You are browsing the archive for 2013 June 04.

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Rothbard on Rent Seeking

June 4, 2013 in Economics

By David Gordon

Murray Rothbard anticipated the concept of “rent seeking,” generally associated with Gordon Tullock. In Man, Economy and State, he says:  “Furthermore, the more government intervenes and subsidizes, the more caste conflict will be created in society, for individuals and groups will benefit only at one another’s expense. The more widespread the tax-and-subsidy process, the more people will be induced to abandon production and join the army of those who live coercively off production. Production and living standards will be progressively lowered as energy is diverted from production to politics and as government saddles a dwindling base of production with a growing and more top-heavy burden of the State-privileged. This process will be all the more accelerated because those who succeed in any activity will invariably tend to be those who are best at performing it. Those who particularly flourish on the free market, therefore, will be those most adept at production and at serving their fellow men; those who succeed in the political struggle for subsidies, on the other hand, will be those most adept at wielding coercion or at winning favors from wielders of coercion. Generally, different people will be in the different categories of the successful, in accordance with the universal specialization of skills. Furthermore, for those who are skilled at both, the tax-and-subsidy system will encourage and promote their predatory skills and penalize their productive ones.” (Scholar’s Edition, p.942)

A similar passage can be found on p.1256. The latter is from Power and Market, which was not published until 1970; but Rothbard completed the manuscript of MES and Power and Market, which were written as part of a single work, in 1959. MES was published in 1962, and Tullock’s seminal article appeared in 1967.

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Source: MISES INSTITUTE

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An Unpublished Nugget from Mises on Adam Smith

June 4, 2013 in Economics

By Joseph Salerno

The following is a remark that Ludwig von Mises made in his famous NYU seminar, as recorded in the notes of seminar attendee Bettina Bien Greaves on September 26, 1957:

{A}uthors who are commonly considered friends of freedom–and they are certainly very sincere and fine economists–want to tell us again and again that even Adam Smith and some of his contemporaries were in favor of interventionism. Such a book was already written 60 years ago by the last, i.e., the youngest, student of Carl Menger, Richard Schueller. . . . Then 60 years after Schueller the same book was written by Lionel Robbins {The Theory of Economic Policy in English Classical Political Econoomy} and in between many [other] people wrote the same book. Their idea is, ‘Look how foolish you are, you anti-interventionists. Even Adam Smith was in favor of certain interventions. Why are you not? Do you want to be more orthodox than Adam Smith?’ To this I answer, ‘I am the liberal and not Adam Smith. The liberals are not some imitators of the heroes of the past. We have no scripture to interpret. The Wealth of Nations is not the bible of liberalism.’

N.B. Mrs Greaves’s interpolations are in brackets; my interpolations are in curly brackets.

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Source: MISES INSTITUTE

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Yes, It Can!–Maybe

June 4, 2013 in Economics

By Gene Healy

Gene Healy

Devouring Freedom: Can Big Government Ever Be Stopped?
By James Antle, III
Regnery, hardcover; $30, 256 pages

As a workaday wonk who writes a weekly column, every day I’m condemned to force-feed myself great gobs of political news—a practice that, as social psych experiments have shown, raises stress-hormone levels and harshes one’s mellow. Yet somehow James Antle, the right’s sharpest young(ish) political journalist, always seems to unearth depressing details I otherwise would have missed. (Thanks, Jim.)

A better title might have been “Big Government for Me, But Not for Thee” or “We the People Ruin Everything.””

In his brisk and incisive if intermittently dispiriting new book, Devouring Freedom: Can Big Government Ever Be Stopped?,Antle, a senior editor of The American Spectator and editor of the Daily Caller News Foundation, turns his sights on recent struggles to tame Leviathan.

The answer to the subtitle’s question is supposed to be “yes,” because who wants to hear otherwise? But Antle’s too honest a narrator to shine us on: “I intend to show how we got here and offer some suggestions as to how to get out. It won’t be easy. Sometimes it will seem impossible.” As the book proceeds, periodic notes of plucky optimism start giving way to grim exhortation: “We cannot afford to fail. We must fight.” Antle repeatedly urges his readers not to despair, but sometimes he makes that seem damn near impossible.

It’s not his fault: A sober look at the mess we’re in can only make you rue sobriety. In his book, even the straight, descriptive lines—“during the 2012 Republican primaries, the leading conservative alternative to Mitt Romney was Rick Santorum…”—could drive you to drink.

As a conservative, Antle’s sympathies lie with the Republican Party—but only slightly more than, say, Garry Wills’ sympathies lie with the Roman Catholic Church. Thankfully, Antle doesn’t have much use for Reagan’s 11th Commandment: “Thou shalt not speak ill of any fellow Republican.” He’s spent his career violating it relentlessly.

In the third chapter, titled “The Second Big-Government Party,” he lingers over a petulant and revealing 2011 primary debate exchange between Mitt Romney and Newt Gingrich, as the candidates tried to settle, once and for all, who was to blame for Obamacare:

Romney: “Actually, Newt, we got the idea of an individual mandate from you.”

Gingrich: “That’s not true. You got it from the Heritage Foundation.”

Heritage! You! Heritage! You! Antle writes: “so there you had two …read more

Source: OP-EDS

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Mercury News Op-Ed: Dynamic tech sector must be free of government interference

June 4, 2013 in Politics & Elections

Last week I traveled through San Francisco and Silicon Valley, seeing firsthand the cutting-edge research and development at Facebook, Google and eBay. I talked with developers, engineers, executives, investors and technology enthusiasts.
These conversations have all reinforced my basic view: Internet freedom must be preserved and enhanced, and the dynamic technology sector must be freed as much as possible from the grip of government.
Government by its very nature is inefficient. Washington dullards attempting to micromanage tech geniuses would be bad for virtually everyone.
In recent years, we have seen repeatedly how the online sphere is enabling democracy and human rights activists to organize and act. We have seen the Internet’s capacity to expand and improve commerce, giving millions of entrepreneurs an avenue to open and grow their businesses. We have seen products once inconceivable, even in the wildest dreams of a science fiction fan, become consumer staples that make it easier for us to communicate and share experiences.
Today we can be connected to one another wherever we may be and whatever we are doing. When I was a kid, no one could’ve imagined that the iPhone, iPad or iPod would exist. Well, almost no one. Steve Jobs certainly imagined it.
Other leaders like Sergey Brin, Mark Zuckerberg, Peter Thiel and the countless innovators who populate the San Francisco-Silicon Valley corridor imagined other tools andechnologies that are now staples of our day-to-day existence.
More importantly, these innovators continue to innovate.
We are in the midst of a national debate about our immigration system. Some are skeptical about inviting more immigrants into America. I believe we should be welcoming more immigrants, and especially entrepreneurs and innovators. We should work to attract science, technology, engineering and math graduates to come to the U.S. and remain here. We should welcome in particular the best and the brightest.
To create the right environment for innovators to be successful, we also need a tax system that incentivizes American companies to invest here at home. We should not penalize companies operating subsidiaries in overseas markets for our outdated, outmoded and nonsensical tax code.
Instead of vilifying job creators and tech revolutionaries like Apple for doing what every sensible business does — seeking to reduce tax liability within the boundaries of the law — we should be taxing money held offshore by American firms at a 5 percent rate if they bring it home. That could add a trillion dollars to the U.S. economy, help …read more

Source: RAND PAUL

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Time to Ditch the Scientific Method

June 4, 2013 in Economics

By Jeffrey Herbener

In a speech discussing the future of liberal education, delivered on the occasion of his retirement as Sterling Professor of Classics and History at Yale, Donald Kagan struck a Rothbardian note:  

But hasn’t the scientific method made its way into other disciplines, and can’t its benefits be obtained through them? Where the attempt has been made most seriously, in the social sciences, it has been a failure. It is increasingly obvious that trying to deal with human beings, creatures of independent will and purpose, as if they were objects like atoms, molecules, cells, and tissues, produces unsatisfactory results. The social sciences, far from producing a progressive narrowing of differences and a growing agreement on a common body of knowledge and of principles capable of explanation and prediction, like the natural sciences, has seen each generation undermine the beliefs of its predecessors rather than building on and refining them. What we see is a war of methodologies within and between fields. In fact, the fundamental idea of the whole enterprise, the attempt to remove values from the consideration of human behavior and simply to apply the scientific method, now seems most implausible.

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Source: MISES INSTITUTE

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The Buck Stops Where?

June 4, 2013 in Economics

By Gene Healy

Gene Healy

“Hey, don’t look at me — I’m just the president!” That’s the common thread in President Obama’s response to his recent scandal eruptions, from IRS harassment of Tea Partiers to his Justice Department’s spying on AP reporters. Like everybody else, Obama learns about these things via cable news, according to press secretary Jay Carney.

Obama’s flight from responsibility punctured the stratosphere in his recent speech on “the Future of Our Fight against Terrorism” at the National Defense University in D.C. In the speech Obama seemed to position himself as the loyal opposition to his own administration.

It’s pretty rich to hear complaints about the vast federal bureaucracy from people ideologically devoted to making it vaster still.”

He worried that “perpetual war … will prove self-defeating, and alter our country in troubling ways.” Look at the current situation at Guantanamo Bay, Citizen Obama chided, “where we are force-feeding detainees who are being held on a hunger strike … Is this who we are? Is that something our founders foresaw?” Obama pronounced himself “troubled” by the proliferation of drone strikes in an ever-expanding war and “the possibility that leak investigations may chill the investigative journalism that holds government accountable.”

All valid concerns, compassionately expressed. So how can we get this guy into the room when the big decisions are being made?

Whoever it is that’s been in charge for the last four-plus years has waged an unprecedented “war on whistleblowers” with a record number of leak prosecutions. He’s radically expanded drone strikes and the theaters in which drones operate — and his top national security officials foresee at least another decade of robot warfare. The dronings will continue until morale improves.

As the Brookings Institution’s Benjamin Wittes points out, Obama doesn’t need congressional approval to “get off of a war footing. He can do it himself.” Instead, Wittes writes, the president used the NDU speech “to rebuke his own administration for taking the positions it has — but also to make sure that it could continue to do so.” For its sheer, brazen phoniness, the NDU speech should be a scandal in itself. What about the domestic scandals currently roiling the administration? Though it makes me want to break out the world’s smallest violin, I have to admit there’s something to David Axelrod’s lament that because “the government is so vast,” it’s become almost “impossible” to manage. “You go through these …read more

Source: OP-EDS

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Big Brother Invades Your Genes

June 4, 2013 in Economics

By Walter Olson

Walter Olson

That’s not the role that’s ordinarily expected of him, of course, but it’s a role he does play from time to time. And he got to play it again yesterday when the Court ruled in Maryland v. King that police can require arrestees to submit to DNA sampling as part of the booking process, with the results matched to a national database to solve old cases. In a slashing dissent entertainingly written even by Scalia-dissent standards, he joined liberal justices Ruth Bader Ginsburg, Sonia Sotomayor, and Elena Kagan to accuse his conservative colleagues of flunking Civil Liberties 101. (Justice Stephen Breyer, ordinarily a liberal vote, was meanwhile crossing over to join the conservative majority.)

Yesterday’s case arose after police arrested Alonzo King for threatening several people with a shotgun, and found his DNA matched that from an unsolved 2003 rape. King challenged the constitutionality of Maryland’s 2008 law requiring arrestees to submit to DNA testing.

The rapid advance of DNA matching technology, which can establish a speck of tissue or bodily fluid as belonging to one and only one individual in the world, has opened up a new era in police forensics, with detectives regularly closing old cases and solving newly committed ones. Equally exciting, the tests have cleared many innocent persons by establishing others’ responsibility.

But along with the good comes a new potential, warned against by civil libertarians, for the authorities to use DNA access to track citizens through life. Who was at the closed-door meeting of political dissidents? Swab the discarded drinking cups for traces of saliva, match it to a universal database, and there you’ve got your list of attendees. Want to escape a bad start and begin life over in a different community? Good luck with that once your origins are an open book to officialdom.

In his dissent, Scalia warns of such a “genetic panopticon.” (The reference is to Jeremy Bentham’s idea of a prison laid out so that inmates could be watched at every moment.) And it’s closer than you may think. Already fingerprint requirements have multiplied, as the dissent points out, “from convicted criminals, to arrestees, to civil servants, to immigrants, to everyone with a driver’s license” in some states. DNA sample requirements are now following a similar path, starting reasonably enough with convicts before expanding, under laws passed by more than half the states as well as Maryland, to arrestees. (“Nearly one-third of …read more

Source: OP-EDS

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From Captive Nations to Free Markets

June 4, 2013 in Economics

By Richard W. Rahn

image

Richard W. Rahn

Vilnius seems very much like a normal European city these days, as do the capitals of the other Eastern and Central European countries. In retrospect, this simple fact is remarkable, because a mere quarter-century ago Estonia, Latvia and Lithuania were part of the Soviet empire, and Poland, the current Czech Republic and Slovakia, as well as Hungary, Romania and Bulgaria were still communist states controlled by the Soviets. Back in the mid-1980s, most people, including the establishment in the West, thought that these countries would remain communist dictatorships for the foreseeable future.

A few visionaries, such as Ronald Reagan and Margaret Thatcher, thought differently and were widely ridiculed. Others who also thought that the Soviet empire could be rolled back were mocked. I still remember a Business Week magazine column from 1988, “The Quixotic Quest of Robert Krieble.” Bob Krieble founded and built the Loctite Corp. into a major American adhesives company. After he retired, he took on the task of helping supply the anti-communist dissidents in Eastern Europe with fax and copying machines so they could better get out their message. A mere three years later in 1991, Mr. Krieble and the others had the last laugh as all the captive and oppressed nations regained their freedom.

Once the communist yoke had been thrown off, few thought that the newly independent countries could evolve into functioning free-market democracies in a short period of time without major strife and loss of life. Yet it happened, and now the citizens of these countries enjoy both freedom and a much higher standard of living. Some give undue credit to Western aid institutions and advisers. I was one of those advisers, having spent time behind the “Iron Curtain” and considerable time on the ground during the transition and the years immediately after in the former communist countries. Each of the countries had a number of very smart, courageous people who had a solid understanding of how both democracy and free markets worked. I was surprised to find a number of economists in Bulgaria who were very well-versed in the Austrian school of economics and had read many of the works of Friedrich A. Hayek — by passing around smuggled copies. They had rejected Keynesian economics as being too close to the socialism they had all been living through.

The outside advisers were a mixed bag, giving perhaps as much bad advice as good. At one point, I had a confrontation with a World Bank official in Bulgaria who was offering to give its state telecommunications company a loan under the condition that …read more

Source: OP-EDS

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Free Trade, Free Markets: Rating the 112th Congress

June 4, 2013 in Economics

A new bulletin from scholar K. William Watson reviews the Cato Institute’s congressional trade votes database for the 112th Congress and reveals how its individual members voted on major trade bills and amendments. Watson includes an explanation of each major trade vote during the 112th Congress as well as analysis of members’ trade policy profiles based on their voting record. “[These] records,” says Watson, “demonstrate a plurality of internationalists in both chambers during a term in which subsidies were expanded and barriers were reduced.”

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Source: CATO HEADLINES