could be summed up in two words, they would be “private property”. In Salvation Through Private Property Alone, Brad Edmonds examines how private property has a tendency to mitigate conflict and other problems in society.

We've experienced several grand conflicts in recent weeks, months, and years — the aftermath of hurricane Katrina, the demonstrations and debates over immigration policy, the war on Iraq, and so on. While it is the natural tendency of news outlets to cover big problems (i.e., it's not news when we all go to work and get back home safely every day), it remains that recent months have seen more than their fair share of disasters. What all these conflicts have in common, however, has not been covered by the mass media: In a free society with all property being privately owned, the problems would have been reduced or entirely prevented.

What is the latest rage in Statism? Smoking ban. In Where There’s Smoke, You Don’t Have to Be, Ninos Malek sticks it to the Health Fascists.

The only two parties that seem to get mentioned in many of these cases are the smokers and the non-smokers. The former argue that it is their right to smoke and the latter argue that it is their right to have clean air. Who seems to be forgotten are the business owners! This misuse of the word "public" is the main cause.

When I ask my friends or students if the government should have the right to tell me whether or not I can smoke a cigar in my own home, they unanimously tell me "No!" But isn't my home where other people come to eat, drink, talk, or watch television a "public" place? Yet, the same people who concede that my home is private property conveniently do not see the connection
between my home and my restaurant (or other establishment). Why? Because they say my restaurant is a public place, established for the benefit of my patrons. I hate to disappoint them, but my business is for my benefit. Sure, I understand that I need many loyal customers who love to spend money at my establishment in order to have a thriving business. However, what people and legislators must realize is that my restaurant, bar, or casino is my private property just like
my home is my private property.
Murray Rothbard was probably the most prolific libertarian writers, scholars, and thinkers in the past 50 years. Many libertarians owe an intellectual debt of gratitude to this man. Having passed away in the early 90s, he is long from being forgotten, and Mises.org frequently republishes various essays and book excerpts of his. In Law, Property Rights, and Air Pollution , a rather scholarly article, he takes issue with certain approaches to the punishment of polluters, specifically the nobel proze winning Ronald Coase.

Another serious problem with the Coase-Demsetz approach is that pretending to be value-free, they in reality import the ethical norm of "efficiency," and assert that property rights should be assigned on the basis of such efficiency. But even if the concept of social efficiency were meaningful, they don't answer the questions of why efficiency should be the overriding consideration in establishing legal principles or why externalities should be internalized above
all other considerations. We are now out of Wertfreiheit and back to unexamined ethical questions.

And what to do about the welfare state? Many libertarians have discussed this for years. David Gordon reviews Charles Murray’s latest book, in an article called, A Man, A Plan, A Flop, and finds it extremely lacking, rifled with contradiction, and just plain counter-productive.

Murray rejects the libertarian approach because it is unacceptable to the American public. Are we then to regard his guaranteed income plan as a compromise with political reality? Unfortunately for this suggestion, Murray also thinks that his own plan exceeds the bounds of political possibility: "The ladder I am describing to you would work if it existed, but today's American politicians will not build it. I must ask you to suspend belief and play along." (p.xv) He cannot then imagine himself a Milton Friedman and say, e.g., "Ideally government should play no role in education. But the public will not accept this. Instead, educational vouchers are the closest to the free market that we can in practice attain." Friedman thought that his proposals were realistic; and however much one may disagree with them — would not vouchers lead to more government control, rather than less? — one can grant that he had a case worth presenting. Not so Murray — what is the point of a detailed account of an inferior plan that cannot be realized?

Want a look at a projection for the economy? Look no further than Sowing the Seeds of the Next Crisis, by Thorsten Polleit. In an article riddled with charts and graphs, he takes a look at various economic indicators, to show how government creates the crisis we face.

One should not get carried away by widespread euphoria. Taking into account the lessons learned from analyzing monetary matters from the point of view of the Austrian School of Economics, it becomes crystal clear that the very foundations of the monetary system on which economic prosperity of the industrial countries so heavily depends keep deteriorating at a rapid pace.

And if you didn’t think that Republicans were fundamentally anti-capitalist, just take a look at the latest calls for a witch-hunt of the commerical class. Prominent Republicans are taking a page out of the Soviet play book, looking to string up some “economic criminals”. William Anderson provides analysis in Republicans Target “Economic Crimes”

Once upon a time in that former country known as the Soviet Union, much of the law centered around the existence of what the government called "economic crimes" or "speculation" (a code word for "free enterprise"). Today, we see the top lawmakers in the United States trying to take a page out of the USSR in calling for prosecution — and, one would suppose, imprisonment — of oil company executives because gasoline prices have risen drastically at the pump.

And finally, today’s article, a rather scholarly one on the ideas of another 19th century economist, Charles Holt Carroll, who was know for his defense of sound money. Read The Organization of Debt into Currency: On the Monetary Thought of Charles Holt Carroll, by Robert Blumen.

Carroll advanced several brilliant arguments against the system of "fictitious money": that it is based on a confusion in thinking; that it creates a state of permanent indebtedness; that it leads to national impoverishment rather than prosperity; that it results in price inflation; and that it inevitably leads to bank runs and then to systemic banking crises; and that it unjustly redistributes wealth from the honest and industrious to bankers and their accomplices.

So, there you have it. A sampling of some of the best articles posted recently at one of the very best educational sites on the web. Many Libertarian readers of this blog will already be familiar with it. Conservatives and Liberals should add it to their favorites, or even subscribe to the mail list to have the daily article delivered promptly.

Enjoy!

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