Author Archive for Ryan McMaken

Mises Weekends: Jeff Deist Talks Scottish Secession and the EU with Andy Duncan

Jeff Deist and Andy Duncan discuss the rise of UKIP in England, and whether it represents a real populist anti-state uprising or just rightist politics. Andy skewers the strutting political class in London, and the charade of voting Labour or Conservative based on minute policy differences. They also discuss the upcoming Scottish independence vote, and whether the land that gave us Robert the Bruce and David Hume has succumbed completely to socialism. Could an independent Scotland become the Singapore of the North, or just another Eurozone basket case?

Andy Duncan is financial derivatives lecturer based in England. He uses the lessons of Austrian Economics to help explain how free markets are trying to work under the current blanket of global government regulation. He teaches mainly in New York, London, Dubai, and Singapore.

YouTube link: https://www.youtube.com/watch?v=uWDTvwI7m1o

 

Must Free-Marketers Reject Global Warming?

GISS_temperature_2000-09_lrgYou can’t make this stuff up. Someone at the UK Guardian named David Grimes has declared that “economic liberalism,” by which he means the ideology of laissez-faire, “clashes” with “scientific evidence.” Which scientific evidence, you might ask? Well, the unassailable scientific dogma of global warming is one:

Climate change illustrates this well, because despite overwhelming evidence of anthropogenic influence, there is a tendency for those with pronounced free-market views to reject the reality of global warming. The reason underpinning this is transparent – if one accepts human-mediated climate change, then supporting mitigating action should follow. But the demon of regulation is a bridge too far for many libertarians.

There is no doubt that some people who purport to be advocates for free markets reject arguments of anthropogenic global warming out of hand without even considering the evidence. I’m agnostic on the matter myself, although I certainly reject the ludicrous assertion that there is such a thing as “settled science” and that the matter is not debatable. And unlike many allegedly great men and women of scientific inquiry, I refuse to agree that global warming “deniers” are heretics who should be burned at the stake (or the modern equivalent of having one’s career ruined). To anyone capable of logical thought, it should be obvious that one’s support for free markets is utterly independent from one’s opinions on the matter of global warming. There’s no reason at all why someone who accepts the reality of anthropogenic global warming would have to support government regulation of all energy usage. To argue such would be like arguing that one’s acceptance of the Bering Strait theory determines one’s opinions about the minimum wage. So why would Grimes think this? We can see it in his quotation above where he says:

The reason underpinning this is transparent – if one accepts human-mediated climate change, then supporting mitigating action should follow.

Ah, so there it is. Acceptance of global warming = acceptance of “mitigation” = acceptance of government regulation. Case closed.

Grimes packs many assumptions into just this one statement. Let’s look more closely:

If one accepts that global warming is a grave danger, is it nonetheless necessary to support “mitigating action” even if it can’t be shown to actually improve anything at all? Even assuming that global warming were proven beyond a reasonable doubt, the burden of proof of success is still on those who want mitigating action. Specifically, they need to be able to prove that such action has  a reasonable chance of achieving the desired ends. They most certainly have not done so. Indeed, many scientists say it’s already too late to stop it. Many argue that even if major global action were taken right now, the expected result over the next century would be too small to make any difference. In other words, it’s futile at this point to enact mitigating actions. (Also here.) Presumably, if it’s too late, then there’s no reason we should still be debating mitigating action. But of course, having realized that the “it’s too late” message is a PR disaster, the message has instead been changed to “it won’t be too late if we act right now!”

Read More→

The Johnson Center at Troy University

The Johnson Center at Troy University has two Mises alums and former Fellows on the faculty: Malavika Nair and G.P. Manish. Have a look at the center’s new video:

Writes Malavika Nair: “We are getting a Masters program next fall with a focus on Austrian economics and liberty so there’s exciting stuff happening!”

The Myth of the Unchanging Value of Gold

6858Mises Daily Friday by Joseph Salerno:

Many economics textbooks claim that a function of money is to measure the value of goods. In fact, the value an individual attaches to a given sum of money or to any kind of good (including gold) is based on a subjective judgment and is without physical dimensions.

Rethinking Japan’s “Lost Decades”

6860Mises Daily Friday by Peter St. Onge:

The “Lost Decades” narrative in Japan and the US has kept the drive for more government intervention going for a long time.

Hoppe on Entrepreneurs and Thornton on the Drug War in The Free Market

augfm The August Issue of The Free Market Is Now Online!

Hans-Hermann Hoppe is back with a new lecture on the social virtues of the entrepreneur this month:

What can be unambiguously stated about a capitalist’s profit or loss is this: his profit or loss is the quantitative expression of the size of his contribution to the well-being of his fellow men, i.e., the buyers and consumers of his product, who have surrendered their money in exchange for his more highly valued (by the buyers) product. The capitalist’s profit indicates that he has successfully transformed socially less highly valued and appraised means of action into socially more highly valued and appraised ones, and thus increased and enhanced social welfare.

We also interview Mark Thornton about his recent debate at Oxford University:

Mises Institute: Why were you invited to debate at Oxford?

Mark Thornton: The Oxford Union can pretty much get whoever they want to debate, including presidents, prime ministers, Mother Theresa, the Dalai Lama, and even Julian Assange, so I was honored that they invited me. I met several students in the Oxford Union and at Oxford University who were familiar with my work on the drug war and at the Mises Institute. Each side of the debate generally consists of a student presenter and three experts. The debate is similar in structure to the House of Commons and has been that way since 1823.

We recounted the highlights of the Summer Fellows program and the Rothbard Graduate Seminar here in Auburn. Be sure to also find the latest updates on new translations, and new publications, degrees, and media appearances from our scholars and alumni.

Military Spending and Bastiat’s “Unseen”

OrigamiTankEric Phillips’s Mises Daily article  on military spending from 2012 is as timely as ever: 

Military Spending and Bastiat’s “Unseen”

by Eric Phillips

[An army of] a hundred thousand men, costing the taxpayers a hundred million of money, live and bring to the purveyors as much as a hundred million can supply. That is which is seen.

But, a hundred million taken from the pockets of the taxpayers, ceases to maintain these taxpayers and their purveyors as far as a hundred million reaches. This is that which is not seen. Now make your calculations. Add it all up, and tell me what profit there is for the masses?

-Frédéric Bastiat

You will often hear self-styled conservatives say, “I support the free market and a strong national defense.” But if by supporting a “strong national defense” they mean supporting a large and aggressive conventional military — as they almost invariably do — these two positions are mutually exclusive. A military establishment funded by taxation, inflation, and debt is just as destructive to the market economy as a welfare establishment funded by taxation, inflation, and debt. Every dollar spent on the military, just like every dollar spent on the Department of Health and Human Services, is a dollar not spent or invested in the civilian economy. Every person employed by the military or the firms that supply the military with equipment is a person not employed in the civilian economy. And since civilian employment and capital accumulation are the foundations of a prosperous capitalist economy, a conventional military can only exist at the expense of a fully functioning free-market capitalist system.

Pork-seeking congressmen, crank economists, and many laypeople believe that generously funding the conventional military is good for the economy. They point to the factories that manufacture tanks and fighter jets, the ports that build ships and service the navy, and the booming economies that surround military bases. But as Bastiat explained, they err in focusing on only “that which is seen.” They neglect to consider the private-sector jobs and investment projects that do not exist because of the taxes necessary to fund the military. In other words, they miss “that which is not seen.” Economists call these foregone alternative uses opportunity costs. The opportunity cost of funding the military is the sum of what could have been produced if the resources devoted to the defense establishment had not been drained from the private sector.

Read More→

How Non-Profits Enhance Freedom and Markets

6850Mises Daily Thursday by Karen De Coster:

The nonprofit form of enterprise is indispensable to both recipient individuals and the benefactors who fund them.

States, Cartels, and the Anarcho-Capitalist Opposition

Political protestMises Daily Thursday by David D’amato:

If, for good reason, we generally distrust the concentrated power wielded by coercive monopolies, we ought to avoid at all costs placing more power in the state, the ultimate embodiment of monopoly.

Working in Ron Paul’s Congressional Office

Lew Rockwell talks to Tom Woods, who was guest-hosting the Peter Schiff Show, about his days as Ron Paul’s chief of staff in DC.

The Socialist Party In Chile Gets to Work Destroying the Economy

download (5)Axel Kaiser at Mises Brasil has penned a helpful update on the situation in Chile where socialist president Michelle Bachelet was elected to a second non-consecutive term in Chile. Bechelet’s second term appears to be far more ambitious in its efforts to introduce a series of socialist programs and reforms, and it certainly looks to be far more damaging than the administration of Ricardo Lagos, who seemed largely concerned with promoting relatively-free trade in spite of his own status as a member of the Socialist Party. 

Below is the Google Translate version of Kaiser’s article (edited down a little and corrected by me):

Michelle Bachelet Intends to Destroy the Institutional Foundations of Chile’s Economy

by Axel Kaiser

Only five months have passed since the socialist government of Michelle Bachelet took power in Chile, but it has been enough to make economic growth in the country collapse. The main cause of this sudden and dramatic decline in economic activity is the increased uncertainty generated by the new Chilean government, which aims to take a tabula rasa approach to to the institutions of the free market that allowed Chile to become the most prosperous country in Latin America.

One of the most harmful proposals is a massive tax reform, which has already been approved, which will dramatically increase the corporate income tax in Chile, leaving it above the average for OECD countries. Moreover, this tax reform – which was strongly opposed by associations of Chilean entrepreneurs, and is losing popular support – grants the national tax agency arbitrary powers over taxpayers.

Another target of the radical socialist Bachelet program is the flagship pension system in Chile. As is widely known, Chile was the first country to introduce a social security system that is managed by private companies and is based on individual capitalization accounts. Under this scheme, each month, the Chilean workers deposit a percentage of their income in an account under your name, which is administered by private companies called AFP (Pension Fund Administration). The arrangement works just like a funded system.

Thus, when the Chilean workers retire, they – unlike all other current worldwide pension systems – do not depend on other workers to continue contributing to the system to receive their retirement; they just get back all the money applied adjusted for inflation plus interest.

Unlike the state pension system created by Bismarck and copied all over the world – technically called pay-as-you-go – the Chilean system is fully solvent, because it does not depend on demographics or fertility rates to remain so.

Moreover, this system, by encouraging savings, has led to an intense process of capital accumulation in the country. The savings of workers was invested in the Chilean economy itself, something that was essential to the remarkable economic growth that the country experienced in the 1990s and 2000.

In many ways,  this arrangement has transformed Chilean workers into capitalists. In Chile, all follow the evolution of their Cuenta AFP (account) as they might follow the national football league, or even more closely: Chileans receive a monthly statement detailing how much has been added to one’s account detailing what he would receive monthly if he retired today, and how much he will receive if he continues contributing to the account until reaching 65 years of age…So it has become anathema in Chile for any union or political group to want to disrupt the system to their advantage. Such groups simply do not have the support of the population.

All of this, recognized by the economic literature, is disdained by the current socialist government.

Determined to bring the state back to pension management, Mrs. Bachelet and her ministers have already submitted a plan to create a state company for the pension sector. As is easy to predict, it is likely to create unfair competition for existing private companies, which would no longer be able to cope with the administration fees for a company that is subsidized with tax money. Moreover, if the state agency has a bad run, it will immediately be bailed out with more taxpayer money. Read More→

The Space-Junk “Crisis”

Debris-GEO1280Whenever you see the words “Lockheed Martin” you should think “taxpayer-funded cronyism,” so when I saw the recent Drudge headline that read “LOCKHEED seeks to clean up space…” I mentally added the clause “with money stolen from taxpayers.”

The space junk crisis is apparently the latest looming global disaster that requires a government solution. Drudge links to a Financial Times article that only gets to the financial heart of the matter six paragraphs down:

[The joint venture to track space junk between Lockheed and Electro Optic System Holdings] follows the award in June of a US$915m contract by the US Air Force to Lockheed to build a “space fence” project – a powerful radar system to track and catalogue space debris. This radar will monitor 200,000 of the largest pieces of junk in orbit.

Ah, so this latest “private sector” effort is really an adjunct to a grant of nearly a billion dollars from the US Treasury to Lockheed.

Lockheed knew how to strike when the iron was hot, of course, since the recent movie Gravity make space junk an issue in the popular imagination:

The 2013 Hollywood movie Gravity, which starred Sandra Bullock and George Clooney, focused public attention on the space junk problem, which Nasa [sic] has been grappling with for years.

It’s not hard to imagine the Powerpoint presentation delivered by Lockheed salesmen to USAF bureaucrats featuring a clip of the space-junk-caused disaster at the beginning of Gravity as an illustration of just how important it is that Lockheed get $900 million ASAP.

This isn’t to say that space junk isn’t a real issue. Space junk is causing real damage to actual property in orbit as noted in the article:

Awareness of the dangers posed by man-made space debris has grown since the first hypervelocity collision between satellites in 2009, which took place 800km above Siberia. Iridium 33, which was part of a network of satellites providing phone services, was destroyed when it collided with a deactivated Russia satellite Cosmos-2251.

But if space junk is a real problem for private parties, then it would appear that they have a large stake in solving the problem either through clean-up or by constructing space crafts differently. In other words, there’s an incentive to put private money into solving the problem. But why use voluntary and peaceful means when it’s easier for Lockheed to just go back to the well of taxpayer funds? When you’re a lobbyist-heavy corporatist outfit like Lockheed, it’s always easier to just employ the violence of taxation than the more costly work of market transactions. The financial benefits of such a strategy can be immense. The FT article notes:

…shares in Electro Optic Systems Holdings have risen: up by 49 per cent over the past seven days, closing Tuesday at 67 cents.

“There is a commercial opportunity when you consider investment in space is worth about US$900m,” says Ba-Ngu Vo, professor at Curtin University.

I wonder how many high-ranking DOD employees and members of Congress just happened to buy stock in EOS right before the new agreement was announced. We may never know.

 

Blaming That Cold Weather Culprit

One hundred dollar bill frozen in iceMises Daily Wednesday by Devin Leary-Hanebrink:

The Fed and it’s friends blamed cold weather for much of the year’s lackluster economic growth. But cold weather does not explain the economic slowdown because cold weather does not stop economic activity, it merely shifts it to other activities and products.

A Lesson in Economic Analysis from the Minimum Wage Debate

Magician holding a magic wandMises Daily Tuesday by Ken Zahringer:

Supporters of government interventions like minimum wages often pretend the economy is far less complex than it really is, and then conjure up a statistic as evidence of success. Careful analysis reveals another story, however.

Why Isn’t Monetary Pumping Helping the Economy?

slow2Mises Daily Monday by Frank Shostak:

The longer central banks world wide persist with their loose monetary policies the greater the risk of severely damaging the wealth-generating process is. This in turn raises the likelihood of a prolonged stagnation.

 

 

Mises Weekends: Marc Victor, Attorney For Freedom

Jeff Deist and Marc J. Victor discuss what’s happening in Ferguson, our disappearing legal rights, and how having Butler Shaffer as a law professor radicalized him and shaped his libertarian views.

Police States and Private Markets

BMises Daily weekend by Jeff Deist:

We know that state monopolies invariably provide worse and worse services for more and more money. Police services are no exception. When it comes to your local police, there is no shopping around, there is no customer service, and there is no choice.

How to Help the Mises Institute on Facebook

As you probably know, Facebook is constantly changing its methods of deciding which posts you see and which you don’t see. Privacy settings change constantly as do settings for your news feed. It difficult to say exactly how these changes affect the number of people who see our Mises Institute Facebook posts, but you can help us extend our reach and the number of posts you see from us. A little known fact is that Ludwig von Mises himself pioneered the “thumbs up” gesture (see photo below), which was in turn adopted by hard-core Misesian Mark Zuckerberg for use on Facebook. Well, that remains unconfirmed, but what is definitely true is that one of the easiest things you can do to make sure more people see our posts is to simply like and share our posts as you see them in your news feed. But there’s more you can do as well.  This graphic below shows you two ways you can help us on Facebook. First, go to our Facebook page at https://www.facebook.com/mises.institute, and then:

facebook_post

A Free Market Case for Independence: Let’s Make Scotland Like Hong Kong

200px-Map_of_Scotland_within_the_United_Kingdom.svgAlasdair Macleod makes a sensible recommendation. This article originally appeared on City A.M.:

“A free market case for independence: Let’s make Scotland like Hong Kong”

by Alasdair Macleod

In September, Scottish residents will vote in the independence referendum, following months of intense political debate between the Yes and No campaigns. Even statements presented as purely financial or economic in nature have not been based on proper facts or sound analysis. The Scottish National Party is pursuing an inherently emotional case, while the Westminster establishment is employing scare tactics: Scotland should hold on to nurse for fear of something worse.

There is no reason why 5m Scots cannot do far better as an independent nation, but it will require that they ditch both welfare dependency and subsidies, and embrace reality. Get it right and Scotland’s diaspora, many of whom have abandoned Scotland’s parochial, socialistic shores for free markets elsewhere, would be back like a shot.

In leaving the UK, Scotland would establish its own constitution. The country could give greater protection to property rights, while reducing the scope for political intervention in economic and business affairs. Its own legal system gives Scotland a head start in this process. Contrary to the threats from Westminster about not keeping the pound, an independent Scotland could run a currency board pegging the new local currency to sterling or even the euro, providing the restraints for monetary stability. The prize for the taking is that Scotland could become an entrepot centre in its own right.

This is the basic formula behind Hong Kong’s success. Remember that Hong Kong emerged from the rubble of Japanese occupation in 1945, and has climbed a far higher mountain than that faced by Scotland. There’s no reason (from a purely economic point of view) why Scotland cannot be a roaring success as an independent nation, as long as it embraces free markets, rejects state intervention and provides legal security.

Unfortunately, the majority of Scottish voters view things very differently. They believe North Sea oil will be part of the independence settlement, and that oil and whisky revenue will pay for welfare and pensions. They hanker after increased socialisation of the means of production, providing an intellectual gloss for the unthinking majority that simply wants more for less. But independence means giving up the security of the Union, and (under the Barnett formula) the subsidy of English taxes.

Read More→

Ron Paul, the Gateway Drug

 Jessica Pavoni explains how she came to know Mises, Rothbard, and the rest:

At that point, Hubby and I had more than six deployments between us, so we were credible listeners. Even more impressive: here was a guy [Ron Paul] who wasn’t toeing the party line, wasn’t kowtowing to pressure, and was actually speaking common sense! Look up any video of any presidential debate in which Dr. Paul takes part, and it’s abundantly clear that he is no politician (this is a compliment in my book). It’s safe to say that listening to his position on foreign policy was the first step down the rabbit hole; I didn’t fully understand every issue that he spoke about, but his words came through like a clear bell. Who was this guy? Where did he come from? What did he know? I was hooked.

We bought a book – Liberty Defined (highly recommend it – short, sweet, and easy to understand). I felt myself being pulled out of the apathetic, unconscious masses, and started to wake up. I started to care, I wanted to learn, and I needed to understand how the United States had found itself in the position of being mired in warfare, welfare, and eroding individual liberties. I had seen warfare; I had lost friends. These things mattered. This was real life happening. Dr. Paul was the first person to shed light on the root causes and offer an alternative system.

We began to research the great thinkers, writers, and economists that Dr. Paul referenced. We discovered Murray Rothbard (For a New Liberty and Ethics of Liberty), Ludwig von Mises (Human Action, LvMI), Lysander Spooner (Vices Are Not Crimes and No Treason), Frederic Bastiat (The Law), Peter Schiff, Ivan Eland, Lew Rockwell, and countless others. Over the course of 18 months, I progressed slowly but steadily from conservative neocon (I joined the military in the first place, right?) to limited-government proponent, to minarchism, and then finally the logically-deduced, well-researched, sound philosophy of anarcho-capitalism (self-ownership and non-aggression).