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Our Interests and Their Interests

February 12, 2018 in Economics

By Murray N. Rothbard


By: Murray N. Rothbard

In the 20th century, the advocates of free-market economics almost invariably pin the blame for government intervention solely on erroneous ideas — that is, on incorrect ideas about which policies will advance the public weal. To most of these writers, any such concept as “ruling class” sounds impossibly Marxist. In short, what they are really saying is that there are no irreconcilable conflicts of class or group interest in human history, that everyone’s interests are always compatible, and that therefore any political clashes can only stem from misapprehensions of this common interest.

In “The Clash of Group Interests,” Ludwig von Mises, the outstanding champion of the free market in this century, avoids the naïve trap embraced by so many of his colleagues. Instead, Mises sets forth a highly sophisticated and libertarian theory of classes and of class conflict by distinguishing sharply between the free market and government intervention.

It is true that on the free market there are no clashes of class or group interest; all participants benefit from the market and therefore all their interests are in harmony.

But the matter changes drastically, Mises points out, when we move to the intervention of government. For that very intervention necessarily creates conflict between those classes of people who are benefited or privileged by the State and those who are burdened by it. These conflicting classes created by State intervention Mises calls castes. As Mises states,

Thus there prevails a solidarity of interests among all caste members and a conflict of interests among the various castes. Each privileged caste aims at the attainment of new privileges and at the preservation of old ones. Each underprivileged caste aims at the abolition of its disqualifications. Within a caste society there is an irreconcilable antagonism between the interests of the various castes.

In this profound analysis Mises harkens back to the original libertarian theory of class analysis, originated by Charles Comte and Charles Dunoyer, leaders of French laissez-faire liberalism in the early 19th century.

“We have to abandon the cozy view that all of us, we and our privileged rulers alike, are in a continuing harmony of interest.”
But Mises has a grave problem; as a utilitarian, indeed as someone who equates utilitarianism with economics and with the free market, he has to be able to convince everyone, even those whom he concedes are the ruling castes, that they would be better off in a …read more


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End Space-Station Funding Right Now

February 12, 2018 in Economics

By Laurence M. Vance


By: Laurence M. Vance

Donald Trump’s possible decision to end NASA’s funding of the International Space Station by 2025 brings up that age-old question of the proper role of government, although it is certainly not he who is bringing it up.

The International Space Station (ISS) program is a joint operation between NASA and the space agencies of Russia, Japan, Canada, and eleven countries of Europe. According to NASA’s “Reference Guide to the International Space Station.”

NASA and the space agencies of Russia, Japan, Europe and Canada have hosted investigators from 83 nations to conduct over 1700 investigations in the long-term micro-gravity environment on-board the ISS. Many investigators have published their findings and others are incorporating findings into follow-on investigations on the ground and onboard. Their research in the areas of earth and space science, biology, human physiology, physical sciences, and technology demonstration will bring yet to be discovered benefits to humankind and prepare us for our journey beyond low Earth orbit.

The first of many components of the ISS was launched into orbit in November 1998. Assembly was completed in July 2011. The station has been continuously occupied by a maximum of six astronauts from various countries since November 2000.

The ISS is the largest man-made object to ever orbit the Earth. In NASA’s reference guide, it is described thus:

The ISS has a mass of 410,501 kg (905,000 lbs) and a pressurized volume of approximately 916 m3 (32,333 ft3). The ISS can generate up to 80 kilowatts of electrical power per orbit from solar arrays which cover an approximate area of 2,997 m2 (32,264 ft2). The ISS structure measures 95 m (311 ft) from the P6 to S6 trusses and 59 m (193 ft) from PMA2 to the Progress docked on the aft of the Russian Service Module. The ISS orbital altitude can range from 278-460 km (150-248 nautical miles) and is in an orbital inclination of 51.6 degrees. The ISS currently houses 6 crew members.

The ISS is so large it can be seen from Earth with the naked eye. It maintains an orbit between 205 and 270 miles above the Earth, and completes 15.5 orbits per day.

Of course, all of this comes at a price — an enormous price to U.S. taxpayers.

The ISS is the most expensive object ever built. According to a recent audit by NASA’s Office of Inspector General, “Through fiscal year (FY) …read more


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Stop Funding Georgia Charter Schools ‘on the Cheap’

February 12, 2018 in Economics

By Corey A. DeAngelis

Corey A. DeAngelis

Atlanta has a great education opportunity ahead, because Georgia
policymakers are considering funding public schools equitably.

The new legislation, House Bill 787, would equalize public charter school
funding with traditional public schools for all 180 school
districts in Georgia, and would cost the state about $10

The bill’s sponsor, Rep. Scott Hilton, says that the price
tag is a “drop in the bucket,” especially since charter
school students are currently being educated “on the

He has a point. Research shows charter schools can achieve the
same outcomes or even better than traditional public schools, and
for less money, too. It’s exciting to think about how
successful these schools would be if they received just as much
funding as their traditional counterparts.

As shown in a recent study by my colleagues at the University of
Arkansas and me, Atlanta public charter schools receive around
$2,000 less funding allocated on a per-child basis than their
district school counterparts each year, or almost $26,000 less
throughout a full K-12 education. And we find that despite the
large funding disadvantage, Atlanta public charter schools are 14
percent more cost-effective and produce an 18 percent higher
return-on-investment than their neighboring district schools.

Let’s make this a bit more concrete. The data show that
every thousand dollars spent on education in Atlanta district
schools translates to around a $4,560 increase in students’
lifetime earnings. That is commendable. But that same
thousand-dollar-expenditure produces an estimated $5,370 in
students’ lifetime earnings if allocated to a public charter
school in the city. And that 18 percent advantage is very important
considering that Atlanta taxpayers spend over $210,000 for each
child’s K-12 education in district schools.

In other words, 13 years of equal funding in charter schools
could produce around an additional $170,000 in lifetime earnings
for each charter school student in Atlanta.

Of course, this isn’t the only study finding that charter
schools do more with less. In 2014, researchers at the University
of Arkansas also found that charter schools across the country were
40 percent more productive, as measured by gains in student
achievement, than neighboring district schools. In addition,
experimental studies by researchers at Harvard University and
Princeton University found that male students that won a public
charter school lottery were less than half as likely to commit
crimes later on in life, and female students were 59 percent less
likely to become pregnant as teenagers.

And positive effects like these pay off. When charter schools
reduce the likelihood that students commit crimes as adults,
society spends less resources on policing, court cases, corrections
programs, and prisons.

Overall, the scientific evidence suggests that charter schools
improve academic outcomes for students. Researchers …read more

Source: OP-EDS

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Brand Loyalty

February 12, 2018 in Economics

By Julian Sanchez

Julian Sanchez

For the No. 3 lawyer at the Department of Justice to quit after just nine months on the job is, to
say the least, unusual. Under the Trump administration, where the
downright bizarre is so commonplace that the merely unusual barely
registers, this is nevertheless an aberration worth marking,
because it says a lot about the state of a Justice Department
locked in a surreal conflict with its own president and his party,
none of it good.

When United States Associate Attorney General Rachel L. Brand
last week announced she’d be stepping down to take a job as a
vice president at Wal-Mart, it made headlines primarily because it
also meant passing on her role as heir apparent to embattled Deputy
Attorney General Rod Rosenstein. Tasked with supervising Robert
Mueller’s investigation into Russian interference in the 2016
presidential election following Attorney General Jeff
Sessions’ recusal, Rosenstein has become an improbable target
of invective from the very president who appointed him, from
Republican legislators, and even from Political Action Committees. It seems clear
that Trump is laying groundwork for his eventual removal, in hopes
that Rosenstein’s successor—meaning, until her
departure, Brand—might be more willing to carry out an order
to fire Mueller. But her departure should be seen as a warning sign
with implications not only for the Mueller inquiry, but the future
of the Trump Justice Department as a whole. To see why, it’s
helpful to appreciate two things about Rachel Brand.

Brand’s departure
suggests that the working environment at Justice—not only
under regular assault from Trump as a handmaiden of a corrupt “Deep
State,” but facing unsubtle and unseemly pressure from White House
Chief of Staff John Kelly—had become corrosive and

The first is that Brand had a solid bipartisan reputation as a
conservative lawyer of professionalism and integrity. When
confirmed to her post last May, she won praisefrom Clinton Administration veteran
Jamie Gorelick, as well as Barack Obama’s former acting
solicitor general, Neal Kaytal. When I first encountered Brand, in
her previous role as a Republican member of the Privacy and Civil
Liberties Oversight Board during the Obama administration, she was
as consistent as she was vocal in her disagreement with those of us
who believed government surveillance in the name of the War on
Terror had gone too far. Yet she also impressed me as a serious and
fair-minded advocate for her positions, and many of my colleague in
civil society have expressed public disappointment at her impending

The second thing to understand is that if you squint at
Brand’s resumé, it resolves itself like a Magic Eye
stereogram …read more

Source: OP-EDS

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Nato Discovers War Is Bad for Women

February 12, 2018 in Economics

By Doug Bandow

Doug Bandow

The North Atlantic Treaty Organization once defended Western
civilization. The alliance was to hold back the Soviet hordes from
conquering “Old Europe,” as it was later called. Then
disaster struck. The enemy disappeared: the Soviet Union dissolved
and Warsaw Pact broke up.

For the last quarter-century the quintessential anti-Moscow
alliance has sought to find a new purpose. NATO officials
originally suggested interdicting drugs and promoting student
exchanges. Then members decided on “out-of-area”
activities, that is, fighting wars everywhere but in

Recently the transatlantic alliance shifted back to containing
Russia because of the latter’s military action against
non-NATO members. Yet the effort has generated little enthusiasm
among members other than those along Russia’s border. So
Secretary General Jens Stoltenberg is pushing another, perhaps more
popular, cause: protecting women.

NATO created the Special Representative for Women, Peace and
Security, who explained a few years ago explained that
“Achieving gender equality is our collective task. And NATO
is doing its part.” In 2016 the organization held a
conference on gender equality, at which Stoltenberg declared the
issue to be critical.

After all, Stoltenberg said, “NATO is a values-based
organization and none of the Alliance’s fundamental values
— individual liberties, democracy, human rights and the rule
of law — work without equality.” Actually, that’s
not true — Western nations established a generally effective
rule of law and protective system for liberties even when forced to
accommodate sometimes pervasive injustice, including slavery.
During the Cold War the alliance helped deter the Soviet Union,
i.e. “worked,” despite much greater discrimination
against minorities and women than today.

If NATO still has a role,
it is to protect Europeans from geopolitical uncertainties in a
more nationalistic and sectarian era. It is not to jump onto the
latest social cause being advanced by the latest visiting

Stoltenberg also claimed that “by integrating gender
within our operations, we make a tangible difference to the lives
of women and children.” He added last fall, “empowering
women is not just the right thing to do, it’s the smart thing
to do: it makes countries safer and more stable.” In fact,
NATO has found that it is difficult if not impossible to transform
another nation’s culture through temporary combat missions.
The allies have not liberated women across Afghanistan despite more
than 16 years of combat. The U.S. doesn’t even interfere with
the pervasive sex slavery of young boys, called bacha bazi, or
dancing boys, by Afghan military personnel. To make Afghanistan
safe first requires making a deal with or defeating the Taliban.
And any stability would disappear if the allies wandered around the
country attacking institutions which didn’t live up to
Western standards.

None of this stopped actress Angelina …read more

Source: OP-EDS

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Has Trump Evolved on Trade?

February 12, 2018 in Economics

By Daniel J. Ikenson

Daniel J. Ikenson

On the campaign trail and into the first year of his presidency,
Donald Trump has been a walking, talking billboard for
protectionist nationalism. He promised 45 percent tariffs on
imports from China, 35 percent levies on imports from Mexico, a
requirement that U.S. oil and gas pipelines use only American
steel, and the closure of “loopholes” in our Buy
American laws to ensure that only U.S. goods and American workers
are eligible for federal procurement projects.

Trump withdrew the United States from the Trans-Pacific
Partnership, forced renegotiations of the North American Free Trade
Agreement and our trade deal with South Korea under threats of
withdrawal, launched investigations under a provocative and rarely
used statute to determine whether U.S. dependence on foreign
sources of aluminum and steel represent national security threats,
and initiated another investigation under an even more provocative
statute to determine whether China is engaging in unfair technology
transfer and intellectual property practices.

A year and change into his presidency, however, Trump’s
making noises about rejoining the TPP, the odds are looking better
for NAFTA renegotiation over withdrawal, and the president’s
only overtly protectionist actions have been to impose safeguard
tariffs on solar cells and tariff rate quotas on washing machines.
Of course, imposing tariffs is as aggressive as it is
self-destructive, so use of the word “only” is not to
excuse the actions, but to suggest that the administration has
exercised relative restraint. There is near consensus that the bark
has been worse than the bite.

Have Trump’s views changed? Is he beginning to recognize
that his protectionist impulses are economically and politically
constrained? Are we merely in the eye of the hurricane? What to
make of the state of U.S. trade policy?

Is he beginning to
recognize that his protectionist impulses are economically and
politically constrained?

First, we are by no means in the clear with respect to avoiding
a deluge of protectionism. Still pending are three potentially
explosive cases (and more contentious issues could soon emerge).
The two investigations into the national security implications of
U.S. imports of steel and aluminum, conducted under Section 232(b)
of the Trade Expansion Act of 1962, reportedly have been completed.
Whether those findings reveal national security concerns and, if
so, whether the president is going to respond with trade barriers
remains to be seen.

The president has broad discretion to impose high tariffs under
this statute and—as is the case generally on matters of
national security—the U.S. courts show great deference to the
executive. Should Trump announce tariffs, the United States might
find itself defending that decision at the World Trade Organization
by invoking GATT Article XXI (the Security Exception), which allows
members …read more

Source: OP-EDS

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As China Rises, the U.S. Should Stand Back and Allow Other Asians to Rise Too

February 12, 2018 in Economics

By Doug Bandow

Doug Bandow

How to respond to the People’s Republic of China is one of
Washington’s more vexing foreign policy challenges. Not only
is the PRC on the rise, but President Xi Jinping is pushing an
increasingly authoritarian policy. The result looks ominous to many

The strategy preferred by successive U.S. administrations,
continued military dominance of East Asia, cannot last. This
approach is not necessary to protect the U.S. Yet it costs far more
to project power against China than to defend America from China.
And it costs the PRC far less to deter Washington than for
Washington to coerce the PRC.

Which makes Washington’s strategy financially
unsustainable. Last year the Congressional Budget Office figured
the U.S. was going to again run trillion dollar annual deficits
around 2022. Total red ink would run $10 trillion over the
following decade.

Whatever Washington’s
short-term desire to limit the PRC, America also benefits greatly
from a peaceful Asia.

But because of irresponsible Republican fiscal policies,
analysts now fear the U.S. could begin running an annual
trillion-dollar deficit as early as next year. That will come on
top of a national debt which already tops $20 trillion and
accumulated unfunded liabilities—promised benefits with no
funding behind them—of some $200 trillion.

At some point Washington will have to trim outlays or face
fiscal disaster. However, Americans are unlikely to accept
reductions in social programs to finance military outlays to
confront the PRC over such issues as Taiwan, the Diaoyu/Senkaku
Islands, and other bits of foreign territory.

Instead of trying to organize a containment system, Washington
should focus on advancing its few serious interests, such as
freedom of navigation. Otherwise the U.S. should step back and
leave China’s neighbors free to respond to whatever they
believe necessary. Those with the most at stake should do the

Perhaps the PRC’s most important potential antagonist is
Japan. Since the late 19th century, their bilateral history has
been always difficult and sometimes violent. Nuclear-armed China is
no longer vulnerable to Japanese coercion, but much hostility
remains. As Beijing’s “peaceful rise” has turned
more assertive if not aggressive, Tokyo has begun to slowly expand
military outlays and adjust defense policies. (North Korea also has
contributed to rising Japanese hawkishness.)

Prime Minister Shinzo Abe is pushing to change the so-called
Peace Constitution to authorize a wider military role. There is
even talk of adding aircraft carriers, creating an ability to
preempt hostile missile launches, and developing nuclear weapons,
though the latter remains unlikely absent either a South Korean
nuclear program or America closing its nuclear umbrella.

Equally noteworthy is how Japan’s other neighbors, once
captive to their memories of World War II, also are beginning to
escape the past. …read more

Source: OP-EDS

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Yes, Tax Cuts Really Are The Reason for Your Raise

February 12, 2018 in Economics

By Nathan Keeble


By: Nathan Keeble

Since Trump’s reduction of the corporate tax to 21%, workers across the country have been rejoicing. Companies like Wal-Mart, Apple, Bank of America, and many more have announced firm wide bonuses and minimum wage raises. To most, the tax cuts appear to be a clear success. However, some commentators, such as Dr. Veronique de Rugy at Reason, are saying not so fast.

Dr. de Rugy claims that these announcements are not in line with economic theory. For wages to be affected by tax cuts takes an extended period of time. The newly freed revenue must be accumulated and invested into new capital equipment which boosts worker productivity and, consequently, their wages. Quite simply, Dr. de Rugy suggests that the tax cuts simply have not been in place long enough to be held directly responsible for these announcements, and she even ponders if they are nothing more than PR moves.

In truth, these bonuses and raises are perfectly in line with what economic theory predicts.

How Wages Are Determined

Wages are equivalent to the expected increase in revenue an individual’s labor generates for the business, or, equivalently, the amount which is expected to be lost if his or her labor went unemployed.

For example, imagine a restaurant employs 5 cooks who are capable of serving C number of customers per hour, earning E dollars in revenue. One cook wins the lottery and retires to the Bahamas, and now the restaurant is only capable of serving C-L customers, and consequently only earns X in revenue. Clearly, entrepreneurs will only be willing to pay the difference between E and X, a number which will be called W, to employ a fifth cook. W is what economists refer to as the marginal revenue product, and, thanks to competition in the labor market, wages tend towards this number in a free market, less a discount for time preference.

To see how taxation effects wages, imagine if every time the restaurant owner goes to deposit his firm’s earnings an armed robber stole 35% of the firm’s net income. Disregarding momentarily what that thief does with his loot, whether he builds roads or funds a study of cocaine’s effects on the promiscuity of Japanese quail, the moment the robbery occurs, the restaurant is making less money than before. It immediately renders the firm less efficient, and the money to be imputed back to the factors of …read more


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Remembering Burt Blumert

February 11, 2018 in Economics

By David Gordon


By: David Gordon

Today would have been the 89th birthday of Burt Blumert, one of the greatest personalities of the modern libertarian movement. Burt was the indispensable man behind the scenes and was a key figure in the Mises Institute, the Center for Libertarian Studies, and He was one of Murray Rothbard’s closest friends; and when you met him, it was easy to see why Murray liked him. He was a genial and kind person and a source of wise counsel to all those fortunate to know him. Burt was the founder of Camino Coins and a principal figure in the hard money community. If you want to get a sense of what Burt was like, you have only to read his collection of humorous essays, Bagels, Barry Bonds, and Rotten Politicians (2008). It was a source of great pride and comfort to Burt in his final illness that he was able to see this book in print. Burt helped me with good advice when I most needed it, and I will always be grateful to him for his counsel and friendship

…read more


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No, There’s No Evidence of a Murder Wave Targeting Gay Americans

February 11, 2018 in Economics

By Walter Olson

Walter Olson

“Why Are Murders Of Gay And Bi Men Up A Staggering 400
Percent?” asks the headline atop Michelangelo
Signorile’s new
HuffPost column
, shared at least 13,000 times so far
“Hint: This Alarming Surge Has Taken Place Since Donald Trump
Became President,” adds HuffPost unsubtly in a tweet
promoting the column.

If your response was to wonder first whether such murders are in
fact skyrocketing, yours is the right instinct.

With the FBI reporting 11,821 male homicide victims in the U.S.
in 2016, even a conservative estimate of how many are gay or
bisexual yields a number of annual victims well into the hundreds,
and perhaps significantly above that.

Were such a number to jump by 400 percent, it would generate a
noticeable blip of 1,000 or more extra gay male murder victims in a
single year. Terrifying, right?

One large gay nonprofit,
Victory Fund, has already been citing the study in fundraising

But Signorile, it seems, is working with a different data set.
Citing a report by an advocacy group called the National
Coalition of Anti-Violence Programs
, he says the number rose
“from four in 2016 to 20 in 2017.”

Wait a minute. Only four gay men were murdered in all of 2016?
And then 20 the next year?

Maybe these figures are meant to count only those murders of gay
or bi men in which the motive is anti-gay hatred. Signorile notes
darkly that hateful groups and persons “may feel
emboldened” by current political trends, perhaps explaining a
murder spree. And he leads off his piece with the story of one
murder last month, the Blaze Bernstein case in California, in which
hateful ideology does appear to have played a key role.

But Signorile also mentions in passing that the NCAVP stats
include murders following social media hookups. That seemed
curious: when do those get counted as hate-related crimes, and when
not? So I went and looked at the underlying report, entitled
Crisis of Hate

The first problem with the data is one that the advocates at
NCAVP make no effort to hide, which is that the recently launched
database consists only of killings reported to them. Among
its sources are “media reports, police reports, or … our
member programs.” If more killings are being brought to
NCAVP’s attention, it’s hard to know whether that
reflects an actual increase, or just that the group has been more
successful in receiving reports.

The report also relegates to a footnote a fact that might seem
significant: the database includes only “individually
reported” murders of LGBT persons. It thus excludes the 2016
slaying of 49 …read more

Source: OP-EDS