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).

 

You Can’t Run an Economy with Spreadsheets

6739Mises Daily Friday by Nicolás Cachanosky:

Some politicians still seem to be under the impression that an economy can be successfully planned with computers and technicians as long as the right data is entered into spreadsheets. Mises and Hayek proved this idea wrong many decades ago.

“From Conservative to Anarchist”

Ron-Paul-cured-my-apathySteve Patterson explains how he evolved “from conservative to anarchist”:

[Ron Paul] was consistent, and he kept coming back to the following principle: what is the proper role of government? Before we argue about cutting 10% of the Department of Education’s budget, shouldn’t we discuss whether or not it should exist in the first place? Is it appropriate, or even Constitutional, for the Executive Branch to send troops into foreign counties for an extended amount of time without Congressional declaration? Before we nibble around the edges of government spending, we need to talk about what government should do in the first place.

To me, he was precisely correct, but it revealed an unsavory truth: Republicans and Democrats aren’t so different from each other. One party might want to raise spending 5%; the other might want to cut spending 5%, but both favor the status quo and support big government in their respective areas. Liberals and conservatives are like two sides of the same coin. Constitutional conservatism, I thought, represented a real alternative.

But my journey didn’t stop there, because Ron implanted a little seed in my head. When he spoke, he often mentioned the “Austrian School of Economics”. I never heard of it, but eventually, I decided to Google around. What I discovered changed my life. I came across the Mises Institute, which had a number of free books and lectures online about Austrian Economics. I was immediately enamored. The explanatory power of Economics was breathtaking. After diving into the literature, I didn’t simply believe government was inefficient, I understood why. This had an enormous impact on my political philosophy, and it started my transition to radical libertarianism.

I now believe it’s impossible to have a clear understanding about how the world works without Economics. The coordination of prices, profits, and losses in a market is awe-inspiring. No exaggeration – it is almost miraculous. I will write extensively about this at a later time. But suffice to say, Economics became a pillar around which I would develop my other political beliefs.

The further I learned – the further I went down the rabbit hole of Austrian Economics – the more “radical” I became. Not only was government inefficient at delivering mail, but they were inefficient everywhere they intervened. The same economic principles apply to the Post Office as apply to the Patent Office. Of course, this wasn’t radicalism for the sake of radicalism, it was just consistency. And if you apply economic principles consistently across the board, you are left with a very grim perspective of government. however, I was no anarchist…

My first interaction with an anarchist, ironically enough, was as an intern in Ron Paul’s congressional office. I was given the opportunity to be his intern in DC for a semester, and one of his staffers considered himself an anarchist. He was a nice guy, but I didn’t take his ideas too seriously.

But that changed in the summer of 2010. I was fortunate enough to attend a conference for students at the Mises Institute – the organization I held in such high regard. The conference was called “Mises University”, and it would be a week long, focusing solely on Austrian Economics. I was elated, and it turned out to be one of the most intellectually stimulating weeks of my life. I was surrounded with the smartest peers I’ve ever met.

A few lectures hinted at the possibility of complete statelessness – the idea that private entrepreneurs could better provide all the services of government, including courts, military, and police. Supposedly, for the same reasons we don’t want government to monopolize the production of shoes, we don’t want them to monopolize the court system or the production of national defense. I wasn’t convinced. Read More→

Video: Panel Discussion on Fractional Reserve Banking

Scholarly discussion about fractional reserve free banking between proponents of free banking and advocates for 100% reserve banking. from the 2013 Summer Austrian Seminar sponsored by Mises Institute Poland.

Hosted by Mateusz Machaj

From L to R: Maciej Bitner, Michał Gamrot,Mateusz Machaj, David Howden, Nikolay Gertchev

Thanks to Mateusz Machaj

Imposing Costs on Russia: How About a Food Embargo?

PutinPresident Obama has threatened to impose costs on Russia for their intervention in Ukraine, but so far, his involvement has been high on rhetoric but low on action. Here’s a proposal that ought to hit Russia where it hurts: impose a food embargo on them.

Americans and Europeans of a certain age can remember the costs they felt due to the OPEC oil embargo of 1973. People need food more than they need energy. Think of how much more we could pressure Russia with a food embargo.

Of course, there would be objections to a food embargo, because it would impose costs and hunger on ordinary Russians, penalizing them for the actions of their political leader. It does sound potentially inhumane.

But, in this case, Putin has beaten us to it, and imposed an embargo of food from the US and EU on his own people!

Putin seems to be saying, if you keep up this pressure on us, we will deprive ourselves of food. Is this really a sensible tactic? Apparently, Putin thinks so, and is threatening not only to deprive Russians of food but also automobiles.

Embargoes have been used against adversaries throughout history. The US has maintained an embargo on Cuba for more than half a century and is pressuring Iran the same way. But it makes little sense for a country to impose an embargo on itself.

If the US and EU had imposed a food embargo on Russia, many would view it as a cruel and inhumane hostile act. For Putin to impose this embargo on his own people appears to be an act of stupidity. No wonder there has been barely any reaction to it in the West.

Putin has heard our empty threats, and appears to be saying that if we won’t follow through and impose costs on Russia, Putin will do it for us.

New Translations of ‘Mises Daily’ Articles

download (4)One from Mises Poland:

Hodowcy bydła a imperium na amerykańskim Zachodzie (orig: “Ranchers and Empire in the American West“)

And four new ones from Mises Hispano:

Los datos son claros: Los mercados libres reducen la pobreza by DW MacKenzie (orig: “The Data Is Clear: Free Markets Reduce Poverty“)

La regla de oro frente al alegato católico contra los mercados libres by Randy England (orig: “The Golden Rule vs. Catholic Case Against Free Markets“)

La Primera Guerra Mundial y el fin del siglo de la burguesía by Ryan McMaken (orig: “World War One and the End of the Bourgeois Century“)

Cuando atacan las industrias subvencionadas por el estado by Dave Albin (orig: “When State-Subsidized Industries Attack“)

VIDEO: Austrian Economics versus Mainstream Economics

Presented at the Ludwig von Mises Institute in Auburn, Alabama, on 24 June 2011.

Six Myths About Money and Inflation

6849Mises Daily Thursday by Patrick Barron:

Politicians and the mainstream media have a lot of faith in the ability of central banks to manipulate, manage, cajole, energize, and tame the global economy. Unfortunately, things are not so easy in actual fact.

Being a State Means Never Having to Pay Your Debts

Flag_map_of_Argentina.svg_Nicolas Cachanosky follows up his Mises Daily article on the legal history of Argentina’s default with a look at the recent effort to blame the default on everyone but the Argentinian government:

Joseph Stiglitz and Martin Guzman have a recent piece at Project Syndicateabout the implications of Argentina’s default, or what they call “Griesafault.” In a nutshell, the piece blames U.S. Judge Griesa (Southern District of New York), rather than Argentine Republic (the debtor), for the default and argues that the court’s ruling “encourages usurious behavior, threatens the functioning of international financial markets, and defies the basic tenets of modern capitalism: insolvent debtors need a fresh start.”

Basically, the contract with the creditors is crystal clear. It does not allow for the Argentine state to weasel out of paying some creditors by striking new deals with some other creditors. It’s as simple as that. Now, I agree with Chris Westley that the Argentine government should just honestly announce that it has no plans to pay anyone back, and to make a clean default. That was a risk the creditors took. Indeed, while Stiglitz and Gusman claim that Griesa’s decision prevents a “fresh start” the only true “fresh start” here for the taxpayers of Argentina is a default.

Anything else is a twisting of a very simple legal contract to favor a relatively-powerful government over the interests of private investors. Argentina wants to get out of paying its debts either way, but if it honestly defaults, there will be a downside to its credit rating. On the other hand,  if it can game the legal system so that it can avoid making good on its debts while still not legally be in default, then that’s so much better. And, of course, that’s what Stiglitz et al want. Endless spending with no consequences, ever.

Ridesharing and Government Efforts to Kill More Jobs

Mises Institute Associated Scholar Jacob Huebert speaks on the war against ridesharing programs and just how damaging the anti-ridesharing crusade is to ordinary people. For those who are unfamiliar with ridesharing, it is nothing more than private individuals providing rides to people in exchange for money. It’s a free-market taxi service, not to be confused with traditional taxi services which are regulated and controlled by state utilities commissions for the benefit of monopolist taxi corporations. Thanks to smart phone apps, it is now simple and easy for people to arrange rides for themselves using these free-market taxi services using services like Uber. Naturally, state governments, eager to please the army of lobbyists dispatched by taxi companies, have been busy finding ways to outlaw ridesharing. Huebert is speaking specifically of anti-ridesharing efforts in Illinois, but nearly-identical debates on going on not just nationwide, but globally.

Colorado’s Illegal Pot Market Thrives

Not unexpectedly, Colorado’s illegal marijuana market has been reported as thriving. The reasons for this are pretty straightforward. First, it is a new and highly regulated market making it difficult to supply products and keeping legal marijuana prices high. Also, steep taxes on legal marijuana exceeding 30% also are keeping prices high.

Camouflaged amid the legal medicinal and recreational marijuana market, the underground market thrives. Some in law enforcement and on the street say it may be as strong as it’s ever been, so great is the unmet local and visitor demand.

That the black market bustles in the emerging days of legalisation is not unexpected. By some reckonings, it will continue as long as residents of other states look to Colorado – and now Washington state – as the nation’s giant cannabis cookie jar. And, they add, as long as its legal retail competition keeps prices high and is taxed by state and local government at rates surpassing 30%.

Richard Ebeling Discusses Globalization and the Recovery of the Mises Papers in Russia, More

Mises Institutes of the World

Forbes today profiles several Mises Institutes around the world, and features longtime friend of Mises USA,  Helio Beltrão, who is also the founder of Mises Brazil. One of the most important contributions made by other Mises Institutes is the translation of Austrian writings into other languages, including German, Portugese, Spanish, Italian, Polish, Swedish, and Romanian. (Alas, there appears to be no French-language equivalent.) Beltrão has started a Portugese-language journal, pictured here:

Helio Beltrão. Credit: Forbes

Helio Beltrão. Credit: Forbes

The Forbes article itself should raise a few eyebrows, since it contains an aside that implies that Mises himself was just as much a “middle of the road” policy analyst as he was a laissez-faire economist, and could have just as easily spent his days doing policy papers for think tanks, had he been offered a job doing so. While Mises was no anarcho-capitalist, I’m a bit skeptical of this suggestion, and it seems more like inaccurate Mises revisionism, than a fair characterization of what Mises was really about.

Nonetheless, the article offers an interesting look at how Mises USA has spawned a global and international movement.  One of my favorite aspects of the Mises Institute is how much more international it is than other similar organizations. Just a look at the Mises Daily archives shows numerous articles from authors around the world, from Poland, to Argentina, to Germany, and Japan.

 

Happy Birthday Dr. Ron Paul!

Today’s is Ron Paul’s 79th birthday. I’ve had the pleasure of knowing Dr. Paul for several years, and he is one of the most thoroughly decent, thoughtful, and humane men one could ever hope to meet. And by the way, Ron is exceedingly fit and has the energy of a 35 year old. In his case age really is just a number.
ron carol
Not everyone knows the extent to which Ron helped Lew Rockwell get the Mises Institute started.  In those early days a fundraising letter from Ron on behalf of the Institute raised critical seed money. And over 30 years Ron has never hesitated to support our mission, speaking at countless functions on our behalf. His 2008 and 2012 presidential campaigns introduced thousands of young people to the works of Mises and Rothbard, reinvigorating interest in the Austrian school. Of course Ron’s initial motivation to run for Congress was his interest in Austrian economics, an interest that became a passion after seeing Mises speak publicly in Houston. Dr. Paul later went on to develop professional relationships with both Murray Rothbard and Hans Sennholz.
Happy birthday, Ron.  And thank you for all that you do.

Austrian Capital Theory and ‘Dawn of the Planet of the Apes’

6847Mises Daily Wednesday by Mark Tovey:

If the apes in Dawn of the Planet of the Apes are so smart, why are they hunter-gatherers? Aren’t they smart enough to think of agriculture? They’re probably smart enough, but Austrian capital theory explains why creating a more technologically-advanced society is easier said than done.

The Failure of Fixed Rates

floatingfiatMises Daily Wednesday by Christopher Mayer:

The only thing worse than floating fiat currencies is fixed exchange rates based on fiat money.

Mark Thornton on ‘Butler on Business’ This Week

Mark Thornton discusses recent economic indicators with Alan Butler.

Mark Thornton Talks About His Article “How the Drug War Drives Child Migrants to the US Border”

From Natural News Radio:

Guest Mark Thornton is a Senior Fellow at the Ludwig von Mises Institute. We’ll talk [Mp3 file] about his article, “How the Drug War Drives Child Migrants to the US Border” We’ll also discuss the current economic conditions. Mark Thornton was way ahead of economist predicting the crash of the housing bubble back in 2004.

The Fed and the “Salvador Dali Effect”

6845Mises Daily Tuesday by Dante Bayona:

The Fed and the Treasury are betting on the fact that the dollar will remain the world’s reserve currency forever, and that the US can inflate without consequences indefinitely. The international victims of the scheme, however, are looking for a way out.